How electricity charges are split by market
The same electricity bill line can be set by an auction in one market, a regulator in another and your own peak load in a third. Which party bills it, the supplier or the utility, also changes by state. This is the map we use to put supply offers on the same terms.
The building blocks
| Charge | What it pays for | Usually set by |
|---|---|---|
| Energy | The electricity itself, hour by hour | Wholesale market prices |
| Line losses | Energy lost moving power to your meter | Utility loss factors |
| Capacity | Generation kept available for peak demand | Capacity auctions or bilateral contracts, times your capacity tag |
| Transmission | The high-voltage grid | Regulated rates, times your transmission tag or peak |
| Ancillary services and grid operator fees | Reserves, regulation and running the market | Grid operator settlements |
| Congestion or basis | Price differences caused by transmission limits | Wholesale market prices |
| Renewable compliance | Certificates required by state standards | State rules and certificate prices |
| Utility delivery | Local wires, meters, customer service and riders | The utility's tariff, approved by its regulator |
PJM
Thirteen states and Washington, D.C., from New Jersey to Illinois.
| Charge | How it is set | Who usually bills it |
|---|---|---|
| Energy | Locational prices by zone or node, day-ahead and real-time | Supplier |
| Capacity | Base Residual Auction price per MW-day for each June-to-May delivery year, times the account's peak load contribution (PLC). The 2026/27 price is $329.17 per MW-day. | Supplier, fixed or passed through |
| Transmission | Zonal network service rate, times the account's network service peak load (NSPL), set from the zone's annual peak | Supplier in some states; the utility in others |
| Ancillary services and PJM fees | PJM settlements per MWh | Supplier |
| Renewable compliance | State portfolio standards, such as alternative energy credits | Supplier |
Each utility sets its customers' PLC and NSPL from summer peak hours using its own method, so two utilities in PJM can tag similar loads differently. See capacity tag errors.
ERCOT
Most of Texas. No capacity market: scarcity is priced through energy.
| Charge | How it is set | Who usually bills it |
|---|---|---|
| Energy | Settlement point prices by load zone; real-time prices include reserve adders when the grid is tight, up to the $5,000 per MWh offer cap | Retail electric provider (REP) |
| Ancillary services | Regulation, Responsive Reserve, Non-Spinning Reserve and ERCOT Contingency Reserve Service | REP, fixed or passed through |
| ERCOT fees and uplift | Administrative fee and reliability unit commitment charges | REP |
| Transmission | The account's 4CP times the TDU's transmission rate | TDU, passed through on the REP's bill |
| Distribution | The TDU's tariff | TDU, passed through on the REP's bill |
In ERCOT's competitive areas the REP issues one bill that includes the TDU's delivery charges. Charges created after Winter Storm Uri, such as securitization charges, have been passed to customers through supplier change-in-law terms.
NYISO
New York State, in eleven pricing zones from A to K.
| Charge | How it is set | Who usually bills it |
|---|---|---|
| Energy | Zonal prices, day-ahead and real-time | Supplier, or the utility on default service |
| Capacity (ICAP) | Monthly spot and strip auctions by locality, such as New York City and Long Island, times the account's ICAP tag from the prior summer's peak | Supplier, often passed through |
| Ancillary services and NYISO fees | NYISO settlements | Supplier |
| Clean energy standard | State renewable and zero-emission credit requirements | Supplier |
| Transmission and delivery | The utility's tariff | Utility |
ISO-NE
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
| Charge | How it is set | Who usually bills it |
|---|---|---|
| Energy | Prices for eight load zones, day-ahead and real-time | Supplier |
| Capacity | ISO-NE's capacity market, times the account's capacity tag from its load at the annual system peak hour | Supplier |
| Ancillary services and ISO-NE fees | ISO-NE settlements | Supplier |
| Transmission | Regional network service rates | Usually the utility, as a delivery charge |
| Renewable compliance | State portfolio standards | Supplier |
MISO
Fifteen states from Minnesota to Louisiana. Retail choice for businesses is mainly in the Ameren Illinois area and, with a cap on participation, in Michigan.
| Charge | How it is set | Who usually bills it |
|---|---|---|
| Energy | Locational prices, day-ahead and real-time | Supplier in choice areas |
| Capacity | The Planning Resource Auction sets four seasonal prices by zone; summer carries most of the annual value | Supplier, fixed or passed through |
| Transmission and delivery | The utility's tariff | Utility |
CAISO
Most of California. Direct access to competitive suppliers is capped, and many businesses buy through community choice aggregators.
| Charge | How it is set | Who usually bills it |
|---|---|---|
| Energy | Locational prices | Direct access provider or community choice aggregator |
| Resource adequacy | Bilateral capacity contracts rather than a central auction | Provider |
| Departing load charges | Power charge indifference adjustment for customers who leave utility supply | Utility |
| Delivery | The utility's tariff | Utility |
Canada
Ontario
The commodity is priced from the wholesale market or a contract, and every customer also pays the Global Adjustment, which covers the cost of contracted and regulated generation. Large customers in Class A pay it based on their share of demand in the five highest Ontario peak hours over a May-to-April base period, applied from July to June. Customers above 5 MW are Class A; customers between 500 kW and 5 MW can opt in. Everyone else pays it per kWh as Class B. Delivery and regulatory charges are billed by the local distribution company.
Alberta
An energy-only wholesale market with an hourly pool price. Businesses buy from a competitive retailer or take a regulated default rate. Transmission and distribution charges come from the local wires owner under its tariff, and rate riders adjust them during the year.
Quebec and British Columbia
Hydro-Quebec and BC Hydro are integrated, regulated utilities. Bills follow published rate classes for small, medium and large power customers, with energy and demand charges set in the tariff rather than by a market.
One charge, many names
| Charge | Names you may see |
|---|---|
| Capacity tag | PLC, peak load contribution, ICAP tag, capacity obligation, ICL, capacity load obligation |
| Transmission tag | NSPL, network service peak load, transmission obligation, 4CP, network load |
| Ancillary services | Ancillaries, ISO charges, RTO charges, grid fees, reserves |
| Energy price | LMP, LBMP, settlement point price, SPP, pool price, HOEP |
| Default supply | Standard offer, default service, price to compare, provider of last resort, regulated rate |
An offer that fixes "capacity" in PJM and an offer that fixes "ICAP" in New York are fixing the same kind of charge, set in very different ways. An offer that excludes "transmission" in Massachusetts may be excluding nothing, because the utility bills it anyway. This is why offers have to be put on the same terms, market by market, before the prices mean anything.