What is a Utility Bill? – What’s Considered a Utility & More

For new homeowners and seasoned homeowners alike, knowing what’s considered a utility bill is paramount to a financially stable home. Utility bills are a regular part of household life, covering the costs of essential services that keep our homes running smoothly. But what exactly falls under the umbrella of a utility bill? 

No need to wonder anymore. We’re covering everything from types, average costs, and tips on how to manage your bills more effectively. Whether you’re a new homeowner or just looking to get a better grasp on your monthly bills, this guide will help you navigate the world of utilities with confidence. 

What is a utility bill?  

A utility bill is a statement that reflects the cost of essential services provided to your home. A utility bill’s main purpose is to inform consumers of the cost of services like electricity, gas, and water, and to collect payment.  

Utility bills are generally issued on a monthly basis, although the frequency can vary depending on the service provider. Utility bills detail the amount of energy or resources you’ve used during a certain billing period, along with any applicable taxes, fees, or surcharges.  

What is considered a utility bill? 

A utility bill is considered any statement that charges for essential services provided to your home. Here are some of the most common you’ll see on your utility bill:

Electricity  

Electricity bills cover the cost of supplying power to you. Common charges might include the cost of energy consumed and delivery charges for maintaining the electrical grid. Electricity is measured in kilowatt-hours (kWh) which accounts for the amount of energy consumed over your bill period. Your electricity bill typically breaks down the rate you pay per kWh, allowing you to see how much you’re being charged for the energy you use. 

Gas  

Gas bills pertain to the supply of natural gas used for heating, cooking, and water heating. Gas usage is measured in therms, with one therm equaling 100,000 British thermal units (BTUs), which quantifies the energy content of the gas consumed. Your gas bill typically includes charges for the amount of gas used during the billing period. There may be some additional charges for delivery fees for maintaining the gas pipelines and ensuring a consistent supply to your home. 

Water  

Water bills reflect the cost of water supplied for household use, including drinking, bathing, and irrigation. Common charges include water consumption & sewer services. Water usage is typically measured in gallons or cubic feet. 

Costs can vary based on the volume of water used, tiered pricing structures, and the need for wastewater treatment. Keep track of your water usage by learning how to find and read your water meter! 

Other Utilities 

• Trash and recycling – Bills for trash collection and recycling cover the cost of waste disposal and the processing of recyclable materials.  

• Internet/Wi-Fi – Internet bills include charges for broadband access.  

• Cable television and streaming services – Cable TV bills cover the cost of television programming, equipment rentals, and optional premium channels or on-demand services.  

• Phone – Landline or mobile phone bills include charges for voice services, data usage, and additional features like voicemail, caller ID, and international calling.  

While these household amenities are often considered utilities due to their importance in modern life, they differ from essential services like gas, electricity, and water, which are necessary for basic survival. Typically, services like trash collection, internet, cable, and phone come on separate bills, as they are not bundled with your primary utility services. 

Factors that might influence a shift in your utility bill 

Keep in mind that your utility bill might not look the same month-to-month. Certain factors can influence your monthly billing amount like: 

Seasonal Demand: If you’re on an electricity or gas plan where your rate varies month-to-month like a variable-rate plan, you could be subjecting yourself to higher energy costs when the market gets tough. 

Weather: Depending on your plan type, if you’re not on an electricity or gas plan that protects you from rate increases during hot summers or cold winters, you could see your utility bill shift upwards. 

Usage Patterns: This goes for almost all your utilities. The more or less you use your essential services will be reflected in your bill. Ensure to monitor your consumption habits during the month to avoid unnecessary overspending. 

Your Location: Utility rates for electricity and gas are different from state to state. This is because of energy regulation and deregulation which influences who your options are for utility providers. 

Importance of utility bills  

Utilities play a role in budget allocation. Utility bills are a significant part of household expenses and play a critical role in budget planning. Regular monitoring and timely payments help prevent financial strain and allow for better management of cash flow.  

Utility bills help track expenses and usage patterns. Bills provide a detailed record of usage over time, helping consumers track their consumption patterns. Understanding utility bills can motivate consumers to use resources more efficiently, reducing both environmental impact and costs. Regular review of your utility bills fosters mindful consumption, encouraging individuals to make more sustainable choices. 

Timely payment of utility bills can contribute positively to your credit history. Timely payments can also allow you to avoid late fees or added charges to ensure your household budget remains on track. 

Most importantly, utility bills are a necessary part of running a household. They cover essential services like electricity, gas, water, and waste management, which are crucial for maintaining a comfortable and functional living environment.  

Components of utility bills  

Utility bills typically break your usage into organized sections for easy readability: 

Energy Usage Charges: A portion of your bill will show how much of that utility you’ve consumed, whether it’s measured in therms (for gas), kilowatt-hours (kWh) (for electricity), or gallons (for water).  

Your bill will be broken down by the rate you’ve been charged for your utility. Keep in mind these rates could fluctuate based on factors like weather conditions or your plan type. Your total usage for the billing period is then multiplied by the applicable rate, resulting in the amount due for that service. 

Delivery Charges: Delivery charges on a utility bill refer to the costs associated with transporting the utility service—whether it’s electricity, gas, or water—from the provider to your home. These charges cover the maintenance of infrastructure, such as power lines, gas pipelines, and water mains, as well as the operational costs needed to ensure reliable service. 

Government Incentives: If applicable, various federal and state programs offer rebates or incentives for adopting energy-efficient appliances, renewable energy systems, or water-saving technologies. If you’ve signed up for these incentive programs through your utility provider, you could see these rebates reflected in your monthly bill. 

Renewable Energy Certificates/Credits (RECs): RECs are a way to incentivize and encourage renewable energy creation. Typically bought by companies and businesses, RECs allow businesses to claim they’re using renewable energy which can encourage others to do the same. Credits and ongoing incentives from this purchase could be represented on your utility bill. 

Utility bill examples  

Utility bills often show a clear breakdown of charges based on usage, making it easier to understand how different factors (e.g., heating, cooling, water consumption) contribute to the overall cost.  

Average utility costs can vary significantly by region, influenced by factors like climate, local rates, and the availability of resources. For example, heating costs in colder climates are generally higher, while water bills may be lower in areas with abundant supply.  

Example: Pennsylvania electricity bill 

Let’s say hypothetically, you live in Pennsylvania where the average electricity rate is 18.10 cents per kilowatt-hour and you’ve consumed 220 kWh of energy for the month. 

To find your total electricity cost, your provider will take 220 kWh X $0.1810/kWh = $39.82. 

This $39.82 represents the cost of the electricity you’ve used. However, your bill might include additional charges such as taxes, service fees, or delivery charges. Using the average kilowatt-hour for a resident living in Pennsylvania and hypothetical fees, here’s what your bill might look like: 

Utility Bill for August 2024 

Service Address: 123 Main St, Anytown, PA 

Billing Period: August 1, 2024 – August 31, 2024 

Electricity Usage: 

Energy Consumption: 220 kWh 

Rate per kWh: $0.1810 

Total Energy Cost: $39.82 

Additional Charges: 

Delivery Charge: $12.50 

Service Fee: $5.00 

State Tax: $2.39  

Local Tax: $1.20  

Total Amount Due $60.91 

How to read your utility bill  

Typically, the top of your utility bill will show your account number with your utility which you can use to access online billing. You’ll also find the billing period—the dates for which you are being charged, usually on a monthly basis—and your physical address, where the utility services are provided. 

Towards the middle of your bill, you’ll see a summary of your charges typically showing what you paid last month and the total amount of your current bill. 

Next, there’s a section dedicated to the amount of electricity, gas, or water you’ve used during the billing period. Some utilities provide a meter reading or graph showing your energy patterns throughout the month. Here, you’ll also find the cost per unit of energy and an itemized list of charges such as supply, delivery, service fees, and taxes. The bill concludes with a grand total of your energy usage and any additional fees that are due for payment. 

Other components of your bill could include utility announcements and alerts as well as contact information to get in touch with your provider. 

Average monthly utility bill by state

Budgeting for home utilities  

Track Your Utility Usage: Monitor and record your monthly utility bills to understand your consumption patterns and costs over time. This can help preserve resources and give you insight into how you can make your home more energy efficient. 

Set a Monthly Utility Budget: Allocate a specific amount for utilities in your monthly budget based on past usage and expected seasonal changes. This will ensure you’ll have the right amount of money put aside when your bill comes for timely payments. 

Use Budgeting Apps or Strategies: Utilize apps or spreadsheets to help track and manage your utility expenses. The 50/30/20 budget rule is just one example of a helpful budgeting tip. 

Enroll in Budget Billing Programs: Some utility companies offer budget billing plans that average your bills over the year. However, budget billing is not ideal because of monthly market fluctuations.  

Automate Your Payments: Set up automatic payments to ensure bills are paid on time, avoiding late fees and managing cash flow.  

Tips for managing and reducing utility bills  

• Replace incandescent bulbs with LED bulbs, which use up to 75% less energy and last significantly longer.  

• Invest in smart power strips that automatically shut off power to devices that are in standby mode.  

• Consider an energy monitoring system that allows you to automatically adjust your appliances when they’re using too much energy. 

• Install low-flow showerheads to help regulate water use.  

• Use caulking and weatherstripping to seal gaps around windows and doors to prevent drafts and heat loss. 

• Upgrade to energy-efficient appliances, which consume less energy and can potentially lower your utility bills.  

What if you can’t pay your utility bills? 

If you can’t pay your utility bills, some states and providers offer assistance to low-income households with paying their energy bills. Additionally, many utility companies have payment plans, hardship programs, or emergency assistance options that can temporarily reduce or defer your payments. 

Who’s responsible for unpaid utility bills in Pennsylvania? 

Responsibility for unpaid utility bills typically falls on the individual or entity whose name appears on the account. This person is usually the primary account holder who set up the service with the utility company.  

Why your energy choice matters when it comes to utilities  

In the end, the right provider makes all the difference when it comes to utilities. Choosing the right utility provider could open you up to a world of new and creative plan types that are perfect for your lifestyle. A few electricity and gas plan types include: 

• Fixed Plans: Offer consistent rates for a set term, providing predictability in your energy costs. Ideal for those who prefer stability and want to avoid market fluctuations.  

• Variable Plans: Rates change based on market conditions but offer the risk of higher costs when rates rise.  

• Unlimited Energy Plans: Often referred to as “flat” plans can offer predictability in your monthly bills as the supply portion of your bill doesn’t change.* 

The type of energy source from utilities (e.g., natural gas, coal, renewables) can make an environmental impact. To help combat this, some energy providers offer earth-friendly energy plans that aim to offset carbon emissions and more. 

Reliable customer service is crucial when dealing with utility issues or billing concerns. Choosing an energy supplier known for strong customer support can help resolve issues more quickly and ensure a better overall experience.  

FAQ’s  

Why is my utility bill so high?  

Several factors can contribute to a high utility bill, including weather, location, and your utility plan type. 

Weather: Extreme weather conditions, such as very hot summers or cold winters, can significantly impact your utility bill. During these times, heating and cooling systems tend to work harder and run longer, leading to increased energy consumption. 

Location: Utility rates vary widely depending on your geographic location due to differences in energy sources, local infrastructure, and regulatory policies. 

Plan type: Some plans fluctuate based on market conditions while other plans offer the option to lock in a specific rate for a set period, offering predictability. 

For more reasons why your utility bill is high, visit our blogs for electricity and gas now! 

How to add my spouse’s name to my utility bill? 

If you’re looking to add your spouse’s name to your utility bill, here’s what you could expect: 

1. Gather Necessary Information: Collect your account details, your spouse’s full name, and any other identification that may be required, such as a government ID or proof of address.
2. Contact Your Utility Provider: Reach out to your utility company via phone, email, or online account services. Ask about their process for adding a name to your account.
3. Request to Add a Name:Inform the representative that you’d like to add your spouse’s name to the utility bill.
4. Complete Any Required Forms: You may need to fill out a form or provide additional documentation to authorize the change. Some companies might allow you to complete this online, while others may require you to submit paperwork.
5. Review and Confirm the Changes: Once the request is processed, review your next utility bill to ensure your spouse’s name appears correctly.

Is internet considered a utility bill?  

Whether the internet is considered a utility bill can depend on the context, but generally, it is not classified as a traditional utility like electricity, gas, or water.  

Can you have two names on utility bill?  

Yes, you can generally have two names on a utility bill. This is often done when two or more people share responsibility for the household’s utility expenses. 

* Restrictions apply. Enrollment based upon program eligibility. Customers using more than 125% of normal monthly usage as determined by Santanna may be required to switch plans.