FAC in an electricity bill usually means Fuel Adjustment Charge or Fuel Cost Adjustment. It is a variable charge added to recover changes in fuel or power-purchase costs used to generate electricity, so it can go up or down depending on market and utility costs.

Quick Scoop

  • Why it appears: Utilities adjust for fluctuations in fuel prices instead of changing the base tariff every time costs move.
  • How it is charged: It is typically calculated per unit of electricity used and multiplied by your monthly consumption.
  • What it means for you: Higher usage usually means a higher FAC amount, while lower usage reduces it; in some cases, it can even appear as a credit if fuel costs fall.

Simple Example

If a bill shows an FAC rate of 1.5 cents per kWh and you used 500 kWh, the FAC would be 7.50 in that billing cycle.

Bottom line

FAC is not a fixed fee. It is a pass-through adjustment that reflects changes in the cost of producing electricity, and the exact method can vary by state, utility, or country.

TL;DR: FAC on your electricity bill is the fuel adjustment charge —a variable per-unit charge or credit based on changes in electricity generation costs.