Calculating Your Bill




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How many of you have no clue as to how to go about calculating your electric bill? I am sure there are many and I was one of them. Calculating your electric bill really is a simple process but there are some things that you will need before you can figure your power bill. If you are interested in learning how to read your meter follow this guide.

Getting Started

The first thing that you will need in calculating your electric bill is your power bill, of course. After that, the next thing that you will need is a copy of your electric rate schedule. This can normally be found on your electricity provider’s website. This is important because there are many different electric rate schedules available.

One way you calculate your cost per KWH is to take your total power bill and divide it by the number of KWH’s. While this would give you an answer, it would not be totally accurate because it does not take taxes or basic facilities charges into account.

So, let’s break down a typical electric power bill. Most companies charge a “basic facilities charge.” This is the minimum amount that your power bill could ever be. This helps the utility pay for reading the meter and maintaining the infrastructure that has been installed to serve you as a customer.

Electric Rates

Many rates are tiered, meaning that as you use more energy, the price changes. Notice that I did not say that the price goes down. This is because there are some utilities that increase the price per KWH as you use more. For this example, we will assume that the price per KWH goes down as more energy is consumed.

Calculating Your Electric Bill

Let’s look at an example. I am pulling the structure for this rate off of a large electric utility’s website. The base facilities charge is $10.00. As aforementioned, this is the lowest the power bill could possibly be. You will be charged this amount as long as the power is turned on in your name, even if you have your main breaker off.

Next, are the energy charges. The rate that I am looking at says that for months June-September, the price for the first 500 KWh are $0.10, the second 500 KWH are $0.09 and all over 1000 KWH are $0.08.

Suppose we used 1200 KWH during the month of June, how would we calculate our power bill? We would first multiply 500 x 0.10 = $50.00. Then 500 x 0.09 = $45.00 and finally, 200 x .08 =$16.

Now, once we add those numbers together we get 50 + 45 + 16 = $111. However, we are not finished. We need to add in the basic facilities charge of $10.00. This brings the total to $121. The last thing that we need to do is add in the taxes, which will very depending on your location.

To calculate the taxes, you simply multiply $121 x tax rate = amount of taxes to be paid. If we assume a 7% tax rate the our final bill will be 121 x .07 = 8.47 + 121 = $129.47.

So, our power bill would equal $129.47.

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