How do I reconcile my electric utility bill to actual energy used?

There are several factors that contribute to what you are charge on your electric bill and although it would seem that it should be straight forward, there are a few gotchas that you need to be aware of. In this article we will walk you through how your electric bill works. In this article, we will be using Pacific Gas & Electric's tariff schedule "E-20" as of March 2023. PG&E tariff schedules can be downloaded from Pacific Gas & Electric - Tariffs at

Disclaimer: Note that every utility company is a little bit different and the information provided herein is based on our interpretation of how US electric utility rates are deployed. Your area may be unique. Please let us know in the comments what's different about your area!

Quick Summary, terminology, and overview​

Here's the simple formula:
Total Electric Bill = Energy Charges + Demand Charges + Fixed Charges
Pretty simple...right? Ha!!

Let's go through some terminology to ensure we're all on the same page:
  • Electric Bill: The bill you receive from your electric company with an total amount due. These bills are usually generated monthly and represent the amount paid for electricity usage during the preceding month.
  • Energy Charges: The amount of money you are charged for the energy used. Energy is measured in kW, aka kilo-watts aka 1000 watts. Energy use over time is measured in kWH, aka kilo-watt/hours which represents the number of watts you used over an hour.
  • Demand Charges: Charges you incur based on your highest energy usage during a time period
  • Fixed Charges: Charges you received monthly which are not related to the amount of energy used.
  • Tariff Schedule: The document that defines your rates and what you are charged.

Energy Charges​

Energy charges on your bill are the simplest charge and they are based on consumption; meaning, you pay for what you use. Electricity consumption is measured in kWH (kilo-watt hours.) Your tariff schedule will indicate your energy charge rate, for example $0.08832 per kWH. From that point, it's simple math to determine what you use. That's where your meter comes in. One of the jobs of your meter is to measure the amount of electricity use you use over time and present that information to the utility company so that they can bill you for it. If you look carefully at the display on your meter, you will notice it's a running count of the amount of kWH used. That number is recorded at the begging and end of your billing period, the difference will be the total kWH you used during that period. Let's work through an example. Given:
  • kWH counter on 1/1/2023: 432759812
  • kWH counter on 1/31/2023: 434581230
  • Rate: $0.08832/kWH
The total energy charges will be 1,821,418 kWH * $0.08832/kWH=$160,867.64.

But is it that simple? Not always. For your home, it is often is that straight forward. For commercial and industrial facilities it often is a little more complex. For commercial and industrial facilities there are both period based and tiered energy charges. Here is an example of a rate structure:
In this application, there are no energy usage tiers but there are periods. You will note that for each period, there is a different rate that is employed. To define which time of day and time of year each period applies to, their is a corresponding data which could be expressed as follows:


So, how do we evaluate these? To determine what your rate is for any particular hour of any particular month, just look it up! For example, consider that it's 8:12am in March on a weekday. Looking that up in the Weekeday Schedule, I see that hour is in period "2." Looking up period 2 in the schedule tells me that energy used during this time will cost $0.10203.

You will also notice a column for Max Usage in the Tiered Energy Usage Charge Structure. In this particular tariff schedule, there is no max. However, here is an example of the same schedule where the max is used

In this example you see that for each period, there are different rates for different amount of energy during different periods.. For example, June-September, 4-8pm on both Weekends and Weekdays are a period 1. During period 1, these rates are in force:
This tells us that between 0-6.7kWH you will pay $0.39848/kWH, and, that for usage > 6.7kWH you will pay $0.48902/kWH.

These tiered and periodic charging models are obviously a lot more complex than just a simple $/kWH for the month! As mentioned above, one of the jobs of your meter is to measure energy usage over time. In order for these complex rate schedules to be realized, your system not only tracks an incremental total energy usage, but must also track how much energy is used during every hour of every day! Both Leviton sub-meters and your utility company store data in this fashion, so you can figure out how much energy you use and when it was used. By measuring your energy usage using Leviton sub-meter's, you monitor in real-time how much energy you are using as well as get alerts when you have spikes, which will help you manage your bill and ensure there are no surprises.

Demand Charges​

Demand charges are charges that are incurred monthly as a result of your highest energy usage during a time period. Just like energy charges, their are usage tiers and periods. The periods, like energy usage charges, are split into weekend, weekday, hour, and month with similar tables. Unique however to demand charges is that there may also be seasonal charges in addition to the time-of-use charges. Consider for a minute this structure.


In this tariff schedule, there are four periods defined for time-of-use and one seasonal charge. In order to determine your demand rate, you need to determine your highest energy usage during each period. Consider the following table:
PeriodMinimum kW/HourAverage kW/HourTotal kWPeak kW

The table shows us min, max, total, and peak energy charges for each period. To work out my demand charges, consider the Peak for each period and the seasonable charge. Considering all the demand tables above, this is how it works out:

PeriodPeak kWPeak $/kWPeak $
Seasonal Charge (April)257,921$15.67$4,041,622.07

In billing structures like this one where demand charges, it behooves you to mange them aggressively. Leviton's sub-meters, combined with our My Building software package, can be used to detect an approaching peak and automatically reduce energy usage to ensure you don't hit it. The goal, of course, is to decrease the delta between average and peak as much as possible, so your demand charges are minimized.

Fixed Charges​

Fixed charges are simply the charges you incur for the priveledge of having an electric meter. Like all other charges they vary based on whatever tariff schedule you're on, however, for the PG&E E-20 Tariff schedule we've been using as an example, they work out to $33.84/day. The specific formula for calculating per month is defined in the tariff schedule as:
The fixed monthly charge include the customer charge mandatory ($32.85421*365/12). Optional Meter Data Access Charge ($0.98563*365/12)

Using the formula, the monthly charge will be $1,029.30/month.

Tariff Schedule​

The tariff schedule describes in detail how you are billed for your electricity. Every utility company follows a different format, however, they all have the following things defined:
  1. To whom this rate schedule applies
  2. What your fixed charges are and how are they calculated
  3. What your energy charges are for defined tier's and periods
  4. What your demand charges are for defined tier's, seasons, and periods
Ultimately you should read your tariff schedule, understand it, and determine how it applies to what you are charged. It might feel overwhelming, but if you work through it step-by-step, you should have no trouble understanding it.

Pulling it all together​

Considering all of the above, your total utility bill is calculated as
Total Electric Bill = Energy Charges + Demand Charges + Fixed Charges
Given all the above examples, total bill can be calculated as:
  • Fixed Charges: $1,029.30
  • Demand Charges: $7,160,700.93
  • Energy Charges: $160,867.64
  • Total Bill: $7,322,597.87
That is a very large utility bill for obviously a very large facility. Most of your facilities will be much less expensive than that. However, it does illustrate the point that usage of energy costs money and that investing time and money into managing your energy can make a significant impact on your total utility bill. The following strategies for reducing and understanding your utility bill have been discussed:
  1. Identify and understand your tariff schedule
  2. Use Leviton sub-meters measure the energy usage of your discrete building systems, ex: HVAC, Lighting, General Use
  3. Use Leviton's DAS (Data Acquisition Server) to collect data from Leviton's sub-meters and make it available to our software tools
  4. Use Leviton's My Building software platform to store and analyze your energy usage
  5. Use Leviton's My Building software platform to detect upcoming peaks and automatically reduce your energy usage
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