Understanding your electricity bill is the first step to taking control of your electric costs. Most people receive their monthly bill and look no further than the amount due. They could be missing out on valuable savings by ignoring the information they need to develop an understanding of their electricity rates, how their usage works with their rate, and where they could take simple actions to lower their bill. With a little more focus, consumers like you can both see why a bill is fluctuating and make smarter decisions on how and when to use electricity.
The Importance Of Understanding Your Electricity Bill
Your electricity bill does much more than just tell you how much you owe. It contains information about your electric provider, your plan, and how you’re using that plan. Knowing where to find this information on your bill and how to use it. Your electric bill should be your first stop in case of power emergency, outage, or if your monthly charges suddenly increase.
What Do Rates Have To Do With It?
Rates are one part of what determines how much your monthly utility bill will be. Understanding your electricity bill relies on determining what goes into calculating your charges. As a Texas electricity customer, you will generally see two types of rates: your TDU delivery charges and your energy charge.
- TDU Delivery Charges – These charges are from the transmission and distribution utility–the company who owns the powerlines that deliver electricity to your area. This charge covers the upkeep and maintenance of power lines, transformers, and other electrical grid infrastructure. It will usually either be assessed on a per kilowatt-hour (kWh) or per month basis.
- Energy Charge – This is the amount you are charged by your electricity supplier for the electricity you use in your home. It is the rate you often see advertised for plans when starting or switching electricity, and it is assessed per kilowatt hour and can fluctuate based on your contract with your electric company.
Other Charges On Your Bill
As you’re developing an understanding of your electricity bill, there are some additional factors to consider. While these are usually unrelated to your usage, it’s important to see how they contribute to your monthly expenses.
- Base Or Account Charge – This fee is what your energy supplier charges to help cover account maintenance and servicing. This is usually charged at a flat rate per day or month.
- State, County, Or City Mandated Charges And Fees – Some government agencies require a set fee or percentage be added to your bill, often for civic improvements or upkeep.
Donations – Many electric companies allow you to contribute through extra payments to assist the needy in paying their electric bills. If you have volunteered a set amount per bill cycle, it may show up printed on your bill as a “charge”.
Why Your Bill Fluctuates
There are several factors that could cause fluctuation to your electricity bill. Understanding them is the first step to potentially saving more on your next bill. These are a few of the most common:
- Rates – Now that you have an understanding of electricity rates and how they contribute to the bill, you can easily spot which of these fees or rates is causing your electric bill to fluctuate. Usually, the primary culprit will be your energy charge. This energy charge is created by multiplying your per kWh rate by the number of kWh used per your electric meter. For example, if your energy charge is 10 cents per kWh and you used 1000 kWh, it would look like this:
$0.10/kWh X 1000 kWh = $100.00
Your $100.00 energy charge would be added to the base fee, TDU charge, and any other mandated or voluntary charges to create your amount owed for the billing cycle. As you can see, if the rate changes your energy charge will change. Many electric plans will lock in a rate for a given time period, usually 6, 9, 12, 24, or 36 months. Once the contract ends, you may end up with a different rate.
- Structure – Your plans rate structure can be another factor. Some plans, rather than a set per kWh rate, will have different rates triggered by different conditions, such as a plan that offers discounted nights. Under such a plan, electricity used at night is cheaper than energy used during the day. If your schedule changed, and you found yourself at home using more energy during the day that had previously been used at night, you would see an increase in your bill.
- Seasonal Usage – Often when there is a jump in energy usage, understanding your electricity bill can help you spot why the change is occurring. One of the primary reasons this can happen in Texas is seasonal. Once summer rolls around, the air conditioner works harder and uses more power. Your bill may show an average monthly usage for your residence that helps you anticipate cyclical trends such as more air conditioning in the summer and more energy used for heating in the winter.
- New Energy Users – While getting a different phone may not be enough to cause a noticeable difference in your electric bill, other plug-in appliances and devices may. Replacing older energy hogs like refrigerators, air conditioning systems, or electric ovens with newer, energy-efficient models create lower bills for a few months before settling into a new “normal”. Other additions, like a plug-in electric vehicle, could lead to fluctuations that make your bill higher.
Using Your Bill To Compare Rates
Understanding your electricity bill can help you look for a better plan based on your actual energy use. When comparing plans, you’ll want to look at your current energy charge rate versus your potential new plan’s energy charge rates. Remember to check for plan-structure changes, like discounted nights or weekends, and make sure you’re out of contract with your current plan, or you could be assessed a cancellation penalty in the hundreds of dollars.
Other Information On The Bill
Aside from the financial information on your bill, you should also see important information like your service address, meter number, account number, and your electric company’s customer service number. These will help if you need to reach out for assistance, report an emergency, discuss your bill, or access your account online.
Compare And Save
Understanding your electricity bill and rates is your first step to savings. We make it easy to compare plans from top Texas electricity providers side-by-side. Call us today at 1-214-446-2210 or compare rates online to find your new low-cost electricity plan.