Understanding Your Electric Bill


It’s important to fully understand your electric bill to know how much energy your home uses and how much energy — and money — you may save from energy-efficient upgrades.

Kilowatt Hours

  • Your electric utility provider uses kilowatt hours (kWh) to measure your home’s energy use.
    • One kWh is 1,000 watts used for one hour; the equivalent of 10 100-watt bulbs left on for one hour.
    • Your electricity usage will typically increase in the summer and winter and decrease in the fall and spring.

Itemized Charges

  • Your electric bill separates and itemizes charges that typically include:
    • Distribution Service: Your utility’s charge for delivering electricity to your home.
    • Electricity Supply Service: Your utility’s charge for generating and transmitting electricity and fuel costs.
    • State and Local Consumption Taxes: Taxes based on the amount of energy used.
    • Local Utility Tax: A tax imposed on energy services by local ordinance.

Your Usage

  • You can compare your usage over time and from meter readings to better understand when your consumption is highest to help detect possible home repairs you need to make.
    • Your utility provider will also provide a summary of your usage for the month, and often a recent month's or full year usage history so you can see how much energy you are using compared to previous months. Most utilities will provide a graph or chart detailing usage for the year.
    • You’ll notice that your bill refers to both current and prior meter readings. Your utility provider will charge you for the difference between the two. For example, if last month your meter read 50000 and this month it read 51000, your utility provider will charge you for the 1000 kWh difference.

Understand Your Meter

  • Your electric meter measures how many kWh you use. To read your meter, you should:
    1. Stand directly in front of the meter, look at the dials straight-on.
    2. Read the number on each dial, moving from right to left.
    3. If the hand is between two numbers, record the smaller number.
    4. If the hand is directly on a number, check the dial to the right. Has it passed zero? If so, record the smaller number.

You may notice your meter dials spinning. The more electricity your home is consuming, the faster the dials spin. 


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