How to read your electric bill

Utility bills are written by people who have to satisfy a regulator, not by people trying to be understood. The result is a document where the number you care about — what changes if I do something differently — is buried among line items that were negotiated in a rate case years ago. Here is how to take one apart.

The four kinds of charge

1. The fixed charge

Variously called a customer charge, basic service charge, service availability charge, or facilities charge. You pay it for being connected, whether you use a hundred kilowatt-hours or none. Across the 576 residential plans in our index that list one, the median works out to $196 a year, though the spread is very wide — rural cooperatives and island utilities often charge several times that.

This is the line that quietly ruins per-kilowatt-hour comparisons. A plan with a low rate and a high fixed charge can be worse than the reverse for a small household and better for a large one, and no amount of comparing cents will reveal it. We cover this in more depth in what fixed charges are and why they keep rising.

2. Energy (supply)

The electricity itself — generated somewhere, sold to you by the kilowatt-hour. On a time-of-use plan this line is split by period, so you will see separate quantities and prices for peak and off-peak. On a tiered plan it is split by usage band instead.

3. Delivery (distribution and transmission)

The cost of moving that electricity from where it was made to your meter: the high-voltage network, the local poles and wires, the transformers, the crews. In much of the country this is bundled into a single price with supply. In states with retail choice it is separated, and it is the half that stays with your utility no matter which supplier you buy from. This distinction causes more confusion than anything else on a bill, and we have a whole guide to it.

4. Taxes, riders and surcharges

Public benefit funds, energy efficiency programs, storm cost recovery, nuclear decommissioning, wildfire funds, state and municipal taxes. Individually small, collectively not: on some tariffs the riders add more than a fifth to the headline rate. You cannot avoid them, but you should know they exist before you compare a rate you read on a website against the total on your bill.

Reading the usage section

Above or below the charges there will be a summary of consumption. Three things in it are worth your attention:

1. The service period and day count. Billing months are not calendar months. A 34-day cycle following a 28-day one will look like a jump in usage when nothing changed. Always divide by days before comparing two bills.
2. Your rate schedule name. Usually printed in small type near your account number — something like “E-1”, “RS”, or “R-TOUD”. This is the single most useful string on the whole document, because it identifies exactly which filed tariff you are on. Look it up in our index and you will see the full price structure, not a summary.
3. Last year’s same month. Most bills print a twelve-month bar chart. Compare against the same month a year ago, never against last month — heating and cooling make month-to-month comparisons meaningless.

What you can actually change

There are only three levers, and they are not equally available to everyone:

• Use less. Always works. Reduces the energy and delivery lines proportionally, leaves the fixed charge and most taxes untouched.
• Use it at a different time. Works only on the 233 plans in our index that price by hour. On the other 296, moving your laundry to midnight achieves precisely nothing.
• Change plan. Often the largest single change available, and the one almost nobody makes. Utilities do not write to tell you a different tariff would suit you better.

Which of those is worth your time depends entirely on the tariff you are on — which is the thing your bill names and then declines to explain. Start from your utility, find your schedule, and the rest of this site will tell you what the alternatives would have cost.