How-to
Reading your electric bill, line by line
Find the kilowatt-hours you used on your electric bill, then sort the charges into what you pay per kilowatt-hour and what you pay every month regardless.
Satisfy+ Editorial · Published August 18, 2026 · 2 min read · 15 min to do
This is general education, not individual financial, investment or tax advice.
At a glance
- The unit
- Kilowatt-hours, or kWh
- Per kWh
- The energy you used, priced in cents
- Every month
- A fixed customer or meter charge, whatever you use
- Why it moves
- Usage first, then prices
Most customers are billed by the kilowatt-hour, usually at so many cents per kilowatt-hour. One kilowatt-hour is one kilowatt used for one hour, so a 40-watt bulb left on for five hours uses 0.2 kWh. In 2025, the average residential price in the United States was about 17.3 cents per kilowatt-hour, more than businesses and factories paid, because it costs more to deliver electricity to homes.
What you need
- Your latest electric bill, paper or online
- Last month's bill, to compare
Steps
- 1
Find the kilowatt-hours used
The usage for the billing period is shown in kWh, and the energy charge is based on it.
2 min
- 2
Find the generation or supply charge
The generation charge pays for producing the electricity. Generating electricity is the largest part of its price.
2 min
- 3
Find the transmission charge
Transmission charges pay for moving high-voltage electricity from the power plant to the local utility's lines.
2 min
- 4
Find the distribution or delivery charge
Distribution charges pay for the local wires, transformers, substations and other equipment that deliver electricity to your home.
2 min
- 5
Find the fixed monthly charge
A fixed charge, such as a customer fee, a metering fee or a meter-reading fee, depends on the number of meters or accounts, not on how much you use.
2 min
- 6
Find the taxes and riders
Each tax and rider is named on the bill. A rider is an adjustment to the rates for a specific purpose, and it may not appear every month. Many riders are figured from your kWh too.
2 min
- 7
Compare with last month
Note the kWh, the per-kWh charges and the fixed charge for both months, so you can see which one moved.
3 min
Read your electric bill
- Note the kilowatt-hours used on this month's electric bill
- List the fixed monthly charges on your electric bill
Why the total changes
Your usage drives the total, and the weather changes your usage. Prices are usually highest in summer, when demand is high and more expensive power plants are brought on to meet it. Fuel prices, especially for natural gas, also affect what electricity costs. So does the cost of building, maintaining and repairing the power plants and the lines, including repairs after storms.
An annotated example
FAQ
What is a kilowatt-hour on my electric bill?
It's the basic unit of electric energy most customers are billed for, usually in cents per kilowatt-hour.
Why is my electric bill higher in summer?
Electricity prices are usually highest in summer, when demand is high, and hot weather raises your usage too.
Sources
Checked October 20, 2026
- U.S. Energy Information Administration. Electricity explained, factors affecting electricity prices (2026)
- U.S. Energy Information Administration. Electricity explained, measuring electricity (2026)
- U.S. Department of Energy, Better Buildings. Understanding your utility bills: electricity (2021)
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