Start with the bill’s rate section
Look for a line measured in cents per kilowatt-hour, ¢/kWh, or $/kWh. A rate shown as 17 cents per kWh should be entered into our calculators as $0.17/kWh. Move the decimal two places to convert cents to dollars.
Why one bill may show several rates
Some providers separate generation, transmission, delivery, fuel adjustments, and other usage-based charges. Others use tiers, seasonal prices, or time-of-use periods. There may not be one printed number that represents every kilowatt-hour.
- Flat rate: use the listed energy rate if it applies to all usage.
- Several usage-based charges: add the per-kWh charges that rise and fall with consumption.
- Tiered rate: use the tier likely to apply to the added or reduced usage, or calculate each tier separately.
- Time-of-use plan: use the rate for the hours when the appliance will run.
Calculate an effective rate
When the bill is complicated, divide the usage-based portion of the bill by total kWh. For example, $136 of usage-based charges divided by 800 kWh equals $0.17/kWh.
Effective usage rate = usage-based charges ÷ total kWh
Do not automatically include fixed customer or service charges when estimating savings. Those charges may remain even if electricity use falls. Our electricity bill estimator provides a separate field for fixed charges.
Which rate should you use for savings?
Use the rate that applies to the electricity you expect to avoid. This is sometimes called the marginal rate. A bill-wide effective rate is a convenient estimate, but it may overstate savings if it includes fixed charges or understate them if the avoided usage falls in a higher-priced tier.
Check the result
Compare the calculator’s estimated energy charge with a recent bill. A small difference can come from taxes, credits, rounding, rate changes, and charges our calculators do not model. Keep the original bill available so you can verify every input.