Breaking Down Your Vermont Utility Bills, Charge By Charge

Oct 7, 2016

"What the heck are all those obscure line items and charges on our gas bill and our electric bill?" That's what Dave Reville, Brave Little State's question-asker this month, wondered.

Listen to the Brave Little State episode: Are Utility Bills 'So High' In Vermont?

We got sample bills from Vermont's biggest investor-owned, for-profit electric utility (Green Mountain Power), from a member-owned, non-profit electric utility (Vermont Electric Cooperative) and from Vermont Gas Systems, the state's only natural gas supplier. Check it.

An electric bill from Green Mountain Power (above)

1) E01 Residential - This tells you what type of rate you’re paying. Residential electricity rates around the country are usually higher than, say, commercial or industrial rates, because residential customers use comparatively small amounts of power, even though there are still infrastructure costs to delivering it to them.

2) Customer Charge - This pays for the cost of the infrastructure (poles, wires, meters) that carries electricity to customers and measures how much they use. This is a per-diem charge, unrelated to how much power you use.

3) 000 Total KWH - This is a charge for the total electricity you use each month. The charge is determined by the total kilowatt hours you consume, times the rate you’re being charged. Right now, the rate is about 14.8 cents, said Charlotte Ancel: about 8 cents is the wholesale cost of the electricity itself; about 2 cents goes toward regional transmission costs (the toll on the highway); about 2 to 4 cents goes toward distribution (carrying power through the side streets to your home).

This money pays for the GMP’s cost of doing business, including salaries, administration and billing.

4) Energy Efficiency Charge - This charge, required by state law, funds Vermont’s statewide energy efficiency program. GMP is required to collect this charge from its customers, though it keeps none of it. All the money is passed on to Efficiency Vermont, which administers the program.

5) Power Adjustment - This represents GMP’s efforts to “true up” its projected power costs with its actual costs. If GMP projected costs to be lower than they actually were, this could show up as a charge on your bill; if GMP projected costs to be too high, this could be a credit to your bill. This adjustment could change depending on wholesale electricity prices or unexpected weather, for example, Ancel said. On balance, the Power Adjustment has returned $25 million to customers since 2008, she said.

6) Electric Assistance Program Fee - This charge helps pay the costs of GMP’s discount program for low-income customers. Vermonters who make less than 150 percent of the federal poverty level can get a 25 percent discount on their electric rates, with certain guidelines.

An electric bill from Vermont Electric Cooperative

A sample residential bill from Vermont Electric Cooperative
Credit Courtesy Vermont Electric Cooperative / Illustration: Alex Keefe

1) Customer charge - This monthly charge is unrelated to how much electricity you use, said Sue Bernier, the manager of member services at the Vermont Electric Cooperative, a member-owned utility that serves about 32,000 people in northern Vermont. This money covers the cost of maintaining the infrastructure (poles, wires, etc.) that bring power to your home. Salaries, administration and billing costs are split between this and the Energy Charge (2).

2) Energy Charge - This is the cost of the electricity itself, and what it costs to bring it to your home. VEC has a special deal with the New York Power Authority to get discounted electricity for residential customers, which is why the first 100 kilowatt hours on the bill are cheaper.

3) Energy Efficiency Charge - This state-mandated charge, based on how much electricity you use, goes to Efficiency Vermont (see above).

4) VEC Community Fund Bill Round Up - VEC members have the option of rounding up their bill to the nearest dollar to donate money to local charities.

5) Patronage Capital Credit - This represents money that’s being given back to VEC customers once a year. Each year, VEC take any money left over after paying operating expenses and returns it to its members. As a non-profit cooperative, it is required to do this by law. The money here can be applied to pay down your bill, pending approval from VEC’s board of directors.

A natural gas bill from Vermont Gas Systems

A sample natural gas bill from Vermont Gas systems.
Credit Courtesy Vermont Gas / Illustration: Alex Keefe

1) Rate R Residential - This tells you what type of rate you’re paying. Residential rates all around the country are usually higher than industrial or commercial rates. That’s because homes don’t use much gas, but the infrastructure costs to pipe it to them aren’t much less than they would be for a bigger customer. This also indicates that you’re a “non-interruptible customer,” Simollardes said, meaning your gas can’t get shut off on a bitterly cold winter day, even if the pipeline system is struggling to keep up with demand.

2) Daily Access - Both this charge and the Distribution charge (3) are where Vermont Gas gets money from customers to run its business, Simollardes says. Generally, the Daily Access charge pays for the things and people who work to serve customers: billing, metering and maintaining the gas line that runs to your home, she said. This is a fixed per-diem cost, unrelated to how much gas you use.

3) Distribution - This charge funds the company’s other costs, such as salaries and administration. It varies based on how much gas you use.

Money from this charge also feeds something called the System Expansion and Reliability Fund, or SERF. Vermont Gas is supposed to use SERF money to expand service in the state. Customers have paid about $22 million into the SERF since 2011, though the company says it hasn’t spent any of it yet. Right now, Vermont Gas wants to dip into the fund to pay for its controversial pipeline project in Addison County, but it first needs approval from state regulators. The SERF fund makes up about six percent of natural gas rates (not bills), according to a company spokeswoman.

4) Natural Gas - This represents cost of the natural gas itself, plus the cost of transporting it all the way to Vermont from Canada. This cost is adjusted every quarter based on wholesale market costs, Simollardes said.

5) Energy Efficiency - This “Energy Efficiency Utility” charge goes toward educating people about how to use energy more efficiently. It’s based on how much natural gas you use. This charge is also mandated by state law, though unlike most electric utilities, Vermont Gas runs its own efficiency program. Gas customers have been paying this charge for years under the Distribution category, Simollardes said, but it was only broken out as a separate line-item in February.

6) Assistance Prgrm Fee - Money from this charge helps pay for discounts offered to low-income customers. Vermont Gas gives a 20 percent discount to customer who make less than 185 percent of the federal poverty level (in 2016, that’s $44,955 for a family of four). This program is mandated by Vermont state law.

7) Res. Water Heater(Rental) - Not pictured. This charge only applies to customers who rent a water heater from Vermont Gas.

8) So. Burlington Local Option Tax - Not pictured. If you rent a water heater, this represents the local tax you pay for the rental. This is not a tax on natural gas.

9) Vermont State Sales Tax - Not pictured. If you rent a water heater, this represents the state tax you pay for the rental. This is not a tax on natural gas.