Want to know how to reduce your electricity bill? Well, the first step towards this is to understand how to read your electricity bills. We observed that many people have not seen electricity bills ever, and those who have seen it are more focused on the total amount to be paid. So, let’s understand how utilities charge you for your energy consumption.
Most utilities follow tiered or step based methods where the price per unit increases as the consumption increases. Think of it like tax slabs, where you pay based on your yearly income. Similarly, here you pay as per your energy consumption. The lower your consumption is, the lower your per-unit price would be.
For example, BEST(Brihanmumbai Electric Supply and Transport Undertaking), a utility provider in Maharashtra, charges ₹1.83 per unit if the user’s monthly consumption is from 0-100 units. Then, they charge ₹4.46 per unit for monthly consumption of 101-300 units. After that, the price per unit increases to ₹7.34 for consuming 301-500 units monthly. And eventually, any consumption above 500 would cost ₹8.91 per unit.
Similar is the case with most other utilities. However, they also charge you a fixed cost, and the final billing amount will also include additional charges like Delivery fees, billing fees etc.