How to Calculate Electric Utility Bills

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Electric power charges are based on units of usage called kilowatt hours. These units register on a meter attached to the outside of your home or place of business. Meters show power usage with a series of dials, or with a simple digital readout. Your electric bill shows figures from the meter that represent the usage over a period of time such as a month, or a quarter. Taxes and service charges are additional fees customers pay on power bills.

  • Read the figures listed on your electric bill that show meter readings. One will show a reading for the present billing cycle and another shows the reading for the previous cycle. The previous reading will be subtracted from the current one to show power usage during the billing cycle.

  • Check the charges on your bill to see if the company uses tiered billing, or lists several different charges for each kilowatt hour. Tiered billing lists different rates for power used based on the amount a customer consumes. The first 200 kilowatt hours or so cost less than the next 500 on a tiered bill. Multiply the cost of a kilowatt hour by the number used. Add the tiers or various separate costs, if necessary, to arrive at a cost for total usage.

  • Add the utility company connection charge, or customer service fee that is commonly attached to power bills. These fees are typically less than $20 per billing cycle.

  • Add the power usage fees to the service charge and multiply that figure by the local utility tax rate. Your power bill will show the percentage used to figure the tax. Multiply your total cost by the tax percentage figure to see the taxes. Add the taxes to your usage and service charges to arrive at a total figure for your electric bill.

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