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Understanding your utility bill

Here is some helpful information on how to read and understand your electric or gas bill. You can also find information on your billing options and calculating your costs.

Table of Contents

1. Determining your electric costs

Electricity is measured in units known as kilowatt-hours (kWh). How much you pay depends on the price of the electricity and the amount that you consume. Your monthly electric bill is calculated by multiplying the cost of a kWh by the number of kWh used. While the average residential customer uses approximately 500 kWh per month, your use may be higher or lower depending on the number and type of appliances that you use in your home. You can determine your average monthly usage by looking over your past electric bills.

2. Breaking down your electric bill

Supply charges

Your electric bill has 2 components.  One component of your bill is supply charges.  There are 2 entities that can provide your electric supply service:

  1. the investor-owned electric company that provides delivery services in your area (Eversource, National Grid, or Unitil), or
  2. a competitive supplier. 

More information on past and present supply charges from the investor-owned electric companies are available on the basic service page.  Some current competitive supplier rates are available on Energy Switch MA.

Delivery charges

The other component of your electric bill is the delivery charge.  Delivery charges include:

  1. transmission charges - The Federal Energy Regulatory Commission (FERC) regulates these charges.  Transmission charges are used to build, maintain, and operate the transmission system. The transmission system brings electricity from power generators to the local distribution system. 

  2. distribution, operations and service charges - These charges include the costs to:

    1. deliver power to your home,

    2. pay employees that maintain poles and wires,

    3. provide customer service, and

    4. make the electric grid more reliable.

  3. public policy charges - State and federal governments mandate these charges. Some of the line items on your bill that fall into this category are:

    1. energy efficiency,

    2. renewable energy,

    3. electric vehicle charge, and

    4. distributed solar charge.

Delivery service rates will vary depending on the town or city in which you live. The only way to reduce the delivery part of your bill is to use less electricity, which will also reduce your supply charges.

Example of how you are charged

Harry pays a total of 31 cents per kWh for electricity:

  • delivery charges - 16 cents per kWh

  • supply charges - 15 cents per kWh

The company tracks Harry's usage, which is about 600 kWh per month. Harry's monthly bill ends up being $186 (31 cents per kWh x 600 kWh = $186). Since the supply charge is 15 cents, the supply part of the monthly bill is $90 (15 cents per kWh x 600 kWh = $90). This $90 is the only part of the bill that is subject to competition. Harry will pay an average of $96 ($186 - $90 = $96) per month to his distribution company for delivery no matter which entity provides his supply.

3. Determining your gas costs

Natural gas is measured in units known as therms.  How much you pay depends on both the price of the natural gas and the amount that you consume. Your monthly gas bill is calculated by multiplying the cost of a therm by the number of therms used. While the average residential non-heating customer uses approximately 20-30 therms per month and the average residential heating customer uses approximately 100-125 therms during the heating season, your use may be higher or lower depending on the number and types of appliances in your home. You can determine your average monthly usage by looking over your past gas bills.

4. Breaking down your gas bill

Supply charges

Your gas bill has 2 components.  One component of your bill is the supply charge.  Your supply charge recovers the costs associated with purchasing and transporting natural gas to Massachusetts. There are 2 entities that can provide your gas supply service:

  1. the investor-owned gas company that provides delivery services in your area ((Berkshire Gas, Eversource, National Grid, Liberty Utilities, or Unitil), or
  2. a competitive gas supplier. 

Current rates for the investor-owned gas companies are available here

Delivery charges

The other component of your bill is the delivery charge.  Your delivery charge recovers the cost of delivering natural gas through the gas company’s distribution system to your home or business. The rates for delivery service will vary depending on the town or city in which you live, regardless of the entity that provides your supply service. The only way to reduce the delivery part of your bill is to use less natural gas, which will also reduce your gas supply charges. 

5. Billing and Rates

The rates charged for electricity and natural gas vary among the different distribution companies.  See the links under "Related" to the right of the webpage for specific rate information.  The DPU reviews and approves all rates proposed by the distribution companies, whether in base distribution rate proceedings or other proceedings.  The DPU licenses competitive suppliers but does not oversee or regulate how they set their supply product prices.

If you select a competitive supplier, you will be paying both your distribution company (for the delivery charge) and the competitive supplier (for the supply charge).  Depending on the competitive supplier, you may receive one bill (combined billing) or 2 separate bills. In general, smaller consumers (residential and small commercial) will receive 1 bill from the distribution company with both supply and delivery charges.  

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