Understanding Your Electric Bill

Understanding your electric bill is another important step in being a better-informed customer. The price a customer pays for electricity varies between utility companies, but all bills have a similar breakdown of charges:

1. Service Charge

This is a basic charge from utility companies to cover costs of the meter, the billing logistics, and the basic maintenance of the utility equipment.

2. Primary Energy Cost

This charge pays for the fuel, such as natural gas or coal that is used at generation facilities, which produce the electricity.

3. Amount of Electricity Used

This is the amount in kilowatt hours of electricity used over the billing time. The cost is often built into a table that sets the price per kilowatt-hour based on the total electricity used in a month. Depending on your class of service, the time of year, and your usage, your utility company may charge on different billing tiers. For questions on your specific billing tier, contact your utility company.

4. Taxes

Taxes are set by the state in a percentage of the total cost of your bill.

5. Regional Transmission Service (not all bills will have this charge)

This may be included on the bill, and is the charge for moving electricity on transmission lines that are not owned by the utility company. This charge depends on your utility company’s agreements with transmission companies.

The pricing structure and rate tables for determining an electric bill is written in a tariff document. When residential, business, or industrial rates increase or decrease, they are noted in the tariffs.

Still interested in learning more about the electric utilities? Here is another opportunity to learn about the , in PDF form, from the Sierra Club Iowa Chapter .