Gas and Electricity Bill: Charges and Fees on Electricity Bill Explained


The gas and electricity bill are a breakdown of the charges one has incurred as a customer of gas and electricity. It is billed monthly, quarterly based on your personal choice. The gas and electricity bill enables customers to know and understand how much they owe and make necessary payments.

However, when you fully understand the energy charges and fees on your natural gas and electric bill every month, it keeps your energy budget under control. Also, when reading your bill you may be thinking the bill charges are all about, the terms used and how they ate calculated, and any other problems. Keep reading on this gas and electricity bill post.

Gas and Electricity Bill

Gas and Electricity Bill

A lot of people just pick up this utility bill, get the figures and do the payment. Most times some people may be wondering what they are been charged for, or thinking why all these prices? The major knowledge you need about your gas and electricity bill is understanding your energy costs and the line items as shown on the bill. Get a copy of your monthly electricity bill from your supplier. Each bill is broken down into different home energy charges, which may vary from your suppliers.

Charges and Fees on Electricity Bill Explained

Below I will be explaining your gas and electricity bill there different breakdowns you often see on your utility bill which most people do not understand. Here they are:

Capacity Cost

The capacity cost fee is usually incurred by commercial customers, businesses, and others. It ensures that the electric utility has enough capacity available to cover the total power use their customers demand.

Since you may not know how much input on how this rate is accessed, you will have to do your part to reduce the costs for all users by using major appliances and machinery when not in use this will reduce the energy consumption during peak hours. Peak hours vary by location and season, get in contact with your electricity provider for more information about how to avoid peak usage times in your location.

Electricity Cost

On every bill, you will see a listing of the amount of electricity your household uses for the month. It’s listed in kilowatt-hours, or kWh. You can control a portion of your bill in two ways. First, you can select a supplier that offers a fixed-rate plan to avoid fluctuations in rates that happens due to changes in energy supply, change of seasons. Secondly, you can cut home energy charges by reducing your usage or other outside factors.

Utility Delivery charges on Electric Bills

The utility delivery charges on electric bills are the fee on your portion of line maintenance and upkeep. This helps to enhance the consistency of the power supply to your home. Small business enterprises can also pay this bill. Your bill may show a different term like “Transmission fee” or something similar, however the impact on your electricity bill remains the same

Gas Bill Explained

Understanding your energy cost also has to do with you understanding your natural gas bill. Your natural gas bill can be a greater part of your home’s energy charges. This is depending on your location and your supplier.  There are various terms you need to be familiar with to adequately understand your natural gas bill.

In addition, fixed rates and variable rates are different billing plans and will affect your natural gas bill. Understanding your natural gas bill becomes a bit more complex especially when you’re given a bill that changes every month. Fixed-rate billing is less complex than variable rate and keeps the rate you pay for gas the same each month. The only variable will be your usage.

Natural Gas Common Bill Terms

BTU – It is a British thermal unit or BTU. It is a measurement of energy that is used to calculate the amount of energy needed to raise the temperature of a pound of water 1 degree Fahrenheit.

CCF – it is the reading of the amount of natural gas you have used within the month, measured by hundreds of Cubic feet.

Therm – A therm is the equivalent of 100,000 BTUs. Typically this is the unit used to calculate the amount of energy used when determining your monthly charge for natural gas.

Price Per Therm – This is the rate you pay per them, per your contract. This rate may vary due to time of year, supply, and other cost factors if you are on a variable rate plan. You may have on your bill customer service charges, transmission fees, capacity fees, and other similar charges based on the requirements of your state or utility.

Breakdown of Your Utility bill

The breakdown of your average utility bill includes

  • VAT charges
  • Distribution charges
  • Wholesale Energy and supply costs
  • Environmental costs
  • Transmission Charges
  • Other Costs

VAT charges – the VAT charges, contrary to normal belief, that one does not pay full vat on gas and electricity. But you do pay a certain amount as a charge. Current VAT payments are capped at 5% of your bill in total.

Distribution charges – out of your total bill 16% of your gas and electricity bill go toward distribution costs. This includes the cost of building, operating, and maintaining the local gas pipes. Also with electricity wires which supply energy to home and to customers.

Environmental Costs – This is a proportion of your gas and electricity bill used to subsidize the government’s environmental initiatives. Environmental costs comprise approximately 6% of your gas bill and 11% of your electricity bill. Environmental schemes which ate subsidized by gas and electricity bill include:

  • Feed-in Tariff scheme (FITs)
  • Carbon Emissions Reduction Target (CERT)
  • Community Energy Saving Programme (CESP)
  • The Renewable Obligation (RO)
  • EU Emissions Trading Scheme (ETS)

Transmission Charges

Transmission networks are what really deliver electricity and gas to your house. And some of the cost of building and maintaining transmission chargers is passed on to customers. Presently, about 2% of the gas bills and 4% of household electricity bills make up these costs.

Other Costs – The other costs may be meter installation and gas storage costs. About 4% of household gas bills and 5% of household electricity bills consist of meter installation and gas storage costs.

The gas and electricity bill is very important for one to understand it so that you will be able to know how to adequately use your utility power per time.  To read further visit these links here or here

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