The next kWh can cost more than the last one.
A tiered bill charges different prices to different blocks of use. Averaging the entire bill can hide the price of adding an EV or electric heater.
Use a blended rate to describe the bill. Use the applicable tier to model a change.
Follow the blocks
In a simple two-tier example, the first 600 kWh costs 0.12 per kWh and additional use costs 0.18. A home using 800 kWh pays 72 for the first block and 36 for the remaining 200 kWh: 108 in energy charges. Fixed charges and taxes would be added separately. These are example prices.
Calculate the blended price
The example’s blended energy price is 108 divided by 800, or 0.135 per kWh. That describes what happened across the whole period. It does not mean another 100 kWh would cost 13.50: because the first block is already used, that extra energy would cost 18.
Follow a saving across the boundary
If the home saves 300 kWh, consumption drops from 800 to 500. The new energy charge is 60. The 48 saving consists of 200 kWh avoided at the upper price and 100 kWh avoided at the lower price. Multiplying every saved kWh by either one rate would give a different answer.
Check how your utility defines a period
Read the tariff’s block size, billing period and seasonal conditions. For example, Ontario’s residential tier threshold changes by season. Use your actual statement when billing days differ from a standard month. Do not assume another province or state follows the same rules.
Your next four steps.
- Find each tier’s price and threshold.
- Check the season and billing days.
- Price the existing use and proposed use separately.
- Keep delivery, fees and taxes visible.
Put the idea into numbers.
Open the calculatorHAUSE Energy · Reviewed September 8, 2026. For current program rules or prices, use your utility’s published documents and the regional source guide.