Anatomy of a bill — Level 2 Auditing

The short version

A bill has four regions: who and when, which price plan, what the meter said, and what each charge was. Find the price plan first — everything else follows from it.

Utilities lay bills out however they like, so the first one from a new utility always looks foreign. It is not. The same four regions are always there, in some order, and once you have named them you can read any bill from that utility in seconds.

Region 1

The top says who, where and when.

The service period — the from and to dates — is what you match against the tariff later. Note the billing days too.

Region 2

One line names the price plan.

A short code like GS-2, E-32 or Rate 23. It names one price plan in the tariff. Nothing else on the bill matters as much.

Region 3

The meter section says what was measured.

Watch for EST next to a reading. That is a guess, not a measurement, and a run of them followed by one large actual is worth chasing.

Region 4

Then every charge, one line at a time.

This is the region you will spend your time in. If you cannot say where a line came from, you do not understand the bill yet.

The charge lines you will meet

Line	What it is
Customer charge, service charge, basic charge	Flat, per month. Charged whether you use anything or not.
Distribution, delivery	Per unit, for moving the energy. The utility’s side.
Demand charge	Per kW, on the month’s peak. Only appears on demand-metered rates.
Energy charge, supply, generation	Per unit, for the commodity. From the supplier or from default service.
Riders, surcharges, adjustments	A stack of small named lines. Some mandatory, some not. Lesson 5.
Taxes	Sales tax, gross receipts, franchise fee, utility tax. Level 1 territory.

Four details that trip people up

The meter multiplier. Some meters do not read in the units you are billed in. If the bill shows a multiplier, the usage is the reading times that number. Ignore it and every calculation you do afterwards is wrong by that factor.
Blocks and tiers. “First 3,000 kWh at one price, everything above at another.” You will see one charge split across two or three lines. That is one component in the tariff, not several.
The bottom of the bill. Previous balance, payments received, late fees, then current charges, then total due. Only the current charges belong in an audit. Never audit against the total due.
Summary bills. One customer, many accounts and meters, one envelope. Each account has its own rate code, its own usage and its own tariff. Audit them one at a time and never average them together.

The one thing to remember

Find the rate code first. Then work down the page giving every charge line a name. A line you cannot name is either a rider you have not found or a mistake.

Check yourself

Which single line on the bill do you look for first, and why?

The rate code. It names the price plan in the tariff, which is what everything else in the audit hangs on.

The bill shows a total due of $9,400 and current charges of $4,100. Which number do you audit?

$4,100. The rest is old balance, payments and fees, and has nothing to do with the rate.

You see EST beside three months of readings in a row. Why care?

Those months were estimated, not measured. The correction lands in a later bill, which can distort both usage and peak demand for the months you are comparing.