Knowing how to read an electric bill helps you assess consumption patterns, manage your energy budget, and spot accounting errors. Too often, homeowners don’t understand the fees they’re being charged or how to track their power usage month-to-month. In this blog, we’ll break down your electric bill in order to help you stay informed, save money, and use energy wisely.
Understanding Energy Usage
Electricity is charged based on kilowatt hours (kWh), the amount of energy required to run a thousand watt appliance for 60 minutes. Because each device in your home has a different power rating, running them for an hour doesn’t necessarily consume one kWh. A 2,000 watt air conditioner uses one kWh every thirty minutes, while a 10-watt lightbulb uses one kWh every 100 hours.
Some power companies also adjust their rates according to time of day. They charge more during periods of high demand (“peak hours”) and less during periods of low demand (“off-peak hours”). Some even include a third category (“super off-peak”) for periods when consumption is especially low. If your company has peak and off-peak hours, the times will be noted on your bill.
Identifying the Basics
Your bill is arranged in several sections, each one containing pertinent information regarding your account, habits, and energy costs. Starting at the top and working down, you’ll see:
- Account Information. Your name, unique identification number, and current use period (e.g. September 1-30) will be listed at the top of the page, as well as the service location ‒ either your home or business address.
- Meter Readings. The first number is the reading at the start of your billing period, while the second is the reading at the end. You’ll find the difference between them listed below – the amount of power you’ve consumed over the past 30 days. This section also contains your meter number.
- Charges Breakdown. Electric bills list all your charges on their own separate lines. Besides the power charge (kWh x rate), there are also delivery fees (the cost of distributing power to your home) and taxes. If you’ve accrued other charges, such as late payment fees, service fees, or adjustments, they’ll be included as well.
- Rate Plan. Reminds you whether your electric rates are fixed or variable. Fixed rates lock in prices for the duration of your contract, while variable rates fluctuate according to demand.
- Total Amount Due. Normally bolded to make it easier to read, this is the sum of all your monthly charges, minus any previous credits or payments. The due date is normally included alongside it for convenience.
- Graphs. To help you understand your energy consumption, some companies provide graphics showing how much electricity you’ve used in the current billing cycle compared to the previous one.
Check for Errors
Knowing how to read an electric bill helps you spot incorrect charges. While seasonal fluctuations are normal, sudden spikes may indicate a mistake. Before contacting your energy company, check your bill from the same time last year. Most households run their HVAC systems more often during summer and winter, so it’s possible the increase fits your usual pattern.
After making certain the increase is unusual, check whether you’re being charged the correct rate. Homeowners with variable rates can experience unexpected price hikes due to extreme weather or supply chain issues. Make sure the right meter number is recorded under the readings section as well. It’s rare, but sometimes customers are charged based on another person’s usage. In other cases, meters provide inaccurate readings, due to malfunction. It’s also possible the extra charges are an unpaid balance being carried over from last month’s invoice.
Finally, contact your energy company. If the meter number is incorrect, take a picture of your meter as proof it doesn’t match the bill. Have previous bills handy as well, to help support your case. If you can’t resolve the problem over the phone, request a meter test or contact your state’s public utilities commission for further assistance.
Watch Out for Unusual Patterns
Reading your energy bill can also help you catch waste and inefficiencies. If your lifestyle hasn’t changed, gradual increases often indicate that one of your appliances is reaching the end of its lifespan. Devices like furnaces and air conditioners gradually become less effective as they age. As their components wear down, they require more power to accomplish basic tasks ‒ a fact often reflected in your electric bill. If you’re seeing higher charges month after month, it may be time to replace the older systems in your home.
Electric bills also offer insight into your energy habits. Tracking costs tells you whether you’re running your house efficiently. In many cases, small changes could significantly lower power consumption. Whether it’s spring, summer, autumn, or winter ‒ there are a surprising number of ways to save throughout the year. Even small business owners can benefit from examining their routines!
Save on Energy-Related Repairs with Agway®
Knowing how to read an electric bill ensures you’re being charged fairly, but long-term protection provides even greater savings. That’s why every Agway® customer is automatically enrolled in our EnergyGuard program. Insurance policies don’t cover damage caused by wear and tear, but EnergyGuard does. Unexpected repairs can cost hundreds or even thousands of dollars. However, thanks to EnergyGuard, Agway customers have built in protection.
Our program protects your heating, cooling, and electrical systems.* When the need for repair occurs, our customers don’t have to waste time searching for a qualified repairman. They contact us instead. We reach out to our network of electricians and HVAC contractors and send the first available one straight to your door. There are no service fees or deductibles either. We pay for the visit and all covered parts. Don’t let a malfunction upset your finances. Sign up and start enjoying the benefits of EnergyGuard today!
*Systems covered depend on commodity purchased
