Your energy company offers you electricity, but how do they charge you for your electricity consumption. Have you ever had an electricity bill that seemed to be too high? Most customers are dismayed by the high electricity bill that they are forced to pay but they usually just accept the charges. You can begin to compare energy company rates and ensure that you’re only paying for what you have used. Let us analyze your energy bills so that we can discover how your energy company has been coming up with such high totals.
Your energy company charges you a small monthly fee for using the services that they offer. The fee is widely known as a base charge and it’s only for having a contract with the electric company and it’s not for the actual usage of electricity. Your energy consumption is the biggest portion of your electric bill with a kilowatt/hour rate. Your kilowatt hour usage is used to calculate your energy charge. For instance, let us say that you’re charged 0.05 cents/kilowatt hour and in the last month you only used 400 kilowatt hours because you were away on vacation for 2 weeks. By multiplying the total amount of kilowatt-hours (kWhs) by the rate per kilowatt hour, you will be able to come up with your energy charge for the month that in this context would be $20.
One aspect of your electric bill that you may not be able to understand is the TDU charges. This is usually higher than $50, and it often leaves many individuals pondering what is the huge charge is for? The TDU (Transmission and Distribution Utility) is a charge from the company that maintains and repairs the poles and power lines in your region. The company is also responsible for reading your meter every month. The TDU charge is for distributing electricity to you, it is similar to the shipping and handling charge that you incur when you order something online or from a catalog. This company is not your regular energy company, it is a different company.
Other miscellaneous charges that may appear on your electric bill are state or local taxes on electricity. You may also be charged fees if you do not pay your bill on time or you were not obligated to pay a deposit when you were opening your energy account. If you’ve signed up for any special program through your electric company charges for these programs will also be included in this section.
The combination of the TDU charge, the base charge and the energy charge, are the charges that the energy companies use to determine how much they will charge you. They are also required by law to include taxes in your electric bill. If you want to determine how much the energy company is charging you on average per kwh in total you should take the TDU charge, your base charge and your energy charge, and add them. You should then divide the result that you will get from the addition by the kWhs that you used during the month. You can use this figure to keep track of the amount that the energy company charges you every month and ensure sure that their calculations are correct.