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Understanding Your Energy Bill

Understanding Your Energy Bill

The national average cost for electricity is 12 cents per kWh. The average American household uses 908 kWh.

But what does that even mean? Many homeowners aren’t sure what their energy bill is telling them.

It’s essential to understand the information presented, however. Mistakes do happen sometimes, and understanding your bill can help you catch them. Continue reading to learn more.

Why Is it Important to Understand Your Energy Bill?

Energy companies strive their hardest to bill you accurately, but sometimes mistakes happen. An error might occur because of an inaccurate meter reading. This might cause you to pay more or less than you’re supposed to.

Paying too much for your energy bills could stretch your budget too thin. Everyone has times when their electric or gas usage is a little higher. Having this rise unexpectedly (and inaccurately) is another matter.

Paying too little for your energy bill is also a problem. It could place you in energy debt unnecessarily.

By understanding your energy bill, you can check it for anything that seems out of the ordinary. If you find your statement appears too high or too low, you can contact your energy supplier to discuss it.

The different sections of your bill are discussed below. The most important things to understand are your rate and charges.


The rate represents how much you’re charged per energy unit. The way this is measured with natural gas can vary. Electricity is measured in kilowatt-hours, which is described as kWh on your bill.

This rate might vary based on two things. First, you’ll need to consider who your provider is. You may be using your local electricity company or an alternative supplier.

You should also understand whether your rate is fixed or variable. A fixed-rate will stay the same for a specific number of billing cycles. A variable-rate will rise and fall based on the current energy market.

Supply Charges

Supply charges are one of two you will usually see on your utility bill. This specific charge tells you the costs of utilities you’ve received since your last statement. The amount charged will be based on your current rate times how much energy you used.

Utility Charges

This is the second charge you’ll usually find on your bill. Utility charges represent a part of the costs of supplying energy to your local area. Even when you work with an alternative provider, your local energy company will likely set these amounts.

There are a lot of costs that go into providing your community energy. The prices of utility poles, employees, and more go into delivering your electricity.

Other Information Found on Your Energy Bill

Other information you can find on your energy bill includes your name, address, and account number. You can usually see a chart of your electric usage over the past few months. You might also see information on previous charges and your utility provider.

Do You Still Have Questions About Your Energy Bill?

Understanding your home energy bill can help you monitor it regularly for any strange changes. If unusual changes are found, then you can contact your service provider.

Do you still have questions about your energy bill?

Check out our other blog posts. You’ll find a wealth of information on related topics.

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