You may enjoy receiving a monthly power bill if you are a business owner, homeowner, or even an apartment renter. And, if you’re like most people, you probably don’t give the itemized costs a second thought, instead scanning the total, paying it, and moving on with your life.
Give your electric bill a comprehensive examination the next time you receive it. You’ll see a breakdown of the various charges that make up your overall energy bill. Are you unsure of what you’re looking at or what you’re being charged for? You’re not the only one who feels this way. Let’s take a look at your electric statement and figure out what all those line items and charges imply.
Electricity is measured in kilowatt-hours (kWh), and most costs are computed using a rate per kWh that varies depending on the type of organization that consumes the energy (i.e. residential versus commercial). You can go to your utility company’s website to learn the rate that applies to your bill (we found National Grid, Eversource, and Unitil rates for you).
The two sections of a typical electric bill are delivery and supply. The delivery rate is the fixed cost imposed by the utility to cover the expense of transporting electricity from the generator to the consumer. Power lines, natural gas pipes, transformers, and other physical equipment are all part of this.
The total delivery charge is made up of numerous itemized charges, as shown in the portion of the commercial electric bill below.
- Customer Charge: a set fee charged by a utility to assist recoup fixed costs associated with serving a customer, such as meter reading, billing, and administration.
- The cost of transporting generated energy from its source to the point where it is consumed is known as the distribution energy charge. Consider it the cost of transferring electricity from the utility’s electrical substation to your residence via power lines. This fee is tiered dependent on the amount of electricity utilized per meter. The bill owner was charged three different rates for the distribution of electricity utilized in the example above.
- Transition Charge: a fee that allows the utility to recoup costs connected with complying with the state’s legal requirements for the sale of its power plants.
- The cost of delivering electricity from power plants (natural gas, coal, or nuclear) to the utility’s electric substations and the start of the utility’s distribution system is known as the transmission charge.
- Energy Conservation Charge: a fee levied by the state to help support energy conservation measures implemented by the state and utilities. One of the most important projects supported by this charge is MassSave.
- Renewable Energy Charge: a fee levied by the state to help fund renewable energy initiatives. (As a side note, this is the portion of the cost that the Utilities are incorrectly labeling as excessive to ratepayersit amounts to less than $1 per month on average on your electricity bill.)
- Only commercial and industrial enterprises who pay time-of-use rates or have specific bill sizes are subject to the Distribution Demand Charge. It’s calculated using the greatest 15-minute average usage reported by a utility meter during a billing period. The higher your demand charge is during peak periods, the more electricity you want. Demand charges can account for up to 70% of a company’s electric bill.
Supply charges, on the other hand, are variable costs that are determined by the amount of electricity consumed. A little-known truth is that, thanks to the Massachusetts Electric Industry Restructuring Act of 1997, consumers in Massachusetts can really choose their power-generating business ” (“Restructuring Act). Consumers can opt to buy their power from a competitive supplier or receive generation from their distribution business under the Restructuring Act (utility). Regardless of the competitive supplier, power is distributed through the utility in both cases.
The customer has opted to source power from Hudson Energy Services in New York, while Eversource meters and delivers the generated electricity, as shown in the example bill above. If you don’t pick a power generator, you’ll be enrolled in the default option “The utility provides a basic service.
Your entire electric bill is made up of delivery and supply charges added together. When you total everything up, those fractions of pennies can add up to a significant amount, especially during the cooler months when energy is more expensive to produce. There is another option for people who do not wish to be exposed to these electricity costs. Return to the blog next week to discover more about the advantages of solar power and how it can lower your electric cost.
What are distributed charges, and how do they work?
These are the fees charged by your local utility provider for delivering power or gas to your home.
These fees are in addition to the cost of electricity or natural gas generation. Regardless of which retail company you choose as your electric or natural gas generation source, your utility company will collect these costs.
What is the distribution fee on my energy bill from Consumers?
- System Access: A one-time fee that covers invoicing and metering.
- Distribution: A cost that is varied according on how much electricity you use. This comprises the cost of delivering power from the transmission system to your business, as well as the equipment, maintenance, and operational costs.
- Energy Optimization: A monthly per meter surcharge is added to fund Energy Efficiency programs as part of Michigan’s energy legislation. By reducing energy consumption, these programs help to prevent costly investments in new energy sources.
- Other fees: These may vary depending on the kind of your business and how much energy you consume.
What does PG&E charge for distribution?
The phrases and explanations listed here are significant terms that may appear on your PG&E energy statement and will help you better understand your energy usage.
Climate Zones, or “baseline regions,” are used to divide PG&E’s service territory. The California Public Utilities Commission (CPUC) uses the average amount of energy utilized by consumers within each baseline territory to determine how much energy is billed at Tier 1 gas and electric prices.
Customers who purchase both energy distribution and energy generating from PG&E are referred to as bundled service customers. Customers that buy electricity from a third-party Energy Service Provider and pay PG&E for transmission and distribution fees are not affected.
Legacy energy contracts signed prior to 1998 that are in excess of a California Public Utilities Commission-approved market price baseline are subject to competition transition costs (CTC).
A demand fee based on the capacity rating of the pumps connected to the meter is known as a connected load charge.
A component of your electric bills that reflects tiered residential pricing is called a conservation incentive adjustment. Customers who use energy predominantly in Tiers 1 and 2 get a credit, while those who use energy in Tiers 3 and 4 get a charge.
Customers on some rate plans are charged a fixed fee for service, regardless of how much energy is spent, as well as usage-based charges.
A demand charge is included in many non-residential tariffs. During a monthly billing cycle, demand is defined as the maximum amount of electricity used in a single fifteen (or sometimes five) minute period. Kilowatts are used to measure demand (or kW). High demand is frequently related with the start-up of new equipment. You may be able to lessen demand and cut demand charges by spreading equipment start-ups across a longer period of time.
The lower-voltage system of electricity lines, poles, substations, and transformers directly connecting PG&E’s distribution lines to homes and businesses is known as the distribution charge.
DWR power charge: Recovers the cost of bonds issued by the California Department of Water Resources (DWR) to buy power for electric users during the state’s energy crisis. PG&E does not own DWR bond charges, which are collected on their behalf.
PG&E collects an energy commission levy based on electric usage during a billing period to finance the California Energy Commission.
Energy cost recovery amount (ECRA): These charges are established by law to help decrease the costs of PG&E’s bankruptcy reorganization. The Dedicated Rate Component is one of these fees (DRC). The right to receive DRC revenues was sold to PG&E Energy Recovery Funding LLC, a special purpose corporation, and PG&E is collecting this fee on behalf of PG&E Recovery Funding LLC. PG&E is not responsible for this charge.
This surcharge compensates towns and counties for the privilege to deliver utility services on public streets. The surcharges are collected by PG&E and distributed to cities and counties. This tax (if applicable) is calculated as a percentage of your energy bill.
The cost of buying natural gas and transporting it to the utility’s local transmission system is known as the gas core procurement cost. On the first business day of each month, the pricing usually changes.
The expense of producing electricity to power your home or business is referred to as generation charges.
Meter charge: Some time-of-use electric prices include a meter charge to offset the increased equipment costs associated with delivering this type of service.
A factor that converts electric meter read variations to kilowatt hours is known as the meter constant (kWh).
A multiplier is a factor that transforms the difference in gas meter reads to therms. The multiplier compensates for variations in elevation, supply pressure, and natural gas heating content.
Nuclear decommissioning: A price charged to rehabilitate nuclear power plant sites to as close to their former state as feasible after they have been decommissioned.
Programs that are regarded by legislation to benefit society, such as low-income ratepayer aid and energy efficiency, are funded through public purpose programs.
This number specifies the order in which your electricity will be interrupted in the case of a power loss that causes the California Independent System Operator to determine that rotating outages are necessary.
When a meter is read for billing, the serial code defines when it is read. Visit Find out when your meter readings are due.
Solar Choice Program: Solar Choice is a program that allows bundled consumers to purchase solar energy to match 50 percent or 100 percent of their energy demand without having to install solar panels on their own property. Visit our Community Renewables page for additional information, and check out the current pricing here (PDF, 400 KB).
Customers on a time-of-use electric rate plan pay higher prices for energy on weekday afternoons and reduced rates at other times, rather than a single flat fee for energy use. Seasonal pricing varies as well, with higher summer costs and lower winter ones. This means that how much energy you consume is just as crucial as when you spend it.
Transmission: The expense of moving electricity from power plants to distribution systems via high-voltage lines and towers.
Utility Users Tax (UUT): This is a tax that we collect on behalf of a city or county government. The tax (if there is one) is calculated as a percentage of your energy costs.
Charge to pay the California Wildfire Fund on behalf of the State of California’s Department of Water Resources (DWR). This payment covered costs connected to the 2001 California energy crisis, which were also collected on behalf of the DWR, for use prior to October 1, 2020. DWR, not PG&E, is responsible for these fees.
Wildfire Hardening Charge: PG&E has been given permission to issue bonds that will allow it to recover certain costs associated with preventing and mitigating catastrophic wildfires more rapidly, while also lowering the total cost to its customers. The CPUC has established a fixed recovery charge called the Wildfire Hardening Charge that is included on your electric bill to repay those bonds. The right to collect the Wildfire Hardening Charge has been transferred to a separate business (known as the Special Purpose Entity) that issued the bonds and is not affiliated with PG&E. The Wildfire Hardening Charge is being collected on behalf of the Special Purpose Entity by PG&E.
How can I save money on my energy cost as a consumer?
15 Ways to Save Money on Energy
- Seals on windows, doors, and appliances should all be checked.
- Repair any leaking ducting.
- Make a small adjustment to your thermostat.
- Adjust the temperature of your refrigerator and freezer.
- Showers should be shorter.
- Replace the showerhead on your shower.
- Do not use hot water to wash your items.
- Fix dripping faucets.
What different methods of charge distribution are there?
DISTRIBUTIONS OF CHARGES
- DISTRIBUTIONS OF CHARGES. Charge distributions can be divided into three categories:
- a) Charge Distribution in a Linear Form. The charge is distributed uniformly along a straight line or the perimeter of a circle in this distribution.
- b) Charge Distribution on the Surface.
- d) Charge Distribution by Volume.
- Charge per point:
What are the different forms of charge distributions?
Coulomb’s force law is generalized to account for all four types of charge distribution (volume, surface, linear, and point):
What’s the deal with my predicted electric bill being so high?
Your energy cost is more than you anticipated for a variety of reasons. These could include a bill that is based on estimated rather than real energy usage, insufficient insulation, a cold spell, having recently moved into a new home, and many others.
What is the source of my excessive heating bill?
Your home could be losing warm air through cracks and other spaces, which is one of the numerous reasons your heating expense is higher than planned. High heating expenditures are primarily caused by these regions of the house.
The simplest and least expensive approach to cut your gas and electric bills throughout the winter is to install simple weather stripping around your windows and doors.
It’s a good idea to replace the weather stripping around your doors and windows with fresh weatherstripping sealer if it’s starting to break apart.
It’s remarkable how much heat may escape via the tiny spaces surrounding your windows and doors, which is why you should inspect the trim around the exterior of your doors and windows.
