# Electricity prices (per month)

Every month, Americans spend on average \$110 on their electricity bill. How much do you pay every month? Are you spending too much money on electricity? Find out here.

## Monthly electricity price per household

The price paid each month by electricity customers varies due to 2 elements:

• Electricity consumption (amount of kWh used each month). This depends on the size of the home, the type of home, the amount of occupants, the type of appliances, the type of heating (electric or gas), the type of heat isolation in place.
• Electricity price (price of a kWh). This is determined either by the price of the market, if you are signed up with a variable rate, or the type of fixed rate you have chosen with a retail supplier.

Here is the monthly electricity bill for typical US homes:

Size of household Average electricity monthly expense (2009 EIA data)
US average \$112
1 person \$76
2 persons \$111
3 persons \$125
4 persons \$139
5 persons \$145
6 or more persons \$152

If you are paying more than what is shown in this graph, you should consider switching suppliers to save on your energy bill.

## What makes up an electricity bill?

• The basic service charge: this part is the same, no matter how much electricity you use. This is charged by your utility company. Depending on your utility company, this amount can be anything between \$10 and \$40.
• Delivery charge per kWh: this part is also charged by your utility, but will depend on your usage. It is a price in \$ / kWh.
• Supply charge per kWh: this is charged by your supplier, which will be different to your utility company if you switch to an alternate supplier. If you remain with your utility company, this will be a price based on the wholesale market price, with an extra purchasing fee (usually called "merchant function charge"). It will also be a price in \$/kWh, but this price per kWh will change every month. Whereas if you choose to switch to an alternate supplier, the price in \$/kWh will remain the same every month for the duration of your contract, and only depend on your consumption.
• State surcharges: state surcharges are also usually dependent on your monthly consumption. This will be a price in \$ / kWh.
• Sales tax: this is based on your total expenditure, both fixed \$ and \$/kWh. It is a percentage of your total amount to pay.

## Use budget billing for your electricity delivery

Budget billing enables you to spread out your bill over the year, in order to pay the same amount every month. In this case, even though you will be charged for your usage of the whole year, each month you will be paying the same amount. If you have bills which change a lot from month to month, and you would like more stable energy bills, you should sign up for budget billing with your utility company. For more information, check our Budget Billing page.

## Switch supplier and choose a fixed rate plan

By switching supplier, you can also better manage your monthly electricity expenses. Suppliers offer a variety of deals which your utility company doesn't. Fixed rates are the best type of rate if you wish to stabilize your monthly bill. Find out more about switching suppliers on our dedicated Suppliers page.

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