Understanding the topic
Electricity bills commonly include a charge for the energy used and a separate daily supply charge. A kilowatt-hour (kWh) measures energy, not instantaneous power. Rates, tariffs, taxes and discounts vary by plan and location.
Quick reference
Use these reference points alongside the worked examples below.
| Term | Meaning / value | Why it matters |
|---|---|---|
| Watt (W) | Rate of power use | A 1000 W appliance is 1 kW |
| Kilowatt-hour (kWh) | Energy used over time | 1 kW for 1 hour = 1 kWh |
| Usage rate | Price per kWh | Multiplied by consumption |
| Supply charge | Daily fixed charge | Applies even with little usage |
| Billing period | Number of days | Used for daily charges |
Step-by-step method
- Find the billing dates and total kWh used.
- Identify the energy rate and any peak/off-peak rates.
- Multiply kWh in each tariff by its applicable rate.
- Multiply the daily supply charge by the number of billed days.
- Compare your estimate with the bill, accounting for discounts, taxes and other charges.
Worked examples
Example 1: Energy charge
350 kWh × $0.30/kWh = $105.
Example 2: Daily charge
30 days × $1.10/day = $33.
Example 3: Simple total
Energy $105 + supply $33 = $138 before any other adjustments.
Common mistakes and useful cautions
- Do not confuse kW (power) with kWh (energy).
- A cheaper usage rate may be offset by a higher daily charge.
- Solar credits, time-of-use pricing and controlled-load tariffs need separate calculations.
Practice questions
Try each question before revealing the answer.
Question 1: What does 1 kWh mean?
Answer: One kilowatt of power used for one hour, or an equivalent amount of energy.
Question 2: What is 200 kWh at $0.25/kWh?
Answer: $50.
Question 3: What is a $1.20 daily charge for 28 days?
Answer: $33.60.
What to remember
- Find the billing dates and total kWh used.
- Compare your estimate with the bill, accounting for discounts, taxes and other charges.
- Do not confuse kW (power) with kWh (energy).