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How Electric Rates are Set and Determine the Charges on Your Bill
Energy is a Regulated Industry
A regulator oversees public utility services like electricity, natural gas, water and telecommunications.
Their responsibilities include:
- Determining the prices utilities can charge
- Monitoring reliability and safety
- Promoting sustainable and renewable energy sources
That means everything we do is approved at the state or federal level by a regulator, including:
- How much you pay for service
- How much we’re allowed to earn
Rates vs. Charges: What’s the Difference?
It’s important to understand the difference between rates and charges.
A rate is the price per unit of electricity you use and the charge is the total amount you pay for your energy usage.
How a rate becomes a charge
Charge = rate × your total electric usage in kWh
Delivery Charge
The Delivery charge covers the cost of operating the entire system that brings electricity to your business.
This includes:
- Maintaining infrastructure like poles and wires
- Providing customer assistance
- Supporting the skilled employees who operate and maintain the system
How Delivery rates are set
Before Delivery charges appear on your bill, rates must go through a regulatory review process.
Step 1: Review costs and future investments
We evaluate what it costs to provide customer assistance, operate and maintain the system, and invest in improvements to keep service safe and reliable.
Step 2: Propose rate adjustments
Using this information, we may propose adjustments to parts of the Delivery category. These adjustments can happen multiple times a year. Every few years, we may file a larger rate review proposal. This process includes a detailed evaluation by the state regulator, public hearings and a thorough review of our proposal. Through this process, final rates are set.
Step 3: Calculate your Delivery charge
The approved Delivery rate is multiplied by the amount of electricity you use. That total is the Delivery charge you see on your bill.
Supply Charges
The Supply charge is calculated using a separate rate. Since we do not generate electricity, we purchase it through contracts with energy suppliers. The supply rate also goes through a regulatory review and approval process.
We do not mark up this rate. You pay what we pay to purchase the electricity.
Interactive Bill
Explore an interactive sample bill to see where you can find the rates and your own usage.
