Understanding tiered utility rates
A tier is a block of consumption with its own price. Crossing a threshold usually changes the price of the next unit, not the price of every unit already used. Check that this matches your tariff.
Price each block once
In a hypothetical tariff, if the first 100 units cost USD 0.10 each, the next 200 cost 0.20, and the remainder costs 0.30, then 350 units cost 10 + 40 + 15 = 65 before fees. Exactly 300 units cost 50; there is no charge in the third tier.
Cumulative boundaries
Enter cumulative upper limits, not block sizes. Use 100 then 300, followed by an unlimited final tier. Tier thresholds must use the same unit and billing period as your usage.
Tiers and time windows
Time-of-use prices and seasonal tiers require separate calculations for each applicable period. A blended average can help with budgeting, but cannot reproduce a time-of-use bill exactly.
Use the marginal price for small changes
At 350 units in this tariff, removing ten units avoids 10 × 0.30 = 3.00. The blended energy price, 65 ÷ 350, is about 0.186 per unit and would understate this reduction. A larger change crossing a boundary requires two complete bill calculations. Average price helps describe a bill but may misprice a saving.
Electricity & Water Bill Calculator
Worked example: Price extra use across an electricity tier
Related reading: Checking a rate change partway through a bill
Reference: EPA WaterSense: understanding your water bill.