Learn How to Read Your Electricity Bill

Do you feel confused when you get your monthly electricity bill? You’re not alone in that experience — many consumers feel confused about what’s actually on their monthly power bill.

To help, the experts on the Choose Energy team created this detailed guide to examine a typical energy bill and answer your biggest questions.

Despite all those confusing terms and sections on your energy bill, your costs come down to three main components:

• Your energy rate
• Utility delivery fees
• Taxes

Using an example from nour partner Gexa Energy, let’s go over every part of your bill.

Section A: Your personal account details

This first section of your bill contains information about your electric account. Here you’ll find your:

• Account number: Your electric account has a unique number that you can use to locate your account online and pay your bill.
• Amount due: This is the current balance due.
• Due date: You must pay your bill by this date to avoid a late fee.

Section B: Account summary

The account summary section breaks down your energy charges. It will also provide your previous balance for comparison. Here are some terms included in this section:

• Open balance: The amount due from the previous billing cycle.
• Balance forward: If you have a remaining balance from last month, you’ll find that charge here.
• Electricity charges: This is the amount you owe based on how much energy you used for the current billing cycle.
• TDU charges and taxes: Your energy bill includes a charge from your utility company for delivering electricity. TDU stands for Transmission and Distribution Utility. This line also includes taxes to your local and state governments.
• Total amount due: This is your total balance, including all additional fees, due for the current month.

Section C: Electricity usage details

Your home or business has an electricity meter that records your energy usage, and your energy provider uses this information to calculate your bill. The most important part of this section is your total kilowatt-hour (kWh) usage. This number is multiplied by your electricity rate to determine how much you pay each month.

Sections D–F: Total charges and taxes

These sections list your delivery charges, taxes, and energy charges. Our example from Gexa Energy pertains to Texas local and state taxes.

• Billing period: The date range for this billing cycle.
• Energy charge: This section takes your kWh usage, displayed as units, and multiplies it by your electricity rate to get your energy charge.
• PUC assessment: The Public Utility Commission of Texas (PUCT) charges utility companies a fee to service each address. This fee is passed on to consumers on their bills.
• TDU charges: Your utility delivery charges are twofold: a base fee for the billing cycle, and a charge per kWh of energy consumed. Your Electricity Facts Label (EFL) outlines your exact utility delivery fees.
• Gross receipts tax reimbursement: Energy providers are charged a fee to operate in deregulated areas. Providers then charge consumers the gross receipts tax reimbursement to cover the cost.

Can I avoid TDU charges?

There’s no way to avoid paying TDU charges. Every customer’s utility company charges delivery fees, which help keep the power grid safe and reliable. These delivery fees are regulated to ensure fair pricing. TDU charges update on March 1 and September 1 each year.

Who do I contact with questions about my energy bill?

Contact your energy provider with questions about your bill or electric account. Your energy bill should contain ways to contact your provider and pay your bill.

How is my energy bill calculated?

Your energy bill has three main elements: your energy charge, utility delivery fees, and taxes—the sum of those three elements results in your total energy bill.

How do I pay my bill?

Most providers offer the ability to pay your bill online, by mail, or over the phone. Some may also offer in-person locations. The bottom of your electricity bill should include options to pay your balance. Check with your provider if you are unsure how to pay your energy bill.