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How to Read Your Utility Bill<br>(in Deregulated States)

Learn what you're paying for and why

En español | AARP is dedicated to helping you save money on your home energy bill by fighting against unfair utility rate hikes. But you may also be able to save money by familiarizing yourself with your monthly bill. Understanding what to look for on your bill can help you identify errors and allow you to monitor your energy usage. Utility bills differ by energy type (electricity, natural gas, etc.) and distributor (your natural gas or electric "company," also known as a utility). However, there is some key information you should look for when reading your bill. This information will allow you to interpret what you are paying and why.

See also: Save up to $1,000 a year on your energy bills.

Rainbow over electrical towers

Electrical meter. — Comstock/Getty Images

Understanding Your Charges

While there may be some difference in specific terms for charges from one utility or another, below are the major categories to look for:

  • Supply Charge – the amount you are charged for actual energy consumed in your home. It generally will make up the largest portion of your overall bill. This charge takes into account your energy usage and the costs needed to generate that energy. It is measured in kilowatt hours (kWh) for electricity and therms (TH) for natural gas, and allows you to see the rate you are charged per kWh or TH.
  • Distribution Charge – this charge is to compensate your local utility for the costs associated with transporting and delivering power to your home. It can also include charges for administering your account services, like maintenance, repairs, meter reading and emergency services.
  • Basic or Customer Charge – a flat fee covering routine business and administrative costs.
  • Taxes – any federal, state and local taxes will be included on your bill.
  • Extra Fees and Surcharges – your bill may include miscellaneous charges for a wide variety of things such as upgrades to infrastructure, installation of smart meters, the use of renewable energy and more. Pay close attention to this category to make sure you understand what fees you are paying and why those fees are being applied to your account. Do not hesitate to contact your utility's customer service department should you have questions about any of the charges on your bill.

Next: Knowing How to Read Your Bill >>

Knowing How to Read Your Bill

It is also important to recognize other information contained in your bill so that you know how much you are paying for energy.

  • Customer Name and Mailing Address: your name (or the name of the person responsible for the account) should appear on the bill, along with the mailing address (which may be different than the actual service address).
  • Account Number: your account number should be clearly stated on your bill and you should have this number readily available when contacting your utility to ensure faster service.
  • Billing Period: the total amount of days included in the billing cycle. It should also include the date of the previous meter reading and the next meter reading.
  • Total Amount Due: the combined amount of your supply and distribution charges, taxes and all other fees that must be paid by the due date.
  • Due Date: the date by which your total amount due must be paid. Most utility companies assess a late payment charge if full payment is not received by the due date, so be sure to submit your payment in a timely fashion.
  • Meter Number(s): the identification number of the meter used to record your home energy usage. Your home may use more than one meter, and therefore your bill may include multiple numbers.
  • Rate Class: there are several different rate types including residential, commercial and industrial. Your home energy bill should be classified as residential.
  • Meter and Usage: this section of the bill provides details related to the use of energy in your home during the billing period. It may also include your usage history, comparing this billing period to past periods.
  • Messages: your utility may print messages on your bill to help you decipher your charges. They may also provide you with energy saving tips, announce pending rate increases or other important updates.

 Action Steps

  • Review each utility bill you receive to check for errors.
  • Ask your utility for an itemized bill if you can’t tell what you are paying for.
  • Contact your utility immediately if you find an error.
  • Contact your state’s utility commission for additional resources for understanding your utility bill. To find contact information for your state’s utility commission visit the National Association of Regulatory Utility Commissioners’ website,
  • Get information on utility savings tips and help AARP fight unfair utility rate hikes at

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