How to Read Your Electricity Bill

Receiving your monthly electricity bill can often feel like receiving a document written in a foreign language. Between the technical jargon, the various rate codes, and the split between supply and delivery charges, it's easy to just look at the "Amount Due" and pay it without a second thought.

However, understanding your bill is the single most important step in taking control of your energy costs. In this guide, we will break down the typical electricity bill line by line so you can spot errors and find opportunities to save.

1. Account Information and Key Dates

At the top of your bill, you will find your account number, service address, and billing period. The most critical piece of information here is the Billing Cycle or Meter Read Dates.

Knowing your meter read date is essential if you plan to switch suppliers. To avoid billing overlaps or gaps, it's best to have a new contract start on the next meter read date.

2. Supply vs. Delivery Charges

This is where most consumers get confused. In deregulated energy markets, your bill is split into two main parts:

Supply Charges (Generation)

This covers the cost of the actual electricity you used. It is calculated by multiplying your usage (in kilowatt-hours or kWh) by your rate (cents per kWh).

Example: 1,000 kWh x $0.12/kWh = $120.00

This is the portion of the bill you can shop for. If you switch to a competitive supplier, their rate will replace the utility's "Price to Compare" in this section.

Delivery Charges (Distribution)

This covers the cost of moving the electricity over the poles and wires to your home. It also includes the maintenance of the grid, storm repair, and meter readings. These rates are set by your local utility company and regulated by the state commission. You cannot lower these charges by switching suppliers.

3. Usage Data (kWh)

Your bill will show exactly how much electricity you consumed during the billing period, measured in kilowatt-hours (kWh). Many bills also include a graph comparing your current usage to the same month last year.

• Rising Trend? If your usage is higher than last year, consider if you've added new appliances or if your HVAC system needs maintenance.
• Estimated vs. Actual? Look for an "E" or "A" next to the meter reading. An "Estimated" reading means the utility didn't read your meter and guessed your usage. If this guess is high, you'll overpay this month (though it usually balances out next month).

4. Taxes and Fees

You will see various state and local taxes, grid modernization riders, and other surcharges. These are mandatory pass-through costs.

How to Spot Errors

Mistakes happen. Here are a few things to check for:

• Wrong Rate: If you signed up for a fixed rate of 10 cents, make sure 10 cents is what appears on the bill.
• Double Billing: Ensure you aren't being charged for supply by both the utility and a competitive supplier for the same period.

By understanding these components, you can make informed decisions about switching suppliers and reducing your consumption.