How to read your electric bill
Last updated 2026-10-21
Most bills have the same parts: a fixed monthly charge, a delivery charge per kWh, a supply charge per kWh, a few adjustments and taxes. Here is what each one means and how to check it.
1. The summary box
- Account number: needed to switch suppliers, enroll in programs or dispute a charge.
- Service address and service period: the dates covered. Periods run 27 to 34 days, so compare cost per day, not per bill.
- Amount due and due date: includes any past-due balance. Late fees typically apply after the due date.
- Rate code / rate schedule: the tariff you are billed on, such as "RS-1 Residential", "E-TOU-C" or "R-TOU". It decides every per-kWh price on the bill. Search it on your utility's website to see the full tariff.
- Supplier (choice states only): if a company other than your utility is listed for "generation" or "supply", you are with a third-party supplier.
2. Usage: kWh and meter reads
A kilowatt-hour (kWh) is 1,000 watts used for one hour. The average U.S. home uses about 874 kWh a month. See watts vs. kWh if the units are unclear.
- Previous and current reading: kWh used = current minus previous (times a meter multiplier, usually 1 for homes).
- Actual vs. estimated: an "E", "Est" or "Estimated" next to the reading means nobody read the meter. Smart meters rarely estimate; if yours does repeatedly, ask why.
- Usage history chart: 13 months of kWh. The most useful comparison is the same month last year.
- Average daily use and temperature: some bills list average daily kWh and average outdoor temperature. Heating and cooling explain most swings.
- Demand (kW): only on demand-rate plans. It is your highest 15- to 60-minute average power draw in the month, billed per kW.
- Net metering lines: solar homes see "delivered" (from the grid), "received" (exported) and net kWh. See net metering explained.
3. Every charge explained
| Line item | Also called | What it pays for | Can you change it? |
|---|---|---|---|
| Customer charge | Basic service, service charge, base charge, fixed charge | Meter, billing, the service line. Same every month regardless of use, often $5 to $20+ | No. It is why your effective rate rises when you use very little. |
| Energy / supply / generation | Default service, basic service, power supply | The electricity itself | Use less; in choice states, pick a cheaper supplier |
| Delivery / distribution | T&D, wires charge, TDU charge (Texas) | Local poles, wires, substations and the utility's return on them | Use less. Same no matter who supplies you. |
| Transmission | Transmission service charge | High-voltage lines between power plants and your area | Use less |
| Fuel / power cost adjustment | FCA, PCA, ECA, fuel factor, energy cost recovery | Pass-through of the utility's actual fuel and purchased-power costs above or below what base rates assumed. Can be positive or negative and changes monthly or quarterly | Use less |
| Riders and surcharges | Energy efficiency, renewable, storm recovery, securitization, nuclear decommissioning, public purpose, system benefits | State-mandated programs and specific approved costs collected separately from base rates | No, except by using less |
| Demand charge | kW charge | Your peak power draw (demand-rate plans only) | Avoid running big loads at once |
| Taxes and fees | Sales tax, gross receipts tax, franchise fee, municipal fee | State and local government | No. Some states exempt residential power or offer exemptions for medical use. |
| Credits | Low-income discount, solar credit, bill credit | Program discounts or exports | Apply if eligible; see bill help |
| Non-electric items | Surge protection, warranty, appliance plan, donation | Optional add-ons | Yes. Cancel if you did not knowingly sign up. |
Price to compare (PA, OH, MD, NJ, NY, IL and other choice states): the utility's default supply price per kWh. A supplier offer below it saves money on the supply portion; offers above it cost more. See electricity deregulation.
Tiered and time-of-use rates: tiered bills show a lower price for the first block of kWh (a "baseline" or "tier 1") and a higher price after. Time-of-use bills split kWh into peak and off-peak lines. See time-of-use rates.
4. Example bill (1,000 kWh)
Illustrative numbers, close to a typical regulated utility. Your tariff will differ.
| Line | Basis | Amount |
|---|---|---|
| Customer charge (fixed) | flat per month | $12.00 |
| Distribution / delivery | 6.10¢ × 1,000 kWh | $61.00 |
| Transmission | 1.80¢ × 1,000 kWh | $18.00 |
| Generation / supply | 8.40¢ × 1,000 kWh | $84.00 |
| Fuel / power cost adjustment | 0.90¢ × 1,000 kWh | $9.00 |
| Riders (efficiency, storm, etc.) | 0.70¢ × 1,000 kWh | $7.00 |
| Taxes | 6% of $191.00 | $11.46 |
| Total | $202.46 |
In this example, delivery-related lines (customer charge, distribution, transmission, riders) are $98.00, or 51% of charges before tax. That share is common, and it is why switching suppliers only affects part of the bill.
5. Find your real cost per kWh
Effective rate = total electric charges ÷ kWh used.
Example: $202.46 ÷ 1,000 kWh = 20.25¢/kWh. U.S. average over the 12 months through July 2026: 17.99¢.
- Add every electric charge, including the customer charge and taxes. Leave out past-due amounts, payments and non-electric add-ons.
- Divide by kWh for the same period.
- Use this number for any appliance or plan calculation. Run it through the bill calculator or the electricity cost calculator.
For the marginal rate (what one more kWh costs), drop the fixed customer charge from the total before dividing. This is the number that matters when deciding whether to run an appliance. Compare your number with your state average or your utility's average.
6. Red flags
- Several estimated reads in a row. Request an actual read.
- Usage jump of 30%+ vs. the same month last year with similar weather. Look for a failing appliance (well pump, water heater element, heat strip, old freezer). The home energy audit and standby power tools help find it.
- A supplier name you do not recognize (choice states). This can mean you were switched without consent ("slamming"). Call the utility and the state commission.
- Supply rate far above the price to compare. Often a fixed-rate contract that rolled to a variable rate.
- Wrong rate code, such as a commercial rate on a home, or a missing low-income or medical discount you qualify for.
- Charges for products you did not order: surge protection, warranties.
- Service dates that overlap the previous bill, or a meter number that does not match your meter.
To dispute a bill, call the utility first and write down the date, name and reference number. If that fails, file a complaint with your state public utility commission. Most states do not allow shutoff for the disputed amount while a complaint is open, as long as you pay the undisputed part.
Next: how to cut your electric bill.
Frequently asked questions
What is my actual price per kWh?
Divide the total of all electric charges (including the fixed customer charge and taxes, excluding past-due balances and non-electric items) by the kWh used that month. A $202.46 bill for 1,000 kWh is 20.25¢/kWh. The U.S. average is 17.99¢.
Why is my bill high when my rate did not change?
Usually usage: compare kWh to the same month last year, not last month. Then check the days in the billing period (31 vs. 28 days is an 11% difference), whether the read was estimated, and whether a fuel or power cost adjustment rose.
What does "price to compare" mean?
In states with retail choice, it is the utility's default supply price per kWh (generation plus transmission in some states). A competing supplier must beat it to save you money. It covers only the supply part of the bill; you pay delivery charges to the utility either way.
What should I do if my meter read was estimated?
Note the "E" or "estimated" label, read your own meter, and compare. If the estimate was high, call the utility with your reading (or a dated photo) and ask for a corrected bill. A low estimate will be trued up later, so a large catch-up bill is possible.