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Easy way to read electricity bill

If you own a business, own a home, or even just rent an apartment, you know how exciting it is to get an electric bill in the mail every month. Like most people, if you pay your bills on time, you probably don't think twice about what's on your statement; you just take a quick look at the amount and pay it.

Pay close attention to your utility bill the next time you get it. You'll get a breakdown of all the fees and supply charges on electricity bill. Looking at something and not understanding it? This could be a sign that something is wrong. You're not the only one experiencing this. Let's take a look at your electric statement and see what all of those line items and fees are all about.

kWh stands for kilowatt-hours, and most charges are determined as a rate per kWh, which varies depending on the type of entity using the power (i.e. residential versus commercial). Visit the website of your utility company to determine the rate that will be applied to your account.

Delivery and supply are the two sections of a typical electric bill. It is the utility's fixed cost to transfer energy from their generation site to the consumer's location that is referred to as the delivery rate. Electricity and natural gas transmission and distribution systems are all part of this.

Multiple itemised charges make up the overall delivery charge, as seen in the following part of a business power statement.

Here are the common types of charges of energy bill:

Customer Charge

To help cover utility fixed costs of serving a customer, such as metre reading, billing, and administrative expenses, there is an additional charge known as a customer charge.

Distribution Energy Charge

It's the expense of transporting electricity from its source to a consumer's location. Consider this to be the cost of transporting electricity to your house from the utility's electrical substation via power lines. This fee is divided into tiers based on the amount of electricity used at a certain metre. The bill owner was hit with three different charges for the distribution of the electricity they used in the case above.

Transition Charge

Transition Charge is a fee that allows the utility to recoup the costs of complying with state laws on the sale of its power-generating facilities.

Transmission Charge

Cost of delivering electricity from power plants (natural gas, coal or nuclear) to the electric substations of the utility and to the start of its distribution system (distribution poles).

Energy Conservation Charge

The Energy Conservation Charge is a state programme fee used to help pay for energy conservation measures implemented by the state and utility companies. One of the most important initiatives supported by this fee is MassSave.

Renewable Energy Charge

a state programme fee to help pay for REC projects. In addition, the Utilities incorrectly characterise as exorbitant to customers a portion of the bill totaling less than one dollar per month on your electricity bill (on average).

Distribution Demand Charge

Only businesses and industries who pay time-of-use rates or have specified bill volumes are subject to the Distribution Demand Charge. Utility metres record 15-minute average usage, and that's what's used to calculate your charge each month. During peak hours, the more electricity you use, the higher your demand price will be. Up to 70% of an organization's electric bill can be made up of demand charges.


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  • Oct 8 2021
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