Electricity Bill Breakdown: Supply, Delivery, Fixed Charges, and Taxes

An electric bill is easier to audit when you stop treating the total as one price. Start with the meter reading and billing days, then separate the charge for energy from the charge for moving it through the grid. Add fixed customer charges, riders, taxes, and credits only after those two variable pieces are clear. The U.S. Energy Information Administration describes delivered retail prices as a combination of generation, transmission, distribution, taxes, and fees, while noting that a published average price is not the same thing as a utility tariff. EIA explains the distinction here.

The four-line bill worksheet

Copy the following fields from your statement:

Line	What to record	Unit to keep
Supply or generation	Energy price multiplied by usage	dollars and dollars/kWh
Delivery	Transmission, distribution, and delivery riders	dollars and dollars/kWh
Fixed customer charge	Service, customer, or meter charge	dollars per billing period
Taxes and other adjustments	Taxes, public-benefit riders, late fees, credits	dollars

The first two lines may appear as a bundled “energy charge.” In a retail-choice territory, the supplier can bill generation while the regulated distribution utility still owns the wires and meter. EIA explains that local utilities deliver electricity even when a customer buys the energy component from a separate power marketer. See its grid-delivery explanation. Record the supplier name and the utility name before comparing offers; a low supply price does not remove the delivery tariff.

A worked, labeled example

This is a teaching calculation, not a typical bill. Assume 900 kWh over 30 days, a supply rate of $0.080/kWh, delivery of $0.060/kWh, a $16 customer charge, and $12 of taxes and riders. The variable subtotal is 900 × ($0.080 + $0.060) = $126. The bill total is $126 + $16 + $12 = $154, or 17.1 cents per kWh when the fixed and other charges are allocated across usage. If usage falls to 300 kWh while the fixed and other charges stay unchanged, the same bill structure produces $70 and an effective 23.3 cents/kWh. The rate did not change; the denominator did.

That is why “my cents per kWh” can differ from the tariff’s energy rate. EIA’s average retail price includes all delivered costs and is derived from revenue divided by kWh, whereas rates apply to particular services and customer classes. Use your bill’s line items for a household decision, and use EIA averages only as broad context.

Charges that deserve a second look

Check whether a fuel or power-supply adjustment is allowed to change monthly. Check whether the delivery rate is tiered, seasonal, or time-based. Check whether a credit is recurring, conditional on autopay, or a one-time correction. Taxes may be calculated on one subset of charges rather than the total. A bill that labels “supply” and “delivery” together may require opening the tariff or supplier disclosure to see the underlying units.

When comparing two bills, normalize billing days and kWh first. Then compare variable dollars, fixed dollars, and taxes separately. If the utility estimated a meter read, flag that month and use the next actual read before deciding that equipment or behavior caused the change. Finally, ask the utility which tariff schedule and effective date apply to your address. Rates are territory-specific; this worksheet is a way to ask a precise question, not a national price promise.