How to Read Your Gas or Electric Utility Bill

How to Read Your Gas or Electric Utility Bill

Taryn Williford
Nov 4, 2010
What do you do when you get your once-a-month gas or electricity bill in the mail? If you're like most people, you just glance at what's due, tear off the stub and write a check. Next time, try checking through all of the charges. Reading and understanding your utility bill could save you money if there's any superfluous charges or an unusual rate hike.

If you spend the time to read your bill, you'll better understand exactly what you’re paying for and use that knowledge to save energy and reduce costs.


  • Electric bills are pretty straightforward, especially when compared to gas utility bills. If you need help de-coding any strange terminology, look for a key on your statement or call your electric provider's customer service line.
  • Your bills should have two readings: A current usage reading and a previous reading, both in kilowatts. A utility employee comes out to read your electric meter to figure out how much you've used and that's how they know how much to charge you.
  • You get charged a set amount per kilowatt of energy used each month on your electric bill, so if your usage has remained around the same from the previous month, your monies due should stay steady also. Read through the taxes and extra charges that are itemized on your bill and compare them to the month before. Call your electric provider if anything unusual has changed.
  • Look specifically for charges you can easily avoid—they might be in the itemized charges or mentioned elsewhere on the statement—such as a small monthly fee for paper billing or for paying online.


  • Gas usage is sometimes notated in the amount of energy used and sometimes as a volume of gas. You'll probably see one of these abbreviations: Therm or thm (thermal unit), BTU (British thermal unit), CCF (100 cubit feet) or MCF (1000 cubit feet).
  • Unlike electric companies which generate the power they supply to you, gas companies usually buy natural gas from a third-party supplier. The price changes from month-to-month much like the petrol you get from the corner station. A lot of the strange terms and costs on your bill are usually designed to account for these fluctuating prices.
  • Some gas companies charge their customers a changing rate for their energy based purely on the cost of the gas supplied to the company. It's usually listed as a "procurement charge" or "commodity charge." Gas companies don't usually mark up this charge and provide gas to you at or near cost. Other gas companies decide to charge an average price throughout the year to keep things simple. If you're curious about your utility company's practices, give them a call.
  • A "gas cost adjustment" means that the company was wrong estimating what the cost of gas was going to be that month. Since your gas company also gets a bill from their natural gas provider for the gas you and your neighbors used, you might see a charge or a credit on a subsequent bill to cover the actual cost of gas.
  • Depending on your area, you may see an "amount over baseline" charge. The baseline allowance refers to the amount of energy you'll probably use to meet your basic needs, and is sometimes mandated by state law. Gas consumed under the allowance is billed at the lowest rates. But if you ever go over the baseline, you'll see a higher rate resulting in the "amount over baseline" charge.
  • Again, if you're trying to save money, look out for any avoidable costs like charges for paper billing. These are the easiest to cut out and trim your budget.

(Images: Flickr user ssteacher under license from Creative Commons, Flickr user splorp under license from Creative Commons)

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