Each month, you receive an electric bill from Indiana Michigan Power (I&M), but do you know how it is calculated? From energy used to the state-specific charges; it is important to understand each section of your bill and how that may change through the year. 

Start with Usage History

Energy use can differ each month, especially as the seasons change. The amount of energy used in one month, measured in kilowatt hours (kWh), is important to figuring the total amount due. This energy use can come from having lights on, using appliances, watching TV and doing laundry – just to name a few. Customers can find in the Usage History (kWh) section on the first page, how energy used in one month compares to that over the last 12 months. To see how your use and average daily cost differ from the previous month and the same month the previous year, check out the Usage Details section on the third page of your bill.

Current Bill Summary

Also listed on the first page is the Current Bill Summary section. Inside the circle graph, it shows total energy used in kWh and charges for the current billing cycle. That amount owed is broken down into three general categories: 

• Monthly Service: A flat monthly fee that pays many fixed costs.
• Electric Service: The cost of producing electricity and delivering it to a home or business.
• Taxes and Fees: Charges from local government agencies.

Breaking Down Line Item Charges

I&M is committed to reliable, cost-effective power today and into the future. To do that, several factors go into the cost of producing electricity. On the final page, the amount due is broken down in the Line Item Charges section. Charges listed in this section will vary for Indiana and Michigan customers. Some items to note include:

• Monthly Service Charge: A flat monthly fee that pays a portion of the costs of meters, meter reading, billing and other fixed costs.
• Current Billing: An amount charged for your monthly electric use, determined by the rate approved by the state the customer live in. Costs of wires, poles and other electric generation, transmission and distribution services are included in this portion.
• Taxes and Fees: Charges from local government agencies, which often benefit schools, cities and county services such as 911.

Most of the remaining line items are called "trackers" or "riders." These reflect actual expenses and investments a utility incurs and adjusts as those costs and other related revenue rise or fall. Several are adjusted at year's end, so differences in a bill can become more apparent with January billing.

Trackers have advantages for customers, such as gradually phasing in I&M capital investments to prevent full impact to customers all at once. They also offer bill transparency. Customers can see exactly how much of their bill goes toward specific areas of investment and expenses. The trackers listed on a bill are typically reviewed each year by state regulators.

For even more details on the rates for your state, visit IndianaMichiganPower.com/Rates.

Up Next: Resources to Support Your I&M Account