Tiered Electricity Bill Calculator

How it is calculated

The tool bills the first block of energy at one rate and everything above it at another. tier 1 cost = min(kWh used, tier 1 limit) × tier 1 rate and tier 2 cost = max(0, kWh used − tier 1 limit) × tier 2 rate, and the bill is the sum. kWh used is the consumption for the billing period, the tier 1 limit is the size of the first block in kWh, and the rates are the price per kWh in dollars. Usage, the limit and both rates cannot be negative; a negative entry shows no result. If you stay inside the first block, tier 2 costs nothing. The tool does not check that tier 2 is the higher rate, and only two blocks are supported. It leaves out fixed monthly charges, taxes, fuel adjustments and time-of-use pricing, which are often on a real bill, so add them separately.

Common mistakes

• Multiplying all kWh by the higher rate once the limit is passed. Only the kWh above the limit pay the second rate.
• Entering a daily threshold with monthly usage, or the other way round. The limit and usage must cover the same billing period.
• Typing rates in cents (12) when the field is dollars per kWh. A value of 12 would mean 12 per kWh, not 0.12, and a 450 kWh month would show a bill of thousands of dollars.
• Forgetting the fixed service charge and taxes that the tool does not include, which makes the estimate lower than the bill.
• Entering a negative rate or limit, for example for a credit. The tool shows no result for negative values, so handle credits separately.