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The do this on the basis of the agreement/contract for the supply of electricity to your house that they have with you. This will determine the cost of the meter and the rate they will charge per unit.

The meter will record how many units of electricity you have used in your house and the monthly charge will comprise:

1) the rent of the meter/connection of supply - a fixed charge.

2) the number of units you have used multiplied by the agreed rate of charge per unit.

3) any local or government taxes that are levied on top.

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