As a business owner, you are always watching your bottom line. Finding ways to cut costs may cause you to take a second look at your electric utility bill. Deciphering how your company came up with the total amount due can be difficult and time consuming, especially if each charge is listed separately. To help you with this task you may want to first define what each charge listed on your bill stands for. That way you can more easily analyze those areas of usage you may be able to reduce.

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Kilowatt hour (KWh)

A kilowatt hour is the unit of measure used to calculate electric consumption. One kilowatt hour equals 1,000 watts of power used in one hour.

I recommend: Check out this ESB information about how much energy is used by common household appliances.

Unit price

The unit price is set by your electric company, and is variable depending on how much energy is consumed in a given time period. The unit price is then multiplied to every kilowatt hour for billing purposes.

I recommend: Review an AARP article's discussion of unit price and the accompanying chart.

Standing charge

A standing charge is the fixed daily rate for your energy supply. Most of the time the standing charge correlates to the level of consumption. Not every supplier bills a standing charge, or they may refer to it in other ways such as a service charge, customer charge or minimum charge.

I recommend: Learn more about standing charge through the Tesco Energy Price Comparison website. The Ask the Expert section explains how some suppliers compensate by not billing a standing charge.

Capacity charge

The capacity charge is also referred to as a demand or system use charge. The capacity charge is linked to demand, and is based on the maximum amount of energy used in the previous year.

I recommend: Westar Energy explains how they calculate capacity charge with demand meters.

Distribution charge

If you have unbundled electric service, you will be charged separately for each service such as generation, transmission and distribution. The distribution charge is the amount charged to the customer for the actual delivery of energy. This amount can include a customer charge, demand charge and energy charge as well. Some suppliers' distribution fees are regulated by state agencies.

I recommend: Check out a sample bill and explanation of all the individual charges - including the distribution charge - from the Official Website of the Attorney General of Massachusetts.

Electric meter

An electric meter is the instrument that gauges the amount of electricity used. There are several different kinds of meters, depending on the type of electricity account you have set up. The most common and basic type of meter is an energy meter which simply measures electricity usage in kilowatt hours.

I recommend: The SCANA Corporation provides information on how to read your meter. Your individual electric company may supply you with similar information.

Electric billing system in need of an upgrade? Data communication technology plays a significant role in the operation of a utility system, and the benefits of new technology can extend to a billing system as well.

Utilities looking for innovative business solutions need look no further than new digital technologies, including software capabilities. With advances in technology, your business can become more effective and more profitable by streamlining billing processes. Finding the right electric utility billing software can help you reduce costs and improve customer service at the same time.

Before choosing electricity billing software, consider the following:

1. Are you looking for utility billing services to be utilized in-house or to be outsourced to a third party?

2. What are the must-have features in the ideal electric utility billing software?

3. What kind of technical support or training will be required for an electric utility billing system upgrade?

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Compare and research electric utility billing software

Many states are deregulating their electric industries, and changes are happening in the way utilities handle information about their customers, metering and billing systems. As a result, many utility companies play down traditional billing processes and instead make way for new concepts.

I recommend: Capterra offers a utility billing software directory. You can also search billing software that is not just limited to the utility business.

Try before you buy an electric billing system

Download a demo version, request more information or find the training you need to see if the software you are considering will best fit your needs. Use it in true examples to see how the software would update and change your current system.

I recommend: WhiteMountainTech.com offers sample outputs for your review. Visual Utility Billing is available from Diversified Technology and bills itself as an easy to use program for utility companies small and large. Continental Utility Systems offers a customer-friendly billing solution for utility companies.

Calculate the cost of the electricity billing system

Pricing among electricity billing systems can vary widely. Evaluate the cost over a five-year period for a realistic idea of the investment. Some of those extra fees-including license fees, a modification fee to adapt software for your operation, installation costs, training and an annual technical support fee, as well as product updates-can really add up.

I recommend: Beware of expensive training fees and high installation costs. A good system should not require high-priced services. Loading software can be as easy as inserting a CD and clicking a few keystrokes. Check out a comprehensive buyer's checklist from Donald R. Frey and Company, Inc.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Make sure that the electricity billing information stored in your old electricity billing software can be backed up or converted to be compatible with the new technology.

With increased changes to state energy legislation, it’s important for you to stay abreast of electric utility billing laws and regulations. Many states now require that utility billing companies include additional information on services covered, details that can often be confusing for the average customer.

The goal of amending the electricity billing system was to reduce costs for electricity customers by giving them a choice of power providers while still having access to safe and reliable electric services. To learn more about electric utility billing laws and regulations, you should:

1. Find out more about state electric billing system restructuring laws.

2. Learn how electric utility billing amendments affect you.

3. Obtain information on electricity billing software.

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Access more information about your electric utility billing state laws

As a result of new electric billing system laws, billing companies for utilities were forced to provide customers with more detailed electricity billing information. Electricity bills include information on the customer's competitive power supplier, distribution provider and kilowatts used per hour. The competitive supplier is the company that sells the electricity delivered to your place of business. The distribution company is the local electricity provider responsible for reading meters, restoring power lines and maintaining power lines. Electric billing software calculates monthly bills by multiplying the hours of electricity used by one kilowatt-hour. One kilowatt-hour equals 1,000 watts of electricity used in an hour.

I recommend: Read more about detailed electric billing systems by checking out Galvin Power. You may also check out the Utility Consumers’ Action Network for assistance with understanding electricity billing terminology.

Obtain competitive pricing due to restructuring electric utility billing system

In the 1990s, nearly all states across the country adopted electric billing system restructuring legislation which changed the electric billing requirements. The new electricity billing regulations allowed for more competition in the electricity industry and disassembled monopolies. The idea behind this move was with more choices for utility services, electricity billing companies would be encouraged to offer more competitive pricing options.

I recommend: Check out the Energy Information Administration to read more about state regulation of electric utility billing systems. You may also read more about state electric utility billing laws and regulations by checking out Mountain View Electric Association.

Learn about the effectiveness of electricity billing software

Electricity billing software allows utility billing companies to automate customer payments, adjustments and other charges. An automatic electric billing system should address every aspect of the utility billing process including accurate customer billing and reporting, meter read documentation storage and reporting and service orders. Users should also be able to modify controls for utility billing software to ensure compliance with changing state and federal energy regulations. Ultimately, utility billing software should be a user-friendly and scalable system that simplifies electric utility billing tasks.

I recommend: You may consider checking out Forbes magazine for a listing of billing companies for utilities. Check out Utility Data Systems to learn more about electric utility billing software features.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  There are several things that customers can do to decrease their electricity billing amounts. This includes fine tuning heating and cooling equipment, purchasing and using a programmable thermostat and purchase energy-efficient products.

An electricity billing system and its corresponding software is a great way to keep tabs on the energy your business is using on a daily, monthly and yearly basis. By having hard data in front of you, decisions can be made on where your company can improve its electric and other utility usage to minimize costs and maximize profits.

But if you're feeling taxed at the thought of having to learn about electric utility billing software, don't be. With a few quality resources, and a little time investment on your part, you'll be up to speed in no time. Just think of your tutorial as electric utility billing for beginners.

1. Familiarize yourself with electricity billing software so that you can see if such applications would be helpful for your business.

2. Educate yourself on an electricity billing system and how it might be incorporated into your business.

3. Go to a seminar where electric utility billing systems and software will be on demonstration.

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Educate yourself about electric utility billing software solutions

There are many different types of software applications which provide solutions in the area of electricity billing. Taking the time to learn about the various software programs and how they operate will allow you to make an informed decision on which product will be right for your business. Take the online tutorials or demonstrations offered by these software companies.

I recommend: Check out the EnergyCap website. A subsidiary of Good Steward Software, they produce utility billing software which helps your business "measure, manage and save" when it comes to the cost of electricity. They offer online demonstrations and videos to help you become accustomed to the software. Continental Utility Solutions Inc. also offers similar demonstrations for their electric utility billing software.

Learn about how an electric billing system works

While simple software applications are good enough for some companies, other businesses require much more complex solutions. Implementing entire electricity billing systems can be a solution for major corporations. Learn about how systems are installed, monitored and produce both monetary and energy savings on a larger scale by familiarizing yourself with these systems.

I recommend: Visit the website for RVS Software. Rather than just offering a single program, they have a series of software solutions that make up an entire system. Check out the tour they offer online about their system. Also visit the website for Harris Computer Systems. They will create an entire system for your business or municipal government location that is geared directly for your needs.

Locate conferences where electricity billing software is being exhibited

National and regional conferences are great places to interface with companies that provide utility billing services and solutions to companies. They often give seminars and demonstrate their latest products. You'll also get to compare and contrast several electricity billing software and system solutions so that you can see which application works the best for your business.

I recommend: Visit the website for the Utility Connection for the latest information on conferences and seminars which cover the latest information on electricity billing information. Also the EUEC holds an energy and environment conference every year where exhibitors from all over, including companies specializing in utility billing software and other utility billing services attend and give seminars of their products.