Your electric bill can be confusing, but knowing what each piece means helps you take control of your energy costs. In Ohio, your bill is made up of three main parts: Generation, Transmission, and Distribution. Each plays a different role in how electricity is produced, delivered, and billed. This guide helps explain these parts in clear, simple terms—so you can better understand where your money goes and what choices you have as a consumer.
This guide will help you learn about:
- Generation (making the power) – Find out who makes electricity, how you can shop for supply, and what the “Price to Compare” on your bill means.
- Transmission (long-distance power lines) – Learn how high-voltage lines carry energy across states, why it’s part of your delivery costs, and what PJM is.
- Distribution (local power lines) – See how electricity gets from substations to your home and why you pay distribution fees even if you use no energy.
- Consumers (who use electricity) – Discover how rates differ for homes, businesses, and factories, plus what protections and assistance programs are available.
Click each one to see more:
- 1. Generation (making the power)
Who owns it?
- Not the utility. Since deregulation in 1999, utilities only deliver power (they’re “pipes and wires” companies).
What is it?
- Generation is the actual electricity.
- Suppliers (companies called marketers) buy energy on the market and resell it to consumers.
- Utilities also buy energy on the same market, but by law they can’t mark it up for profit.
What does it cost?
- Delivery makes up about 40% of your bill.
Who regulates it?
Your choices:
- Shop for a supplier
- Join a community aggregation program
- Stay on the utility’s default rate, called the Standard Service Offer (SSO)
- Save money by using less electricity (LED lightbulbs, programmable thermostats, etc.)
The Standard Service Offer (SSO):
- If you don’t choose a supplier (marketer or aggregation), you’re placed on the SSO.
- The SSO is part of the Price-to-Compare listed on your bill.
- This rate changes every month, and the price shown is last month’s price.
- Switching suppliers (or removing an unwanted one) can take 2–3 billing cycles.
- 2. Transmission (the “long-distance power lines”)
Who owns it?
- The utility company.
What is it?
- Tall, high-voltage wires that move electricity long distances from power plants to substations.
What does it cost?
- Your bill has a base fee for transmission.
- The cost goes up if you use more electricity.
- Transmission is part of the delivery section of your bill.
- Delivery makes up about 60% of your bill.
- The Federal Energy Regulatory Commission (FERC) sets rules and costs at the national level.
What’s included in delivery costs?
- Tree trimming
- Reliability standards
- Building and repairing equipment
- Assistance programs
Do you pay even if you don’t use energy?
- Yes. If you’re connected to the grid, you must pay delivery fees (transmission + distribution).
What’s PJM?
- Ohio is part of PJM Interconnection, a regional power grid serving 65 million people in 13 states and Washington, D.C.
- PJM is the largest power grid operator in the U.S.
- 3. Distribution (the “local power lines”)
Who owns it?
- The utility company.
What is it?
- Smaller wires that carry electricity from substations to neighborhoods, homes and businesses.
- Substations lower the high-voltage energy from transmission lines before it’s sent to your home or to a business.
What does it cost?
- Your bill includes a base fee for distribution.
- Some costs rise if you use more electricity.
- Distribution is also part of the delivery section of your bill.
- Delivery makes up about 60% of your bill.
Who regulates it?
What’s included in delivery costs?
- Tree trimming and vegetation management
- Service reliability standards
- Building and maintaining infrastructure
- Other programs to keep power safe and dependable
- Funds for assistance programs
Do you pay even if you don’t use energy?
- Yes. If you’re connected, you must pay the base delivery fees (transmission + distribution).
- 4. Consumers (who uses electricity)
Who are consumers?
- Residential: homes and apartments
- Commercial: businesses
- Industrial: factories and manufacturing
Why does it matter?
- The type of consumer determines the rates paid.
- Different consumer groups are charged different rates.
Who sets the distribution and transmission rates?
- The Public Utilities Commission of Ohio (PUCO) sets rates through rate cases.
- In some cases, residential consumers may help pay for part of the costs for commercial or industrial users in their residential rates.
Bill-payment assistance
- PUCO-regulated utilities must contribute to and offer assistance programs.
- Municipal utilities, rural co-ops, and submetered utilities do not have to offer all the assistance programs available to regulated utility customers.
Disconnection protections for consumers
- With PUCO-regulated utilities, you have protections for disconnection and reconnection.
- These protections do not apply to municipal, co-op, or submetered utilities