What “mills” means in energy pricing
In energy pricing, a mill is a unit equal to one‑tenth of a cent, or one‑thousandth of a dollar. When you see electricity rates quoted in “mills per kilowatt‑hour (kWh),” it’s just a precise way of expressing very small price increments: 1 mill/kWh = $0.001/kWh = 0.1¢/kWh.
Why mills are used instead of cents
Electricity prices often move in fractions of a cent. Using mills avoids awkward decimals and makes small differences easier to read and compare, especially in:
- Wholesale power markets
- Utility rate schedules and tariffs
- Power supply cost recovery charges
- Broker or supplier margins embedded in commercial rates
For example, a rate of 45 mills/kWh is the same as 4.5¢/kWh or $0.045/kWh. A broker fee of 5 mills/kWh is 0.5¢/kWh , which can look trivial on a household bill but adds up quickly for large commercial users.
Converting mills to more familiar units
The conversions are straightforward:
- 1 mill = 1/10 cent = 1/1,000 dollar
- 10 mills = 1 cent
- 1,000 mills = 1 dollar
For electricity specifically:
- mills/kWh → cents/kWh : divide by 10
- mills/kWh → dollars/MWh : the numeric value is the same (e.g., 45 mills/kWh = $45/MWh)
So if a utility filing lists a charge at 7.3 mills/kWh , that’s 0.73¢/kWh or $7.30/MWh.
Where you’ll actually see mills
Mills show up most often in:
- Regulatory documents : state public service commissions and utility tariffs frequently list adjustments and surcharges in mills per kWh.
- Commercial electricity contracts : brokers and suppliers may quote all‑in rates or add‑on fees in mills to show fine granularity.
- Market reports and dashboards : wholesale power prices and marginal costs are sometimes expressed in mills to keep numbers clean when dealing with large volumes.
You won’t usually see mills on a residential bill, which is more likely to show cents/kWh or total dollars, but the underlying calculations may still use mills internally.
Don’t confuse “mills” with wire “mils”
In electrical engineering, “mil” (or “circular mil”) also refers to a unit of wire size (one‑thousandth of an inch in diameter). That’s a completely different concept from the currency mill used in pricing. In the context of energy prices , “mills” always means thousandths of a dollar, not wire dimensions.
Understanding mills makes it easier to read rate filings, compare offers, and spot small but financially meaningful differences in electricity costs.