When the state of Texas deregulated the energy sector, residents could then choose their own electricity provider. Being able to choose a provider and plan means that you could find options to help lower your electricity bill. However, it’s important to note that sometimes, electricity plans can have confusing terms, conditions, and pricing structures. If you aren’t careful, you could end up paying much more on your electricity bill. Before understanding the bill, though, you will need to understand the Electricity Facts Label.
The Electricity Facts Label
To help make things somewhat easier for consumers to understand, the Public Utility Commission of Texas created the Electricity Fact Label. Once you have chosen your provider, you will receive an EFL with your first electric bill. It is a legal disclosure about your electricity service.
The EFL is essentially a guide to your electric service, and it will give you a good idea of how the provider calculates your bill each month. Understanding how they do this will make it easier for you when you are checking your bill to determine whether it is accurate or not.
On the EFL, you will find important information regarding your electricity plan, the monthly energy charges, and your contract terms. It ensures transparency for utility customers when it comes to the variables that could affect the cost of the electric service, such as usage and zip code.
Sections of the EFL
There are several sections on the EFL. First, there will be the electricity price. All utility companies will charge a different amount for electricity. Your provider’s press for energy and other services should be located on the EFL. Remember, they are supposed to be about transparency.
There will also be a rate calculation on the EFL, which will determine the rate you are paying. Keep in mind that there will also be a base charge that will cover the basics of having your home connected to power.
Finally, the EFL is going to include all of the details about your contract. This is the longest part of the EFL. It will show whether you have a fixed rate or a variable rate, how long your contract will be, the cost of early termination fees, and more.
What Does Your Energy Bill Have to Say?
Now that you know more about the EFL, it’s time to get fully acquainted with the energy bill you are going to be paying each month. The bill will include all of your monthly charges from the energy company. It has quite a bit of detail to it that breaks down your charges, but if you are like most people, you don’t bother reading the entire bill. Instead, you just look at the bottom of the electric bill for the total.
When it’s higher than it usually is, a lot of people simply pay the bill without ever looking into their electricity usage and the number of kilowatt hours they are being charged. They assume that the bill is right. However, there could be problems or errors with the bill, or other issues that are going to be discovered when you look deeper into your monthly bill.
Below, you’ll learn more about how to properly read your electric bill, understand kilowatt hours, how much electricity you are using, and be able to better see exactly what you are paying for. Having this knowledge will give you a better grasp of your energy usage, so you can see if maybe you should make some changes to bring down costs and to improve energy efficiency.
The Parts of the Energy Bill
You will find that most electric bills from providers will have several main parts. These include your account information, the bill summary, a breakdown of energy usage, the current charges on the electric bill, and the price of the electricity that was used. Let’s have a closer look at what is in some of these sections.
Account Information
The account information section of the electric bill will provide all of the important details about your account with the provider. This will include your account number, for example. If you find any issues with your electric bill, you need to know where to quickly find your account number, so you can give it to the provider when you contact them. It will allow them to find your information quickly.
This section should also contain the electronic service identifier number. The ESI is connected directly to your electric meter, and it should provide accurate accounts of your electricity consumption.
Bill Summary
Under the bill summary, you will find a complete overview of the current charges for your energy usage. Most of the time, the provider will break down the charges further for you, so you can see exactly what each component you are being charged for costs. This includes things like the energy cost, supply fees, market cost, utility charges, and taxes.
The purpose of this section is to provide you with a breakdown that can make it easier for you to see variances in different costs from month to month on your utility bills. For example, the supply charge could be different from one month to the next. It should be easy to spot when you compare the separate bills from one month to the next.
Energy Consumption
This section of the electric bills will show the energy consumption over the past month through your billing cycle. It will provide you with a look at the number of kilowatt hours (kWh) you have used and will generally have a comparison of what you used in the previous month. Since it is all shown in kilowatt hours, it’s important to have a good understanding of what this means and how they are calculated.
What’s a Kilowatt Hour and How Is It Calculated?
Your provider tracks your energy consumption in kilowatt hours each month. You are then charged for the total of these hours that you have used. Keep in mind that how much energy you use will typically fluctuate throughout the year based on where you live in Texas. Most of the time, the consumption will be highest in the summer months. This is when it’s the hottest and most people are going to be running fans and AC. It might also be higher during the winter if you are using a heating system.
So, what is a kilowatt hour? kWh is the unit of measure for electricity usage. It is a combination of the speed at which something uses power, which is the wattage, and the amount of time that the electricity is used at that speed.
How can you calculate the kWh usage? It can take some time, but it’s possible, so you can get a better idea of whether anything is out of place with your electric bill. You can multiply the wattage of any appliances you are using in the house by the number of hours that you are using. You will find that most appliances today have a label that will let you know the wattage.
It’s easy to determine how many kWh are being used by that appliance. Let’s look at an example. Let’s say that you have an appliance that is 500 W and you run that appliance for two hours. This would mean that you have then used 1000 kW for the full two hours, which equates to 1 kWh. Using the basic calculation for all of your appliances can give you a good idea of your energy usage.
What will 1 kWh provide enough power for? Naturally, different sorts of appliances and electronics are going to use different amounts of power. Let’s look at a couple of examples. You could run a dishwasher or a washing machine for 100 minutes. You could run a space heater for 40 minutes or a desktop computer for about five hours.
When you have an idea of how much you are spending when you are using your various appliances, it can help you to find ways you might be able to save on your electric bills. For example, you can see how much your AC is costing, how much your washer is costing, etc. You can then make some changes to reduce energy consumption or to become more energy efficient.
Check the Charges and Look for Inconsistencies
You want to check your electricity bill from one month to the next to look for any types of inconsistencies. If the bill is higher than expected, you have to determine whether it’s something that you did to cause the increase in how much electricity you used or not. For example, if you were running the air conditioner because it was hotter than usual, your bill would go up because you used more energy. Heating and cooling will often mean higher charges.
However, if there was no appreciable difference between your actions last month and this month, the electricity costs should be relatively consistent unless you have a variable rate plan.
You should make sure you check the average kWh you are using during the billing period for your monthly bill. Most of the time, a provider will let you see how much you used compared with the previous month. There are even those that will show you how much you used the previous year.
You will also want to check the energy charge. The rate per kWh does not always remain constant. It can change depending on usage. Typically, the electricity rate you are quoted will be for a specific amount of usage.
Most of the time, a plan might be for 8 cents to 10 cents per kWh for using up to 1,000 kWh during your billing period. However, some homes are going to use more energy than this. When you go over the usage amount in your contract, your price is going to rise if you don’t have a fixed cost for all energy usage.
Of course, if you are also using renewable energy sources, for example, your energy costs could be lower for the standard electricity you are using. A lot of things can affect the price of your energy bills.
Some of the other elements you will want to look at for consistency include the delivery charges, which cover the transportation of energy to your property, transmission and utility distribution charges, and the name of your plan. You would think that the name of your plan will always stay the same, but that’s not true. Sometimes, a provider might switch your plan. This happens more often than you might think, so be aware of your contract expiration dates.
Tips for Saving on Your Energy Bill
Have you noticed that your energy bill seems to keep going up and up month after month? You want to spend as little as possible on your electricity bill, but it can seem like a losing battle when you aren’t sure of the best ways to reduce energy costs. Fortunately, there are a few relatively simple things you can do that will help you reduce costs.
First, do some kWh calculations to figure out the cost of your electricity use for different appliances. You can see which ones are costing you the most, and this can give you an idea of where you might want to cut back. For example, even average air conditioner use can be quite costly. You may want to cut back on the amount of AC you are using.
You might also want to stop using the dishwasher and choose to hand wash dishes in cooler water. Once you see how much you are using, you will want to find ways that you can reduce costs. Make a game of it and see just how low you can get your energy usage without negatively affecting your life. Below are a few ideas you can use.
Consider Supplementing with Renewable Energy
Use Smart Switches and Power Strips
Having some smart switches with motion detectors help to ensure you don’t leave lights on by mistake when you leave the room. You could also use dimmer switches to reduce the amount of energy you are using.
Lower your electric bill with a power strip, as well. Plug some of your smaller appliances into the power strip and then turn off the strip when you aren’t actively using those appliances.
Use Appliances During Off Peak Times
Pay attention to the peak times for energy usage in your area, and always try to use major appliances after those hours. By using the washer and dryer later at night, you could end up saving quite a bit. Of course, you could also opt not to use the dryer and simply use a clothesline or clothes rack for air-drying instead.
Something else to consider with appliances is their age and efficiency. It may be a better solution to buy new, energy-saving appliances.
Change Providers
You should also keep track of your current contract with your provider. Often, the companies will increase your rates after your current contract, so you don’t want to stick with them. Instead, you should consider switching providers. Since electricity has been deregulated, as mentioned, you can check out a range of providers to find one that can offer a good plan with rates that can keep your electric bill under control.
With these tips, you can better understand what you are seeing with your electricity bill. You will know what you are paying, how it’s calculated, and even ways that you can reduce your energy costs with the local utility company.