Energy bills are the detailed invoices that show the amount of electricity used by a business or residential customer. They include information about usage, rates, and charges.
You know to turn off the lights when you leave a room and to unplug curling irons, but do you also do other things that can help lower your electric bill?
How much do they cost?
Electricity bills are typically the largest utility cost for homeowners. Prices are based on energy production and consumption, so the more you use, the more you will pay.
Electric rates vary by state, and the climate and time of year can also play a role. Warmer climates require more electricity for heating and cooling, while daylight hours can make people more likely to turn on lights and electronic devices.
A good way to get a sense of what you should be spending on utilities is to look at past utility bills from similar homes in your area. You can also ask the current owner for a year of utility bills if you are considering buying a house.
Your home’s energy efficiency is a big factor in how much your bills will be. Poor insulation, gaps around windows and doors and older appliances can drive up your bills. Upgrading your home’s insulation and installing ENERGY STAR® appliances can help lower your bills.
You can also reduce your electric costs by switching to equal billing, which allows you to budget your monthly utility costs. This strategy is ideal for homeowners with fluctuating usage, like a summer vacation or a family growing.
How do they work?
If you’re a business owner, then understanding your energy bills is crucial to controlling costs. Energy bills contain charges for both energy consumption and the delivery of electricity to your business or building.
Electricity delivery is billed on a per-kilowatt-hour (kWh) basis. One kWh represents 1,000 watts of electricity used continuously for an hour. The amount of electricity you use will be recorded by your electronic meter and shown on your bill each month.
This usage data is then compared to your electricity tariff’s price-per-kilowatt-hour to calculate the charges on your bill. The price of a kilowatt-hour will vary depending on the time of day that your electricity is consumed. Energy companies typically charge higher rates during peak times, when demand for electricity is highest.
Your energy supplier will also add on any other relevant charges to your total bill. These could include grid connection charges, distribution service charges, or late fees.
Some suppliers may add loyalty points to your electricity bill, if applicable under your tariff. Whether this is an additional incentive for switching or simply a bonus for your loyalty, it can be a good way to cut down on your average cost per kWh. Your meter point administration number, or MPAN, will be displayed on your energy bill and may appear as an abbreviation or as a longer string of numbers. It’s important to know where this information is located as it will differ between energy plans.
What can I do to lower my energy bill?
Utility costs are a significant part of the average household budget. And with electricity prices rising 13% in 2022 alone, many people are seeking ways to cut their energy bills. From DIY projects to energy-efficient appliances, there are plenty of ways to save.
With an electric plan, you are charged for how much energy you use — measured in kilowatt-hours (kWh). This makes reducing your electricity usage the most effective way to lower your bill.
Start by examining your household’s “always-on” energy uses and looking for opportunities to reduce them. You can use a smart meter or online portal to see how much energy you’re using at different times of the day and find out if any of your appliances are consuming electricity when they shouldn’t be. These are known as “vampire loads.”
Another great way to cut your electric bill is by switching to a renewable energy provider. This will help reduce your energy consumption while lowering your environmental impact. And with a growing number of renewable options available nationwide, it’s easier than ever to switch.
Finally, perform regular home maintenance to ensure your home is running as efficiently as possible. This will not only help your electric bill, but it can also reduce the need to run your heating and cooling systems as frequently. And this is a win-win for both you and your utility.
What are the charges on my bill?
Millions of utility bills are sent out every month, and most have an incredibly detailed explanation of the bill charges and usage. But the amount of information is overwhelming, and it’s easy to get lost in the many charges, numbers and symbols. In the end, most people just pay their bills without ever really understanding what they are paying for.
The first charge on your bill is called the Energy Charge. This is the cost for Entergy to deliver electricity to your home or business, measured in kilowatt hours (kWh). It covers things like electricity delivery, meter readings, and customer service fees.
Another important part of your electric bill is the Demand Charge. This is a fee for using a lot of power during peak times, and it’s based on the highest 15-minute average on your demand meter during the billing period. It’s a good idea to look at your meter to see what the current peak is, and then try to reduce your use during those periods.
Sometimes you may also see a “Renewable Energy” charge on your bill. This is a small charge that goes to help pay for large-scale renewable energy projects. The energy industry is highly regulated, and there are state committees that make sure utilities and electric providers follow all the rules to the letter. But, with all of the different rules and charges, it’s not uncommon for mistakes to be made and overcharges to occur.