Understanding Your Energy Bill

What You’re Really Paying for on Your Electric Bill

(And Why It’s So Expensive)

Every month, your electric bill shows up, and maybe you glance at the total, sigh, and pay it. But have you ever really looked at where that money goes?

Most people think they’re just paying for the power they use.

The truth? You’re paying for a whole system of costs—some obvious, some, not so much—that make your bill way more than just “energy.”

Let’s break it down, so you finally understand what you’re really buying each month.

1. The Fees Before You Even Flip a Switch

Even if you used no electricity this month, your bill wouldn’t be zero.

• Customer and Meter Fees – You pay just to be connected. These cover meter reading, billing systems, and grid access.

• Delivery Charges – This is for the poles, lines, and transformers that bring power to your home. You’re helping maintain an enormous grid, even if your usage is minimal.

Think of it like paying rent for access to electricity before you’ve even turned on a single light.

2. Energy Charges (The Part You Expect… Sort Of)

This is the “per kWh” cost most people focus on, but it’s not as straightforward as it seems.

Most California utilities use tiered rates, meaning:

• Your first chunk of energy each month is charged at a “baseline” rate.

• Go over that baseline, and your cost per kWh jumps to a higher tier—sometimes 30–40% more per unit.

On top of that, many plans use Time-of-Use (TOU) pricing:

• Power costs less late at night or mid-morning.

• Run your AC or do laundry between 4–9 PM? You’re paying premium prices.

So if your bill feels unpredictable, it’s not your imagination—it’s designed to be more expensive if you’re using a lot or using it at the wrong time.

3. The Wildfire Factor

Here’s a gut punch: A big chunk of your bill goes toward wildfire costs.

Utilities are spending billions burying power lines, hardening the grid, and covering massive insurance premiums to avoid disasters. These are projects that cost millions per mile, and those costs get passed directly to you.

While these upgrades do make the grid safer, they’re also lucrative for the utility companies because they earn returns on those investments. In other words, they charge you more to build the system—and profit from doing it.

4. It’s Still a Business (And a Profitable One)

Electric utilities may be regulated, but they’re still for-profit companies.

Executives are highly paid, shareholders expect returns, and every dollar spent on infrastructure or recovery is designed to bring in more revenue down the line. You’re not just paying for safety and service—you’re helping them keep profits and bonuses flowing, too.

5. California’s Energy Shift: Paying More for Less

Part of what’s driving bills higher is how we get our energy. California shut down its San Onofre nuclear plant, and its last one—Diablo Canyon—is set to close soon.

With less local generation, we rely more on natural gas plants and even import electricity from other states. Imported power is often more expensive, especially during peak demand, and those costs show up on your bill.

6. All the Extras You Didn’t Know About

On top of everything else, you’re also covering:

• State-mandated programs and renewable energy projects

• Utility taxes and bonds

• Keeping CEO’s & Shareholders Happy

Individually, they might not seem like much. Together, they can make up a surprising portion of your bill.