Capacity charges on electricity bills
Short answer. A capacity charge recovers the cost of generation being available when the system peaks, not the energy you used in an ordinary hour. In PJM and some other markets, your contribution is tied to load during the system’s peak hours. A business contract may pass that charge through. A residential fixed price often bundles it so you never see the word.
Why a single hour matters
If your facility was running hard during the hours that turned out to be the system peak, that usage can set a capacity tag that follows you for a planning year. The tag is not the same as your monthly utility demand charge, though both punish peaks. They use different hours and different tariffs.
You often learn the peak hour after it happens. Curtailment strategies aim at likely peak days. They are operational, and they fail if you guess the wrong day. They are not a reason to ignore a supply price.
How contracts treat them
A fixed all-in price includes a forecast of capacity. A pass-through shows the charge on the bill and can surprise you. Neither is free. Ask which one the quote uses before you compare two suppliers.
This is not a residential line-item guide. If your household bill does not list capacity, you are paying it inside a rate and this page is background, not a missing charge you should demand to see.
Questions people ask
Is a capacity charge a tax?
No. It is a market or tariff cost for availability of generation. Taxes are labeled separately.
Can I cut the tag after the peak?
Not for the period the tag already set. You can try to be lower at the next peak.
Does Texas bill capacity this way?
ERCOT does not run a PJM-style capacity market. Do not copy a PJM capacity explanation onto an Oncor bill without checking the contract. Energy-only wholesale design is a different structure.
Use the bill, not a stale screenshot
Capacity charges on electricity bills comes down to documents you can keep: the utility name on the bill, the supply price or default price, the kWh or demand that drove the charges, and the term and fees in any contract. National average prices from the Energy Information Administration are context. For 2024, EIA put average residential use at 865 kWh a month and the average residential price at 16.5 cents per kWh. For June 2026, EIA reported 18.34 cents per kWh of residential revenue. Those figures mix supply and delivery for the whole country. They are not a price to compare, and they are not an offer in this territory.
If a salesperson’s number and the bill disagree, keep the bill. Shop Energy Prices does not rank suppliers and does not publish a live rate table. Re-check the official shopping site or the utility tariff on the day you enroll, because offers and default prices change.
Going further on Capacity charges on electricity bills
Capacity charges on electricity bills is a local shopping problem only if the account is in a retail-choice territory and the account is in your name. The utility printed on the bill is the fact. The city name is a hint.
Where choice exists, you shop supply. Delivery, outages, and the meter stay with the utility. A supplier that does not name that utility is showing you the wrong product.
The benchmark is the price to compare, basic service, standard offer, or standard-offer service for that utility, not the national average. EIA’s 16.5 cents per kWh for 2024 and 18.34 cents of residential revenue per kWh in June 2026 mix supply and delivery for the whole country.
Offers change. This site does not rank companies and does not post a live table. On the day you enroll, read the contract term, the monthly fee, and the early termination fee at your own kilowatt-hours.
An illustration only: moving from 9 cents to 8 cents on 480 kilowatt-hours is 5 dollars before fees. A monthly fee or an early termination fee can erase it. Delivery does not disappear.
Addresses on the edge of a town, and addresses served by a municipal utility or a cooperative, often cannot use the investor-owned shopping site. If the bill and this page disagree, follow the bill.
What to verify before you act
Write down the utility name, the account name, the supply price or default price, and a typical month of use. Capacity charges on electricity bills does not change those four facts. If a contractor, a supplier, or a city page disagrees with the bill, the bill wins. Shop Energy Prices does not sell electricity and does not keep a live rate table.
Use one official source for the benchmark: the price to compare or default service on the bill, the state shopping site if your state publishes one, or the commission docket that sets the default. EIA’s national averages are context for scale. They are the wrong number to beat.
Keep the contract PDF. Circle the term, the fee to leave, the renewal rule, and any pass-through that is not fixed. A verbal match to a competitor is not the product. If you are inside a cancellation window, follow the written notice method the same day and keep a copy.
Re-read the contract or tariff section that mentions Capacity charges on electricity bills and copy the defined term into your notes. If the defined term does not match the way a salesperson used the words, the defined term controls. Ask the supplier or the utility, in writing, which line on the next bill will change and which lines will not.
Re-read the contract or tariff section that mentions Capacity charges on electricity bills and copy the defined term into your notes. If the defined term does not match the way a salesperson used the words, the defined term controls. Ask the supplier or the utility, in writing, which line on the next bill will change and which lines will not.
Re-read the contract or tariff section that mentions Capacity charges on electricity bills and copy the defined term into your notes. If the defined term does not match the way a salesperson used the words, the defined term controls. Ask the supplier or the utility, in writing, which line on the next bill will change and which lines will not.
A worksheet for Capacity charges on electricity bills
Write the utility, the rate class, the current supply or default price, the end date, and a recent month of kilowatt-hours. Beside them write the alternative and every fee. Capacity charges on electricity bills is finished only when those two columns can be subtracted. If you cannot name the fee to leave, you do not yet have a decision.
Ask, in writing, which bill lines change and which stay. Delivery, franchise fees, and gross-receipts taxes usually stay. Supply, a voluntary green attribute, or an equipment runtime can change. A seller who will not point at the line is not ready for your signature.
Set one reminder for 60 days before the contract ends and one for the day a commission usually resets default service, if you know that month. Capacity charges on electricity bills does not require weekly shopping. It requires one careful comparison at the moment the price can actually change.