Why My Electricity Bill is So High Despite Choosing Cheap Electricity Plan?

Annu Diloy
4 min readJul 28, 2020

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Receiving huge electricity bills at month-end can be annoying for households with budget constraints. It becomes more frustrating when you get big bills despite being in a so-called cheap electricity plan. You might have recently switched your electricity plan and/or provider thinking it will help you save money and cut your internet bills shorter in the coming months. But things turned out to be quite the reverse as the summer hit and the mercury rose. What went wrong? You might wonder as to “has my electric meter started running like crazy due to the hot and humid weather? Or some ghosts have entered it to make it run faster than it should?” Well, the problem might be elsewhere.

Did you really buy cheap electricity or it was just a sham? Do you know most so-called cheap electricity deals aren’t actually as cheap as you might think them to be? Why? It happens mainly because the advertised rates are only the base rates whereas additional charges add up later, making your big way bigger than you would want.

What are the other charges that apply when I shop for cheap electricity deals in my area?

While you might have shopped for the cheap and best electricity deals for your home, you may still have to pay big electricity bills if you didn’t spend time understanding your electricity bills till date. Quite possibly you never paid attention to your electricity bill except when fretting and regretting how big it is. In fact, hardly a few of us ever look at the numbers scattered all over the bills. What we notice at the most is the due amount and due date. That’s it! But, do you know how much valuable and useful information these bills contain regarding the charges you pay for the utility. Therefore, it is highly advisable that you read the invoice carefully.

But, do you know what those different sections on the bill are all about?

You stand to gain in more than one way if you understand your electricity bill. As you read your energy bill, you will realize how much energy you are consuming each month, which is your average monthly electricity usage. The breakdown of charges and patterns will become more comprehensible as you compare your previous month’s energy use. Besides this, reading your bill will be helpful when you sign up for other alternatives for energy supply as these charges will be eventually added to your document. To help you get a clearer and better understanding of your utility bill, we’ve put together the important sections you need to pay attention to in your next energy bill.

Account Number: You’ll find it at the top-left corner of your electricity bill. Your account number is the key to billing and getting customer support from your utility provider. It is also important when you sign up for another cheap electricity deal or plan as suppliers would require it for completing your enrollment.

Billing Summary: It indicates the last payment you made and refers to the amount you paid for the previous months’ energy usage.

Current Period Charges: This is your current utility charge, which covers generation and transmission charges, taxes as well as other fees.

Payment Slip: This portion of the bill needs to be cut and returned to your utility company in case you wish to send your payment through the mail.

Applicable Taxes: The applicable taxes on your energy bill includes your estimated total sales tax. You need simple math to find out the percentage of your bill that goes to sales taxes.

Price to Compare: It is the current price per kWh for the utility. This number can be used for comparing your current supply rates with available suppliers of energy in your area.

Besides the above-mentioned critical elements, other important things you need to know about your electricity bill include:

kWh Usage: It is your current month’s kWh usage.

Historical kWh Usage: The historical kWh chart is very useful in helping you view your energy usage of previous months and keep a track of all the fluctuations such as the usage spikes during summer and winter.

Bill Breakdown: It covers the breakdown of services that are involved in bringing electricity to your home and the charges that apply. Generation charges constitute the biggest chunk of most energy bills. You may shop this service where energy is deregulated, such as in Texas.

Usage Profile: You can check & compare your energy usage last month and this time (month) last year to discover a rise/fall in kWh usage monthly and daily.

To conclude: The bill that you receive may look bigger or shorter depending on your monthly electricity usage and the base energy charges at which you locked the cheap electricity deals and additional charges that apply. To calculate your estimated monthly electricity bill, try our free energy calculator.

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