Electric rates, the cost of energy per kilowatt-hour, vary from utility to utility; by rate class within a utility, and sometimes even by the time of day or the season of the year. Each power supplier has established rate schedules that are usually approved by regulatory agencies for a given customer type.
The base electric rate is applied to the number of kilowatt-hours consumed during a billing period, approximately a month long, to determine the electric bill. The billing period will usually not be the same as the calendar month and the meter may run 30 to 32 day intervals - and not on exactly the same day of each month.
Other charges may be added to the base cost of electricity. These may include a charge for minimum monthly service, demand charges on larger customer accounts, fuel adjustment charges, other surcharges, power factor penalties and taxes. Rates charged in the summer months may differ from those charged during the winter. Special rates may be offered for customers who agree to let the power supplier cycle equipment on and off such as electric heaters or air conditioners during high use times of the day or year. All of these charges and their application are covered under "Electric Bill Components."