How to Decipher Your Utility Bill

Utility bills can be complicated -- and there are steps you can take to understand them better, but you may never be able to figure them out fully.

It's an important issue now, as fuel prices soar to new heights, the U.S. economy teeters, and rising numbers struggle to afford the heat and electricity in their homes.

There are a few items on your bill that remain simple enough to check. If you live in a state where the company does automatic meter readings, you might be able to cross-check it by reading the meter yourself. You can then compare your reading with the one on your bill to make sure they match.

Another approach is to compare your usage against past history. For example, Southern California Edison's bill contains 19 components, and charges related to energy generation and delivery are broken down into several additional pieces associated with a "baseline."

Utilities such as SCE, which is a unit of Edison InternationalEIX, are in the midst of adding components to their bills that will give consumers even more information about their energy use.

But it isn't all smooth sailing.

Scott Rubin, a Selinsgrove, Pa.-based attorney and consultant, pointed out that gas and electricity bills already have so many taxes and surcharges thrown into them, it's difficult to make important comparisons.

"The utility bill should be pretty straightforward," Rubin says. "But it's not."

The bill today "doesn't really provide customers much information on what they use historically," says Lynda Ziegler, SCE's senior vice president of customer service. "It's pretty complicated and it was the result of different regulatory decisions over the years."

Also, if you want to get into the nitty-gritty of why you're getting charged a specific rate, you'll have to read the tariff. That's the set of rules that your gas and electric company must follow when calculating your bill. However, tariffs can run hundreds of pages long. You can find information about New York's tariffs here.

There's hope on the horizon: Ziegler says SCE is in its third round of testing a new bill format that's expected to simplify matters when it becomes available to customers in April. For example, it will include a graph that shows your history over the past year, so you can make month to month comparisons and get ideas about ways to cut back on your usage effectively.

"One of our primary objectives on the bill redesign was to make it simple," Ziegler says.

Bill redesigns don't necessarily clarify everything, though. After Consolidated EdisonED redesigned its bills in New York recently, the format morphed from a handful of items to more than 10.

When asked to explain why the charges for gas supply on one bill amounted to 105 cents while the charges for transporting it into the home amounted to 55.9184 cents, a customer service representative was unable to help.

"I really don't know how they come up with those numbers, ma'am," she said. "There isn't anywhere where we have detail for how we come up with that amount."

Con Edison's spokesman, Bob McGee, says his company redesigned its bill after the local regulator, the Public Service Commission, required New York State utilities to provide additional detail of their charges.

Con Edison worked with a bill-design consultant and went through several rounds of customer focus groups, and incorporated feedback into the new bill design.

"There's no doubt that it's complicated and I understand that customers have difficulty understanding the details," said an official at the PSC. "They've unbundled the bill to disclose more to customers so they understand the charges they're paying."

Utility customers can only hope the planned redesigns really do shed more light on how these bills work. Unless somebody really likes wading through those novel-length tariffs...