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Power To Choose – Do you know what your Electricity Bill means?

June 6, 2014

Every month, we receive a bill from our energy provider, and we pay that bill to keep our lights on and our homes comfortable. But, do you know what all of the jargon and price values and rates mean? If your bill seems higher than you expect it to, you can see exactly what you are paying for, including electricity use, service charges, taxes, and fees. There are several different sections on your bill, and we’ll help break it down for you and you’ll be reading your bill like a pro in no time.

            Account Details

This section tells you who your service provider and your utility (wire company) are, and what your account number and contact information are. There will also be contact information for your service provider and utility.


Your bill will tell you what type of plan you have. Fixed rate plans lock in your rate for an amount of time determined by your contract with your service provider. Variable rate plans change every month based on the service provider’s costs, which includes market conditions. Indexed rate plans change every month based on a published formula for energy costs.


To determine how much electricity you are using, the utility sends a technician to check your energy meter. They document the reading on the meter each month, and use the difference between your current and previous readings to determine how much electricity you used. Sometimes, the utility may estimate a reading for a month, but they will ensure the amount you pay the following month is accurate by conducting a proper reading.


            This section tells you how much you are paying per kilowatt hour (kWh) of electricity you use. It will break down the cost per kWh from your Texas electricity provider as well as the cost per kWh from your utility for getting the electricity to you. In a fixed rate plan, the rate per kWh remains the same for the duration of your contract. This rate will change each month in indexed or variable rate plans. You will also see an average rate per kWh that takes into account all the fees, service charges, and electricity use. This average rate is the best way to compare prices when shopping for a new energy provider.

Charges, Fees, and Taxes

This section breaks down the extra charges outside your electricity rate. Your energy provider may charge you a certain amount each month depending on whether you use less or more than 2,000 kWh per month. This section also includes charges for meter readings, charges for using renewable energy like solar or wind, and any penalties incurred, such as late payments.

Amount Due

This is the total amount due for this billing cycle. It takes into account your electricity usage based on meter readings, taxes, fees, and service charges.

There may be other sections of your bill that offer additional information, but this varies by service provider. If you are finding that your bills are higher than you had planned, contact Shop Texas Electricity, and they will help you compare several different energy providers and rate plans. This gives you the power to choose the company with the cheapest electricity rates that also suits your energy needs.

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