What Comparing Michigan Electric Rates Taught Me About Power Bills.

Electricity is one of those things most of us don't think about very much—until the bill arrives.

We flip a switch, charge our phones, make dinner, and expect everything to work. Then, once a month, we get a collection of numbers and charges that can leave us wondering a pretty straightforward question: Am I paying a lot for electricity?

That question helped inspire WattWatch, a project I built to make Michigan electricity information easier to understand. I wanted a place where people could explore what utilities report, learn more about their provider, and see the public information behind the numbers.

As I looked at the data, I found that one of the most useful distinctions is easy to miss: the price of electricity and the size of an electric bill are related, but they don't tell you the same thing.

A higher price doesn't always mean a higher bill

Here's an example from the U.S. Energy Information Administration's 2024 residential electricity data:

• Michigan: an average price of 19.30 cents per kilowatt-hour, average monthly use of 618 kilowatt-hours, and an average monthly bill of $119.31.
• United States: an average price of 16.48 cents per kilowatt-hour, average monthly use of 863 kilowatt-hours, and an average monthly bill of $142.26.

Michigan's average price per unit was higher, but its average bill was lower. Why? Michigan residential customers used less electricity on average.

That doesn't mean electricity is inexpensive here, or that every Michigan household has a lower bill than a household elsewhere. These are averages across many customers. Your home, the weather, your appliances, how you heat and cool, and your utility's charges all affect what you pay.

The figures above are a 2024 snapshot, useful for comparing the same year across places. They aren't today's rates; the EIA has since published newer annual price data.

First, what's a kilowatt-hour?

If your bill says you used 600 kilowatt-hours, often written as kWh, that's a measure of how much electricity you used during the billing period.

One kilowatt-hour is the amount of energy a 1,000-watt appliance uses when it runs for one hour. A 100-watt device running for 10 hours uses the same amount. It's a way to measure the electricity you use over time, not how many appliances you have plugged in.

That number matters because many charges on a bill depend on how much electricity you use. Some may also depend on when you use it.

The price on the page may not be the whole bill

Let's say your bill shows that you used 600 kWh, and one usage charge is 10 cents per kWh. Multiply those together and that particular charge comes to $60.

That is an illustration, not a quote from a Michigan utility. It's also not necessarily your total bill. Your utility might list separate charges for delivering electricity, a fixed monthly customer charge, adjustments, taxes, or other items. Some usage charges may vary by season or time of day.

In other words, finding one number labeled “energy charge” doesn't mean you've found the full price of keeping the lights on.

The Michigan Public Service Commission has a helpful plain-language guide to common bill charges if you'd like to look up the terms on yours.

Comparing utilities takes a little care

One thing I wanted WattWatch to do was make it easier to see how providers compare. That comparison can be revealing, especially in a state with utilities of different sizes serving very different communities.

But there's an important detail behind the numbers: the EIA's average price per kilowatt-hour is calculated from reported revenue divided by electricity sales. It is an average across customers, not the current rate on a particular person's bill. The EIA explains the difference between its average prices and utility rates.

That's why I think of these comparisons as a starting point. They can help us ask better questions: How does my provider compare? What is included in my bill? Have charges changed? What decisions are being made about future rates?

For many households, the utility serving the home is determined by where they live. A comparison can still provide useful context, even when switching providers isn't an option.

Try this with your own bill

You don't have to become an energy analyst to get a little more familiar with what you're paying. Start with a recent bill and look for:

• Your usage: How many kWh did you use, and how does that compare with the same time last year? Notice whether the billing periods cover a similar number of days.
• The charges: Look for supply, delivery, customer charges, and any adjustments. Your utility may use different names.
• Your plan: Does your rate change by season or time of day? If so, check your utility's current schedule before moving your electricity use to a different time.
• The electric total: If your bill also includes natural gas, separate the electricity charges before comparing them with electric-only figures.

You can also divide the electricity portion of your bill by the kWh used to get a rough average cost per kWh for that billing period. Leave out unrelated items such as a past-due balance. That average can help you understand the whole bill, but it isn't the same as the price of using one additional kWh, especially when fixed charges or time-of-use rates apply.

If you want to dig a little deeper, WattWatch lets you find a Michigan provider, explore reported comparisons, and follow the sources behind the data. Your utility's current tariff and your own bill remain the best places to check the charges that apply to you.

Better questions make better tools

The more I work on projects like this, the more I come back to the same idea: useful technology should help people understand something they care about.

Most of us don't need another chart just for the sake of having a chart. We want to know what the information means, where it came from, and what we can do with it. If WattWatch makes those questions a little easier to answer, it's doing what I hoped it would do.

And if you notice something on the site that could be clearer, I'd love to hear about it. Good questions tend to lead to better tools.

Disclosure: I built WattWatch, a project I work on through I am Your Geek LLC.