kWh Cost Calculator Formula

Understand the math behind the kwh cost calculator. Each variable explained with a worked example.

Use the kWh Cost Calculator

Formulas Used

All-In Rate

all_in_rate = effective_rate

Variable Rate

variable_rate = usage_rate

Fixed Charge Share

fixed_pct = fixed_charges / total_bill * 100

Projected Annual Cost

annual_cost = total_bill * 12

Variables

VariableDescriptionDefault
total_billTotal Electric Bill(USD)150
kwh_usedElectricity Used(kWh)900
fixed_chargesFixed Monthly Charges(USD)15
effective_rateDerived value= total_bill / kwh_usedcalculated
usage_rateDerived value= (total_bill - fixed_charges) / kwh_usedcalculated

How It Works

How to Calculate True kWh Cost

Your true electricity cost includes more than just the generation charge.

Formula

All-In Rate = Total Bill / kWh Used

Variable Rate = (Total Bill - Fixed Charges) / kWh Used

Bill Components

  • Generation charge: 50-60% of bill
  • Delivery/distribution: 20-30%
  • Taxes and fees: 10-20%
  • Fixed monthly charges: flat fee regardless of usage

    • Worked Example

    A $150 electric bill for 900 kWh with $15 in fixed charges.

    total_bill = 150kwh_used = 900fixed_charges = 15
    1. 01All-in rate: $150 / 900 = $0.1667/kWh
    2. 02Variable rate: ($150 - $15) / 900 = $0.1500/kWh
    3. 03Fixed charge share: $15 / $150 = 10%
    4. 04Annual cost: $150 * 12 = $1,800

    Ready to run the numbers?

    Open kWh Cost Calculator