If Electricity Rates Go Up, Will My Bill Go Up, Too?

It depends; we explain

When you hear that your utility's electricity rates are increasing, you probably assume it means your electricity bill will be higher, too. But not necessarily. It depends on whether the increase is to pay for things like new generation or investing in energy efficiency

With things like building new power plants or upgrading transmission and distribution systems, rates and costs can both increase.

But when customers participate in energy efficiency programs or implement their own energy-saving measures, their electricity costs will go down, even if rates go up.

Why? Because they use less energy.

Even though a utility may need to increase its rates to cover its fixed costs, investing in energy efficiency means lower utility bills in the longer term.

This, along with the avoided costs and risks of building new plants, makes efficiency a good long-term investment that more than pays for itself over time. Much like compound interest, its future value accrues.

And, equally important, it's a carbon-free resource.

Educating consumers about the distinction between rates and bills is important, because when it comes to energy efficiency, you get more than what you pay for.