How is an electric bill computed?

Bill = (energy charge) + (fixed customer charge) + (demand charge for commercial / industrial) + (taxes and fees) − (any solar / net-metering credits). Energy charge = sum across tiers / TOU periods of (kWh × $/kWh). For a typical 1 200 kWh residential month at $0.15/kWh: energy ~$180 + customer charge $10 + 8 % tax $15.20 = $205.20.

What are the components of an electric bill?

Six common line items. (1) Energy charge — kWh used × tariff rate, possibly tiered or TOU. (2) Customer / fixed charge — flat per-month service fee. (3) Demand charge — peak kW during the month × $/kW (commercial / industrial). (4) Power-factor penalty if PF < threshold. (5) Riders — distribution, transmission, public benefit, transition recovery, capacity. (6) Taxes — state sales tax, city utility tax, regulatory fees.

How much is the average residential electric bill?

EIA data: U.S. average residential electricity rate was 16.2 ¢/kWh in 2024. Average residential consumption was 893 kWh/month, giving an average bill of roughly $145/month. Highest by state: Hawaii ~$200; California, Connecticut, Massachusetts $150–180. Lowest: Idaho, Utah, Washington ~$95.

How can I lower my electric bill?

Five high-impact moves. (1) LED replacement of any remaining incandescent / halogen lighting (saves ~80 % on lighting load). (2) Insulation and air-sealing (cuts HVAC by 15–30 %). (3) Programmable / smart thermostat (5–15 % HVAC). (4) Heat-pump replacement of resistance heat or air-conditioner (40–60 % heating). (5) On-site solar plus net metering (largest single move, but capital-intensive). Demand-response and TOU shifting (running EV / pool pump overnight) helps if your tariff is TOU.

What is a kilowatt-hour (kWh)?

A kilowatt-hour is the unit of electrical energy used by utilities for billing. It equals the energy consumed by a 1 000-watt device running for one hour, or 3.6 megajoules. A 100-W LED bulb running for 10 hours uses 1 kWh; an electric oven on for 1.5 hours at 3 kW uses 4.5 kWh; a typical American refrigerator uses about 1.2 kWh per day or 36 kWh per month.

How is an electric bill computed?

Bill = (energy charge) + (fixed customer charge) + (demand charge for commercial / industrial) + (taxes and fees) − (any solar / net-metering credits). Energy charge = sum across tiers / TOU periods of (kWh × $/kWh). For a typical 1 200 kWh residential month at $0.15/kWh: energy ~$180 + customer charge $10 + 8 % tax $15.20 = $205.20.

What are the components of an electric bill?

Six common line items. (1) Energy charge — kWh used × tariff rate, possibly tiered or TOU. (2) Customer / fixed charge — flat per-month service fee. (3) Demand charge — peak kW during the month × $/kW (commercial / industrial). (4) Power-factor penalty if PF < threshold. (5) Riders — distribution, transmission, public benefit, transition recovery, capacity. (6) Taxes — state sales tax, city utility tax, regulatory fees.

How much is the average residential electric bill?

EIA data: U.S. average residential electricity rate was 16.2 ¢/kWh in 2024. Average residential consumption was 893 kWh/month, giving an average bill of roughly $145/month. Highest by state: Hawaii ~$200; California, Connecticut, Massachusetts $150–180. Lowest: Idaho, Utah, Washington ~$95.

How can I lower my electric bill?

Five high-impact moves. (1) LED replacement of any remaining incandescent / halogen lighting (saves ~80 % on lighting load). (2) Insulation and air-sealing (cuts HVAC by 15–30 %). (3) Programmable / smart thermostat (5–15 % HVAC). (4) Heat-pump replacement of resistance heat or air-conditioner (40–60 % heating). (5) On-site solar plus net metering (largest single move, but capital-intensive). Demand-response and TOU shifting (running EV / pool pump overnight) helps if your tariff is TOU.

What is a kilowatt-hour (kWh)?

A kilowatt-hour is the unit of electrical energy used by utilities for billing. It equals the energy consumed by a 1 000-watt device running for one hour, or 3.6 megajoules. A 100-W LED bulb running for 10 hours uses 1 kWh; an electric oven on for 1.5 hours at 3 kW uses 4.5 kWh; a typical American refrigerator uses about 1.2 kWh per day or 36 kWh per month.

Reference · Tutorials · EIA · Utility tariffs · TOU

Electric Bill Computation — From kWh Reading to Total Charge

Q: How much is the average residential electric bill?

EIA data: U.S. average residential electricity rate was 16.2 ¢/kWh in 2024. Average residential consumption was 893 kWh/month, giving an average bill of roughly $145/month. Highest by state: Hawaii ~$200; California, Connecticut, Massachusetts $150–180. Lowest: Idaho, Utah, Washington ~$95.

Q: How can I lower my electric bill?

Five high-impact moves. (1) LED replacement of any remaining incandescent / halogen lighting (saves ~80 % on lighting load). (2) Insulation and air-sealing (cuts HVAC by 15–30 %). (3) Programmable / smart thermostat (5–15 % HVAC). (4) Heat-pump replacement of resistance heat or air-conditioner (40–60 % heating). (5) On-site solar plus net metering (largest single move, but capital-intensive). Demand-response and TOU shifting (running EV / pool pump overnight) helps if your tariff is TOU.

Q: What is a kilowatt-hour (kWh)?

A kilowatt-hour is the unit of electrical energy used by utilities for billing. It equals the energy consumed by a 1 000-watt device running for one hour, or 3.6 megajoules. A 100-W LED bulb running for 10 hours uses 1 kWh; an electric oven on for 1.5 hours at 3 kW uses 4.5 kWh; a typical American refrigerator uses about 1.2 kWh per day or 36 kWh per month.

Computing an electric bill is the simplest energy-engineering exercise once you have the right tariff sheet. This page walks through the five-line residential calculation (energy + customer charge + tax), the commercial / industrial extensions (demand charge, power-factor penalty, TOU rates), reads the standard EIA bill anatomy, and works through a 1 200 kWh PG&E E-1 example. Reviewed by a licensed PE.

Electric power calculator

The power calculator converts between V, I, P, and R for DC, single-phase AC, and three-phase AC — useful for translating a kW load into monthly kWh consumption. The wire-size and voltage-drop calculators handle the engineering side of utility service entrances.

→ Active power calculator · → How to calculate power · → kWh / kVA reference

Electric bill formulas

Eq. 01 — Total monthly bill SI

B = E_{kWh} + C_{fixed} + D_{kW} + T + R - Cr

·: E_kWh = energy charge — sum across tiers / TOU periods of (kWh × $/kWh)
·: C_fixed = fixed customer charge ($/month)
·: D_kW = demand charge — peak kW × $/kW (commercial / industrial only)
·: T = taxes (state, city, utility)
·: R = riders (distribution, transmission, capacity)
·: Cr = net-metered solar credits

Eq. 02 — Energy charge with tiered rates SI

E_{kWh} = \sum_i k_i \cdot p_i \quad \text{where } \sum_i k_i = \text{total kWh}

·: k_i = kWh consumed in tier i
·: p_i = price per kWh in tier i ($/kWh)
·: PG&E E-1 example: tier 1 0–350 kWh, tier 2 350–700 kWh, tier 3 700+ kWh

Eq. 03 — Time-of-use (TOU) energy charge SI

E_{kWh} = (k_{peak} \cdot p_{peak}) + (k_{off} \cdot p_{off}) + (k_{super} \cdot p_{super})

·: Peak (4–9 PM weekdays in CA): premium price ($0.40–0.60/kWh)
·: Off-peak (mid-morning to mid-afternoon): mid-tier ($0.20–0.30)
·: Super off-peak (overnight): discount ($0.10–0.15)

Eq. 04 — Demand charge (commercial / industrial) SI

D_{kW} = P_{peak,15min} \cdot p_D

·: P_peak,15min = highest 15-minute average kW recorded during the billing month
·: p_D = demand price ($/kW), typically $10–25/kW residential-large or commercial
·: Resets monthly; a single large excursion can dominate the bill

Eq. 05 — Power-factor penalty SI

PF_{penalty} = E_{kWh} \cdot \left(\frac{0.95}{PF_{actual}} - 1\right) \text{ for } PF < 0.95

·: Applied by some utilities when the load PF drops below the tariff threshold (0.85–0.95)
·: Avoided by installing power-factor-correction capacitor banks
·: See the PF calculator to size the kVAR needed

Standards and references

Source	Scope
U.S. Energy Information Administration (EIA)	Monthly retail electricity prices by state and customer class
FERC Order 745, 755, 2222	Wholesale demand-response market rules influencing retail TOU tariff design
NIST Handbook 44	Electricity-meter accuracy requirements (legal-for-trade)
ANSI C12.20	Electricity-meter performance standards (Class 0.2 / 0.5)
IEC 62053	International electricity-meter performance standard
State Public Utility Commissions	Approve all retail tariffs (PG&E E-1, ConEd SC1, FPL RS-1, ERCOT REPs, etc.)

Reference: typical U.S. residential electricity rates (2024)

Region	Avg ¢/kWh	Avg monthly kWh	Avg bill ($)
U.S. national average	16.2	893	145
Northeast (NY / MA / CT)	22–25	650	150–170
Mid-Atlantic (PA / NJ / VA)	13–16	900	120–145
South (FL / TX / GA)	11–14	1 100	125–155
Midwest (IL / OH / IN)	13–15	900	120–135
Mountain (CO / UT / AZ)	11–13	900	100–120
Pacific (CA)	30–35	550	165–195
Hawaii	40–45	500	200+
Pacific NW (WA / OR)	10–12	1 000	100–120

Find your tariff Read the rate schedule on your utility bill (PG&E E-1, ConEd Service Class 1, FPL RS-1, etc.) or pull it from the utility website. Note the customer charge ($/month), energy charge ($/kWh, possibly tiered or TOU), demand charge ($/kW, only on commercial / industrial), and any state / city taxes.
Read the meter (or use the smart-meter portal) Subtract last month's reading from this month's reading to get the kWh consumed. Smart-meter customers can pull 15-minute or hourly interval data through the utility customer portal. Most U.S. residential meters read in kWh directly; some older mechanical meters use a multiplier — check the meter face.
Apply tier / TOU pricing Tiered (e.g. PG&E E-1): first 350 kWh at Tier 1 rate, next at Tier 2 (higher). TOU: peak hours (4–9 PM weekdays) at premium, off-peak at base rate, super off-peak (overnight) at discount. Multiply kWh × $/kWh per tier and sum.
Add fixed charges and demand charges Customer charge ($5–25/month residential, $50–500 commercial). For commercial / industrial customers, demand charge = peak 15-min average kW during the billing month × $/kW (often $10–25/kW). Power-factor penalty applies if PF < 0.85–0.95 depending on tariff.
Add taxes, riders, and net any solar credits State sales tax, city utility tax, public-purpose charges, transition recovery, distribution fees, capacity charges. For net-metered solar customers, subtract export-credit kWh × export rate (1:1 retail rate or avoided-cost depending on jurisdiction).

Worked example — PG&E E-1 residential bill, 1 200 kWh month

California residential customer, 1 200 kWh consumed in a 30-day billing cycle. PG&E E-1 tariff (2024 rates, simplified).

Tier 1 — Baseline (0–350 kWh): 350 × $0.36 = $126.
Tier 2 — Above baseline (350–1 200 kWh = 850 kWh): 850 × $0.45 = $382.50.
Energy charge subtotal: $508.50.
Customer minimum charge ($0.396/day × 30): $11.88.
State / city utility tax (5 %): $26.02.
Total monthly bill: ~$546 — California rates explain why CA solar adoption is the highest in the US.

For comparison, a 1 200 kWh month in Texas at $0.13/kWh (no tiering) = $156 + $10 fixed = $166. The same usage costs 3.3× more in California.

Comparison — flat vs. tiered vs. TOU vs. demand-charge tariffs

Tariff type	How it works	Best for	Worst for
Flat rate	Single $/kWh, all hours	Predictable usage, no shifting	Heavy users (no incentive)
Tiered	Higher $/kWh as monthly kWh climbs	Conservers — low base usage	EV owners, large families
Time-of-use (TOU)	Different price by hour-of-day	Customers who can shift loads (EV charging, pool pump, dishwasher overnight)	Inflexible peak-hour usage (HVAC during 4–9 PM in summer)
Demand charge	Bill includes peak kW × $/kW	Steady-load customers (data centres, refrigeration)	Spiky loads (EV charging, welding, kiln)
Net metering	Solar export credited 1:1 retail rate (shrinking — many states moving to avoided-cost)	Solar-equipped customers	Renters, shaded sites

Variants and related queries

Calculator electric — typical conversions

Beyond the bill itself, electricians and homeowners convert between watts, amps, volts, kWh, and HP constantly. The power calculator handles all of these in one form. The voltage-drop calculator handles long-run conductor sizing for utility services and EV chargers.

Electric circuits examples and electric power calculator

The energy charge on the bill is the integral of instantaneous power over time: kWh = average kW × hours. For a single appliance: kWh / month = (Watts × hours per day × 30) / 1000. Example: 1 500-W space heater, 8 hr/day, 30 days = 360 kWh/month → at $0.15/kWh = $54/month just for that one heater.

Types of electric cable wire

Residential service cables: SE-U (above-ground service entrance, aluminum conductors, integral neutral), USE-2 (underground service entrance), URD (utility radial distribution). Branch cables: NM-B (Romex — most common 14 / 12 / 10 AWG), MC (metal-clad armoured), TC-ER (industrial tray cable). For full reference see the AC cable page.

Gauss\'s law for electric field

Maxwell\'s second equation in integral form: ∮ E · dA = Q_enclosed / ε₀. The electric flux through any closed surface equals the enclosed charge divided by the vacuum permittivity. Used to derive the field of a charged sphere (E = kQ/r²), an infinite line (E = λ/(2πε₀ r)), an infinite plane (E = σ/(2ε₀)). Foundational for capacitor and high-voltage cable design.

Frequently asked questions

How is an electric bill computed?: Bill = (energy charge) + (fixed customer charge) + (demand charge for commercial / industrial) + (taxes and fees) − (any solar / net-metering credits). Energy charge = sum across tiers / TOU periods of (kWh × $/kWh). For a typical 1 200 kWh residential month at $0.15/kWh: energy ~$180 + customer charge $10 + 8 % tax $15.20 = $205.20.
What are the components of an electric bill?: Six common line items. (1) Energy charge — kWh used × tariff rate, possibly tiered or TOU. (2) Customer / fixed charge — flat per-month service fee. (3) Demand charge — peak kW during the month × $/kW (commercial / industrial). (4) Power-factor penalty if PF < threshold. (5) Riders — distribution, transmission, public benefit, transition recovery, capacity. (6) Taxes — state sales tax, city utility tax, regulatory fees.
How much is the average residential electric bill?: EIA data: U.S. average residential electricity rate was 16.2 ¢/kWh in 2024. Average residential consumption was 893 kWh/month, giving an average bill of roughly $145/month. Highest by state: Hawaii ~$200; California, Connecticut, Massachusetts $150–180. Lowest: Idaho, Utah, Washington ~$95.
How can I lower my electric bill?: Five high-impact moves. (1) LED replacement of any remaining incandescent / halogen lighting (saves ~80 % on lighting load). (2) Insulation and air-sealing (cuts HVAC by 15–30 %). (3) Programmable / smart thermostat (5–15 % HVAC). (4) Heat-pump replacement of resistance heat or air-conditioner (40–60 % heating). (5) On-site solar plus net metering (largest single move, but capital-intensive). Demand-response and TOU shifting (running EV / pool pump overnight) helps if your tariff is TOU.
What is a kilowatt-hour (kWh)?: A kilowatt-hour is the unit of electrical energy used by utilities for billing. It equals the energy consumed by a 1 000-watt device running for one hour, or 3.6 megajoules. A 100-W LED bulb running for 10 hours uses 1 kWh; an electric oven on for 1.5 hours at 3 kW uses 4.5 kWh; a typical American refrigerator uses about 1.2 kWh per day or 36 kWh per month.

Historic source — invention of the load curve and the demand charge

Insull\'s 1898 talk to the National Electric Light Association introduced demand-based pricing and the practice of building large central generators serving diverse loads to maximise the load factor. Every modern two-part electric tariff — energy charge plus demand charge — descends directly from this work.

Samuel Insull — Chicago Edison address → 1898 — introduction of the demand-charge concept and the load-factor analysis that underlies modern electricity pricing

Related calculators and references

Sources and further reading

U.S. EIA — Electric Power Monthly (current edition); Annual Electric Power Industry Report (Form EIA-861).
FERC — State of the Markets Report, current year.
NIST Handbook 44 — Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices, Section 4.1 (electricity meters).
ANSI C12.20 — Electricity Meters — 0.1, 0.2, and 0.5 Accuracy Classes.
State Public Utility Commission rate schedules (PG&E, ConEd, FPL, Duke, etc.).
Insull, S. Central Station Electric Service: Selected Speeches (1915 collection).