Have you ever taken a close look at your electricity bill, only to get confused and discouraged by all the unfamiliar terms and information? If so, you’re not alone! Everything about an electric bill—strange vocabulary, lists of fees, even which utilities are included on the bill—can be hard to understand at first glance. Most of us look for the big Amount Due box, pay the bill, and move on. But if you’re interested in reducing your energy consumption and saving money on your utilities, it’s important to spend some time learning what’s actually on your bill so you can use it as a tool for change.
While your electric bill may look a little different depending on your location and your utility company, it will have the same basic information on it. Let’s dive in, using mine from Chicago as an example!
First things first: start by identifying what kind of bill you’re looking at. Depending on where you live, you may have multiple utilities grouped into one monthly bill. Most commonly, you might see gas and electric on the same bill, but some municipalities also include water. So before you start looking at the bottom line charge, make sure you know if that bill is for just electricity or if other utilities are lumped in there as well.
In my Chicago apartment, all of my utilities are separate, so this bill from ComEd covers just electricity. But even if your bill is for multiple utilities adding up to one big charge, each utility should be separated out with specific information about your usage and charges. If your bill includes other utilities, stick to the section just about electricity to get the best financial picture of your electricity usage.
On the front of my bill, there’s a section called “Current Charges Summary.” On this, I can see that I owe $16.29 for Supply, $22.13 for Delivery, and $10.32 for Taxes and Fees, for a total of $48.74. So what do these terms mean
Supply is the charge for the actual electricity used during the billing period. This is probably what we think of when we think about any utility bill—how much of the utility was used.
Delivery (sometimes also Service) is what the utility company charges the customer for getting the electricity from the source to your home. Basically, this covers the infrastructure and staffing required to deliver electricity, track usage, and maintain the grid.
Taxes and Fees are exactly what they sound like—local, state, and federal taxes and fees levied on every bill. These can either be set monthly charges or percentages based on your supply.
You might assume that Supply would account for the majority of the bill (I certainly did), but in Chicago at least, that’s not true! On my bill, Supply is only 33% of the total charge. Delivery accounts for 45%, and Taxes and Fees make up the remaining 22%.
(I should note that I’m enrolled in a budget billing program, which means that ComEd looks at my usage every six months, takes an average, and creates a standard monthly billing amount to help keep bills predictable throughout the year. This is why the amount billed isn’t going to line up exactly with the current charges on this bill.)
If you’re looking to cut your bill down and monitor your energy usage, focus on Supply charges, because that’s what connects to your actual day-to-day electricity habits. This is the part of the bill your behavior will affect, and even some of the other charges on your bill are based on your usage. And hopefully, as you pay attention and cut your usage, this is where you’ll be able see the results of your efforts!
On the front page of my bill, there’s a bar graphic labeled Total Usage that shows my electricity usage over the past twelve months. This is measured in kilowatt hours (kWh), which is how usage will be measured on the whole bill. My monthly usage for this bill is 243 kWh, which I can see is right about average for me.
Next to that is a box with Average Daily Use, which neatly breaks down my monthly usage to a daily average of 7.1 kWh. I can see here that my daily usage is down 0.9 kWh from my previous bill, which is great!
To see how ComEd has gotten these numbers, I can go down to the next page to Meter Information. This is where the utility company reports how it gathered the data for your supply charges, which is the Reading. To take the reading, the meter is checked at the beginning and end of the cycle, and the difference between the numbers is your total usage.
There are a few types of readings that you may see:
Actual, which means that someone from the utility looked at the meter on my building to get the reading or a smart meter automatically fed that information to the utility. (This is how my reading was taken on this bill.)
Estimated, which occurs when the utility company can’t get to the house for a reading and estimates your usage for the month based on previous usage.
Customer, where the customer provides the meter reading to the utility company.
If you’re trying to track your energy usage closely but see that your readings are Estimated for more than one month at a time, get in touch with your utility company—they may allow you to self-report for a more accurate picture of your usage.
If your utility company offers programs like Time of Use pricing, these will be itemized under a Charge Details section. Otherwise, it’s pretty straightforward: you’re charged per kWh for the power used. The total price per kWh is a little hard to find on my bill—it’s the Price to Compare under Updates. So you may need to read closely, but the price (or prices) will be listed somewhere!
The frustrating thing about the other parts of an electric bill is that they vary wildly depending on your utility and location. And the reality is that you likely can’t do much to change the delivery charges or fees, so whether you want to think much about them is personal preference.
I was curious for details and found that with ComEd, I can go onto their website and get a detailed description of each fee and tax, why it’s on the bill, and which agency (local, state, or federal) charges each. There are also sites with billing information from lots of different companies, which may be useful if you’re in a state with multiple options for providers.
Generally speaking, the delivery fees will include at least three basic categories of charges:
Metering: this covers the cost of the electric meter in your home.
Customer Charge: this goes towards customer service and service connections.
Distribution Charge: this goes towards maintaining and developing the infrastructure required to deliver electricity.
And as for taxes and fees, these can vary a lot, but likely, you’ll have local and state taxes, plus fees for things like efficiency and energy transition programs. Most of these are state-level, so you’ll need to dig in to know what specific taxes are on your bill.
For me, what’s important to note about these charges is that out of 13 delivery charges, taxes, and fees, 8 of them are calculated based on my monthly usage. So, while I can’t remove the fees, I can still reduce my monthly bill overall by reducing my monthly usage.
While reading these bills can seem daunting, seeing how your efforts to conserve energy are reflected in your monthly bill can be rewarding and motivating! Spend a little time learning about how your bills are written and you may learn a lot about how small changes in your daily electricity habits can really add up to savings.
As always, signing up for OhmConnect can help as well since we’ll send you energy conservation tips as well as let you know when prices are spiking in your area (if you’re on a Time of Use plan) so you can save then!
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