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  • Writer's pictureGabe C

Secrets for Lower Electricity Bills: The Series

Know Your Energy Usage and Save on Your Electricity Bills

When your energy bill arrives each month, I bet you ask yourself, how did we spend so much electricity?

I will do a series of short blog posts addressing each of the following questions. Remember that knowledge is power and to lower your electricity bills, it’s important to learn a few things so you understand why things happen.

Lower Electricity Bills
Lower Electricity Bills

Here are a few questions you may find interesting; each question will be addressed in detail in a short blog post.

  • Do you know how to read your energy bills?

  • Is your electricity company charging you what they offered?

  • Did you know your energy rate can change depending on your energy usage?

  • Is it important to you to lower your electricity bills?

  • How far would you go to save on energy?

  • Do you know how much electricity you use every month? Most importantly, every day?

Let’s get started on your energy savings and lower your electricity bills part 1:

Lower Electricity Bills knowing what's in there

What do you see on your electricity bill?

I know that feeling when something terrible happened and you have no clue how it happened. It happens all the time. In the same way, we learned that 2 + 2 = 4, we need to learn how to read our electricity bill. In all honesty, energy bills contain a lot of information that we don’t really need, however, the energy companies must detail all the incurred charges. The 2 main things you really need to know are your energy charge and your utility (delivery) charge. Of course, the taxes.

We need to clarify the difference between the utility company and the electricity company.

The electricity company resells the energy we use, they buy it in bulk (megawatts) from the major energy companies like Shell, GE, Dominion, ConEd, Exxon, etc. You may just see them as gas and oil companies, however, most of our electricity comes from those companies. The electricity company adds the energy they purchased into the grid. We can’t buy energy from the utility.

In the case that you live in an area where the city or a cooperative control the electricity, then the co-op will be the utility and the electricity company all in one.

How’s our electricity metered?

The utility company owns the grid. Most importantly, they are in charge of the electricity meter reading. Also, they maintain the power lines, towers, transformers, meters, etc. With that said, they are the ones who deliver the electricity to our homes. They also oversee the electricity company’s operations, just to make sure they follow the rules (billing, slamming, connections, etc.). So, the utility company sends the meter read to the electricity company and they will send us our electricity bill.

With that explained, we can move on to the charges

Utility or Delivery Charges

The energy bill will show the delivery charges in detail, we can’t get away from those. The utility charges are passed through from the utility company to you and the electricity company can’t alter them. Just make sure is about 50% of your electricity bill.

As mentioned above, the utility charges us for delivering the energy we use every day. Meaning that they maintain all the poles, wires, towers, transformers, meters, and all that matters for us to have electricity at home. This charge is also metered and charged by a rate.

Energy Charges

This is what the electricity company charges us for the energy we consume every day. It’s about 50% of the total of your electricity bill. Once again, if you live in an area where your energy is supplied by a co-op, the co-op will send you the electricity bill all included in the same statement, including delivery charges, energy charges, and taxes.

As the majority of Texans, we can choose the electricity supplier, they will send the statements, it shows the number of kilowatts used. Those kilowatts are metered by the utility, not the electricity company. It will show the charges from the utility (delivery of electricity) and the energy charges.

In my next blog post, I will review how an electricity rate is composed, so you know that your electricity company is charging you what they are supposed to.

You can follow our blog and see how you can save electricity every day.

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