Understanding the System: Regional and Federal Transmission Planning
Electric Bill
Where Do Decisions at Your RTO/ISO Show Up on Your Electric Bill?
Electric bills are more than just a monthly expense. They’re a window into how our energy system works, what we pay for, and where policy decisions show up on our bottom line. Yet with autopay and digital billing, many people pay their bill without ever looking closely at what’s on it.
Electric bills reflect the real-world impact of infrastructure investments, market design, and regulatory oversight. As demand for electricity grows and we face new challenges around affordability and reliability, knowing what is driving consumer costs and where those decisions are getting made is the first step in shaping smarter energy policy.
How to Read Charges on Your Bill
The amount you pay for electricity is largely determined by how much energy you use, measured in kilowatt-hours (kWh). In addition to usage-based charges for generating, transmitting, and delivering electricity, most bills include a fixed monthly service fee. For customers in an RTO/ISO region, usage fees related to electricity generation/supply and transmission are significantly impacted by decisions and outcomes at the RTO/ISO, given the regional grid operator’s role in administering markets for electricity and planning the transmission system. How directly wholesale market costs for electricity supply are passed on to consumers varies by state and region.
Here are items you will find in your electric bill:
Costs impacted by FERC and RTO/ISO decisions:
Generation charges or supply charges, for producing electricity
Transmission charges, for transmitting electricity from where it is generated to substations
Costs impacted by state and utility decisions:
Distribution charges, for distributing electricity from substations to homes and businesses
Customer or account charges, covering various other costs including customer service, administration and billing
Fees or riders to support special programs (generally a much smaller portion of the overall bill)
