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If you've been opening some steep winter energy bills, you're probably wondering what you can do asap to cut costs. Well, it all starts with reviewing your bill thoroughly. Once you understand how much energy you're using, you can go from there.

Every utility company is unique, and this means every utility bill will have different charges, but there are a few commonalities. To get a sense of the common charges, we looked at online samples of some of the largest utilities in the U.S. (ranked by number of customers for the year 2011).

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Here's what to know:

Electricity and Natural Gas: These are the two forms of energy that will most likely show up in your bill. Electricity is widely used for a lot of important appliances and systems in your house; natural gas usually involves your stovetop, water heater, or other heating device. Natural gas will be expressed in terms of therms, which is 100,000 BTUs, and electricity will be expressed in terms of kWh. To get a better understanding of how many kWh you're using, consider that one kWh is equivalent to powering one 100-watt light bulb for 10 hours, or ten 100-watt light bulbs for one hour.

Billing Summary and Account Balance: This is the most important part of your bill. Here you will find the basic breakdown of your charges, and the total amount due. If you use natural gas in your house, it will be listed as a separate charge from your electricity. Also, if you have any outstanding balance from last month, you will see that listed as well.

Monthly Electricity or Gas Usage: This is usually presented as a graph and is a breakdown of how much electricity or natural gas you use each month. This can help you determine how much you might expect to be charged.

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Metering Information: This is how your utility provider determines how much electricity or gas you have used in a month. This meter, which is usually located outside of your house, gets read every month on the same day by a service professional. Your current reading is subtracted by a previous reading to determine how much energy or gas you used in that month. These meters are locked and tampering with them is a criminal offense that can result in a fine or possibly jail time.

Break Down Charges: This is where the bill gets tricky. Your utility company likely breaks down the total charge of both your electricity and natural gas into multiple charge categories. This can make for a lot of numbers that may not make sense. All of these charges should be explained either on the back of the bill or on the utility's website. However, there are two basic charges: Those that are fixed and those that are variable.

  • Fixed Fees: The fixed fees are mostly associated with basic services such as metering, maintenance, etc. These services typically remain constant from month to month.
  • Variable Fees: These fees are usually associated with the cost of energy generation, transmission, and distribution. They are variable to reflect the fluctuating nature of energy demand and usage. Looking at one of these rows, the first number that appears is the amount of energy associated with this charge. This is can either be the total amount of energy used in one month, or a fraction of the total energy associated with the rate that is charged. This rate is the next value in the row and is typically expressed as either a 5 or 6 digit number. Utilities can either choose a fixed rate for all energy used, or a tiered system, where the rate is higher for more energy used. For electricity, this rate is higher during the winter months than the summer months.

This is just a basic rundown of what is on your energy bill. Again, every bill will be different depending on your utility, so it is good practice to understand what you are actually getting charged for, so that you can have a better awareness of your energy usage in the future.

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