Almost all electricity providers charge some base level fee to provide you electricity. They have different names for this fee, but most often it is called a minimum usage fee.

While the minimum usage and associated fee is most commonly $9.95 for usage less than 1000 kWh, it can vary both in usage and amount charged. Because of the fee, the average rate for usage less than 1000 kWh can be considerably higher than the average rate at 1000 kWh. For example, a plan that offers 6.5¢ at 1000 kWh will be 9.0¢ at 500 kWh if the minimum usage fee is 9.95$.

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