Understanding Your Electricity Bill

It can sometimes be difficult to understand how your electricity bill is calculated. In an effort to make electric bills more understandable to consumers, the city has prepared this page dedicated to answering frequently asked questions.

My bill has a charge for “base fee.” What is this?

A “base fee” is a flat fee charged each month regardless of the amount of electricity (kWh) used. Each customer pays the same base fee as all other customers within the same customer class. For example, all residential customers pay the same base fee regardless of how much electricity they use each month. Similarly, all industrial consumers pay the same base fee as other industrial consumers. This fee is intended to cover fixed charges associated with each customer, such as meters and meter reading, etc., that do not vary based on the amount of electricity used.

My bill also has charges for “energy charge” and “power cost.” What are these charges?

These are both variable costs (costs that vary each month depending on the amount of electricity used) that are based on the amount of electricity (kWh) used by the customer for the month. The energy charge and power cost are multiplied by the kWh used by the customer to come up with a dollar amount to be charged for each of these items. The energy charge represents the non-fuel cost to produce the electricity used (such as the cost of the power lines, for example). In contrast, the power cost is merely a pass through cost for any purchased power and the fuel needed to generate the required electricity used. The power cost is the cost that is charged to Jasper to purchase the power supplied to customers. Along with some other local municipalities, Jasper purchases its power from Sam Rayburn Municipal Power Association (SRMPA). These costs vary each month, based on market forces, and are passed on directly to customers based on their usage share of the power purchased.

What is a “Demand Charge” and why do residential customers not pay it?

A demand charge is a charge based on the rate at which electricity is delivered to or by a utility system at a given instant, or averaged over a designed period, during the billing cycle. A demand charge is charged by the city to commercial and industrial users because their electricity usage is generally greater, on a pro rata basis, than residential customers. The charge is intended to reflect the additional burdens that larger users of electricity place on the utility system in comparison to smaller users.

Think of an electric utility system like a car that everyone shares.

It may be helpful to think of an electric utility system like a car that people buy together. The “base fee” is like each person paying an equal fixed amount of the monthly car payment for the right to have equal access to the car every month. The “energy charge” would be like a variable cost that each person pays based upon the miles they drive on the car each month, and would be designed to represent their share of the “wear and tear” placed on the car by their usage. Thus, a person driving more miles should pay more because they are causing more “wear and tear” on the car. Finally, the “power cost” is like the cost of gas for the car. It is the fuel needed to run the car. And people who drive the car more will pay more of the gas cost because their usage represents a greater share of the total gas cost than people who drive fewer miles.