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Energy Explained: Demystifying Your  Energy Bill

Energy Explained: Demystifying Your Energy Bill

Does it seem like your energy bill is written in another language? Do you just pay the “Total Amount Due” at the bottom, and never give it a second thought?

Understanding your energy bill can go a long way toward helping you control your energy budget. But, with varying charges and industry jargon like kWh, CCF, and BTU, it can feel a little overwhelming.

It doesn’t have to be. We, here, at Sunwave Gas + Power are here to help. Keep reading to get a better grasp on what exactly goes into your bill. It’ll help you to stay on budget, and still enjoy all the comforts of home.


What Factors Affect Energy Prices?


There are several factors that influence the price of raw energy (electricity or natural gas). Your supplier and your location are two of those factors.

Energy costs tend to be higher in crowded, concentrated areas where there is more of a demand on the power grid. These would include any of the major metro areas throughout the U.S.. 

Suppliers can also negotiate different rates depending on how much energy they’re purchasing, how much their local market needs, and how much supply the market has available. 

Electricity can’t be stored like other forms of energy. As a result, the supply of energy can vary which, in turn, can cause prices to change. Energy prices also change as the seasons change. Winter and Summer are peak energy consumption seasons. This is when everyone is heating or cooling their homes most often. Prices tend to drop in Spring and Fall when temperatures are milder.

Natural gas works similarly when it comes to the seasonal changes. The big difference between electricity and natural gas is that natural gas can be stored. Natural gas is typically used to power heating. It can be stored in the off-peak months (summer, spring, fall), and those reserves can be drawn on during peak consumption in the winter.

All of the energy markets work together and are all influenced by one another. Natural gas, electricity, coal, and crude oil vary in supply and demand. When one fuel source varies, it affects the pricing of the others.

In addition to weather and other fuel sources, energy pricing is affected by government regulation, geopolitical events, and any sort of outages. Some of these can get rather technical, but it’s important to know that any of these events happening will affect the bulk pricing of energy.


How Does This Affect Me?


Naturally, consumers are going to feel any sort of price increase in energy at the bulk level. Energy is a commodity, just like gold and silver, and that means the price can fluctuate. 

But what can you do as the consumer? Unfortunately, you can’t control the bulk price of electricity and natural gas. But you can control your knowledge of your energy usage rates, as well as any other charges listed on your bill.


What is My Usage Rate?


Let’s talk usage rates. When you visit a supplier’s website to select an energy plan, you’ll see a price for kWh. That stands for Kilowatts per hour.

Most people use kW and kWh interchangeably, but it’s important to note that they are different. A kilowatt (kW) is a unit of energy measurement equal to 1000 watts. Kilowatts per hour (kWh) measures how much power is being used per hour. This is what we want to pay attention to.

The total amount of your energy bill is calculated by multiplying your kWh rate by the amount of usage time for the month. This number is just shown to you in general, but you can actually figure out how much kWh each appliance in your home is using.

To do this, you’ll want to locate the silver “Energy” label on your appliances. This will show you the wattage. Next, divide that by 1000 to reach the number of kW that particular appliance uses.

Once you have the amount of energy your appliance uses in kW, just multiply that number by the usage time and then multiply by the number of days in the month. 

Congrats! You’ve just calculated how many kWh of energy your appliances use per month!

Now, using the kWh rate listed on your bill, you can calculate the energy consumption fees associated with that particular appliance. This can be helpful in seeing which appliances are drawing the most power. From there, you can decide to run certain appliances less, purchase a more fuel-efficient version, or even go with a “green” energy source for that particular appliance. Knowledge is power...literally!

 

How Do I Manage My Energy Bill?


Even though things like bulk energy costs and the amount of energy your appliances consume may seem out of your control, there are still things you can do to control your energy budget. 
One step would be to control your kilowatt-hours of usage. This means being mindful of lights left on, appliances left running in the background, etc. to make sure power isn’t wasted. Keeping an eye on appliances that constantly drain power, such as chargers for devices, will help as well.

Commercial customers will also need to keep an eye on capacity cost. Unfortunately, customers don’t get much input into how these rates are calculated but your capacity cost can be controlled. 

Check with your local electricity provider to see when peak hours are in your area. All users can help keep capacity cost down by using larger appliances during off-peak times.

 

Wrapping Up


Making sense of your electricity bill can be tough. We hope we’ve helped make more sense of your monthly bill, and give you some ways to manage your energy usage.

If you’re interested in more energy-saving tips like these, browse through more of the educational resources on our blog. Also, our in-house customer service team is only a phone call away. Their job is to make sure you’re as happy as you can be with your Sunwave Gas + Power service, and they will answer any energy question you have.

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