Understanding your energy bill
You will receive your electricity and/or gas bill each month, with the amount of money you owe to your utility company and/or supplier. The bill will contain your personal account information, your meter readings, the price of the electricity or gas, the various charges which appear in the price of the electricity or gas, and the total amount you must pay.
Your account information contains:
- Account number
- Rate type. Your rate type will most likely be the default utility rate (unless you have switched suppliers). You may also be on a Time-of-use rate.
List of charges
Most utility companies will give you in your monthly energy bill the detail of the charges you are paying. These will vary in each state and for each utility company, but globally the charges will include these:
- Delivery charges
- Supply charges
- Taxes & state surcharges
Delivery charges are the charges which pay for the transport of electricity (or gas) from the power plant (or gas relay station) to your home. They include:
- Basic service charge: this will be a fixed price you pay no matter how much energy you use.
- Delivery charge per kWh (or per them): this charge will depend on how much energy you have used.
Supply charges are the charges which pay for the cost of the electricity (or gas). This is the part which will change if you switch supplier.
Taxes & state surcharges
Each state and each utility will have different sales taxes and different state surcharges. State surcharges may include:
- Renewable energy incentives
- Energy efficiency incentives
- Assistance for low income customers
- Payment for other energy programs
The total amount is the addition of the delivery charges, supply charges, as well as taxes and state surcharges. The proportion of each charge will be different depending on the customer's location.
In order to issue your bill, your utility company needs to know how much electricity or gas you have used for the last month. This is the purpose of your electricity/gas meter. The meter counts the amount of electricity or gas you have used since the last meter reading. Find out more about different electricity meters or different gas meters or how to read your electricity meter.
For electricity, the meter reading will be in kWh (which is a measure of energy). If your first electricity meter reading is 8010, and the next one is 8919, then the amount of electricity you have used in the time between both readings is 8010 - 8919 = 909 kWh.
An average american home in 2013 used 909 kWh per month. What is a kWh? Find out by visiting our what is a kWh page.
For gas, the meter reading will most often be in CCF (Centum Cubic Feet), which is a unit of volume. In order to convert this volume to energy and accurately estimate your energy usage, the gas reading in CCF must be converted to the unit of energy for gas: the Therm. If your first gas meter reading is 8116 (CCF), and the next one is 8120 (CCF), then the volume of natural gas you have used in the time between both readings is 8120 - 8116 = 4 CCF. Then you must convert it to energy: 1 CCF is equivalent to approximately 1.025 Therms (source eia.gov). This conversion factor may change slightly over time and depending on your location.
Convert CCF to Thems
1 CCF is equivalent to 1.025 Therms
For more information about the CCF, go to our CCF page.
Choose your state
Each state has different utility companies, which have different ways to display your energy bill. You must therefore choose your utility. But first, choose your state: