Every charge on a utility bill comes from a document anyone can read: the utility’s tariff. It lists every rate schedule, every rider and every rule the utility applies to its customers. Regulated utilities file it with the state commission, and most municipal utilities publish their own version.
It is also long, dense and organized for regulators rather than customers. Hundreds of sheets is normal. The good news is that you rarely need most of them, and the parts you need read in a set order.
Where the tariff lives
For an investor-owned utility such as Xcel Energy, the tariff is filed with the state utility commission, in Colorado the Public Utilities Commission, and posted on the utility’s website. Changes are filed with the commission before they take effect.
Municipal utilities such as Colorado Springs Utilities and Fort Collins Utilities set rates through their own city process and publish their rate schedules and rules on their websites. The structure differs, but the parts are similar.
Electric and gas each have their own tariff book, and water and sewer often sit with a different utility entirely. Make sure you are in the right book before you start.
How the book is organized
Most electric tariffs follow a similar layout:
- Table of contents and index. A list of every sheet by number. Start here.
- Rules and regulations. How service is provided, billed, estimated, corrected and disconnected. This is where back-billing limits, deposit rules and meter testing live.
- Rate schedules. One section per schedule, from residential through large industrial.
- Riders and adjustments. Separate charges or credits applied on top of the base schedule.
- Service territory and forms. Maps, standard agreements and application forms.
Every page is a numbered sheet with a revision mark and an effective date. When a sheet changes, the utility files a revised sheet with a new revision number. The sheet number stays the same, which makes it easy to cite in a letter.
Rules worth reading once
Most people skip the rules and regulations section and go straight to prices. A few rules in it affect commercial accounts directly, and they are worth reading once per utility:
- Billing corrections and back-billing. How far back the utility can bill for an undercharge, and how far back it must refund an overcharge.
- Estimated bills. When the utility may estimate a read, and any rule on repeated estimates.
- Meter testing. How to request a test of a meter you think is wrong, who pays, and what accuracy range counts as correct.
- Deposits. When a deposit is required, and when it is returned or credited.
- Disputes. How to dispute a bill, and whether the disputed amount can be held while the question is open.
These sections answer most of the questions that come up when a bill looks wrong. Knowing them before a dispute saves a round of letters during one.
Read a rate schedule in order
A rate schedule usually runs a few pages. Read its sections in this order:
- Availability or applicability. Who may take the schedule: customer class, size, voltage, sometimes a demand threshold.
- Character of service. The voltage and phase the schedule assumes.
- Monthly rate. The service charge, the energy charge per kWh and the demand charge per kW, often by season or time of day.
- Determination of demand. How billed kW is calculated: the interval, any ratchet, any minimum, any power factor adjustment.
- Minimum charge. The least the account pays in a month.
- Riders. Which riders apply to this schedule.
- Terms and special conditions. Minimum stay, contract requirements, metering and switching rules.
Section four deserves the most attention on demand-metered accounts. The National Renewable Energy Laboratory notes that demand charges are typically based on the highest average electricity usage in a defined interval, usually 15 minutes, during a billing period. The tariff tells you which interval, and whether the highest one in the month is the one that counts.
Riders change more often
Riders are where tariff reading trips people up. They live on separate sheets, often refer to the base schedule by name, and many reset on their own calendar: monthly, quarterly or annually.
Common rider types include fuel or commodity cost adjustments, transmission cost recovery, energy efficiency program charges and charges tied to specific investments. Each one states what it applies to (kWh, kW or the bill total), which schedules it applies to, and how often it changes.
A bill can carry a handful of riders. Check each against its sheet, and keep in mind that the value on the sheet today may not be the one in effect during your billing period.
Match the sheet to the period
Because sheets change, you need the version in effect for the days on the bill. Check the effective date on every sheet you use.
When a price changes mid-cycle, most utilities prorate: the days before the effective date are priced on the old sheet and the days after on the new one. In this example, a 30-day bill with a rider change on day 12 should price 11 days at the old rider and 19 at the new one. If the bill applies the new value to all 30 days, it is worth a question.
Many utilities post only the current sheets, and older versions sit in the commission’s filing records. When you download a sheet, save it with its effective date in the file name, so next year’s question about this year’s bill has an answer on file.
Rebuild one bill from the tariff
The fastest way to learn a tariff is to rebuild a real bill from it. Pick a recent bill for a demand-metered account and work through it:
- Find the schedule code on the bill and open that schedule’s sheets.
- Confirm the account meets the availability section.
- Apply the service charge for the period.
- Multiply billed kWh by each energy price, by season or period if needed.
- Work out billed kW using the determination of demand section, then apply the demand price.
- Add each rider listed on the bill, using the sheet in effect for the period.
- Apply taxes and fees for the service address.
- Compare your total to the bill.
If you land within a few dollars, you understand the schedule. If you are far off, the gap points to the line worth questioning. Our utility billing glossary defines the terms you will meet along the way, from ratchet and rider to load factor and power factor.
Words that change the math
A few phrases carry more weight than they look. Wording varies by utility, but phrases like these are common. Read them slowly.
| Phrase to look for | What it usually decides |
|---|---|
| “Whichever is greater” | Billed demand or a minimum wins over metered demand |
| “Per kW of billing demand” | The price applies to billed kW, not metered kW |
| “On-peak period” | Which hours a time-of-use price or demand applies to |
| “Shall apply to all schedules” | A rider lands on every account, not just one class |
| “Upon request of the customer” | You have to ask; the utility will not switch you |
The last one matters more than it seems. Many schedule changes, credits and options exist only for customers who request them in writing.
What the tariff leaves out
The tariff gives the rules, not how the utility applied them to your account. It will not tell you which multiplier the billing system uses, why a schedule changed, or whether a correction is pending. Those questions go to the utility’s business account team, in writing, with the sheet number you are asking about.
It also will not tell you whether another schedule would fit better. That takes your load, the alternatives and a rerun of your bills.
Let someone read the whole book
Our tariff analysis work starts from the current tariff for every utility in a portfolio, and each utility analyst is trained on those books before touching an account. The Rate Fit Review applies that reading to up to 20 accounts on one utility and shows every formula. For a first look at how your bills line up with the tariff, send three for a free Three-Bill Read.
