The useful answerA tiered electricity rates calculation prices each block of consumption at its applicable rate. The average bill rate may differ from the cost of the next kWh. Read your own tariff’s thresholds and billing-period rules before estimating an appliance’s effect.

Identify the tariff structure

PG&E’s explanation provides an example of usage tiers and baseline allowances. Your provider may use different blocks, seasonal thresholds or a combination of tiers and time-of-use pricing. Do not apply another utility’s structure to your apartment without checking the actual plan.

Copy the applicable kWh thresholds and variable charges from the current tariff. Keep fixed fees separate, and note whether allowances change with billing days or season.

Calculate a fictional two-tier bill

Imagine the first 300 kWh cost $0.15 each and consumption above 300 kWh costs $0.25 each. At 400 kWh, usage charges are 300 × $0.15 + 100 × $0.25 = $70. The average usage rate is $70 ÷ 400 = $0.175/kWh.

These are invented rates, not PG&E prices. An additional 20 kWh in the upper tier would cost $5, even though multiplying by the average rate would suggest only $3.50.

Handle a saving that crosses the threshold

In the same fictional plan, reducing consumption from 320 to 280 kWh removes 20 kWh at $0.25 and 20 kWh at $0.15. The saving is $8, not $10 or $6.

Calculate the usage charge before and after the change when a threshold is crossed. This is often clearer than trying to assign one rate to a change spanning several price blocks.

Use a simple calculator with clear limits

The blog’s flat-rate appliance calculator accepts one rate at a time. Use it for a change that stays within a known tier, or split the change into blocks and add the results. It does not automatically reproduce every tariff. Include applicable variable supply and delivery charges, while preserving fees that do not change with use. Save the tariff date with the estimate so later price revisions can be distinguished from appliance behavior.

Choose your next step

Continue with the question that matches your next decision:

Sources & further reading

Numerical examples are illustrative unless explicitly described as measured. This guide does not claim hands-on product testing. Read the methodology and editorial disclosure.