Quick question, when was the last time you analyzed your electricity bill? The answer is probably close to never. Now what if I tell you that there’s probably been a time where you’ve been overcharged, would you start looking at it now?

Obviously you would, but what good would that be if you don’t know what you’re looking at? That’s what we’re here for. We’re going to breakdown the different parts of your electricity bill, plus we’ll take a look as to why signing up with Arcadia can ease many of your worries, including simplifying your electricity bill.

Before we look at the different parts of your bill, we first need to look at the different types of rates offered throughout the United States. If you haven’t looked at your bill lately, I doubt you’ll know what type of rate you fall in. Your electricity bill is going to show you’re energy consumption in kilowatt hours (kWh). The price you pay per kWh will depend on the type of rate you currently have.

To understand your electricity bill, you first need to understand the different rate structures.

Energy rates vary from state to state. Some states have regulated markets, while others have deregulated markets. If you’re wondering what this has to do with rate structure, living in a deregulated market gives you the ability to shop for better rates. So if you feel you’re paying a tad too much, and you happen to be living in a state with a deregulated market – shop around.

Usually you’ll find yourself in one of two rates:

  • Fixed rate
  • Variable rate

Even though these are the most common types of rates, there are some utility companies who use two other rate structures:

  • Time-of-use rate
  • Demand rate

While time-of-use rates are sometimes implemented in fixed and non-fixed rates, demand rates are typical with commercial buildings – even though they’re sometimes offered to residential consumers.

Understanding these rates is quite easy. Fixed rates are exactly what they say they are – fixed. This means your utility company will charge you a specific amount per kilowatt-hour used. At times there might be some additional fees, but overall a fixed rate is predictable and simple to calculate.

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Non-fixed rates are more like a rollercoaster – which is where time-of-use rates sometimes creep in. Utility companies vary in terms of  the way variable rates are implemented. Some utility companies will charge you a higher rate during months with extreme temperatures (i.e. summer, winter). Others will offer a different form of a non-fixed rate, where you’ll pay a low fixed rate for a specific amount of kWh used, and any extra used after that will be charged at a higher rate.

Time-of-use rates usually affect us during our everyday lives. During peak hours, some utility companies will up the amount they charge. If you’re experiencing a high energy bill on a time-of-use rate, you might need to look at which times you’re energy consumption is at its highest and make some changes.

If you own a business and are operating out of a commercial or industrial building, you might be currently dealing with a demand charge. According to Stem, “Demand charges are based on the peak electricity usage of a customer during a billing period.” This means if your business demands high energy usage during peak times, you’ll be responsible for an added charge to your total bill.

Now that we’ve described the different types of rates you’ll encounter, we’re ready to take a look at the various components that make up your electricity bill.

A simple breakdown of your electricity bill.

Most times when you receive your electric bill, it will probably include two separate documents. One will have an overall summary that includes your basic account information, bill summary, current charges, and your electric price. The other document will offer a more comprehensive breakdown of your energy consumption, which typically includes:

  • Meter reading
  • Current kWh usage
  • Breakdown of services/price of services
  • Usage profile

When you first look at your meter information, you’ll see the date of when it was read, your current and previous meter reading, and the difference. The difference between your previous and current meter reading is the amount of kWh you’ve used in the current month. For example, if your previous meter reading was 22,000 kWh, and your current meter reading is 22,700 kWh, then your difference and amount of kWh used for the current period is 700 kWh.

The next part of your bill will show you the different services that go into getting energy to your home. You’ll usually see transmission charges, generation charges, customer charges, and distribution charges. These charges are what makes up your energy bill. Each will have a different price point per kWh, but when tallied up, they’ll make up the bulk of your bill.

These prices are calculated by multiplying the current monthly amount of kWh used, by the rates of the different charges (e.g., 700 kWh  x Transmission charge rate). Remember how we mentioned deregulated markets earlier? Well if you live in a state with a deregulated market, you can shop around for better services that may offer a more friendly price.

The final part of your bill is your usage profile. Usually this section is made up of two parts. One will show you the total kWh used in the previous months, while the other section will show you your kWh usage for the current and previous month, as well as your usage during the same month but during the previous year. It’ll also include your average daily usage, and sometimes it’ll also include the average daily temperatures.

Your usage profile helps you get an overall look at your energy consumption patterns. From here, you’ll be able to analyze and see where the periods of highest consumption have taken place. This gives you the ability to make changes in your daily energy consuming habits, that can help you save some money in the long run.

As you can see, breaking down your energy bill sounds easy, but when you take a look at it for yourself, it can be a bit overwhelming. Fortunately there is an alternative, and it just so happens to be available through Arcadia.

How your Arcadia statement will simplify your life.

If you’ve been reading this article, it’s because you’re conscious of your electric bill – which is already a great first step.  

To make things even better, Arcadia is here to help you out.

First and foremost, signing up with Arcadia means you’ll be reducing your carbon footprint – which should be atop your daily to-do list. Joining Arcadia means we  supply with you with a monthly statement summary that is quick and easy to analyze. This means you’ll know exactly how much your utility charges are, including the extent of your clean energy impact.

If that’s not good enough for you, maybe this is – you will no longer need to worry about analyzing any of the rates from the various charges that comes from a standard energy bill. Your Arcadia statement will show you your local utility charge, your wind energy charge, and any solar savings you may have accrued.

The impact portion of your bill will make you feel even better, since you’ll be able to see just how much you’ve helped out the environment. We’ve even included a “Clean Impact” section which will show you the amount of CO2 you’ve diverted during that month, based on your clean kWh usage.

For an even more in-depth look at an Arcadia statement, check out “Understanding your clean energy statement.
Automatic bill pay, no transaction fees and lower Smart Rate are some of the many benefits that come with joining Arcadia.