How Is an Electricity Bill Calculated?


Quick Answer

According to EPB Electric Power, an electricity bill is calculated by taking the total kilowatt hours, or kWh, consumed and multiplying it by the rate. The rate takes into consideration the fuel cost adjustment and residential electricity rate. The result is then added to the monthly flat charge that is uniformly applicable to all customers to get the monthly electricity charge.

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How Is an Electricity Bill Calculated?
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Full Answer

Reading an electricity meter around the same time the energy provider does, enhances the chances of working out an accurate estimate of a monthly power bill, notes EPB. A household that uses 550 kWh in a month and is charged a residential rate of $0.10 per kWh has a monthly energy bill of roughly $55, according to an example from HowStuffWorks.

It is also possible to get an estimate of how many kilowatt hours a household can consume in a month. Online calculators that rely on information a user supplies on appliances he is using, lights, heating systems and other factors can yield a cost in dollars or usage in kWh. As UKPower states, it is also possible to use price comparison tools that help determine how much a homeowner can save by making changes, including switching energy providers.

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