UNDERSTANDING YOUR UTILITY BILL
A GUIDE FOR BUSINESSES IN INDIANA
TABLE OF CONTENTS
Introduction..................................................................................................................................................... 5
Basic Billing Concepts...................................................................................................................................... 6
Electric Energy and Demand........................................................................................................................ 6
Electric Consumption and Charges............................................................................................................... 7
Metering Electric Energy and Demand.......................................................................................................... 7
Understanding Electric Demand......................................................................................................................... 8
How to Read Your Bill Statement..................................................................................................................... 10
Pricing Options.............................................................................................................................................. 14
Glossary of Terms........................................................................................................................................... 15
3
4
INTRODUCTION
Understanding your utility bill is an important first step in lowering your energy costs. This guide provides you with
simple and direct explanations of the components of your utility bill and how it is calculated.
Many businesses have found they can lower their utility bills without impacting their operations. You may be able to
reduce your energy costs by revising operating schedules, replacing inefficient equipment or selecting a different rate
schedule. You can also take advantage of our energy efficiency and demand response programs:
• Smart $aver® Incentives help you lower the initial costs of purchasing energy efficient
equipment – to help control your operating costs and improve your bottom line. These
programs are currently available for customers whose demand for energy is less than
500 kilowatts (kW). For customers with higher demand, regulatory approval of Smart
$aver Incentives is pending.
• Our PowerShare® demand response program rewards your business for curtailing your
energy usage during periods of peak demand.
Please contact your Account Manager, or go to www.duke-energy.com for more information.
See the Glossary on Page 15 for definitions of terms appearing in bold.
5
BASIC BILLING CONCEPTS
ELECTRIC ENERGY AND DEMAND
Example:
Two main types of charges appear on your electric
bill. The energy component of your bill measures the
quantity of electricity supplied in kilowatt-hours (kWh).
The demand component of your bill measures the power
supplied, in kilowatts (kW).
When you turn on an electric appliance, you create
demand for power. This instantaneous amount of
electricity demanded is measured in watts. A 100-watt
light bulb, for example, demands 100 watts of electricity
when it is energized. Ten 100-watt light bulbs would
demand 1,000 watts (10 x 100 = 1,000) or 1 kilowatt
(kW). So kilowatts measure the rate at which electricity
is used.
Electric utilities invest in generating and distribution equipment to supply the power you need, when
you need it. Because electricity is not easily stored, it
is generated as needed. So we must have adequate
capacity on hand to meet customers’ maximum requirements, both for quantity (kWh) and power level, or
demand (kW). Electric rates are set to cover the total
cost of providing both.
It may help to use the analogy of the odometer and
speedometer in a car. The amount of energy used
(kilowatt-hours) can be compared to miles driven, as
shown on the odometer. Energy demand (kilowatts) is
more like the speed or the rate at which the miles are
driven, as shown on the speedometer.
Odometer (kilowatt-hours)
100 watts
1,000 watts or 1 kilowatt
If this same 1-kilowatt load is operated for one hour,
1 kilowatt-hour (kWh) of electricity is used (1 kilowatt x
1 hour = 1 kilowatt-hour). The kilowatt-hour is the most
common unit for measuring electrical energy usage.
 Kilowatts measure the demand, or rate of energy usage,
at any point in time.
 Kilowatt-hours measure the total amount of energy used.
Speedometer (kilowatts)
6
Why does Duke Energy measure demand?
We need to plan for the maximum electrical demand that
could be expected from your business during the year.
How we plan to meet your energy needs is similar to your
decision process when you purchase a car. For example,
if you want a car that can go up to 90 miles per hour, it
needs to have a large enough engine.
See the Glossary on Page 15 for definitions of terms appearing in bold.
Even if you never actually get the chance to drive
that fast, you plan for that possibility by buying a car
with capacity to do so. Similarly, Duke Energy installs
facilities to satisfy your highest energy demands, even
though your operations may reach that level only a few
times a year. We do this to reserve capacity for you on the
Duke Energy system (generating plants, and transmission
and distribution lines) and to ensure we properly size the
equipment necessary to serve your business.
By measuring demand, Duke Energy can better ensure
that facilities are properly sized and that customers are
charged appropriately for their capacity needs. This helps
us to meet the energy needs of all our customers.
Electric consumption and charges
If demand readings are shown on your billing statement,
you may notice two separate entries. One is actual
demand (measured by the meter) and the other is billing
demand. Your utility bill is based on billing demand,
which may not be the same as actual demand for the
billing period. Billing demand is based on metered
voltage versus delivered voltage. This can account for
adjustments (plus or minus) to the metered kilowatthours (kWh), kilowatts (kW) and kilovolt-amperes (kVar).
Power Factor, Reactive Power and kVar
Motors (as well as magnetic lighting ballasts,
transformers and other inductive equipment) draw two
kinds of current. Electrical current is converted by the
motor to useful power. Magnetizing current carries no
“energy,” but is needed to make the motor operate and
the transformer hum.
Metering electric energy and demand
The meters used at residences and some small
businesses register only electrical energy usage
in kilowatt-hours (kWh). The meter continuously
measures the number of kWh used. At the end of each
billing period (typically one month), a kWh reading is
obtained from the meter. The previous month’s reading
is then subtracted from the new reading to determine
kWh consumption. In some cases, the meter registers a
known portion of the kWh used, and a multiplier is
used to determine the final actual usage. The multiplier,
if applicable, is shown on your billing statement.
Meters at businesses that have three-phase electric
service measure both kilowatt-hours (energy) and
kilowatts (demand). Kilowatts measure the average rate
at which kilowatt-hours are used during a certain time
interval. The time interval used by Duke Energy Indiana is
30 minutes.
Example:
If a 10-kW electrical load (like a commercial oven) is
operated for 30 minutes, the demand register on the
meter will record 10 kW. During this same 30 minutes,
the kWh register on the meter will record the use of 5
kilowatt-hours (10 kW x ½ hour = 5 kWh). The demand
register will retain this 10-kW demand unless higher
demand occurs during any subsequent 30-minute interval
during the billing month.
Power factor, a measure of how effectively the current
delivered to the motor is converted into useful energy, is
normally shown as a percentage. Many electric utilities
charge extra for poor (low) power factor, because
it costs the utility more to build and operate the
additional equipment that carries this extra current.
Utilities may call this charge a power factor charge, a
reactive power charge or a kVar charge. For Duke Energy
Indiana, you will see a kVar charge on your bill.
See the Glossary on Page 15 for definitions of terms appearing in bold.
7
Understanding ELECTRIC demand
INTEGRATED DEMAND
A demand meter measures the average maximum 30-minute kilowatt demand during the applicable billing period.
Since the demand measurement is “integrated,” or averaged over each 30-minute period during the billing month,
short periods of intense use, such as the start-up of a motor, will have minimal impact on the registered demand.
At the end of the billing period, Duke Energy records both the kilowatt-hour and the maximum 30-minute integrated
kilowatt demand readings from the meter. The demand register is then reset so it can measure maximum demand
for the following month.
Example: 30–Minute Integrated Demand Profile
This example illustrates how demand is calculated for an office with about 4,500 square feet of space, during the summer.
For the first five minutes, the lights are on and the cooling system is running. During the next 10 minutes, the air
conditioning system cycles off, but several pieces of office equipment (computers, printers and a copy machine) are in
use. During the last 15 minutes, all the equipment is in use and the air conditioning system cycles on. The resulting
“integrated” demand for this 30-minute period is illustrated below.
40
35
Demand (kW)
30
25
20
15
10
5
0
5
10
15
20
25
30
Time (Minutes)
Demand (kW):
Lights & Cooling
Lights & Equipment
Lights, Equipment & Cooling
30 kW x 5 minutes
+
30 minutes
18 kW x 10 minutes
+
30 minutes
36 kW x 15 minutes
30 minutes
=
5 kW
6 kW
18 kW
= 29 kW
+
+
Even though the maximum demand was 36 kW, the “integrated” demand is only 29 kW for this 30-minute interval.
8
Example: 24-Hour Integrated Demand Profile
Continuing with our small-office example, demand is low in the early morning hours, since most of the equipment
is off. Maybe only a few exterior lights and the security system are on. As the business day begins, all the lights
and equipment are turned on and workers begin to arrive, producing a small peak in the early hours. Then, as the
outside temperature warms, the need for cooling inside the office increases, and the cooling system has to respond.
Note the highlighted area between 1 p.m. (13:00) and 1:30 p.m. (13:30). This represents the 30-minute interval
discussed in the previous example. Demand finally reaches a peak at about 3 p.m. (15:00). Then, as business
winds down, the outside temperature cools and the cooling system begins to cycle on and off for longer intervals,
demand begins to drop. After the business closes down for the evening, demand returns to its minimal level.
35
Highest Demand of the Day
Demand During Each Interval
30-Minute Demand Interval
Quantity of Energy Consumed
30
For this example, the
maximum 30-minute
demand for the day
was 34 kW.
Demand (kW)
25
20
15
10
5
0
1a.m. 2
3
4
5
6
7
8
9
10 11 12p.m.1
2
3
4
5
6
7
8
9 10 11 12
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00
Time (Hours)
9
How to read your bill statement : page 1
The first page of your bill contains remittance information, general account information, and a summary of your energy
consumption and charges.
Duke Energy Indiana has several different rate codes, based on the actual service delivered. Your electric bill may look
a little different than this example, but it will contain the same basic billing information as noted below. If you have
questions about your specific bill, please contact your account manager.
1. Remittance Document
This section of the bill is your remittance document. Please
return it to Duke Energy with your payment, indicating
the amount enclosed so that we can properly apply your
payment to your account.
2. Name and Address
This is the name on the account and the address where
service is provided.
3. Customer Service
Call us 24 hours a day, seven days a week for information
about your account or any of our programs or services.
4. Account Number
This is the Duke Energy account number for the meter billed
on this statement.
5. Payment and Billing Information
This tells you where to send your payment, as well as
information regarding the timing of payments, meter
readings and bill preparation.
6.Energy Consumption Summary
This is a summary of your energy consumption for the billing
period covered by this statement.
• Meter numbers are provided for electric service, along
with the dates your meters were read and the number
of days between meter readings.
• Previous and present meter readings are provided so that
you can verify your energy consumption.
• In some cases, the meter registers only a portion of the
kilowatt-hours used, and a multiplier is used to determine
actual usage. The multiplier, if applicable, is shown here
on your billing statement.
• Your energy usage, or consumption, is the difference
between your present and previous meter readings.
Electric consumption is measured in kilowatt-hours (kWh).
10
7. Summary of Electric Charges
This section provides a summary of the charges relating to
your electric consumption, including the rate code used to
compute your electric charges.
8.Taxes
Indiana state tax of 7 percent of the total current bill will
appear here, if applicable. (If the account is tax-exempt, this
box will not appear on the bill.)
9. Current Billing
This section summarizes your current billing and payment
information. The amount due to Duke Energy from your
previous bill is listed first, followed by the amounts you
have paid since your last billing statement, any returnedcheck charges, late-payment fees or other adjustments –
this results in the Balance Forward. Added to the Balance
Forward are your Current Electric Charges and Taxes,
resulting in the Current Amount Due to Duke Energy.
10. Due Date, Amount Due and Late Charge
Average cost per kWh, due date, amount due, and amount
due after due date.
1
Account Number 0000-1234-05-6
MA 18
For less detailed billing information on
your monthly bill, check box on right
Due Date
Amount Due
Aug 19, 2011
$4,572.87
$ ___________________ $ ___________________
Acme Enterprises
Attn: Accounting Dept
123 Main St
Hanover IN 47243-8955
400
P.O. Box 1326
Charlotte
NC 28201-1326
00001234567
2
00123456789
00001234567
Page 1 of 2
For Inquiries Call
Acme Enterprises
Attn: Accounting Dept
123 Main St
Hanover IN 47243
Meter
Elec
Number
012345600
Payments after Jul 28 not included
Last payment received Jul 11
Reading Date
From
To
Jun 28
Jul 27
Days
Meter Reading
Previous Present
29
14441
56,760 kWh
Duke Energy Rate - Rate HSN0
Current Electric Charges
120.00 kW
41.60 kVar
$ 4,273.71
$ 4,273.71
8 Taxes
Taxes
Average Cost: $ 0.0753 per kWh
15860
Bill prepared on Jul 28, 2011
Next meter reading Aug 25, 2011
Multi
Usage
Actual
kW
40
56,760
120.00
Current Billing
Electric - Commercial
Usage -
0000-1234-05-6
Account Information
Mail Payments To
6
4
Account Number
Duke Energy
1-800-555-5555
For Account Services, please contact
Betty Smith
PO Box 1326
Charlotte
NC 28201-1326
7
123456789
3
Name /Service Address
5
Amount Enclosed
HelpingHand Contribution
(for Customer Assistance)
Amt Due - Previous Bill
Payment(s) Received
Balance Forward
Current Electric Charges
Taxes
Current Amount Due
$ 4,446.47 9
4,446.47 cr
0.00
4,273.71
299.16
$ 4,572.87
$ 299.16
Due Date
Amount Due
After
Aug 19, 2011
Aug 19, 2011
$4,572.87
$4,701.08
10
11
How to read your bill statement : page 2
Page 2 and subsequent pages of your bill contain the details of your electric charges. Here, Duke Energy provides a
breakdown of your consumption and the various charges relating to your specific rate code, which appears on Page 1.
Your account manager can answer any questions you may have about your bill.
11. Electric Consumption and Demand
Here you will find information on your electric usage,
including your electric meter number, electricity consumption
(in kilowatt-hours), 30-minute peak monthly demand (in
kilowatts), reactive power (in kVar) and the billing period.
If applicable, meter-specific multipliers used to compute
your energy consumption and peak demand also appear
here. If your rate code includes a metering adjustment, that
adjustment will appear here as well.
12. Details of Electric Charges
This section presents the information we use in computing
your electric charges. The rate code is provided, along with
an itemized list of its components.
• Rider 66 (Demand Side Management) – This tracker
reflects the costs of Duke Energy’s program to help
customers conserve and use less electricity. (This rider
does not apply to commercial and industrial customers
with peak demand greater than 500 kW.)
• Rider 67 (Cinergy Merger Credit) – This tracker allows
Duke Energy Indiana to pass on to its customers any
savings benefits due to the Cinergy merger.
• Most rate codes include a fixed Connection Charge, which
is independent of your electric consumption or peak
demand. This charge is intended to cover Duke Energy’s
fixed costs of rendering electric service, billing and
customer care.
• Rider 68 (Midwest Independent System Operator Adjustment) – This tracker allows the company to recover costs
related to its participation in a regional transmission
operating system, in order to safely and efficiently move
power among utilities as needed.
• Demand Charge – This is based on your 30-minute peak
demand for the current billing period. (This demand
(kW) may be a stand-alone charge, or it could be used to
determine the monthly load factor and the energy usage
(kWh) for the Rate Code LSN0 billing calculation.)
• Rider 70 (Reliability Adjustment) – This tracker allows the
company to recover costs for power purchased to meet
reserve requirements established by the regional transmission operator, or to return revenues to customers from the
sale of surplus capacity and/or energy to other utilities.
• Energy Charge – This is the basic charge for your
energy consumption.
• Rider 71 (Clean Coal Adjustment) – This tracker recovers
the cost of operating and maintaining pollution control
equipment.
• kVar Charge – This is your reactive energy (power
factor) charge.
• Rider 60 (Fuel Adjustment) – This covers the cost of coal,
natural gas and related fuel costs for running our power
plants. This charge also covers our cost to purchase power
when that is more economic than generating power.
• Rider 61 (Coal Gasification Adjustment) – This tracker
currently allows the company to recover financing costs
for construction and related expenses associated with the
IGCC coal gasification plant in Knox County, Ind. Once the
plant is operational, it will allow for recovery of the costs
of operating and maintaining the facility, as well as the
cost of the plant.
• Rider 62 (Pollution Control Adjustment) – This charge
reflects the financing cost for pollution control equipment
installed at Duke Energy Indiana plants.
12
• Rider 63 (Emission Allowances) – This tracker allows
the company to recover the cost of purchasing emission
allowances in order to meet pollution control requirements,
or to return revenue to customers for the sale of unused
emission allowances.
•Other Charges – If applicable, excess facility or backup
capacity.
13. Total Current Electric Charges
This will match the Current Electric Charges on Page 1 of
your bill.
14. Explanation of Taxes
This will match the Taxes shown on Page 1 of your bill.
15. Electric Usage Graph
For your convenience, Duke Energy provides a graph of your
electric consumption for the past year, showing your monthly
kWh usage. You can use this information to analyze your
energy consumption and look for ways to use energy more
efficiently in your business, and reduce your energy bill.
See the Glossary on Page 15 for definitions of terms appearing in bold.
Page 2 of 2
11
Name
Service Address
Account Number
Acme Enterprises
Attn: Accounting Dept
123 Main St
Hanover IN 47243
0000-1234-05-6
Electric
Meter Multipliers kWh Usage Demand Read Actual kW Billed Kvar Power Factor -
12
Duke Energy
Rate HSN0 - High Load Factor Sec Srv
012345678
Connection Charge
$ 15.00
Demand Charge
120.00 kW
@
$ 14.06000000
Energy Charge
56,760 kWh @
$ 0.01583000
KVAR Charge
41.60 Kvar
@
$ 0.24000000
Rider 60 - Fuel Adjustment
56,760 kWh @
$ 0.01420700
Rider 61 - Coal Gasification Adj
120.00 kW
@
$ 1.91436100
Rider 62 - Pollution Control Adj
120.00 kW
@
$ 2.04057600
Rider 63 - Emission Allowance
56,760 kWh @
$ 0.00032300
Rider 66 - DSM Ongoing
56,760 kWh @
$ 0.00021600
Rider 67 - Cinergy Merger Credit
56,760 kWh @
$ 0.00029700cr
Rider 68 - Midwest Ind Sys Oper Adj
56,760 kWh @
$ 0.00072500
Rider 70 - Reliability Adjustment
56,760 kWh @
$ 0.00035700
Rider 71 - Clean Coal Adjustment
120.00 kW
@
$ 2.08452600
40
56,760
03.00
120.00
41.60
94.4%
Jun 28 - Jul 27
29 Days
1,687.20
955.27
9.98
806.39
299.72
244.87
18.33
12.26
16.86 cr
41.15
20.26
250.14
4,273.71
Total Current Electric Charges
$ 4,273.71 13
Explanation of Taxes
Taxes
Indiana State Tax
$ 299.16
$ 299.16
Total Taxes
$ 299.16
14
Electric Usage
kWh
15
100,000
80,000
60,000
40,000
20,000
0
J
A
S
O
N
D
J
F
M
A
M
J
J
Calculations based on most recent 12-month history
Total Usage
598,680
Average Usage
49,990
Electric
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
33,090
55,680
53,920
50,080
41,960
50,980
45,528
45,120
45,880
47,640
47,580
59,800
56,760
13
Pricing options
A number of rate schedules are available for business and institutional customers. Other pricing options may be
available based on your specific circumstances – please check with your account manager for more information.
Principal electric pricing options
Rate
Description
Rate CS
Secondary Distribution Service
Commercial Service
Applicable to all single-phase voltage,
120/240 volts or 120/208 volts, three-wire,
as designated by Duke Energy Indiana.
Demand
Charge?
Energy
Charge?
kvar
charge?
Rate
riders?
No
Yes
No
Yes
Maximum Provision – Rate limited to a maximum load requirement of 75 kW per metered account
Minimum Provision – Connection Charge
Rate LLF
Secondary, Primary or Transmission Service
Low Load Factor
Service
Applicable to all single-phase or poly-phase
voltage supplied by Duke Energy Indiana.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Minimum Provision – Connection Charge based on delivered voltage
Load Factor Provision – for Secondary Service delivery
Interval data meters installed for accounts with demand over 500 kW
Metering Adjustment – Metered voltage versus delivered voltage
Rate HLF
Secondary, Primary or Transmission Service
High Load Factor
Service
Applicable to all single-phase or poly-phase
voltage supplied by Duke Energy Indiana.
Minimum load requirement of 25 kW.
Minimum Provision – Connection Charge based on delivered voltage
Demand and Energy Provision – Charges based on delivered voltage
Metering Adjustment – Metered voltage versus delivered voltage
Interval data meters installed for accounts with demand over 500 kW
Annual prorated 14-day maintenance periods for customers at Primary delivery or higher
14
See the Glossary on Page 15 for definitions of terms appearing in bold.
Glossary of terms
BILLING demand (kW) or BILLING MAXIMUM LOAD
Customer’s maximum load expressed in kilowatts (as
adjusted per the applicable rate), used to calculate
the bill.
BILLING PERIOD OR MONTH
The interval between two consecutive meter readings
for billing purposes, taken every 30 days to the
extent practicable.
METEring ADJUSTMENT
If metered voltages exceed delivered voltages, before
computing the charges, the actual measurement of
energy, kVar and Billing Maximum Load is decreased
by 1 percent. If delivered voltages exceed metered
voltages, before computing the charges, the actual
measurement of energy, kVar and Billing Maximum
Load is increased by 1 percent.
DELIVERed VOLTAGE
The voltage of the utility’s facilities at the delivery point.
METERed VOLTAGE
The voltage at which service is metered, irrespective of
the delivery voltage.
DEMAND
The rate at which energy is used, measured in
kilowatts (1,000 watts) and peak-averaged over
30-minute intervals.
MULTIPLIER
Factor used with certain meter types to determine
actual usage.
ENERGY
The active component of the quantity of supply,
measured in kilowatt-hours.
KILOVOLT-AMPERE (kVar)
1,000 reactive volt-amperes (Var).
KILOWATT (kW)
1,000 Watts.
KILOWATT-HOUR (kWh)
The use of the active component of power where 1
kWh is equal to 1 kW used for 1 hour.
LOAD FACTOR (LF)
kWh divided by the product of the average hours per
month (730 hours), times the kW maximum load in the
month. Expressed as a percentage.
MAXIMUM LOAD
The maximum integrated rate of use of power during a
specified time interval as provided in the rate schedule,
expressed in kW.
POWER FACTOR (PF)
In rate schedules providing for power factor adjustment,
PF is calculated from the relation between the reactive
(RkVah) and the active (kWh) components of energy
used, expressed as a percentage.
RATE SCHEDULE
A part of the tariff which sets forth the availability
and charges for service supplied to a particular class
of customers.
RIDER
A part of the tariff setting forth supplemental provisions
applicable to specific rate schedules.
RkVah
The metered use of the reactive component of power.
Var
Reactive component of power.
WATT (W)
Active component of power. The electrical unit of
real power.
15
Duke Energy
1000 East Main Street
Plainfield, IN 46168
www.duke-energy.com
©2013 Duke Energy Corporation LU 4/13