How to Read Your Electric Bill

To read your electric bill, start with the billing dates and electricity used, then check how your rate plan converts that usage into charges. Separate the cost of electricity supplied to your property from delivery charges, taxes, and account adjustments. The total amount due is not necessarily the cost of this month’s electricity: it can include an unpaid balance, payments, or charges for another service.

Electric Bill Fields to Check First

Bill field	What it tells you	What to check
Service address and meter number	Which property and meter the charges cover	Match them to the account you intend to review
Billing period and billing days	The dates covered by the charges	Compare periods of similar length, or calculate kWh per day
Usage, in kWh	The electrical energy billed for the period	Check the meter readings or interval-usage totals
Actual or estimated reading	Whether usage came from a meter reading or an estimate	Investigate estimated readings before attributing a change entirely to equipment use
Rate plan or service classification	Which pricing rules apply	Match the bill to the applicable rate schedule and effective dates
Supply or generation charges	The cost of the electricity purchased	Check the supplier, billed kWh, and applicable supply rates
Delivery charges	The cost of providing grid service	Identify fixed charges and usage-based charges
Demand, in kW, if applicable	The power demand used for demand billing	Check the measurement interval, billed demand, and USD/kW rate
Taxes, adjustments, and credits	Additional charges or reductions	Check each item’s calculation basis and sign
Current electric charges and total amount due	Service-period costs versus the account balance payable	Keep previous balances, payments, gas charges, and other services separate

Utilities arrange these fields differently. Con Edison’s residential sample bill separates the billing summary from service-charge details; PG&E likewise separates its account summary from detailed electric charges. Use the field names rather than expecting the information to appear on a particular page.

Read the Bill in Six Steps

1. Confirm the account and service details. Check the service address, meter identifier, billing dates, and rate plan. On a combined gas-and-electric statement, locate the electric section before calculating an electricity price.
2. Record the billed electricity usage. Find the total kWh and whether the reading is actual or estimated. For time-of-use billing, also record the kWh assigned to each pricing period.
3. Identify the rate structure. Determine whether usage is billed at one rate, in tiers, or by time of use. If a demand charge appears, record its billed kW separately from energy usage.
4. Recalculate the charge lines. Multiply each billed quantity by its applicable rate, then add fixed charges, adjustments, and taxes according to the rate schedule. Do not assume every line uses the same quantity or tax basis.
5. Reconcile current charges with the amount due. Start with the previous balance, subtract payments and applicable account credits, and add new charges. This distinguishes a billing increase from an unpaid balance carried forward.
6. Compare usage and pricing separately. Check daily kWh, changes in rates, and changes in the share of usage billed during expensive periods. A larger bill does not, by itself, prove that you used more electricity.

The order matters. Checking equipment use before confirming the billing period, reading status, and rate plan can send you looking for a consumption problem when the difference actually comes from billing or pricing.

Understand kWh, kW, and Meter Readings

kWh Measures Energy; kW Measures Power

A kilowatt, or kW, measures the rate of electricity use. A kilowatt-hour, or kWh, measures energy used over time. Your energy charges generally use kWh; demand charges, when applicable, use kW.

For a load drawing constant power:

[
\text{Energy (kWh)}=\text{Power (kW)}\times\text{Time (hours)}
]

For example, an illustrative load drawing 1.5 kW continuously for four hours uses:

[
1.5\ \text{kW}\times4\ \text{hours}=6\ \text{kWh}
]

That calculation assumes the load draws 1.5 kW for the entire four hours. It does not assume that a cycling appliance runs continuously at its nameplate rating.

Check the Reading Difference and Any Meter Factor

For a cumulative energy register, the basic check is:

[
\text{Billed energy (kWh)}
=
(\text{Ending reading}-\text{Starting reading})
\times\text{Applicable meter factor}
]

PG&E calls the factor that converts electric meter-reading differences into kWh a “meter constant.” Use the factor shown for your account rather than assuming every meter has the same conversion.

Illustrative inputs:

• Starting register: 18,420.
• Ending register: 19,170.
• Applicable meter factor: 1.

The calculation is:

[
(19{,}170-18{,}420)\times1=750\ \text{kWh}
]

This checks the energy quantity, not the price charged for that energy. A time-of-use bill also requires the usage assigned to each pricing period; one total register difference cannot verify that allocation. PG&E’s bill guide identifies separate peak, part-peak, and off-peak usage categories where applicable.

Distinguish Actual and Estimated Readings

An actual reading comes from the meter. An estimated reading projects usage from past consumption when an actual reading is unavailable. Con Edison identifies this distinction in its billing glossary.

If your bill is estimated, verify that status before treating the billed kWh as a precise measurement of the period’s consumption. When reviewing a later bill, check the reading dates and any adjustment or correction messages together rather than examining only the new total. Con Edison’s sample bill specifically provides a message section for billing adjustments and corrections.

Separate Supply, Delivery, and Additional Charges

Supply, sometimes labeled generation, pays for the electricity purchased for your use. Delivery pays for the network and services that bring electricity to your property. Con Edison groups its bill into supply, delivery, and taxes; its sample bill also shows related surcharges within the service details.

Charge type	Typical calculation basis	How to verify it
Supply or generation energy charge	kWh × applicable USD/kWh rate	Match the quantity and rate to the supplier’s pricing
Usage-based delivery charge	kWh × applicable USD/kWh rate	Check the delivery rate separately from supply
Basic service or customer charge	A fixed service charge under the plan	Check the applicable charge and any billing-period treatment
Demand charge, where applicable	Billed kW × applicable USD/kW rate	Verify demand quantity and the rate schedule’s rules
Taxes and surcharges	The specified percentage, unit rate, or fixed amount	Use the stated calculation basis, not an assumed percentage of the whole bill
Credits and adjustments	The amount or calculation specified for that item	Confirm whether the item reduces or increases current charges

The applicable utility documents control the details. PG&E distinguishes customer charges from usage-based charges and notes that its Base Services Charge can vary with billing-period length. Con Edison’s guide explains that a tariff contains the formal rates, terms, and conditions of service.

If another company supplies your electricity, the utility may still deliver it. Con Edison explains that a consolidated bill can combine an energy service company’s supply charges with the utility’s delivery charges. Two separately labeled charges therefore do not automatically mean you have been charged twice for the same service.

A common mistake is treating the supply price as the full electricity price. Supply, delivery, and taxes can appear separately, so a supply-only USD/kWh figure may explain only part of your current electric charges.

Recalculate a Simple Electric Bill

The following is a hypothetical U.S. residential example, not a quoted rate for any state or utility. All amounts are in USD. It assumes one energy rate for supply, one usage-based delivery rate, a fixed customer charge, and no tiers, time-of-use pricing, demand charges, taxes, or credits.

Input	Illustrative value
Billing period	30 days
Billed energy	750 kWh
Supply rate	USD 0.100/kWh
Usage-based delivery rate	USD 0.060/kWh
Fixed customer charge	USD 15.00

Calculate each charge separately:

[
\text{Supply}=750\times0.100=\text{USD }75.00
]

[
\text{Usage-based delivery}=750\times0.060=\text{USD }45.00
]

[
\text{Current electric charges}
=
75.00+45.00+15.00
=
\text{USD }135.00
]

The combined variable energy rate is:

[
0.100+0.060=\text{USD }0.160/\text{kWh}
]

The effective price for this period, including the fixed charge, is:

[
\frac{\text{USD }135.00}{750\ \text{kWh}}
=
\text{USD }0.180/\text{kWh}
]

These two prices answer different questions. USD 0.160/kWh is the variable rate under the example’s assumptions. USD 0.180/kWh spreads the entire current-period charge across the electricity used.

Now suppose the account also shows a previous unpaid balance of USD 40.00 and a payment received of USD 25.00:

[
\text{Amount due}
=
40.00-25.00+135.00
=
\text{USD }150.00
]

Dividing USD 150.00 by 750 kWh would produce USD 0.200/kWh, but that would incorrectly include USD 15.00 of remaining prior-period debt in this period’s electricity price.

Apply the Right Method to Your Rate Plan

Single-Rate, Tiered, and Time-of-Use Energy Charges

The calculation must follow the way your plan assigns prices to usage. PG&E distinguishes tiered plans from time-of-use plans and explains that time-of-use prices depend on when electricity is consumed.

Rate structure	Calculation method	Important check
Single energy rate for the period	Total kWh × applicable rate	Determine whether the rate covers supply, delivery, or both
Tiered pricing	Add the charge for the kWh allocated to each tier	Check tier allowances and the quantity billed within each tier
Time-of-use pricing	Add the charge for the kWh in each time period	Match usage to the plan’s hours, season, and day classifications

For a hypothetical U.S. time-of-use example, assume the following energy prices include supply and usage-based delivery but exclude fixed charges and taxes:

• Peak usage: 200 kWh at USD 0.300/kWh.
• Off-peak usage: 550 kWh at USD 0.120/kWh.

Then:

[
\text{Energy charges}
=
(200\times0.300)+(550\times0.120)
]

[
=\text{USD }60.00+\text{USD }66.00
=\text{USD }126.00
]

Total usage is still 750 kWh, but the cost depends on its timing. Applying the off-peak price to all 750 kWh would not reproduce this bill.

Use your actual plan’s time windows. PG&E and Con Edison describe different time-of-use arrangements; one utility’s peak hours are not a universal billing rule.

Demand Charges on Applicable Accounts

A demand charge is separate from the charge for total energy. PG&E describes demand billing on many nonresidential rates using the highest demand during a defined interval, with 15-minute and sometimes 5-minute intervals in its billing glossary. Those intervals should not be assumed to apply to another utility’s plan.

For a hypothetical U.S. commercial account, assume:

• Billed demand: 20 kW.
• Demand rate: USD 12.00/kW.
• One demand-charge component.

[
\text{Demand charge}
=
20\ \text{kW}\times\text{USD }12.00/\text{kW}
=
\text{USD }240.00
]

This calculation verifies the multiplication only. To verify the billed 20 kW, you need the applicable demand definition and meter data. Do not substitute monthly kWh, an equipment nameplate rating, or a service-panel rating for billed demand.

Compare Bills Without Misreading the Difference

Normalize Usage by Billing Days

Start with:

[
\text{Average daily usage}
=
\frac{\text{Billed kWh}}{\text{Billing days}}
]

Consider two illustrative periods:

Period	Usage	Billing days	Average daily usage
Earlier bill	750 kWh	30	25 kWh/day
Later bill	825 kWh	33	25 kWh/day

The later bill contains 10% more energy, but daily usage is unchanged. The longer billing period explains the difference in total kWh.

Daily usage still needs context. Weather, operating hours, and changes in equipment use can affect consumption; Con Edison’s sample bill includes average daily usage graphs with a temperature overlay to help show seasonal changes.

Use an Effective Price for Comparison, Not as a Universal Savings Rate

For an account with positive billed electricity consumption:

[
\text{Effective electricity price}
=
\frac{\text{Current-period electric charges}}{\text{Billed kWh}}
]

Keep the numerator consistent between periods. Do not mix electric charges with gas charges or include prior balances on one bill but not the other. PG&E reports total electric charges separately, including applicable credits and taxes.

The resulting figure describes the period’s cost per kWh. It does not necessarily describe what one additional kWh costs or what removing one kWh would save. Fixed charges do not disappear simply because consumption falls, and time-of-use prices depend on when usage changes.

Treat National Averages as Benchmarks, Not Billing Rates

The EIA Electric Sales, Revenue, and Average Price tables provide average retail prices by customer sector and geography. If you use them for context, record the actual data year, location, and sector—residential, commercial, or industrial.

A national average is a starting reference, not a substitute for your local rate schedule. To audit your bill, use the rates applicable to your account and service dates rather than replacing them with an EIA average.

Recognize Payment Plans and Solar Credits

Budget billing changes how payments are spread through the year. Con Edison describes it as estimating annual energy use and distributing the cost across monthly payments, with reviews and potential adjustments. The payment amount alone therefore is not the same as the current period’s electricity cost.

Solar accounts require separate attention to electricity imported from the grid, electricity exported, and credits. Under PG&E’s Solar Billing Plan in California, export credits vary by timing, and credits do not apply to every charge category. These are plan-specific rules, not assumptions to apply to every solar customer.

When reviewing a solar bill, use the billed import quantities and the plan’s credit calculations. Do not treat exported kWh as automatically canceling imported kWh at the same price.

Final Bill-Checking Checklist

• The service address, meter identifier, and rate plan match the account.
• The billing dates and number of days are recorded.
• The reading is identified as actual or estimated.
• The usage calculation includes any applicable meter factor.
• Tier or time-of-use quantities match the categories used for billing.
• Supply and delivery charges have been checked separately.
• Any demand charge uses billed kW and the applicable demand rules.
• Fixed charges, taxes, adjustments, and credits are included correctly.
• Current electric charges are separated from previous balances and other services.
• Bill comparisons use consistent cost categories and account for billing-period length.

If a difference remains, identify the exact line item and the calculation you expected. Use your utility’s official bill guide for field definitions and its applicable tariff for pricing rules. For example, Con Edison’s rate and tariff guide explains the role of formal tariffs, while PG&E’s bill guide maps the account, usage, and charge sections of its statements.

Provide the utility or supplier with the billing dates, reading status, disputed quantity, rate, and your arithmetic. That gives the billing representative a specific discrepancy to investigate instead of only a higher total to explain.