Understanding Your Electricity Bill: What Does It Mean?

If you are a resident of Pennsylvania and use PECO for your electric supply company, then you are very familiar with the monthly PECO electricity bill. Skipping over the itemized list of charges, you reach the bottom of the bill to the total amount you need to pay for the month, and make a bill payment online. After all, it’s electricity that powers your home and without it, you can’t plug into your daily life of cooking, cleaning, watching television, using your iPad etc. But what exactly are you paying for? What does your electricity bill actually mean? Understanding what you are paying for is important, especially because there are other utility companies in PA that can save you cash in the long run. Customers in Pennsylvania were among the first to have the option of choosing an electricity supplier other than PECO to power their homes for greener options, and money-saving opportunities.


Breakdown of Your Electricity Bill

Before going into the itemized charges on your electric bill, it’s important to note that your electricity is calculated by the amount of kilowatt hours used in the billing period. A kilowatt hour is a basic measurement of electric energy used by the customer, and is charged by the number of cents per kilowatt hour. One kilowatt hour is the amount of energy used by one 100-watt light bulb for 10 hours.

  • Customer Charge

    A customer charge is a general monthly fee that covers a slew of things like billing and meter costs. Meter costs include the actual meter and equipment itself, automation of reading your meter to figure out how much to charge monthly, and any maintenance needed for the meter.

  • Generation Charge

    A generation charge is a general monthly fee for the production of electricity. On the same line before the total amount for the generation charge, you will see the total amount of kilowatt hours of electricity used in that billing period multiplied by the amount in cents per kilowatt hour PECO charges for their generation charge.

  • Alt. Energy Portfolio Standard

    Alt. energy portfolio standard is a charge that is allocated monthly for the cost of purchasing alternative energy sources like renewable energy that PECO uses for its supply of electricity. It is mandatory by the state of Pennsylvania that PECO supplies a percentage of its electricity from alternative energy resources like solar and wind energy. You will see this reflected on your bill with the total number of kilowatt hours you used for the billing period multiplied by the amount in cents per kilowatt hours PECO charges for this alt. energy portfolio standard cost.

  • Transmission Charge

    A transmission charge is a monthly fee to cover the costs of transporting the electricity from generating stations to the PECO facilities.

  • Distribution Charge

    A distribution charge is a monthly fee that covers all of the equipment necessary to deliver the electricity to your home, which includes the use of the power lines, substations, and transformers.


Switching Electricity Suppliers

  • Why Would Someone Switch Electricity Suppliers?

You don’t have to switch your electricity supplier if you are completely satisfied with PECO; however, now that you know what your electricity bill means, you have the option to change your electricity supplier for potential savings. Comparing the price you spend per kilowatt hour can really add up. Depending on your usage, if you are just saving one cent per kilowatt hour by making the switch, you can potentially save over $100 a year!

It’s not just the cost that influences how people choose their electricity supplier. Many people are switching suppliers because of how the electricity is produced. Some companies only provide electricity that is produced through alternative resources other than the burning of fossil fuels, like wind and solar energy. Consumers are becoming more aware of their carbon footprints, and take that first step by exploring “greener” options when powering their homes.

  • What Do I Look For on My Current Bill to Compare Prices?

When looking at your current bill versus pricing of competitors, the PTC (price-to-compare) will be the cents per kilowatt hours. Look at your Transmission charge and your Generation charge on the PECO bill. The competitor companies usually have these two charges combined into one total, called the Generation charge or the Transmission/Generation charge. All other charges on your PECO bill will stay the same for any competitor supplier because those other charges are regulated by the PUC (Public Utility Commission).

  • Where Can I Compare Pricing for Electricity Suppliers?

    A useful website for Pennsylvania residents to find out more about competitor companies to compare pricing for electricity is www.PAPowerSwitch.com. Another great website to make price comparisons is www.chooseenergy.com.