• Understanding the Cost of Energy

  • There are four main areas that make up the cost of your energy:

    • Generation
    • Distribution
    • Transmission
    • Surcharges

    Generation means the production of electricity. You will pay electricity suppliers for the generation of electricity. We will charge you for the Standard Offer Service (SOS) based on the rate at which we buy electricity for our customers. Or, you can choose another energy supplier and pay them directly. 

    Distribution is everything needed to deliver electricity safely and reliably to your electric meter. It covers the cost of maintaining, expanding and improving our electric system. 

    Transmission is the cost of transmitting electricity from power plants over high-voltage lines and towers to the distribution system. While we own some transmission facilities, all transmission in the region is regulated by a regional transmission operator (RTO). 

    Both the distribution and transmission costs are regulated.

    Surcharges refer to taxes and other charges that we are required to include on your bills. Some examples are Delivery Tax, Environmental Surcharge and Gross Receipts Tax. The funds are collected by the company and passed through to the appropriate government agency. 

    You can also learn more about how rates are determined by reading our Rates 101 information.