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Straight Talk Articles

Understanding Your Utility Bill
July, 2018

Dear Pat, Every month, I look over my electric bill, but a lot of it doesn’t make sense to me. Is there information on the bill that can help me save money? – Don

           

Dear Don,

It’s always a good idea to understand how you’re spending your money.  You look over your credit card statement carefully and you should do the same with your utility bills.  As you suspect, analyzing your bill may help you save energy and money.

If you live in an all-electric home, all of your home energy costs will be on the monthly bill from your co-op. This bill will probably have one or more fixed charges that cover some of the costs your co-op incurs in getting the power to your home.


Beyond these fixed fees, you will pay for the power you have used that month, which is sold in kilowatt-hour (kWh) (1) units  One kWh is equal to 1000 watts over a one hour period.  Think of ten 100 watt lights on for an hour.  Most co-ops charge the same rate for a kWh no matter when you use it, but other co-ops have a Time of Use rate that is higher during peak hours when the wholesale price of electricity is higher.   Some co-ops have different rates for different usage tiers, so the rate could be higher or lower as monthly usage increases. (2)   Electric rates can also vary by season, and cost more during high-use months.

If you are being charged more for usage during On-Peak hours, you can often shift some uses such as your dishwasher, air conditioner, clothes washer or oven to Off-Peak hours. This won’t reduce your electric use, but it can save you money.

Your bill may show a graph of your electric use over the past 12 months. If your home is electrically heated you will see how much your use goes up in the winter. This graph can also show how much your use goes up in the warm months for air conditioning.

Your electric cooperative may have tools on their website to help you track your energy use and estimate how much you use for space heat, air conditioning and water heat, which are often the three largest energy uses (3). Knowing how much you spend on heating or AC can help you determine how much you might save by installing a new heat pump or other efficiency measure.

Some co-ops have online audit tools that suggests ways to reduce energy costs based on a detailed set of questions about the home.  If your co-op doesn’t offer an online tool, or if you want a different perspective, you can try the ENERGYSTAR Home Energy Yardstick. (4)

 

You can get a pretty good idea of your space heating and air conditioning usage without using an online tool. Just total up your average electricity usage for the months when you use the most energy and subtract the average amount you use in “shoulder months” when you’re pretty sure you don’t have any electric space heating or AC going on. The difference is likely the amount you pay each month for heating and cooling. If someone says switching to a new heating or cooling system could save you 20%, they may mean you can save 20% on heating or cooling costs. Some homes also have significant uses besides heating and cooling that increase their winter or summer bills, such as a well pump, spa or swimming pool.

You may receive a separate monthly bill for natural gas,  or for propane or heating oil which might be delivered on an as-needed, keep-filled basis.  The Home Energy Yardstick accommodates any type of fuel you use in your home.

 

Hopefully this information can help you analyze your energy bill.  This kind of analysis can give you some general ideas on how you might be able to cut your energy expenses.  The best way to turn these general ideas into specific actions is to get an energy audit.  Our past columns, which you’ll find on our website, are loaded with specific ideas, and our column next month will address the energy required for appliances.

This column was co-written by Pat Keegan and Brad Thiessen of Collaborative Efficiency.

For more information on understanding your energy bill, please visit the July 2018 more information page.

 

Footnotes

1 https://pocketsense.com/analyze-calculate-electric-bill-4848095.html

2 www.mwenergy.com/commercial/payments-billing/understanding-your-bill/glossary

3 www.eia.gov/todayinenergy/detail.php?id=10271&src=%E2%80%B9%20Consumption%20%20%20%20%20%20Residential%20Energy%20Consumption%20Survey%20(RECS)-f4

4 www.energystar.gov/index.cfm?c=home_improvement.hm_improvement_index_tools

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A heat pump. For most homes, heating and cooling require more energy than any other end use. Photo Credit: Creative Commons, Wikimedia.org