1) Energy charges (kWh)
Energy is what most people think of: how many kilowatt-hours (kWh) you consumed in the billing cycle multiplied by your rate per kWh. On some plans the rate is flat; on others it varies by time (TOU) or usage level (tiers).
Find “kWh used” and “rate” on your bill. If there are multiple lines—peak/off-peak or tier 1/tier 2—sum them.
Try it with our Monthly Bill Estimator—supports flat, tiered, and TOU.
2) Fixed fees & minimum bills
Utilities often charge a fixed monthly fee to cover metering, billing, and a share of infrastructure. Some also enforce a minimum bill—you pay at least that amount even if your energy charge is low.
- Customer charge: the base fee (e.g., $8–$30/month).
- Meter or service fee: sometimes broken out separately.
- Minimum bill: if your variable charges are tiny, the bill rounds up.
Even if you slash kWh with efficiency or solar, fixed fees and minimums limit how low your bill can go.
3) Demand charges (kW)
Demand is your highest average power draw (kW) over a short window (often 15–60 minutes) during the cycle. It charges you for how “peaky” your usage is, not just how much energy you used overall.
- Peak window: Highest 15/30/60-minute average.
- Rate: $/kW applied to that peak.
- Ratchet (some utilities): A percentage of last year’s max sets a floor on this month’s billed kW.
Use our Peak Load Analyzer to estimate running vs surge kW and see how staggering loads reduces peaks.
4) Time-of-Use (TOU)
TOU prices energy differently by time of day. Peak hours (late afternoon/early evening) cost the most; off-peak is cheaper. Some plans add a shoulder period in between.
- Peak: highest $/kWh, usually weekday late afternoons.
- Shoulder: medium price.
- Off-peak: lowest price, nights/weekends.
Run laundry, dishwashers, and EV charging off-peak. Even a small shift dents the average rate. Model it in the Bill Estimator (TOU mode).
5) Tiered rates
With tiers, the first block of usage (e.g., 0-500 kWh) costs one rate, and the next block costs more. This encourages conservation.
- Tier 1: baseline or essential usage, cheaper.
- Tier 2/3: higher usage, higher $/kWh.
Keeping your monthly kWh under the next threshold can cut the bill disproportionately.
6) Riders, fuel & adjustments
Bills often include extra line-items:
- Fuel or power cost adjustment: pass-through of fuel/market prices.
- Transmission & distribution riders: infrastructure recovery.
- Renewable rider / community programs: small adders or credits.
These may be cents/kWh or percentages. They change over time—watch recent bills for trends.
7) Taxes & municipal fees
Sales tax, franchise fees, and local surcharges apply on top of the subtotal (energy + fixed + demand + riders). Your Bill Estimator models taxes as a percentage of the pre-tax total.
8) Worked example
Suppose you used 750 kWh in a 30-day month on a tiered plan with:
- Tier 1: first 500 kWh @ $0.22
- Tier 2: remaining 250 kWh @ $0.34
- Fixed fee: $12/month
- Taxes & fees: 8%
- No demand charge
| Line | Amount |
|---|---|
| Energy (Tier 1) | $110.00 |
| Energy (Tier 2) | $85.00 |
| Fixed fee | $12.00 |
| Subtotal | $207.00 |
| Taxes (8%) | $16.56 |
| Total | $223.56 |
Effective rate ≈ $223.56 / 750 kWh = $0.298/kWh. Try your own numbers in the Bill Estimator.
9) Ways to lower grid costs
- Right-size your plan: If you have big evening peaks, a flat plan may beat TOU. If you can shift usage, TOU can win.
- Reduce peaks: Stagger large appliances to lower demand kW. See Peak Load Analyzer.
- Trim standby loads: Use Appliance Cost to spot 24/7 devices.
- Consider solar/battery: Solar reduces energy (kWh). A battery can shave peaks and shift usage off-peak.
- Seal, insulate, tune HVAC: Efficiency often beats rate-hunting.
Plug your actual rates into the Bill Estimator and compare scenarios—flat vs TOU, with and without solar or a small usage reduction.