How to Use Your Electric Bill to Save Money – Five Ways to Cut Your Electric Bill


There are three things you should know about your electric bill to save money. If you’re like me, you want to save everywhere you can. When I save on my electric bill I reduce my carbon Mepco Bills 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.

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.

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%!

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:

your “price to compare,”

the sum of your monthly fixed charge divided by kilowatt-hours used,

the sum of your monthly variable charges divided by kilowatt-hours used,

and the total amount of your electric bill divided by kilowatt-hours used.