Guide · Updated November 2026 · Data: EIA Form 861 2025 and EIA-861M

Average Realized Rate vs Tariff Rate: What You Actually Pay

Ask "what does electricity cost in Florida?" and you will get two kinds of answers. A utility's tariff is its official price list: so many cents per kWh for energy, so much per month as a customer charge, plus demand charges, tier structures and riders. An average realized rate is simpler and, for most comparisons, more honest: it is the total revenue a utility collected from a customer class divided by the total electricity it sold them.

Why the two numbers differ

A household paying a $12 customer charge and 11¢/kWh for energy, plus fuel adjustment and taxes, does not actually pay 11¢/kWh. At 900 kWh a month the fixed charge alone adds 1.3¢ to every kWh. Add riders and the effective price might be 14¢. The average realized rate captures all of it automatically, because the numerator is every dollar collected and the denominator is every kWh sold. EIA computes state averages exactly this way in its average-bill tables, and every rate on this site works the same way - the formula is spelled out in our methodology.

When the tariff is the right number

• Deciding whether a specific action saves money - running the dishwasher at night on a time-of-use plan, for instance - because savings accrue at the marginal tariff rate.
• Comparing two suppliers' offers in a restructured state, where the energy charge is the part that changes.
• Sizing rooftop solar: exported and offset energy is valued under your tariff and net-metering rules, not at the average rate.

When the average realized rate is the right number

• Comparing what households in different places actually pay - the purpose of the cheapest and most expensive utility rankings.
• Estimating a typical bill: average usage times the average realized rate reproduces EIA's published average bill closely.
• Tracking change over time: tariff sheets change dozens of line items at once, while the realized rate shows the net effect, as in the five-year trends on every utility profile.

The caveats

An average realized rate blends all customers in a class - the careful and the careless, big homes and small. Your personal effective rate will differ, mainly through the fixed charge: low-usage customers pay more per kWh, high-usage customers less. Treat the average as the center of the distribution, not a price quote. For a step-by-step tour of where the money goes, read how to read your electric bill.

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