Electricity bill

An electricity bill, in the context of buildings and their owners and/or occupants, is effectively an invoice detailing money that is owed for electrical energy that has been used.

In its simplest form, electrical energy will have been metered, usually in terms of the quantity of kilowatt hours that have a been used in a given time period.

A kilowatt hour or ‘Kwh’ is the quantity of energy that a load of 1Kw uses in 1 hour.

So:

1Kw running for 1 hour = 1Kwh

Equally:

0.5 Kw (500w) running for 2 hours = 1Kwh

And

2kW running for 30 minutes also = 1Kwh

1Kwh is also known as ‘1 unit of electricity’

The company supplying the energy will have set the price for the unit of electricity. This and other details that make up the bill will be detailed in the supplier’s terms and conditions. Such terms and conditions are known as tariffs.

Tariffs will vary widely between suppliers. As well as detailing the cost per unit of electricity, these will also cover other costs that make up the total amount owed.

In its most simple form, the bill will set out payment terms, such as payment due date, VAT rate if applicable and methods by which payment may be made.

On larger installations, it is common to see much more detailed tariffs, which may often encourage electricity saving at peak times and variable unit rates for different times of day.

With more complex tariffs, electricity usage will be charged while taking into account other factors such as:

• Time of day.
• Maximum demand at any given point in time.
• Seasonal variations.
• Power factor that electricity has been taken at.
• System usage charges.
• Payment methods.

The electricity bill must clearly set out all this information so that it is easy to establish how the total amount charged has been calculated.

NB Making Mission Possible - Delivering A Net-Zero Economy, published by the Energy Transitions Commission (ETC) in September 2020, suggests that the levelised cost of electricity (LCOE) is: ‘A measure of the average net present cost of electricity generation for a generating plant over its lifetime. The LCOE is calculated as the ratio between all the discounted costs over the lifetime of an electricity-generating plant divided by a discounted sum of the actual energy amounts delivered.’

--ECA

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