You could be paying an extra $100 a month for your power bill.

You could be paying an extra $100 a month for your power bill.

March 06, 2020

You could be paying an extra $100 a month OR MORE for your power bill.

You could be paying penalties on your electric bill that cost you extra each month. Most people just look at what dollar amount they owe, but there's a lot more to a power bill than just the total costs.  We'll take a look at some things to look for, go over how to read your power bill, and how to reduce your monthly cost. 


How do they come up with their rates? 

First, we need to go over what kWh is because you'll see this a lot. 1 Kwh can be defined as the amount of electrical energy consumed when a 1000 watt electrical appliance is used for an hour.

This is by far the easiest to understand. The Simple Rate program is simply that. Simple. The utility charges $0.xx cents per kilowatt-hour used. There may be sales tax or other incidentals added, but it is by far the easiest to understand. Billing example:

kWh used: 2,300
Rate per kWh: $0.1125
Calculation: 2,300 x $0.1125 = $258.75

 

Many utilities do have a separate “Energy Charge” and “Delivery Charge.” The ‘Energy Charge’ is just that...the amount charged for energy consumed. The ‘Delivery Charge’ is a fee charged to deliver the electricity - which may include things like telephone poles, transformers, power lines, utility meter, etc. The rates for each are generally a multiplier of your kWh usage - so you would simply add them together. For example, if the ‘Energy Charge’ were $0.1001 per kWh and the ‘Delivery Charge’ were $0.0650 per kWh, you would sum $0.1001 + $0.0650 = $0.1651 per kWh.


Generally speaking, you can sum all of the charges on your electric bill that are a multiplier of kWh usage. You also may see charges for fuel costs, billing, delivery, and retirement. 

What's a demand rate?

Demand rates are typically associated with commercial or industrial facilities, but there are some utilities that do offer it to residential customers. The Demand Rate is only one component of an electricity bill, but it can be most significant. Accompanying a Demand Rate will generally be a low kWh charge for the energy consumed throughout the billing period; this is then added to the Demand Charge.    Many utilities are now implementing Demand Charges to help offset their cost of providing power during peak times (in addition to the normal tariff being charged).   Demand charges are easy to explain, yet very hard to manage.

Explanation of Demand Charge: A Demand Charge is based on the highest amount of power reached during any 15, 20, 30, or 60-minute averageduring a billing period.  The utility then charges a fixed amount (as a multiplier).   For example, let’s say your dryer uses 5.2 kW of power and your oven uses 4 kW.   If you use these appliances at the same time to produce an average of 9.2 kW over 30 minutes (and this is your highest average over a 30-minute span for the bill cycle) – this becomes your Peak Demand.   So you would be charged 9.2 times the Demand Charge rate.   If, in the above example, the appliances were used at different times of the day, the same amount of energy would be used, but the Peak Demand would be greatly reduced and your Demand charge would be cut almost in half. Demand charge rates can range anywhere from $1.50 to $14 per kW.   So in this example, the Demand Charge would be: 9.2 kW x $1.50 = $13.80 ... or in the extreme pricing: 9.2 kW x $14 = $128.80.   This would be an additional charge added to the utility bill.



How do you regulate your peaks?

TBH. You don't have a lot of options. The number one way to regulate your peaks is through capacitor units. NRG Savers offers custom built capacitors that regulate your peak, protect against lightning strike, keep your equipment/appliance running great for longer, improve your power factor, and reduce the cost of your power bill. You can get yours here

 

What's a seasonal rate?

Seasonal charges (Winter, Spring, Summer, Fall) are pretty standard in the industry. Some utilities charge a higher rate during Winter and Summer, as they are the seasons that require the most energy (primarily due to Heating and Air Conditioning) ... and it costs more to produce more energy. So the utilities pass the extra costs on to the consumer.



What to look for to see if you're paying a penalty? 

Penalties won't always come out and call themselves penalties Here's a list of charges and terms to look for on your power bill to see if you're paying extra:
Explicit

Power Factor Penalty 

Power Factor Adjustment

Power Factor Multiplier

Reactive Demand Charge

Calculated Demand

Billed Demand


How can I get rid of my penalties? 
Power factor correction. We talked about this earlier, but NRG Savers offers custom built capacitors that regulate your peak, protect against lightning strike, keep your equipment/appliance running great for longer, improve your power factor, and reduce the cost of your power bill. You can get yours here. This will help you reduce or get rid of your penalties because right now, you're putting stress on the power company's grid. They don't want to replace their equipment because that costs their business money; therefore, they are charging you extra money. With a NRG Savers custom built capacitor(s) you will be improving the way your equipment/appliances run and your power factor which means less costs to you.

 


 

 

 

 

 

 


References: https://www.theenergydetective.com/bills



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