There are three things you should know about if your serious about lowering your electric bill. If you’re like me, you want to save everywhere you can. When I save on my electric bill I reduce my carbon footprint and help save planet earth. This article will help you learn how to use your bill to save money. It concludes with five specific money-saving actions. Find a recent electric bill and have it handy as you read on.

  1. What is the total dollar amount of your electric bill? Most people open their bill, hoping that it is no higher than last month’s bill. For them, that is the bottom line. They write a check and mail it. They forget about electricity until next month’s bill arrives and they repeat the process — pay and forget about electricity.Study your bill closely. Remember the total dollar amount. Pay your bill before the due date to avoid the late charge. Prepare a chart or spreadsheet and record your monthly electric charges.
  2. How much electricity are you using? If asked, most people do not have a clue about how much electricity they are using. Look at your bill. It will tell you the number of kilowatt-hours of electricity you used this month, last month, and a year ago. Put those numbers into your spreadsheet. Most of your electric bill is based on the number of kilowatt-hours you use. You need to reduce that number in order to reduce your total electric bill. Suppose a 100-watt electric light bulb is left on for 100 hours. It will consume 10,000 watt-hours (100 watts times 100 hours) of electricity, or 10 kilowatt-hours. Let’s say you forgot to turn off that 100-watt lamp and left the house for four days (or 96 hours). That lamp consumed 9.6 kilowatt-hours while you were gone. If you pay 15 cents per kilowatt hour, you would have wasted over $1.40. Replace that bulb with a 23-watt compact fluorescent lamp (CFL) that produces the same amount of light as the 100-watt bulb. You will save 77%! And don’t forget to turn off the light. You’ll save 100%!
  3. How much are you charged per kilowatt-hour? Most people look only at the bottom line - they skip over the details in their bill. Study those details. You may be able to save money. Somewhere on your bill is your “price to compare” per kilowatt-hour as of a certain recent date. It is the average price you pay for electric supply [or commodity]. That is what you are charged just for the electricity. It depends on how much it costs your utility to generate or buy electricity. If your state and electric utility offers “supply choice” you may be able to obtain your electric supply from an alternative supplier for less than your utility’s “price to compare.” You can also use your “price to compare” to estimate your annual electric supply charge from your electric utility. Simply multiply that rate by the total number of kilowatt-hours of electricity you use in a year. (Some utilities include on their bills the number of kWhs you used over the last year.) Now do some simple arithmetic. Divide your total electric bill by the number of kilowatt hours you used. The resulting number is the average charge to you for all the electricity delivered to your home. Surprise! That number is higher that the “price to compare” (or commodity charge). Why is that? It is higher because, in addition to your commodity charge, there are other fixed or variable charges on your bill. Your fixed charges include customer charges and other fees or taxes you pay regardless of the amount of electricity you use. Compare several monthly bills. Those fixed charges do not change from month to month. Your variable charges include other charges (e.g., distribution charge for delivering electricity to your home), fees and taxes you pay based on how much electricity you use.Put the following unit prices ($/kWh) into your spreadsheet:
    1. your “price to compare,”
    2. the sum of your monthly fixed charge divided by kilowatt-hours used,
    3. the sum of your monthly variable charges divided by kilowatt-hours used,
    4. and the total amount of your electric bill divided by kilowatt-hours used.

    Track them each month.

Which unit price should you use for estimating how much money you can save by reducing your power consumption?I suggest that you add your “price to compare” (#1) to the price/kWh for other variable charges (#3). Use the resulting unit price use that unit price when estimating savings.Here are five ways to save money on your electric bill:

  1. Reduce your power consumption. Turn off all lamps and appliances when they are not in use. Beware of all the stealth power-eaters that use power even when they have been turned off (e.g., TVs, multimedia equipment, computers). Plug them into power strips with a switch that you control, and remember to turn if off when not in use. If you have air conditioning, set your thermostat a few degrees warmer. Use natural cooling whenever possible.
  2. Purchase Energy Saver appliances and equipment. The Energy Saver label on an appliance means that it meets federal standards for energy efficiency.
  3. Consider interruptible electric service rates. Your utility may offer you a discount on your electric rates if you agree to interruptible service. During times of peak electric loads (such as hot summer days) your electric utility can reduce its load by interrupting your electric service. Check with your local electric utility.
  4. Sign up for time-of-use rates offered by your utility. Check with your utility. If you are home mostly on weekends or evenings (off-peak), you may be able to save money by signing up. Be careful! If you sign up for time-of-use rates and find yourself using all of your power during the peak rate time, you could end up paying more than you would have had you not signed up!
  5. Switch to solar energy and wind power. They are free resources. But installing the systems can be costly even though there are federal and state financial incentives. It you are a motivated do-it-yourselfer, you can build a small system yourself. You’ll learn about solar or wind power and generate enough energy to run small home, garden or workshop appliances.