Understanding Your Electricity Bill

How to read an electricity bill, why the price per unit rises as you use more, and simple ways to reduce the bill.

An electricity bill can look confusing, with units, slabs, charges and taxes. Understanding it helps you check for errors and find ways to save.

Key terms

Units: electricity use is measured in kilowatt-hours, often called units. One unit is the energy used by a 1,000-watt appliance running for one hour.
Meter readings: the bill shows the previous and current readings; the difference is your consumption.
Fixed charge: a monthly charge based on your connected load, paid regardless of how much you use.
Energy charge: the cost of the units you used.
Taxes and duties: added by the state.

Slab tariffs

In India, most states use slab tariffs for households: the price per unit rises as consumption increases. The first units are cheapest, and higher slabs cost more. This makes basic use affordable while charging more for heavy use. Some states provide a number of free units each month to households.

Because of slabs, reducing consumption from a high slab can save more per unit than the average price suggests.

Reducing your bill

Fans and lights: switch off when not needed; LED bulbs use much less electricity than older bulbs.
Air conditioners: set to around 24 degrees Celsius, the default recommended in India, rather than very low temperatures.
Energy-efficient appliances: look for star ratings from India’s Bureau of Energy Efficiency; more stars mean lower running costs.
Standby power: switch off appliances at the plug.
Refrigerators: keep them away from heat and do not leave doors open.

The slab effect

A household uses 320 units a month. The first 100 units cost 3 rupees each, the next 100 cost 5 rupees, and units above 200 cost 7 rupees. By using an efficient air conditioner and switching off idle devices, it cuts use to 250 units. The 70 units saved were all in the highest slab, saving 490 rupees a month, more than the average price would suggest.

Accessibility

Many electricity companies offer online bills, apps and SMS alerts. Blind customers can request bills by email or in accessible formats, and use apps that work with screen readers to check usage and pay.

Thinking every unit costs the same

Under slab tariffs, the last units you use are usually the most expensive. Cutting consumption at the top saves the most money.

Key takeaways

Bills show units used, fixed charges, energy charges and taxes.
Slab tariffs make each extra unit more expensive as use rises.
LED bulbs, star-rated appliances and sensible AC settings reduce bills.
Accessible digital bills and apps help blind customers manage their usage.