Supply vs Delivery Charges on Your Electric Bill Complete 2025 Breakdown

In deregulated electricity markets like Ohio, Pennsylvania, and Massachusetts, your electric bill separates into two distinct components:

• Supply charges — Cover generating the electricity you use
• Delivery charges — Cover transporting electricity from power plants to your home

Why this separation exists: Electricity deregulation opened generation to competition while keeping transmission and distribution as regulated monopolies. Key insight: Only supply charges are subject to competition. When you switch suppliers, you're changing who generates your power and at what price — but delivery charges remain identical. Common mistake: Many consumers expect their entire bill to decrease when switching suppliers. Understanding the distinction helps set realistic expectations.

Supply charges (also called generation or energy charges) pay for producing the actual electricity you consume. What's included in supply:

• Fuel costs — Natural gas, coal, nuclear fuel, wind, solar
• Power plant operations and maintenance
• Supplier overhead and profit margin
• Wholesale market costs

Your supply charge appears as a rate per kilowatt-hour (kWh) multiplied by your usage. In Ohio, Pennsylvania, and Massachusetts, you can shop for this portion using tools like ElectricRates.org. Rate options:

• Fixed rates — Provide stability
• Variable rates — Change monthly

Important: Supply typically represents 40-60% of your total electric bill depending on your utility territory and current market conditions.

Delivery charges pay for the infrastructure that moves electricity from power plants to your home. What's included in delivery:

• High-voltage transmission lines that carry power across long distances
• Substations that reduce voltage for neighborhood distribution
• Local distribution lines and transformers
• Electric meters at your home
• Utility customer service operations
• Infrastructure maintenance and upgrades

Your utility company (AEP Ohio, PECO, Eversource, National Grid, etc.) handles all delivery regardless of your supplier choice. Key point: Delivery charges are regulated by state commissions (PUCO, PA PUC, MA DPU) and don't change when you switch suppliers.

Understanding supply versus delivery matters for several important reasons. 1. Know what you're shopping for:

• Only supply rates vary among competitive suppliers
• When comparing offers on ElectricRates.org, you're comparing supply rates only
• A supplier offering 6¢/kWh can't control your 8¢/kWh delivery charges

2. Set realistic savings expectations:

• If supply = 50% of your bill, a 1¢/kWh savings = ~0.5¢/kWh total bill reduction
• Focus on the supply portion you can actually control

3. Eliminate service quality concerns:

• Delivery stays constant regardless of supplier
• Same wires, same utility crews, same reliability
• Your utility provides identical delivery whether you use their default supply or a competitive supplier

Locate supply charges on your bill by looking for these terms:

• "Generation" or "Supply"
• "Energy Charges"
• Your supplier's name

Default rate labels by state:

• Ohio: "Standard Service Offer" (SSO)
• Pennsylvania: "Price to Compare" (PTC)
• Massachusetts: "Basic Service"

If you have a competitive supplier, their company name appears on the supply portion. What the supply section shows:

• Your rate per kWh
• Total supply charges
• Any monthly service fees (shown separately)

Calculate your effective supply rate:

1. Add total supply charges + any fees
2. Divide by your kWh usage
3. Compare this number against offers on ElectricRates.org

Delivery charges appear under these labels on your bill:

• "Delivery" or "Distribution"
• "Transmission"
• Your utility's name

Typical delivery components:

• Customer charge: Flat monthly fee regardless of usage
• Distribution charges: Based on kWh used
• Transmission charges: For moving power to your area
• Riders and adjustments: Renewable requirements, low-income assistance, etc.

Key difference from supply: Delivery has both fixed and variable components. Important:

• Total delivery cost depends on your usage
• Rates are set by regulators
• Identical for all customers in your utility territory

Some utilities break delivery into many line items; others consolidate them into fewer charges.

To accurately calculate savings, focus exclusively on supply charges. Step-by-step calculation:

1. Find your current supply rate: Divide supply charges by kWh usage
2. Compare to competitive offers: Look at supplier rates on ElectricRates.org
3. Calculate the difference: Current rate minus new rate = savings per kWh
4. Multiply by annual usage: Savings per kWh × annual kWh = yearly savings

Example calculation:

• Current supply rate: 7¢/kWh
• Competitive supplier offer: 5.5¢/kWh
• Difference: 1.5¢/kWh
• Annual usage: 12,000 kWh
• Annual savings: 1.5¢ × 12,000 = ~$180/year

Don't forget: Factor in any monthly service fees suppliers charge. ElectricRates.org displays all fees clearly so you can compare total costs, not just advertised rates.

Many consumers have misconceptions about supply and delivery. Here's the truth: 🚩 Misconception: Switching suppliers changes your service quality. ✓ Reality: Delivery remains identical regardless of supplier — same wires, same utility crews. 🚩 Misconception: The lowest supply rate means the lowest total bill. ✓ Reality: Compare supply rates to each other, not to your total bill. Delivery stays the same. 🚩 Misconception: Delivery charges should decrease with lower supply rates. ✓ Reality: Delivery is completely separate and regulated independently. 🚩 Misconception: Your supplier maintains the power lines. ✓ Reality: Your utility handles all infrastructure regardless of your supplier choice. Understanding these distinctions helps you make informed decisions and set appropriate expectations when shopping for electricity.

Manually comparing supply rates is time-consuming and complicated:

• Rates change frequently
• Contract terms vary
• Hidden fees complicate comparisons

ElectricRates.org simplifies everything:

• Aggregates all licensed supplier offers in one place
• Shows supply rates only (delivery is fixed anyway)
• Makes true apples-to-apples comparisons easy

How to use it:

1. Enter your ZIP code
2. Instantly see available supply rates from every supplier in your utility territory
3. Compare total costs including all fees

Continuous monitoring: ElectricRates.org watches rates and alerts you when better supply options become available. Results: Ohio, Pennsylvania, and Massachusetts customers save an average of $521*/year on supply charges alone. Cost: Free for consumers — suppliers pay a commission when customers enroll.

Your total electric bill combines several components:

• Supply charges (what you can shop for)
• Delivery charges (fixed by your utility)
• Taxes
• Regulatory fees

Typical bill breakdown in Ohio, Pennsylvania, and Massachusetts:

• Supply: ~40-60% of total bill
• Delivery + taxes + fees: Remaining ~40-60%

Total residential costs: 12-18¢/kWh average when combining all charges. Important context:

• When a supplier quotes 6¢/kWh, that's only the supply portion
• Your total effective rate will be higher once delivery and fees are added
• Focus on comparing supply rates — that's the portion you can control

ElectricRates.org helps you understand the supply portion you can control and find the best rate for your situation.