Why You Should Read Your Energy Bills – Electric

Everyone can elect to use energy efficiently.

Understanding your electric and natural gas bills could turn you into a frugal energy user and unleash your inner climate activist.

We need to stop burning fossil fuels and each one of us has a responsibility (if we choose to accept it) to do our part. Decreasing energy consumption in our homes is something everyone can do to help. When millions of people take a small action like switching to LED light bulbs, the energy savings can really add up.

This is the second in a 2-part post exploring how you can use your energy bills to educate yourself about your energy use and make informed decisions about when and how much energy you use in your home.

In the first post, Why You Should Read Your Energy Bills – Natural Gas, readers confronted the facts about the ubiquity of fossil fuel infrastructure in the United States and learned how much natural gas common appliances use, how to read and understand natural gas bills, and had an opportunity to establish a usage reduction goal.

This post is devoted to giving you a high-level overview of electricity use in the United States, helping you unravel the mysteries of your electric bill, and encouraging you to set your own electricity reduction goal.

Electricity Generation in the United States High-Level Overview

Currently, in the United States, power plants generate 65% of their electricity by burning fossil fuels (34% natural gas, 30% coal, 1% petroleum). Nuclear, hydroelectric, and renewable energy make up the remaining 35% of electricity generation.1

Coal Power Plant with Piles of Coal on the Edge of a Lake
Coal Power Plant with Piles of Coal on the Edge of a Lake – Photo Credit Dreamstime/Maria Dryfhout

Fossil fuel burning power plants are expensive to ramp up and down so operators try to run these baseload plants at levels where they can generate and distribute a consistent amount of electricity continually.

During peak demand times or when electricity use spikes unexpectedly, electric companies bring their peaker plants online and/or purchase electricity from other power providers with excess capacity. This is a bad deal all around. Peaker plants are often the least efficient, most expensive, and worst polluting facilities.

What is a Kilowatt-Hour of Electricity?

Residential electricity is billed by the kilowatt-hour so you need to understand what that means.

Technically a kilowatt-hour is a measure of electrical energy equivalent to a power consumption of 1,000 watts for 1 hour.2 That begs the question, “What is a watt?” which then leads to “What is a joule?” and so on. For the purposes of this post, we will simplify matters by saying a watt is a measure of the operating power of an appliance or a piece of equipment.

You can find the wattage of your electric appliances and equipment on product labels, in user guides, and on the Internet. The examples below illustrate how long you could use several common electrical items for a kilowatt-hour of electricity.

  • Dry your hair for 37.5 minutes or about 5 minutes a day for 1 week using a 1600-watt hair dryer.
  • Cool your home for about 15 minutes using a 3500-watt central air conditioning system or for about 42 minutes using a 1400-watt window unit.
  • Brew 6 to 7 pots of coffee each taking 10 minutes using a 900-watt automatic drip coffee maker (fewer pots if you leave the machine on to keep the coffee warm).
  • Use a 1200-watt microwave oven for about 10 minutes a day for 5 days.
  • Watch a 48-watt television for 3 hours a day for 1 week (less time if you have a cable box and/or external speakers).

You can do the math for any electrical item in your home using simple equations.

If your appliance runs at x watts, it will run for 1000/X hour.

1600-watt hair dryer example where X is 1600.

1000/1600= .625 hour

.625 hour × 60 minutes/hour=37.5 minutes

What Does a Kilowatt-Hour of Electricity Cost?

In 2016, the average price of residential electricity in the United States was 12.55¢ per kWh. Hawaii had the highest average cost of 23.87¢ per kWh and Louisiana the lowest at 7.41¢. The average price in California where I live was 18.28¢ per kWh.3, 4

Mountain Top Removal to Extract Coal - Photo Statewide Organization for Community Empowerment
The Obvious but Hidden Cost of Mountain Top Removal Coal Mining – Photo Credit Statewide Organization for Community Empowerment

How Much Electricity Does the Average Household Use?

In 2016, the average residential electricity consumption was 897 kWh per month or 10,766 kWh for the year. Louisiana had the highest consumption at 14,881 kWh for the year and Hawaii had the lowest at 6,061 kWh.5

This figure varies widely across the country depending on where you live, the weather, and the number, type, and efficiency of the electric appliances and equipment you use in your home. For instance, in my region, the average monthly electricity use is about 417 kWh in the summer and 474 kWh during the winter.6

What Can You Learn from Reading Your Electric Bill?

I live on the California Central Coast and my electric company is PG&E. After looking at electric bills for electric companies in several states, I concluded that there is a fair amount of variability but the basics are similar.

For this section, you will need a copy of your electric bill from last December. If you do not have a paper or digital copy, most if not all electric companies, make bills available online. If you need to, take a break to go sign up, retrieve your bill, and then come back.

Electric Bill with Pen and Calculator - Photo Credit iStock/Niyazz

Now look at your bill and find the following or similar items.

Rate

This field indicates what rate schedule is being used to calculate your bill. You can look up rate schedules on your electric company’s website.

Climate Zone

Your home’s location places you in a climate zone that electric companies use to estimate how much electricity you and other customers in the same area will use during various times of the day and during different seasons of the year.

Baseline Allowance

The climate zone assigned to your home is used to determine your baseline allowance, which is an amount of electricity intended to cover about 50-70% of an average household’s use. The baseline is adjusted seasonally. Not all electric companies use baseline allowances.

For example, our town is in the climate zone that covers most of the California coast and a short distance inland. Here the baseline is 7 kWh/day (about 210 kWh/month) May through October and 8.5 kWh/day (about 255 kWh/month) November through April.7

Billing Period

The number of days in the billing period is used in calculations on your bill.

Meter Reading

Your electricity usage is calculated by subtracting the previous month’s meter reading from the current month. The difference is the number of kilowatt- hours you used.

Electricity Charges

Here is where it gets tricky. Electric companies often charge different rates at different times of the day and/or charge higher rates if your consumption is above a certain number of kilowatt-hours.

Tiered Rates

If you are on a tiered rate schedule, your per kWh rate will vary depending on your overall electricity consumption. Your baseline allocation kWh is charged at the lowest per kWh rate and you pay more for each kWh over the baseline.

For example, PG&E customers on a tiered rate plan pay 20¢ per kWh for tier 1 (baseline allocation), 28¢ per kWh for tier 2 (100-400% above baseline), and a 40¢ per kWh high usage surcharge (above 400%). The baseline allowance of kWh is different in the winter and summer, but the per kWh rate stays the same.7

Time-of-Use Rates

For customers on time-of-use schedules, you will pay the highest per kWh rate during peak demand (usually during the workweek from the late afternoon to mid-evening) and pay a lower per kWh rate during off-peak hours. Some companies have an interim rate for part peak hours (usually just before or after peak hours). The times considered to be in the peak demand period vary by company.

For instance, during the winter season, PG&E customers on the time-of-use rate schedule pay 23¢ per kWh from 4:00-9:00 p.m. Monday through Friday and 21¢ per kWh for electricity consumed at all other times and all weekend. When the summer season begins in May, rates will go up to 36¢ and 26¢ respectively.7

State Regulatory Fee

As a customer, you are funding the public utilities commission that regulates electric companies in your state.

Other Fees & Taxes

Some costs are spread across all customers like financial assistance for low-income customers, efficiency programs, and rebates. States and/or municipalities may charge tax. In California, we are billed every month for nuclear power plant decommissioning and the cost of the bonds issued to buy electricity during our energy crisis in 2001.

Electricity Usage History

Hopefully, your bill will have a handy chart that shows your total electricity used each month over the past twelve months and a comparison with the same month in the prior year.

Messages

It is worth taking a few seconds to read the messages section as it contains information about new programs, rate changes, and rebates.

Establish Your Electricity Reduction Goal

Now that you are acquainted with your electric bill and your electricity use for last December, you are ready to set a reduction goal for this December and decide what you are going to do to achieve it.

Minimizing your electricity use during peak demand times is perhaps the most impactful action you can take in your own home. Keeping peaker plants offline is good for the environment, people’s health, and your wallet.

To help you get your creative juices flowing below are several no-cost ideas about what you can do to minimize electricity use during peak demand times. These actions may seem small and insignificant but if millions of people do them, it makes a significant impact.

  • Defrost food for dinner in the microwave oven while you are eating breakfast or reading the morning paper.
  • Turn off electronics when you are not using them. Most electronics come to life as soon as you turn them on and computers (even older models) only take a few minutes to boot.
  • Bosch DishwasherTurn your dishwasher on after 9:00 p.m. by using the delay button (if it has one) or turning the machine on just before you go to bed.
  • Leave your outdoor lights off completely or at least until after 9:00 p.m. If you are expecting guests after dark, turn the lights on near their arrival time and off after they do arrive.
  • During the summer, especially when it is hotter than usual, leave your air conditioning off or set it several degrees warmer than you normally would between 4:00-9:00 p.m. Use a portable fan in the room you are occupying (moving air helps you feel cooler).

If you are looking for more ideas, try reading Energy Awareness Month – 10 Energy Savings Tips and Tackle Energy Vampires and Stop Phantom Power.

Once you get in the habit of doing things that reduce your electricity and natural gas consumption, they become routine, meaning you do them without really thinking about it.

I hope this 2-part post has helped you become conversant with your energy bills and inspired you to challenge yourself to use electricity and natural gas sparingly and efficiently as if your life depended on it, which it does.

For readers interested in learning more about fossil fuel energy, electricity, and environmental issues, you will find links to articles and reports in the resources section.

Featured Image at Top: Coal Mining Operation in Tuscaloosa, AL – Photo Credit iStock/toddmedia

Related Posts

References

  1. Electricity Explained: Electricity in the United States – U.S. Energy Information Administration
  2. Kilowatt Hour – Wikipedia
  3. Electricity Explained: Factors Affecting Electricity Prices – U.S. Energy Information Administration
  4. California Electric and Gas Utility Cost Report, California Public Utilities Commission, April 2017
  5. How much electricity does an American home use? – U.S. Energy Information Administration
  6. PG&E Residential Accounts 2016 Zone 5 (non-CARE) – California Public Utilities Commission
  7. E-1 Residential Services – Pacific Gas and Electric Company, 08/18/17

Resources

Energy Awareness Month – 10 Energy Saving Tips

You have the power to conserve energy.

This October, fulfill the promise you made to yourself earlier in the year to get serious about saving energy and reducing your carbon footprint.

October is an ideal time to address your energy use for a number of reasons. First, you still have plenty of time to put energy saving ideas into action before cold winter weather arrives in earnest and the holiday season diverts your attention. Second, if you enjoy challenging yourself during national awareness days or months, you are in luck because October is Energy Awareness Month (it should be Energy Action Month). Third, reducing your energy use can also save you money.

I realize that switching to LED light bulbs and putting on a sweater instead of cranking up the heat will not stop Americans from burning fossil fuels. However, if millions of Americans take these and other seemingly small actions, it all adds up and can make a significant impact.

For instance, if each American household tackled their energy vampires for Halloween we could save 100 billion kilowatt hours of electricity and use it to provide the annual power needs of 35 million Americans.1

I believe that taking action, even a tiny action, acts as a strong antidote for inertia. The first action may be difficult but each subsequent action is easier because you gain momentum.

Are you ready to take action to save energy and reduce your carbon footprint? If you are, below are ten tips of varying degrees of difficulty and expense to help you get your creative juices flowing. Most of the tips include links to other posts where you can get more information and find useful resources.

Light with LEDs

If you have not made the switch to LED light bulbs yet, now is the time.

Residential LEDs use 75% less energy and last 25 times longer than incandescent bulbs and they do not contain hazardous mercury as compact fluorescents do.2

The cost of LEDs has dropped dramatically over the past several years and now you can purchase an LED light bulb for around $2.00 maybe less (depending on wattage and type).

If you put LED bulbs in your indoor and outdoor light fixtures this month, you may not need to change a light bulb for a couple of decades and you will immediately reduce your energy use. You can even decorate your Christmas tree with a few strings of colored LEDs.

Snug House

Snug House - Scarf Wrapped Around Miniature HouseKeeping cold air outside and warm air inside during winter months and vice versa during the summer is a good idea, right. What you may not realize is how even small air leaks can wreak havoc with your heating and cooling bills. For example, a 1/8” gap under your front door lets in as much air as if the door had a 2 ¼” hole.3

Fortunately, you can shore up your home’s air defenses with a caulking gun, door sweeps, and weather stripping. You may be able to reduce some air leaks with things you have on hand like rolling up a bath towel to minimize door drafts. I folded up a piece of cardboard and stuck in a crack where the weather stripping on the fixed side of our double front door did not quite reach the threshold.

Read more in Seal Air Leaks to Reduce Home Energy Use and Cost.

Take Advantage of Your Thermostat

A thermostat is a useful device for moderating your home heating and cooling system. Turning back your thermostat 7°-10°F for 8 hours a day could save you 10% on your heating and cooling bills.If you frequently forget to adjust your thermostat when you leave for work, try hanging your keys on a hook next to it.

Learn more about thermostats, recommended temperatures, and thermostat options by reading Use Your Thermostat to Save Energy and Money.

Staying Warm Indoors

On average, home space heating consumes a whopping 42% of the energy Americans use in our homes.5 Hot air rises and cold air sinks so during the winter we are living in the coolest layer of our homes.

You probably take care to dress appropriately for the weather when you go outdoors in the winter so why not carry that theme indoors. Instead of ratcheting up your heater consider wearing clothing made of warmer materials or trying one or more of the tips in 7 Ways to Stay Warm Indoors in the Winter and Be Green.

 Shower Power

Low-flow showerheads are water and energy saving devices. Using less water also means using less energy to heat water. A standard showerhead sprays out at least 2.5 gallons of water per minute even when you are lathering up your body or washing your hair.

Low Flow Handheld ShowerheadWhen you switch to a low-flow showerhead that puts out 1.6 gallons of water per minute you can easily cut your water use by 25% and reduce the energy needed to heat your shower water. If you buy a model with a “trickle” button or a shut-off valve you can reduce your water and energy use even more by restricting the water flow while you are soaping up.

Even non-handy people like me can easily install a low-flow showerhead for under $50.00.

Use Your Dishwasher

Washing dishes by hand is not a water or energy saving activity. A kitchen faucet pumps out 2.5 gallons of water per minute so you may be using more water than you think filling up the sink or a dish tub and then rinsing dishes.

Cramming a bunch of dishes in a dishwasher willy-nilly may result in some items not getting clean so do pay attention to where the spray jets are and learn to load your dishwasher efficiently.

Green and Lazy Laundry

Doing the laundry is a habit that you learn and then repeat thousands of times over your lifetime so you may find energy and water savings hiding in your laundry room.

I did not think much about my own laundry habits until my kids went away to college but if you have children at home you do not have to wait that long. If you are interested in evaluating your laundry habits, you may find the posts Laundry – Laziness is Good and Greening Your Laundry Habits useful.

Extra Credit: Using the sun to dry your clothes on a clothesline is a significant energy saving action, but I admit that I do not do it, at least not yet.

 Tackle Your Energy Vampires

Energy Vampire - Cell Phone ChargerAn energy vampire is a piece of equipment that sucks power even when it is not in use; this is called standby power. For instance, a cell phone charger left in a wall socket or a television both draw power just standing by waiting for you to use them.

Our Halloween activity for 2013 was tackling our energy vampires. It was fun, easy, and inexpensive. A few weeks after we completed our energy vampire project I learned the hard way that cable boxes must be on standby power to receive system updates. Our cable television service was abruptly discontinued without notice because our cable box had been going offline each evening. Now I leave it on.

Energy and Water Efficient Appliances

I am not advocating buying new appliances unless you need to replace a worn out or un-repairable appliance or piece of equipment. However, if you are in the market for a new refrigerator, air conditioner, or television, consider adding energy and water efficiency to your list of must-have features.

Look for the ENERGY STAR and WaterSense labels to identify and compare appliances and equipment. I wrote about my search for a high-efficiency replacement dishwasher in Dishwashers – Top 3 Eco-Friendly Features.

Go Solar

There is no better time than right now to go solar. Solar panel prices are low, tax incentives are available, and the summer rush for solar installers is over. You can increase the value of your home with solar panels while reducing or eliminating your electric bills. If you do not want to buy a rooftop solar system, then consider leasing.

Purchasing solar panels for your home is a sound financial investment and even more importantly, it pushes the ball forward in creating a clean renewable energy future for all our children.

You can learn more about home solar panels and our real life rooftop solar experience by reading Go Solar with Home Rooftop Photovoltaics – We Did, Rooftop Solar Costs Less than You Think, and You Can Increase Your Home’s Value with Owned Solar Panels.

My energy saving action for Energy Awareness Month is washing our laundry with cold water. I know, I know, why did I not make this change years ago? My only defense is that old habits stick with you. The good news is that you and I can change our habits today or any day and make a positive impact.

I hope one or more of the above ideas has struck your interest and helped inspire you to take action to reduce your energy use and carbon footprint. Please share what you are doing to reduce energy use with other readers.

Featured Image at Top: Coal-fired power plant looming over a residential neighborhood in West Virginia – Photo Credit Wigwam Jones

Related Posts

References

  1. Energy Vampires and Phantom Loads – Standby Power, Green Groundswell
  2. LED Lighting – Energy.gov
  3. Energy Advice for Owners of Historic and Older Homes – U.S. Environmental Protection Agency
  4. Thermostats –U.S. Department of Energy
  5. Use of Energy in the United States Explained: Energy Use in Homes – U.S. Energy Information Administration