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Understanding Your Energy Bills: Tips For Analyzing Gas And Electricity Expenses In Montpellier
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© 2023 Constellation. The offerings described herein are those of Constellation New, Inc. or Constellation New-Gas Division, LLC, affiliates of each other. Brand names and product names are trademarks or service marks of their respective owners. All rights reserved. Reading your electric bill may not seem complicated, but if you are like most Americans, you can make many mistakes. The complexity of your bill will vary depending on your location and utility, but there are some common components that everyone should understand. If you are looking for help with the bill, here are the first five things to know to read and understand your electricity bill correctly, with examples from my electricity bill.
Depending on where you live in the country, your electricity bill may be combined with other municipal bills – so it’s important to know what you’re looking for! Electricity consumption is measured in kilowatt-hours (kWh), while water use is measured in gallons, and gas use is measured in British Thermal Units (BTU). These units of measure should serve as an easy indicator of where your electricity bill ends and where your water or gas bill begins.
I live in Massachusetts and receive two separate bills each month from my utility company, Eversource: one for electricity and one for gas. Each invoice is clearly labeled on the front page so you can distinguish them.
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On the other hand, my friend in California gets a combined electric and gas bill from his utility company, PG&E.
This step is crucial: are you on a budget billing plan? Or, are you paid for your monthly usage? If you are on a monthly budget billing plan, your utility takes the number of kWh you consumed last year, assumes you will use about the same year, and creates a monthly average for you to pay. This allows your utility to spread the total cost you pay for power over the course of the year. As a result, if you live in a hot part of the country and use electricity to run your air conditioner, in the summer months, you will see a lower bill than your neighbors who are on a billing cycle of monthly use. But on the other hand, in the winter months, you should expect a higher bill than your neighbors.
If you are charged monthly for your use, it is a little simpler. You will receive a bill each cycle charging you for the number of kWh your household used that month at the prevailing rate. I am billed for my monthly usage, so my electric bill fluctuates monthly based on my usage (I owed $81.18 for electricity in February 2022).
There are many charges that go into your energy bill. Your payment is not only for the electricity you consume, but also to help the utility maintain the network and pay the salaries of its workers. In general, there are two main components of your electricity bill: a supply (or generation) charge and a transmission and distribution (or delivery) charge. The supply charge includes the cost of generating electricity while the transmission and distribution charges cover the costs of providing the electricity.
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Also look at the various expenses related to taxes, tariffs, renewable energy and energy efficiency. If you live in an area with a deregulated energy market, you may be able to buy another supplier that can provide you with the power you need at a more competitive price.
As you can see, there are a number of charges that include my electric bill, most of which are based on my monthly consumption. However, I also owe a fixed customer fee to my utility each month.
It is also possible that you live in an area with demand charges or time of use rates; if this is the case, you will pay more for electricity when it is more in demand or at certain times of the day. For example, my Californian friend is on a time-of-use rate plan in which the peak price is from 4-9 p.m. every day.
It is also important to make sure that you have correctly calculated the amount of electricity you use each month: many invoices will reveal your daily use, or will show you how your monthly use changes over the year. Make sure you measure and rate your usage for your current billing cycle – for most consumers, this
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