Take a Fresh Look at Your Energy Bill This Spring

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When you receive your energy bill, do you really look at it? Or, you may not even look at it because you’re set up for auto-pay. If you’re someone who actually does pay close attention to the items listed on your bill, there are a few things you should be aware of when it comes to how you’re billed for electricity and natural gas, such as:

  1. Generation service charge
  2. Transmission and distribution service charge
  3. Supply service charge

These charges impact your bill and below, we’ll break down how each affects your overall charges.

1. Generation service charge

As the name implies, this relates to the cost for electricity to be generated from a power source near you. Depending on your location, this “generation” can come from a coal plant, a wind turbine or even a solar farm.

2. Transmission and distribution services charge

Transmission charges are simply the lines and pipes that carry the electricity and natural gas from the source; i.e. generation or wellhead, respectively, to cities and neighborhoods. The distribution charge is for “the last mile” that carries energy from local lines specifically into your home or business. In some cases, you may not see these charges listed separately on your bill, but these costs go to the maintenance and operating costs of the lines and pipes.

3. Supply service charge

You only see this charge if you enroll with an energy supplier. In that case, the supplier name and your rate will be on your bill. If you don’t have a supplier, this cost is simply added to your utility’s supply charges. The supply charge refers to how much energy you used and the rate at which you were charged.

Depending on your utility, there may also be a few miscellaneous charges such as “Customer Charge” or “Service Fee”, but these are related more to administrative or operating costs.

By understanding how to read your monthly utility bill—and all of the related charges—you can then make more informed and smarter choices when it comes to your home energy.