# How much are you really paying for electricity?

I agree with your assessment as far as your bill goes. However, if you use ONE additional kwh, what is the additional cost ? I bet it works out to .069 cents.
In my area, the bill has a "fixed" cost, whether I use any or not, and a "useage" cost, which is based on the number of kwh I use.
If I use NO electric power for that month, my cost per kwh using your reckoning would be infinite. It's not unfair, just ambiguous. A power company has to cover it's fixed cost whether you turn on your lights or not, since you want it to always be at the ready.
I think 14.9 cents per kwh is a bit on the high side, but not unreasonabley so.
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The distribution cost on my bill is also based on the number of kWh used. It goes up with usage. It is not a fixed cost.
Anyway, the reason I brought this topic up was an article that I read comparing cost/mile driven in an electric car versus a gasoline powered car. The advocates of electric cars used the nominal cost of a kWh to make it appear that electric cars are much cheaper to operate. (In my case, .069 vs .149). Also when I fill up my car at the gas station, I know that a large portion of a gallon of gas goes to taxes and a road repair fund. Are owners of electric cars getting a free ride on this also?
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wrote:

The distribution cost on my bill is also based on the number of kWh used. It goes up with usage. It is not a fixed cost.
Anyway, the reason I brought this topic up was an article that I read comparing cost/mile driven in an electric car versus a gasoline powered car. The advocates of electric cars used the nominal cost of a kWh to make it appear that electric cars are much cheaper to operate. (In my case, .069 vs .149). Also when I fill up my car at the gas station, I know that a large portion of a gallon of gas goes to taxes and a road repair fund. Are owners of electric cars getting a free ride on this also?
Yes, those few owners of totally electric cars are not paying any road taxes as they are collected at the gasoline pump; but they are paying taxes on their higher use of electricity. The tax laws will have to be revised to correct the imbalance at some point, but similar things happen when you buy merchandise on line and pay no sales taxes vs. buying at a local store where sales taxes are added.
Because of deregulation, electric rates are no longer fixed, but vary month-by-month with a generation charge and fees plus a transportation/service charge and fees. Take your total bill and divide by the kWh that were used to find your rate for the month. That's the true rate because that's what you actually pay.
Tomsic
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On 3/14/2012 8:29 AM, Tomsic wrote:

unless they're using solar to recharge their cars, in which case, their tases paid could be pretty close to 0, or even negative if they're putting more into the network rather than taking it out.

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In California, when you file your state income tax there's a section to voluntarily state the amount of purchases you have made through tax free outlets and you are then required to pay the sales tax for all those items.
...STOP LAUGHING!
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They get about as much compliance as the assault weapon registration days?
In California, when you file your state income tax there's a section to voluntarily state the amount of purchases you have made through tax free outlets and you are then required to pay the sales tax for all those items.
...STOP LAUGHING!
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Why would we laugh? Many states do essentially the same thing. In NY they call it a "Use Tax". It's for items that, for example, you bought on the internet and didn't pay taxes on. NY actually makes it easy on you by "suggesting" an amount based on the data in your return. You have the option to change it or leave it as it is. Of course, if you get audited, you'd have to explain the amount used.
Last year, I was helping my college-age daughter do her taxes. She made less than \$3000 and the software package I used suggested \$8 as the Use Tax. Since most of what she bought was over the internet, I just left it alone.
A few days after filing, I got a notice that NYS found an error on her return. They set the Use Tax to \$0 and increased her refund by \$8.
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wrote:

"Use" tax originated as the means to recover taxes from nominally tax-exempt transactions that are taxable. An example would be a stationary store's use of a ream of paper. Normally the paper is exempt from taxes because it is taxed at sale. Since the store *used* it, it's no longer exempt, so is taxed. A sale in another state can't be taxed but its *USE* within the state can. So, if you buy an item in Vegas, and it stays in Vegas, there is no tax in your state. If you bring it home and USE it, then it is taxed.
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Same in pa.
Greg
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On 3/14/2012 12:23 PM, Robert Macy wrote:

That line item has been on the PA tax return as long as I can remember. On occasion they have been known to obtain audit information from other states and send out letters.
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George wrote:

Correct. Be aware that state sales tax workers have a background communication channel between themselves. If, during an audit of an Oklahoma business, the auditor discovers the business made significant sales to Company A in Ohio, the auditor makes a note to himself.
Later, the Oklahoma auditor snitches out Company A to his cohort in Ohio. The sales tax entity in Ohio then swoops down on Company A.
Take away: If audited, don't open your records to the auditor. Show him only those invoice copies pertaining to your state. Don't be a rat. (Besides, if your customers ever find out that you were the one who gave them up, your butt's busted.)
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gallon), plus state+local, which normally totals less than 15%.. (62cents)
http://www.floridastategasprices.com/tax_info.aspx
Thus an EV is paying more tax for it's fuel percentage wise than you are filling up an SUV. The key difference is than 70-80% of the EV's electricity is converted into useful work, while the SUV is less than 10% efficient converting gasoline into useful work.
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On 3/14/2012 10:09 AM, Edge wrote:

Oh, just wait till the politicians start howling for road use taxes for electric vehicles. I know that some states require all interstate trucks to have receipts showing that fuel was purchased in that state when the truck goes through a weigh station.
TDD
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On 3/14/2012 11:37 AM, The Daring Dufas wrote:

They have moved way beyond that. Interestingly enough it is actually fair.
There is an organization called IFTA. If you operate commercial vehicles interstate you file an electronic return with them and they divy the taxes up. You report all of the fuel you bought and where you bought in and the miles your vehicles were driven and where. So say you fill your truck up in Ohio and drive through PA to NJ. PA gets the same taxes as if you bought the fuel there and Ohios only gets the taxes on the fuel used there.
Our former governor was a big proponent of turning all major roads over to the turnpike. The turnpike is a big, giant huge inefficient bureaucracy filled with political appointees. The former governors major justification was that "most trucks driving on I-80 don't pay road use tax to PA" which is very incorrect.
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The federal, state, and local governments are always looking for ways to get more of your money. Deregulation of the electric utilities was justified to promote competition and thereby lower your electric bills. This resulted in separate supply and delivery charges. The delivery charge is relatively fixed even if you use no kWh, like a vacation home.
My village supplies water to my house and recently decided to raise the water rates. Deregulation didn't require them to, but I guess they liked the idea of having a fixed fee as a steady source of revenue. So they changed the billing method to include a fixed charge - even if you use no water. To make it better, they shorten the billing cycle from three months to two months. I guess this allows them to collect more of these fixed charges in a year.
I look forward to others adopting this idea. Maybe the next time I go to the gas station, they will not only charge me for the gas, but a parking fee for using their land while I fill up.
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On 3/15/2012 7:56 AM, Edge wrote:

I have no problem with a fee for paying for infrastructure and having the service available even when the service is not used. Someone has to be paid for hooking up the service and maintaining it. Paying a fee to have your home hooked to the grid makes sense. ^_^
TDD
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On 3/15/2012 9:38 AM, The Daring Dufas wrote:

For sure, and I also think it wouldn't be unreasonable to pay more if it costs more to provide service. So if you decide to live in a sparsely populated area where there are only a few customers per mile it clearly costs more to install/maintain that infrastructure than it does in a location where say homes are much closer together.
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On 3/15/2012 9:30 AM, George wrote:

I suppose the costs can be spread out to make it possible for rural areas to be electrified. I think that was the mission of the TVA.
TDD
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On 3/15/2012 8:56 AM, Edge wrote:

Nothing changed on our electric and NG bills regarding a base charge. Both bills always had a base use it or not charge. The only difference is previously the consumption was a single rate. After deregulation the consumption became separate line items.

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The delivery charge sure isn't fixed here in NJ. It's billed per Kwh just like the charge for the energy itself. Don't have a bill in front of me, but the total rate per Kwh is around 18 cents. About half of that is delivery and half is generation. There is also a monthly base charge of a couple bucks.
I also don't think you can attribute today's electric rates here as being higher due to deregulation. Deregulation has allowed us to choose alternate suppliers for generation that are a little lower than the utility. Govt here has tacked on charges that are being used to fund the socialist solar agenda. A few years ago it turned out the state had \$100mil that had accumulated in that fund sitting in a bank account, with no clear authority of who was authorized to release it, for what purpose, etc. And they are forcing the utilities to buy an increasing share of energy from renewable sources. Both of those have contributed to raising prices, but those have nothing to do with deregulation and competition.