What’s the Right Way to Read Your Electric Bill?

Understand what monthly billing plan you’re on

This step is crucial: are you being charged for your monthly usage? Or are you on a budget billing plan? If you’re charged monthly for your useage, you’ll receive a bill every cycle charging you for the number of kilowatt hours your household used that month at the prevailing rate. If you’re on a monthly budget billing plan, your utility takes the number of kilowatt hours you consumed last year, assumes that you’ll use around the same this year, and creates a monthly average for you to pay. This allows your utility to spread out the total costs 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’ll see a lower bill than your neighbors who are on a monthly usage billing cycle. But on the other hand, in the winter months you should expect a higher bill than your neighbors.

Know what bill you’re looking at and know your billing system

Depending on where you live in the country, your electricity bill can come bundled in amongst a lot of other municipal bills. Make sure you know what you’re looking at! Electricity is measured in kilowatt hours (kWh), while a water bill is measured in gallons. Gas usage is measured in BTUs, or British Thermal Units. These units of measurement should serve as an easy indicator of where your electricity bill ends, and where your water or gas bill begins.

Know what charges make up your final price

There are several charges that go into your energy bill. Your payment is not only for the electricity you consume, but also for helping the utility maintain the grid and pay the salaries of its workers. Look for charges related to supply, delivery, taxes and fees on your bills to make sure you understand exactly how much you’re paying for each line item. If you live in an area with a deregulated energy market, you may be able to shop around for another supplier that can provide you with the power you need at a more competitive price.

Know how many hours of electricity you use per month

Ensure you’re correctly calculating the amount of power you use in a given month. Many bills will break out your daily use, or simply show you how your monthly usage changes over the course of the year. Make sure that you’re measuring and assessing your usage on the same periodicity that you’re billed on: for most consumers, this will be monthly. Don’t confuse a daily rate with a monthly rate!

Sometimes figuring out how many hours you’ve used in a given month is more complicated than simply dividing your total bill by the rate your utility charges for power. Some utilities charge consumers with a tiered billing structure; your first 500 kilowatt hours may be one price but your 501st hour would be a different price. If your utility uses a tiered billing structure, the number of hours that you use in each tier should be shown on your bill. If you add together the number of hours used in each tier that will sum up to are the total hours used in the entire month.

Learn more about your billing in Billig strøm by Strømtest

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