How Tiered Electricity Pricing Works
Tiered (progressive) electricity pricing charges a higher rate per kWh as your usage increases. This calculator uses approximate US residential rates: Tier 1 (0–500 kWh) at $0.12/kWh, Tier 2 (501–1,000 kWh) at $0.17/kWh, and Tier 3 (1,001+ kWh) at $0.24/kWh, plus a $12 fixed monthly charge and 10% tax.
Only the usage within each tier is charged at that tier's rate. For example, if you use 700 kWh, the first 500 kWh is billed at $0.12 and the remaining 200 kWh at $0.17. Rates vary significantly by utility, state, and season — use this as an estimate and check your utility bill for exact rates.
Staying in a lower tier significantly reduces your average cost per kWh. Running high-wattage appliances like dryers and air conditioners at off-peak hours or reducing total usage are effective ways to manage your bill.
Frequently Asked Questions
Each tier has a higher rate per kWh. Only the usage within each tier is charged at that rate — not your entire usage at the highest rate reached.
These are approximate US averages for illustration. Actual rates vary by utility, state, and season. Check your utility bill or provider website for exact rates.
Stay in lower tiers by using efficient appliances, reducing air conditioning, and shifting energy-intensive tasks to off-peak hours where time-of-use rates apply.