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Understanding How Your Electric Bill Is Calculated

Electricity rate schedules can vary quite a lot depending on the provider and the specific plan you choose. As such, it’s important that you understand how your electricity usage is measured and how your monthly bill is calculated. Knowing how the different factors that can affect your electricity consumption are calculated is important for ensuring you’re getting a good rate. This also makes it easier to find ways you can save money on your energy bills.

Electricity Rates and Usage

Your total monthly electric bill obviously depends on how much electricity you used during the previous month and the current rate your utility provider charges. The total usage is measured in kilowatt-hours (kWh), and all electricity providers charge a predetermined rate for each kilowatt-hour you use. The total number of kilowatt-hours is multiplied by the current rate to calculate your final bill. Your utility provider also charges a set monthly “transmission fee” or “facilities charge” on top of your usage, but this is usually only around \$10 to \$20 a month.

How to Estimate Energy Usage and Monthly Electricity Cost

You can easily estimate how much it costs you each month to run your washing machine, air conditioner, or any other appliance. To determine the monthly energy usage, all you need to do is estimate the total number of hours the unit runs in one month and then multiply this by how many kilowatts of electricity it uses in one hour. Once you know this, you then just need to multiply the total usage by the current kWh rate to find the total monthly energy cost. If you calculated this for your TV, lights, computer, and everything else in your home, you could also estimate your total monthly expenditure.

Doing this type of calculation can be useful when trying to see how much money you could save by upgrading to a more energy-efficient appliance or even switching to LED lights. Let’s say that you want to figure out how much your lighting costs per month and whether it is worth the price to upgrade all of your lights to LED bulbs. If you have one 60-watt incandescent bulb that is normally on for eight hours a day, it would use 500 watt-hours or 0.5 kWh per day. This means that just that one bulb would use 3.5 kWh every seven days or 14 kWh over four full weeks.

The average electricity rate in the Concord area is around \$0.11 per kWh, which means that the light bulb would cost you around \$2 per month. If you typically have 40 60-watt lights on for eight hours a day, they’d use around \$80 in electricity per month.

An equivalent LED lightbulb will only use around 7 watts per hour. If you replaced all 40 of those 60-watt incandescent bulbs with LEDs, all of the lights combined would use around 62 kWh over four weeks and cost you under \$7 a month.

Other Factors That Can Affect Your Electricity Rate

One thing to understand is that many electricity providers charge different rates depending on how much electricity you use during the month. For instance, some utility companies in our area charge a base rate for the first 350 kWh and then a slightly lower rate per kilowatt-hour for anything above 350 kWh.

Some utility companies also charge different rates for different times of the year or even different times of the day. For instance, many companies charge slightly lower rates from fall to spring and then higher rates during the summer air conditioning season when electricity demand is much higher.

Similarly, many providers charge lower rates during the non-peak demand times and higher rates during the peak hours. Peak hours can vary, but they are usually from around 9 a.m. to 8 p.m. Monday through Friday since these are the times when electricity demand tends to be highest.

If your provider does have peak and off-peak hours, you can end up saving lots of money by trying to only use your higher-power appliances during the off-peak hours in the early morning, late evening, and over the weekend. For instance, you may want to wait and turn your dishwasher on just before going to bed or only run your washing machine and dryer on the weekends if possible.

Many providers that have peak and off-peak pricing also give you the option to instead sign up for a plan with flat-rate pricing. A flat-rate plan with typically charge a bit more per kWh than the off-peak price, but you won’t have to worry about price fluctuation and having to pay a much higher rate over the summer months or during the peak hours.

If you’re looking to save money on your monthly energy costs, All Temp Co., Inc Air Conditioning, Heating, Plumbing, & Electrical is ready to help. We offer professional home energy audits and energy-efficiency testing, both of which can help you find various ways to lower your energy usage and make your home more efficient. We also offer a full range of electrical, heating, cooling, and plumbing services, so give us a call today to discuss any of your home service needs in Concord.