Introduction
We’ve all been there. You wake up, look at your energy bill, and wonder how it got so high. It’s not the first time you’ve looked at that bill and wondered how much you’re spending on electricity or natural gas per kilowatt-hour (kWh). I also want to know this because when I was growing up, my dad would always tell me not to waste electricity by leaving lights on when I wasn’t using them—and now that I’m all grown up with my own bills and responsibilities (including paying for those lights), it’s important that I understand what’s going into them!
How to read your energy bill
The total amount due is the sum of all your other line items. It’s what you pay to your utility company, and it can be quite confusing for customers who aren’t familiar with how energy charges work. The amount due is the sum of all your line items, which include:
– The usage charge (how much electricity or natural gas you use)
– Distribution Charges (The pass-through costs it takes to deliver the energy through power lines)
– A fixed fee for service (this is a recurring cost that varies by company, but it’s usually around $10 per month)
– Tax and other surcharges (these could be anywhere from 2% to 20% of your total bill).
Taxes and Surcharges
You may have noticed that your electric bill has a few extra charges on it. This is because energy companies are allowed to tack on taxes and surcharges to their customers’ bills, which they do in order to make up for government regulations that require them to spend money on things like renewable energy programs or infrastructure repairs.
The first thing you need to know about taxes and surcharges: They’re not the same thing! A tax is a fee levied by legislators (for example, state or federal lawmakers), whereas a surcharge comes from the company itself–in other words, it’s an extra fee added onto your bill. While both types of fees can be found on electricity bills across America, only some states allow utility companies to include both taxes and surcharges in their final price tags for customers; others ban one or both types of charges outright.
In addition: Taxes differ depending on where you live; some states have different rates depending upon how much power each household uses per month (for example). In contrast with taxes which affect all homeowners equally regardless of income bracket , these additional charges vary widely depending upon where exactly they’re situated along their respective power grids’ transmission lines – so while some regions might experience higher prices due solely towards location alone without any other factors affecting cost such as usage habits etcetera involved whatsoever, others may only see small fluctuations based entirely upon geography alone!
Distribution Charges
You might not be aware of it, but there is a charge for delivering electricity to your home. It’s called the distribution charge, and it’s typically charged per kilowatt-hour (kWh). The exact price varies from utility company to utility company, but generally speaking it’s higher in rural areas where the cost of maintaining lines is higher than in urban ones.
Price Per Kilowatt-hour
How much you pay per kilowatt-hour is the most important number to know when comparing energy prices. It’s also the easiest one for companies to manipulate, so watch out for this trick:
The “lowest rate” and “most affordable” plans may not be what they seem. They might look like they have low rates, but those rates include a monthly fee that can add up over time. If you see an advertised rate of 9 cents per kWh but then discover it includes a $15 monthly fee, that’s really more like 13 cents per kWh–and probably not what you want in terms of affordability!
Peak Hours vs. Non-Peak Hours
Electricity rates can vary depending on the time of day. For example, if you’re using a lot of electricity during peak hours, you’ll pay more than if you used the same amount at non-peak hours. That’s because utilities have to purchase additional power from other companies to meet demand during these times. If you have a smart meter, your utility may offer time-of-use rates that vary depending on the time of day. If you can shift some of your electricity usages to non-peak hours (for example, by running appliances at night), you might be able to save money on your bill.
The all-in blended cost, how to calculate your energy bill.
The all-in blended cost is the total price you pay for electricity each month. It’s calculated by adding together all of your energy charges, including the kWh charge and any fees or taxes and then dividing that by kw/h hours used. The most common way to figure out your blended rate is by using a calculator on your utility company’s website or by looking at your bill. This tells you how much money you’ll pay for each unit of electricity (kilowatt-hour). If you have a variable rate, your monthly bill will likely vary depending on how much power you use. For example, if you use 1,000 kWh one month and 500 kWh the next month, your blended rate will be higher in the first month than in the second.
Conclusion
We hope this article has been helpful in understanding how energy companies mislead their customers. Power Companies such as Idaho Power in Idaho tout that they have amongst the lowest price per kw/h for electricity in the nation. However, after you add up the multitude of line item charges, you’ll be shocked to see how much you are actually paying (our research shows an average of 13 cents per kw/h). While that price is in the middle of the pack when compared to all 50 states, it’s not all as low as they advertise. This practice is done by several utility companies nationwide, but we found Idaho Powers advertised sticker price per kw/h to be furthest from the true cost after all additional fees were added up. You can find their incredibly complicated calculator here https://www.idahopower.com/accounts-service/understand-your-bill/pricing/idaho-pricing/for-your-home/.
We encourage you to do your own research on how much you pay for electricity and make sure that the prices listed on your bill match up with those advertised by other providers. In addition, don’t be afraid to ask questions when dealing with an energy company – they should be happy to answer any concerns or inquiries that arise during the process of switching providers! (That is if you aren’t in a monopoly with only 1 option).
