Understanding How to Read and Calculate Your Electricity and Natural Gas Bills – Calculator Included!
Fully understanding the energy charges and fees on your electric or natural gas bills each month is an important part of keeping your energy budget under control. When reading your electricity bill or natural gas bill, you might wonder what the electricity or natural gas supply charges are about, what a kWh is, how they’re calculated, or you might be having other problems understanding your energy bills. Constellation wants to help you manage your energy expenses by teaching you about energy costs and how power usage might affect your overall monthly bill.
- Electricity Cost: On your bill (or this sample electric bill), you will see a listing of the amount of electricity your home used for the month, listed in kilowatt-hours, or kWh. You have control over this portion of your bill in two ways. First, you can work to cut home energy charges by reducing your usage. Second, you can gain more control by selecting a supplier that offers a fixed-rate plan to avoid fluctuations in electricity rates that happen due to the change of seasons, energy supply changes, or other outside factors.
- Capacity Cost: Another important fee to understand on your electric bill is capacity cost. This fee, usually incurred by commercial customers, ensures that the electric utility has enough capacity available to cover the total power use demand of their customers.
While you don’t get much input on how this rate is assessed, you can do your part to help lower these costs for all users by using major appliances and machinery during off-peak times and reducing your energy consumption during peak hours. Peak hours vary by location and season, so contact your electricity provider for information about how to avoid peak usage times in your area.
- Utility Delivery Charge on Electric Bills: Another common question about electricity billing concerns the electricity delivery charge. The delivery fee on your electric bill is your portion of line maintenance and upkeep, which helps to ensure that consistent power is delivered to your home or small business. Your bill (like this sample electric bill) might show a different term such as “transmission fee” or something similar, but the impact on your electricity bill remains the same.
Constellation’s electricity bills are designed to give our Texas customers all the important billing information needed, in an easy-to-read format.
In all other states served by Constellation, customers will receive electricity bills from their utility.
How Are Electricity Bills Calculated?
Understanding how your electric bill is calculated is more than knowing the rates you pay — you also need to understand how much energy you are using, because that’s what ultimately determines your home electric charges. When reading your electricity bill, you will see the total cost of energy usage that month. This is calculated by multiplying the rate you pay per kWh by how many kilowatt-hours your home has used during the month. Knowing this formula (provided below) will give you a basic way of understanding your energy costs.
How To Calculate Your Electric Bill Using the kWh Calculation Method
When you look at your electricity bill, you will see the total number of kWhs you used in the month, but you can’t tell how much electricity each appliance is using. To calculate the electricity usage of each appliance or device, you’ll need the following: the wattage of the appliance, the average number of hours you use it per day, and the price you pay per kilowatt-hour (kWh) of electricity.
To calculate power consumption estimates, find the general number of kWhs you use per month for each appliance, using this method:
- Find the silver energy label on your appliance. The wattage should be on this silver label.
- Divide that wattage by 1,000 to get your appliances energy use in kilowatts.
- Multiply kilowatts by the average amount of hours the appliance is in use.
- Multiply that number by 30 days to calculate the average kWh your appliance uses each month.
- Multiply that number by your kWh rate to estimate your electric bill for the month.
- Repeat these steps to find the cost of energy for each appliance and then add them together to find the cost of energy of your entire house each month
Constellation customers can find a more in-depth view of their bill here: Constellation's Energy Bill
A Few of the Most Common Natural Gas Bill Terms:
- What is a CCF? CCF is the reading of the amount of natural gas you have used within the month, measured by hundreds of cubic feet.
- What is a BTU? A British thermal unit, or BTU, is a measurement of energy that is used to calculate the amount of energy needed to raise the temperature of a pound of water 1 degree Fahrenheit.
- What is a Therm? A therm is the equivalent of 100,000 BTUs. Typically this is the unit used to calculate the amount of energy used when determining your monthly charge for natural gas.
- What is a price per therm? This is the rate you pay per therm, per your contract. This rate might vary due to time of year, supply and other cost factors if you are on a variable rate plan.
- You might also have customer service charges, transmission fees, capacity fees and other similar charges based on the requirements of your state or utility.
Constellation’s natural gas bills are designed to give our Georgia customers all the important billing information needed, in an easy-to-read format.
In all other states served by Constellation, customers will receive natural gas bills from their utility.