Every Line on Your Electric Bill, Explained

Bills have three moving parts

An electric bill has three main components: electricity supply, delivery, and fixed customer charges. The Electricity Supply Charge is the base cost of power measured in kilowatt-hours (kWh) and this is the "Price to Compare" for shopping around for alternative suppliers. ComEd's residential bill calls this the electricity supply charge. Delivery is a separate, regulated fee charged by the local utility for moving electricity from the power plant to the home end user across its wires. A residential utility bill also includes a fixed Customer Charge paid by every customer on a given rate, usually per month, regardless of usage. Customer charges vary and must be verified for any specific jurisdiction.

Cost of supply is measured in kilowatt-hours and varies from month-to-month based on the season and how much electricity a household or business consumes. delivery charges and customer charges vary by utility and state but not by a change in usage.

What the kWh count does

Usage is measured in kilowatt-hours, or more simply, the kWh count tells you how many units of electricity you used during the preceding billing cycle. Regardless of the utility, the billing cycle typically starts on the read date and runs for a full calendar month.

An electricity bill lists the on-bill meter read dates: when the utility took a physical reading from your meter. On the same line of the bill, you'll usually see "ACT" or "ACTUAL" to show that the read was performed in-person. The meter read date is

If a bill says "Estimated," The utility did not read the meter that month and guessed usage from historical patterns. Estimated bills are based on last year’s usage for the same month, adjusted for weather.

Why the bill has extra lines

Electric bills often have riders, surcharges, and local fees that appear regularly in the Fixed Fees & Charges section. These add-ons are approved by state regulators and explained in the utility's tariff.

• Energy efficiency or conservation
• Low-income bill assistance
• Transmission and distribution system upgrades
• System or environmental compliance
• Other regulatory-approved programs

The Pepco example shows a Distribution charge, which is approved by and identical for residential customers of the same rate class within a service area. DCPSC is the abbreviation for District of Columbia Public Service Commission, an oversight body similar to a public utility commission. Other jurisdictions use different abbreviations.

The Pepco example also shows extra rates and services like EmPOWER Maryland plus local franchise taxes and collection fees for Baltimore Gas and Electric in that instance. Maryland’s PPRP report also details universal services surcharges including enterprise and environmental surcharges.

Many of the other extra lines on an electric bill are calculated from the customer’s usage — that is, the kWh total. These add-ons include taxes, line access fees, renewable energy fees, and system costs such as transmission and distribution.

Regulated versus deregulated pricing

Electricity supply costs can be bundled with delivery on the same bill. But not all utility bills present electricity costs in the same way.

If you shopped for electricity online, you may have discovered deregulated electricity pricing. Deregulation allows consumers to choose an energy supplier, such as an electric generation company (GenCo), or stick with the incumbent utility.

The line a household can change

The amount of electricity used, the choice of plans, and the base supply portion of the bill is where a household has the most opportunity to control costs. The other charges on a bill, including the delivery line, are fixed by the utility, the regulated body, and state laws—

The remainder of the electric bill is made up of fixed costs, regulated tariffs, and pass-through charges that are the same for every customer on a particular plan, regardless of how much electricity the customer uses or doesn’t use. The delivery charge, made up of the utility fee or distribution fee, is the utility’s fee for sending electricity along the wires. A number of fees and surcharges are collected by the utility but originate from outside agencies and are outside the utility’s control. This includes subcharges for transmission, distribution, and any local franchise fee.

Finally, the large portion of a customer's bill, the cost of electricity supply, is recently also visible as a separate charge. This so-called supply charge can usually change, either by voluntary direct swapping to an energy seller like a GenCo, or by reviewing a utility's recent "Price to Compare" figure, or PTC. If the PTC looks low, it means the customer is paying the "default" supply rate directly from their utility company. But if the PTC looks too high, and the customer has choices, then shopping electric supply can save money. There's a right and wrong way for a customer to decide on a switch, of course, so be sure to confirm or cross-verify. The PTC and other rates on the bill are usually confirmed in the utility's filings with a state agency, such as a public service commission.

Most lines on an electric bill should be traceable to a legally set purpose. If a customer can't confirm which addition funds a specific purpose, and especially if they think it funds no purpose, then they should contest the line and seek a clarification. State agencies are the arbiters for utility charges on your bill.

How to read your own bill

Each utility's bill carries some of these same explanations, so be sure to scan the writing on your bill itself or find the online result.