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The monthly electric bill may look like a test to

gauge a consumer’s patience. The statement is

jammed with detail written in a language not Account Number: 11 00 13 5169 32
spoken in most homes. The electricity is measured
in something no one can imagine, let alone see, JOE SMITH
touch or smell. And its cost, though just pennies, 2222 S. MAIN ST.
seems to have gone out of control by the time you
get to the bottom line. 1
What to do? Take a look at the Illuminating Co.
sample summer bill and accompanying explainer. Account Summary Amount Due
Ohio Edison bills are nearly identical. 79.51
1 Account summary and current basic 0.00 0.00
charges: Electric utilities bill their customers
monthly for the amount of energy used the 49.01
previous month, as measured by a meter or as 90.92 90.92
estimated, using historical consumption patterns. Total Due by Aug. 19, 2009 – Please pay this amount $90.92

2 General information: If you are buying your

electricity from a company other than the
Illuminating Co. or Ohio Edison, your bill will list that General Information
company here. Currently there are only two outside
suppliers offering power here — FirstEnergy
Solutions or Gexa Energy through NOPEC. 2

3 Price to Compare: This is the price, or the

rate, the utility charges for each unit of power
it bought and paid to have moved over the high-
voltage transmission system, also known as the
“grid,” to the lower-voltage wires on your street, 3 Price to Compare Message
and finally, to your home.

What is a kWh? Imagine your teenager manages

to turn on 10 table lamps around the house, each
with a 100-watt bulb. You are now using 1,000
watts, or 1 kilowatt. The bulbs burn for an hour
before you find them. You have consumed 1,000
watts (or 1 kilowatt) for one hour, or one
kilowatt-hour, abbreviated 1 kWh. Don’t forget the 4 Charges from The Illuminating Company this billing period
delivery charges.

4 Charges from the utility: This is the most 5

confusing section of the bill to many
consumers because it is detailed and written in
terms that are defined elsewhere on your bill.

5 Customer charge: A fixed monthly $4 charge 7 Bypassable Generation and Transmission Component 9
just for the privilege of being a customer. It
covers administrative costs. 8 10 Charges from FirstEnergy Solutions this billing period

6 Distribution Related Component: This is

the delivery charge. It pays for your use of the
local wires, substations and transformers. It is also
750 KWH x 0.065340 per KWH 49.01
based on a rate — about 4 cents per kWh.
7 Transition charges: These will be on
Illuminating Co. bills until Dec. 31, 2010, paying Detail Payment and Adjustment Information
down state-approved expenditures the utility made
before deregulation began. The charges were in the
rates before deregulation, but not listed separately.
Ohio Edison transition charges have been paid off.

8 Cost Recovery Charges: Less than half a cent Account Balances by Company
per kWh, these were authorized by the state to
reimburse the utility for upgrades to the big trans-
46.88 –46.88 41.91 41.91
mission lines it had to make when rates were 32.63 –32.63 49.01 49.01
locked at set prices. Illuminating Co. residential 79.51 –79.51 90.92 90.92
customers pay a much higher cost recovery charge Meter Reading Information
than Ohio Edison customers because cost recovery
for this company includes a rate to reimburse the
utility for the long-term, deep-discount contracts it
signed with industrial users before FirstEnergy
bought the utility. As these contracts expire, any
new CEI industrial discounts have to be linked to
job creation or retention and have to be approved
by the state.