Most U.S. electric bills have four parts: a fixed monthly charge, a supply charge for the electricity, a delivery charge for the wires, and a list of smaller riders, fees and taxes. The names differ by utility, but the structure is close to the same everywhere. Once you can sort each line into one of those four groups, you can tell why a bill changed and which parts solar or a new supplier can actually reduce.
The Four Parts at a Glance
| Part | What it pays for | How it is billed | Who usually sets it |
|---|---|---|---|
| Fixed monthly charge | Billing, metering, customer service, the service line | Flat amount per month or per day | State utility commission, in a rate case |
| Supply (generation) | The electricity you used | Per kWh | Utility default price or a competitive supplier, depending on the state |
| Delivery | Transmission lines and local distribution wires | Mostly per kWh | State commission for distribution; federal regulators (FERC) for transmission |
| Riders, fees and taxes | Fuel, storms, efficiency programs, grid upgrades, local taxes | Per kWh or percent of bill | Commission, legislature or local government |
Line names vary. A “customer charge” in Massachusetts is a “customer service charge” in Connecticut and a “basic service charge” at Georgia Power.
Start With kWh
Everything on the bill is built on kilowatt-hours (kWh). The U.S. Energy Information Administration (EIA) gives a simple example: a 40-watt bulb running for five hours uses 200 watt-hours, or 0.2 kWh.
Your bill shows a start and end meter reading (or a total from a smart meter) and the kWh used between them. EIA’s most recent published figure puts the average U.S. residential customer at 10,791 kWh a year, about 899 kWh a month, in 2022. State averages ranged from 6,178 kWh a year in Hawaii to 14,774 kWh in Louisiana, so “average” tells you little about your own home.
Check two things first: the number of days in the billing period, and whether the reading is actual or estimated. A 34-day bill will be higher than a 28-day bill at the same daily usage.
1. The Fixed Monthly Charge
This is billed whether you use 50 kWh or 2,000 kWh. Connecticut’s Office of Consumer Counsel describes it as covering “costs related to customer billing, meter reading, customer service and maintaining the service line.”
It matters more than its size suggests, because no amount of conservation or solar generation reduces it. Some states are raising it: California’s large utilities began moving residential customers to a Base Services Charge in late 2025 and 2026, as we covered in our California rate article.
2. Supply
Supply is the electricity itself. Massachusetts regulators describe it as “the actual electricity you used for that month.” EIA says the cost of generating electricity is the largest component of the price.
How supply is priced depends on your state:
- States with supplier choice (Pennsylvania, Ohio, Illinois, Texas and others): you can buy supply from a competitive supplier or stay on the utility’s default price. That default is often printed on the bill as the “price to compare.” PECO’s residential price to compare, for example, was 11.572 ¢/kWh from June 1, 2026 (Pennsylvania article).
- States without supplier choice (Georgia, Florida and others): the utility supplies the power. Fuel is often shown as its own line and adjusted separately from base rates (Georgia article).
If you switch suppliers, only this part of the bill changes.
3. Delivery
Delivery covers two systems:
- Transmission: high-voltage lines from power plants to your local utility. These charges are regulated federally by FERC.
- Distribution: the local poles, wires, transformers and substations. Your state commission sets these in rate cases.
Delivery charges stay with your local utility no matter who supplies your power. Many are billed per kWh, so they fall when your usage falls.
4. Riders, Fees and Taxes
This is the long list of small lines. Each rider recovers one specific cost outside base rates. Massachusetts lists more than a dozen on its consumer guide, including:
- Energy efficiency programs
- Storm fund replenishment
- Grid modernization
- Low-income discount recovery
- Net metering recovery
- A renewable energy charge of $0.0005 per kWh, set by law
That last one shows the scale. At 600 kWh, it adds 600 × $0.0005 = $0.30. Individual riders are small. Together they can be a meaningful share of the bill, and they change more often than base rates.
Why the Rate on Your Plan Is Not What You Pay
Three things push your real cost per kWh away from the headline rate.
Tiers. Some plans charge more as usage rises. Georgia Power’s standard residential plan lists summer energy charges of 8.8 ¢/kWh for the first 650 kWh, 14.6 ¢ for the next 350 kWh and 15.1 ¢ above 1,000 kWh.
Seasons. The same Georgia Power plan charges 8.2 ¢/kWh for all usage from October through May. EIA notes that prices are usually highest in summer, when demand is high and more expensive generation is needed.
Time of use. Some plans charge more during peak hours. Check your plan name and the hours of the peak window.
Calculate Your Real Rate
Formula: all-in rate = total bill ÷ kWh used.
Example with made-up round numbers: a $162.00 bill for 900 kWh is $162.00 ÷ 900 = $0.18, or 18.0 ¢/kWh. If the plan’s printed energy rate is 11 ¢/kWh, the other 7 ¢ is fixed charges, delivery, riders and taxes spread across your usage.
For scale, EIA reports the average U.S. residential price was 17.30 ¢/kWh in 2025. That figure is total revenue divided by total kWh, so it is an all-in number, comparable to the result of this formula. State averages for all customer types ranged from 8.20 ¢ in North Dakota to 35.72 ¢ in Hawaii. See our EIA forecast summary for the 2026 projection.
Run the formula on a summer bill and a winter bill. The difference shows how much of your cost moves with season and usage.
What This Means If You Have or Want Solar
- Solar cuts per-kWh charges, not fixed charges. The fixed monthly charge stays. Some utilities add a metering charge for solar customers; Georgia Power’s solar tariff lists $5.97 a month for single-phase service.
- Self-use and exports are valued differently in many places. A kWh you use at home avoids the retail per-kWh charges. A kWh you export is credited under your utility’s net metering or net billing rules, often at a lower rate. Our net metering guide covers how to check which rules apply.
- Use the right rate in a solar quote. A savings estimate built on your all-in rate overstates savings if part of that rate is a fixed charge. Ask the installer which rate was used and whether fixed charges were excluded.
- Tiers and time-of-use plans change the math. Solar that offsets your highest tier or peak-hour usage saves more per kWh than solar that offsets the lowest tier.
A Five-Minute Bill Check
- Find the kWh used and the number of billing days.
- Find the fixed monthly charge.
- Find the supply line and its rate. If you have a supplier, note the contract end date and whether the rate is fixed or variable.
- Add up the delivery lines.
- Divide the total by kWh to get your all-in rate, and compare it with last month and the same month last year.
Limitations
Bill layouts and line names differ by utility and state, and this guide uses a few states as examples. The EIA usage figure is from 2022 and the price figures are from 2025. Demand charges, common on commercial bills, are not covered. Tariff rates cited here were verified on the dates shown in the linked articles and can change.
Sources
- EIA, Electricity explained: Factors affecting electricity prices
- EIA, Electricity explained: Measuring electricity
- EIA, How much electricity does an American home use?
- Massachusetts Department of Public Utilities, Understanding your electric bill
- Connecticut Office of Consumer Counsel, What are the charges listed on my electricity bill? (July 1, 2025)
- Georgia Power, Residential Service rate plan
- Georgia Power, RNR-11 tariff
Frequently asked questions
What is the difference between supply and delivery on an electric bill?
Supply is the charge for the electricity you used. Delivery is the charge for moving it over transmission lines and local wires to your home. In states with supplier choice you can change your supplier, but delivery always comes from your local utility.
How do I work out what I really pay per kWh?
Divide the total amount of the bill by the kWh used in that billing period. The result includes fixed charges, riders and taxes, so it is higher than the energy rate printed on your rate plan.
What is a rider on an electric bill?
A rider is a separate charge or credit added on top of base rates to recover a specific cost, such as fuel, storm repairs, energy efficiency programs or grid upgrades. Riders can change more often than base rates.
Does solar lower every part of an electric bill?
No. Solar lowers the charges billed per kWh. A fixed customer charge is billed whether or not you use any electricity, and some utilities add a separate metering charge for solar customers.
