When you receive your monthly energy bill, do you take the time to read through all of the charges? Or do you just look for the “balance due” and trust that everything adds up?

We’re not saying that your utility provider is out to get you, but it is possible for there to be inaccuracies on your statements. This is especially true for nonresidential properties, where energy bills can drastically differ from month to month.

If you don’t know how to read your energy bill, this breakdown will help you understand some of the charges and terminology…

kW vs. kWh

Two of the most common terms found on electricity bills are “kW” and “kWh”. Here’s the difference:

  • kW stands for “kilowatt”, which is a unit of power used to measure the amount of energy being consumed at an exact moment in time.

  • kWh stands for “kilowatt hours”, which is kilowatts * hours. This measures the total energy consumed over a period of time (such as a week or a month), not just in a particular moment.

The main charges

Generally speaking, there are four main charges on your utility bill. They are:

  • Generation: the cost of producing the energy you consumed.

  • Transmission: the cost of transmitting electricity from an off-site power plant to your facility through power lines and towers.

  • Distribution: these charges cover the costs of electricity poles, wires, and the workers needed to install and maintain this equipment.

  • Surcharges: additional charges, usually taxes.

The last three charges should be relatively consistent on a monthly basis. The total kWh consumed will be multiplied by different rates (peak vs. off-peak) to calculate your total energy bill.

Make sure that you are being charged correctly by investing in real-time power monitoring instruments for your facility. With this equipment, you will be able to track your business’ energy consumption over the course of the month and compare it with your utility bill in order to make sure you are not being overcharged.

If you want the best power monitoring equipment, you need Electro Industries. We have been a worldwide leader in the energy management industry for more than 40 years, and have helped businesses across the globe accurately monitor their energy consumption. Visit our website for more information, or give us a call at 866-928-7908.