Guide · Updated November 2026 · Data: EIA Form 861 2025 and EIA-861M
How to Read Your Electric Bill: Every Charge Explained
Electric bills look complicated because they are unbundling several different businesses - generating power, moving it across the state, delivering it down your street, and metering and billing you - into one statement. Here are the lines you will actually see, and what each pays for.
The fixed part
- Customer (or service) charge: a flat monthly fee, typically $5-$20 for residential customers, covering the meter, the service drop to your home, billing and customer service. You pay it even at zero usage - which is why a vacation home's bill never quite reaches $0.
- Minimum bill: some utilities guarantee a floor amount instead of, or on top of, a customer charge.
The usage part
- Energy charge (per kWh): the core price of the electricity itself. It may be flat, tiered (cheaper or pricier blocks as usage rises), seasonal, or time-of-use - different prices at peak and off-peak hours for customers on those tariffs or with smart meters.
- Demand charge (per kW): standard on commercial bills, rare but growing on residential ones. It prices your highest short burst of usage in the month, because the grid must be built for peaks, not averages.
- Fuel adjustment (fuel cost recovery): a per-kWh rider that passes the utility's actual fuel and purchased-power costs through to customers, trued up monthly or quarterly. When natural gas prices spike, this line - not the base rate - is what moves your bill.
The riders and fees
- Transmission and distribution riders: recovery of specific grid projects approved by regulators, often itemized separately from base rates.
- Renewable, efficiency and public-benefit charges: state-mandated program funding, usually a fraction of a cent per kWh.
- Storm recovery: in hurricane and wildfire states, securitized charges repaying bonds issued for storm restoration or fire mitigation - these can run for years.
- Taxes and franchise fees: state and local taxes, and fees your city charges the utility for using public rights-of-way, passed through on the bill.
Delivery-only and energy-only lines
In restructured states you may see the bill split between a delivery company (the wires utility, which always serves you) and an energy supplier you chose. EIA data treats these as separate reports, and this site keeps delivery-only figures separate so the same electricity is never counted twice.
Sanity-check your bill
Divide your total by the kWh you used. That effective per-kWh price should land near your utility's average realized rate on its profile page - a bit higher if your usage is low (the fixed charge spreads over fewer kWh), a bit lower if it is high. If it is wildly higher, check for demand charges, a fuel-adjustment spike, or an estimated read. For the math behind the averages on this site, see average realized rate vs tariff rate.
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