Understanding Your Energy Bill

July 2018

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

Dear Don:

It’s always good to fully understand how you’re spending your money. You look over your credit card statement carefully each month, so you should do the same with your utility bills. As you’d suspect, analyzing your bill can 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 electric cooperative. This bill will probably have one or more fixed charges that cover some of the costs your co-op incurs in delivering 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) units. One kWh is equal to 1,000 watts over a onehour period. Think of 10 100-watt lights that are used for one hour. Most electric co-ops charge the same rate for a kWh no matter when you use it, but some offer a “time-of-use” rate that is higher during peak energy hours –– when the wholesale price of electricity is higher because there’s greater demand. Some co-ops have different rates for different-use tiers, so the rate could be higher or lower as monthly use increases. Electric rates can also vary by season and cost more during high-use months.

If you’re being charged more for energy use during on-peak hours, you can often adjust the time you use certain appliances and equipment, like 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 if your co-op offers a time-of-use rate.

Most energy bills include a chart that shows 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 chart can also show how much your use goes up during the summer when you’re running your air conditioner.

Your electric co-op may offer tools on its website to help you track energy use and estimate how much you use for space heating, air conditioning and water heating, which are often the three largest energy users. Knowing how much you spend on heating or cooling can help you determine how much you might save by installing a new heat pump or other energy-efficiency upgrade.

Most energy bills include an annual energy use chart, which can provide clues to identify areas of energy-efficiency opportunities.

Most energy bills include an annual energy use chart, which can provide clues to identify areas of energy-efficiency opportunities.

Some co-ops also offer online energy-audit tools that provide ways to reduce energy costs based on a detailed set of questions about your home. If your co-op doesn’t offer an online audit tool, or if you want a different perspective, you can try the Energy Star Home Energy Yardstick. This resource can give you a good idea of your space heating and cooling use without using an online tool. Just total up your average electricity use for the months when you use the most energy and subtract the average amount you use in “shoulder months” –– when you’re not cooling or heating your home. The difference is likely the amount you pay each month for heating and cooling.

This is an image of an externally fitted A/C heat pump. For many homes, heating and cooling require more energy than any other end use.

This is an image of an externally fitted A/C heat pump. For many homes, heating and cooling require more energy than any other end use.

If someone says switching to a new heating or cooling system could save you 20 percent, this may mean you can save 20 percent 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, that might be delivered on an as-needed, keep-filled basis. The Home Energy Yardstick can accommodate any type of fuel you use in your home.

We hope this information can help you analyze your energy bill and give you some general ideas on how you might be able to cut your energy expenses. The best way to turn these ideas into specific actions is to conduct an energy audit of your home.


This column was co-written by Pat Keegan and Brad Thiessen of Collaborative Efficiency. For more information on understanding your utility bill, please visit: www.collaborativeefficiency.com/energytips.