Blame it on the Rates: Electricity Bill Charges and What it All Means

It’s as easy as flipping on the lights– electricity is quick to use and seemingly immeasurable. Or is it? When the electricity bill comes in the mail, it can be difficult to make sense of the charges and fees; it can leave you wondering, “What am I even paying for?” Let us break it down for you.

When you buy gas, you’re charged by the gallon. When you buy electricity, you’re charged by the kilowatt-hour (kWh). When you use 1000 watts for one hour, that’s a kilowatt-hour. To get kilowatt-hours, take the wattage of the device, multiply by the number of hours you use it, and divide by 1000.

Example calculation: 500watts*10hours=5000/1000=5kWh

When the electricity bill comes in the mail, it can be difficult to make sense of the charges and fees; it can leave you wondering, “What am I even paying for?” Let us break it down for you.

It’s important to remember:

  • Watts is the rate of use at this instant. We use watts to see how hungry a device is for power (e.g., 100-watt bulb is twice as hungry as a 50-watt bulb).
  • Watt-hours is the total energy used over time. We use watt-hours to see how much electricity we used over a period of time. That’s what we’re paying for.

Depending on the appliance, you can’t always trust the wattage printed on the device because many devices don’t use the full listed wattage. For example, the compressor in a refrigerator doesn’t run constantly, so you can’t go by the listed wattage for a fridge. To get a more accurate use of electricity of your appliances, go through these steps:

Step #1.  Go get your electricity bill and see how many kilowatt hours you used last month.

Step #2.  Assume that the lights in your kitchen and living room together use 400 watts. How much does it cost if the lights are on 24 hours a day, for a whole month?  How much per year? Assume 15¢/kWh, then go through the formula mentioned above to figure cost.

Step #3.  Assume your window AC uses 1440 watts.  How much does it cost to run it continuously for a month?  How much per year?  Assume 15¢/kWh, then go through the formula mentioned above to figure cost.

So what does this all mean? How do you know you’re paying for exactly what you use? How do you know that you’re getting the best rate?

When the electricity bill comes in the mail, it can be difficult to make sense of the charges and fees; it can leave you wondering, “What am I even paying for?” Let us break it down for you.

 

If you live in a deregulated market, you have the power to choose the company that supplies energy to your home or business. By the time you flip a switch or press a button to enjoy the benefits of convenient, reliable energy, several different entities have worked together to bring this energy to you.

Electricity can be a pesky thing to keep track off, especially when it’s costing you lots of money. Let us help you get your home into ‘green’ shape, while saving you time and money on your next electricity bill. Connect with us today and we’ll help you get on track to a more energy efficient home.

Like what you read? Read more tips here: 
10 Tips to Save Energy this Fall and Winter
How to Save Green While ‘Going Green” This Winter
You’re Wasting Money on Monthly Expenses: Five Tips to Lower Your Bill
5 DIY Ways to Insulate Your Home on the Cheap

Residents of MA, NJ, OH, PA, MI: Did you know that thanks to deregulation, consumers can often save money on their electric bill?

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