Utility Billing Guide
How to Identify Hidden Surcharges on Residential Electric and Gas Bills
Every electric or gas bill is really two bills stitched into one: a supply charge for the energy itself, and a delivery charge for getting it to your home. On top of those two, most utilities layer several smaller line items — surcharges, riders, and fees — that are easy to miss unless you read the bill line by line.
40–60%
of a typical electric bill is the supply charge alone — the rest is delivery, plus any additional surcharges and taxes.
Supply vs. Delivery: The Core Split
Supply Charge
Covers the electricity or gas itself — fuel, generation, and the supplier's margin. In deregulated states, this is the part you can shop around for with a different supplier.
Delivery Charge
Covers the wires, pipes, meters, and grid infrastructure that carry it to your home. Set by your local utility regardless of which supplier you use, and tends to rise steadily year over year.
Common Surcharges to Look For
- Public benefits / system-improvement charges — fund infrastructure upgrades or low-income assistance programs, mandated separately from your base rate.
- Renewable energy or clean-energy riders — pass through the cost of renewable-energy programs the utility participates in.
- Franchise fees and taxes — local fees for the utility's right to operate in your area, itemized as their own line.
- Late-payment and reconnection fees — one-time charges that should only appear if they actually apply to your account that period.
Tip: None of these surcharges are inherently improper — they're standard parts of how utilities are regulated and funded. The audit isn't about proving they're illegal; it's about confirming the ones on your bill are the ones that should actually apply to your account, at the rate your utility has on file.
How to Audit Your Own Utility Bill
- Pull last month's bill and this month's side by side. A new line item that wasn't there before is worth asking about.
- Check your usage (kWh or therms) against the meter reading. An estimated read that doesn't match your actual usage can inflate the supply charge.
- Confirm the delivery rate matches your utility's published rate schedule — most utilities post current rates publicly.
- Call and ask what any unfamiliar line item is — utilities are generally required to be able to explain every charge on request.
Frequently Asked Questions
What is the difference between a delivery charge and a supply charge?
Supply is the cost of the energy itself; delivery is the cost of the infrastructure that gets it to your home. Delivery is set by your utility no matter which supplier you use.
Can I shop around to lower my utility bill?
In deregulated markets, yes — for the supply portion. The delivery charge stays fixed to your local utility regardless of supplier.
What extra fees commonly show up on a utility bill?
Public benefits charges, renewable energy riders, franchise fees and taxes, and late-payment or reconnection fees — each usually its own itemized line.
Have BillVerify Check Your Utility Bill
Upload your electric or gas bill and BillVerify checks the line items against typical rate structures for anything that looks off — free to start, no card required.
Audit My Bill Free →