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How to Read Your Energy Bill

December 12, 2018

When it comes to your energy bill, it’s often easiest to look at the total amount due and write a check. However, when it comes to something as crucial at your energy, it’s important to understand exactly what you’re getting when you pay that bill each month.

Key terms you might find on your energy bill

There are a variety of terms that could appear on your bill. Having a good understanding of what these terms mean will better help you interpret your bill.

Transmission – a charge for delivering electricity over network lines and equipment from the supply source to the customer’s point of delivery.

Distribution – utility charge to transfer the energy from transmission to your home and business.

Capacity – a charge that recovers costs associated with system capacity needed to meet peak system demand. The charge is typically based on the customer’s peak demand.

Supply (generation) – the charge, normally per kWh or Mcf, for energy used during the bill period.

Charges included on your energy bill

If you use an energy supplier, like AEP Energy, for your business’ energy, the utility and supplier are responsible for different portions of your bill. You may not always see these items listed on your bill, but they are components that determine your overall bill cost.

While it varies by utility, most utilities charge distribution, utility tariffs (like energy efficiency rebate programs, energy grid modernization fees, etc.) and a customer charge (a fee for keeping an energy meter on your building).

Generally, your energy supplier fee consists of generation, transmission (however, in Ohio transmission is charged from the utility), capacity, renewable portfolio standards (RPS), ancillary fees and line loss charges. It’s important to note that the supplier fees aren’t added on just because you’re working with a supplier. If your utility supplied your business with energy, the fees listed above would still be factored into your energy price, however it would come from your utility instead of a supplier.

This is a sample bill that demonstrates how your bill could be broken out if you’ve partnered with an energy supplier. Actual line items vary by state and utility. As an AEP Energy customer, you’ll always see our logo on your bill.

At AEP Energy, educating our small business customers is a top priority. We want to make sure you understand the energy bill you receive each month. Contact your Account Management Team at 1-888-924-7111 or aepenergyrenewals@aepenergy.com with questions about your AEP Energy account.

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