Utility bills seem detailed and very confusing. If you look closely at your bill, however, you may learn a few things about the way energy is used and how you are charged for it. For example, the concepts of kilowatts (kW) and kilowatt-hours (kWh) are often misunderstood. The term kW (1,000 watts) refers to the rate at which energy is used (demand), while kWh measures overall consumption (usage). Understanding these concepts can provide you with important insight into how you can reduce your energy costs. The best way to reduce your energy costs is to reduce the amount of energy you use.