An American electricity bill has two halves that behave completely differently. One is a commodity you may be able to shop for. The other is a regulated monopoly service that follows you no matter what you do. Most people never separate them, which is why so much energy-saving advice lands badly.
Supply: the electricity itself
Supply is the cost of generating the power and getting it into the wholesale market. On your bill it may be called generation, energy, basic service, standard offer or price to compare.
In a regulated state, the utility buys supply on your behalf and passes it through at cost. It is not allowed to profit on the commodity, so there is nothing to shop and nothing being marked up.
In a retail choice state, this is the part a competitive supplier sells. Texas is the extreme version: nearly the whole bill in the competitive area is supply, sold by a retail electric provider, with the wires company billed separately. That is why plan shopping matters so much more in Texas than anywhere else.
Delivery: the wires and everything attached to them
Delivery covers the physical network and the institutions around it: poles and lines, substations, transformers, your meter, the crews who restore service after a storm, tree trimming, and the engineering to plan it all.
It also covers a set of things that are not really wires at all but are funded through the same charge. Depending on the state, that can include energy efficiency programmes, low-income discount subsidies, renewable procurement obligations, nuclear decommissioning, wildfire insurance and mitigation, and recovery of costs from plants that closed before they were fully depreciated.
Delivery is set by your state's public utility commission. There is exactly one company that can deliver electricity to your address, and no amount of shopping changes that.
Why the split decides what you should do
Consider four states with very different structures.
| State | Rate | Structure | What actually helps |
|---|---|---|---|
| Texas | 16.44¢ | Mostly supply, fully competitive | Plan shopping. The single biggest lever in the country |
| Pennsylvania | 21.55¢ | Split, well-run comparison market | Comparing fixed offers against the price to compare |
| Massachusetts | 28.82¢ | Delivery-heavy | Efficiency programmes and usage. Switching moves little |
| California | 33.25¢ | Delivery and policy dominated | Rate schedule and load shifting. No individual switching exists |
The pattern is consistent. In supply-dominated states, shopping is the lever. In delivery-dominated states, the lever is how much you use and when you use it, because the part of the bill you can negotiate is small.
Working out your own split
Find the two subtotals on your bill and divide. If delivery is more than half, treat supplier advertising with scepticism: even a very good supply deal moves a minority of your total.
There is a subtlety worth knowing. Some competitive supplier offers quote an energy price and then pass capacity and transmission costs through separately. The advertised number looks better than the utility's price to compare because it is not measuring the same thing. Always ask whether capacity is included in the quoted rate.
Why delivery keeps rising
Across most of the country, delivery has been growing faster than supply for several years, and the reasons are structural rather than temporary.
Generation has been getting cheaper in much of the country. Wind and solar have no fuel cost, and where they have been built at scale they push down the average energy price. Meanwhile the network they connect to needs more investment: transmission to reach remote renewables, hardening against storms and fire, replacement of equipment installed decades ago, and automation to reduce outage times.
Two specific pressures dominate. In the West, wildfire. After utility equipment was found responsible for catastrophic fires, California's utilities began the largest grid-hardening programme in American history, and Oregon is following at smaller scale. All of it recovers through delivery rates and none of it produces an additional kilowatt-hour.
In the East, storm resilience and the recovery of plants retired early. When a coal unit closes before it is fully depreciated, regulators generally allow the utility to recover the remaining book value, so ratepayers can be paying for a closed plant and its replacement simultaneously.
What this means in practice
- Check the split before you shop. It takes two minutes and tells you whether the exercise is worth doing at all.
- Use the efficiency programmes you already fund. If your bill carries an efficiency charge, you are paying for rebates whether or not you claim them. In delivery-heavy states these are usually the most generous in the country.
- Look at your rate schedule. Most utilities offer optional tariffs that are never the default. Time-of-use pricing is the common one, and it can be worth considerably more than a supply switch.
- Do not expect a supply switch to fix a delivery problem. If your bill is high because your state is rebuilding its grid, no supplier can sell you out of that.
For where your own state sits, the full rate table gives the combined figure, and the average bill comparison shows what that translates into once usage is taken into account.