Making Sense of Your Utility Bill

Your utility bills are complicated, but it’s not all bad…

A utility bill may appear to be relatively simple on the surface, especially if you’re only concerned with the bottom line dollar value that you have to pay up each month.

Many people may assume that the charge is pretty much linearly related to the amount of energy they consume, and this is a pretty logical assumption.

After all, so many other resources that we purchase and consume are priced in such a fashion.

Things like gasoline that we purchase on a weekly or daily basis is a good example that would support this type of assumption.

The water that comes into our homes is often priced in a similar fashion, as is the natural gas that many people use to heat their homes or work spaces.

It would be a logical conclusion that electricity is the same way, and that in order to reduce your expense, you absolutely must use less.

This is not necessarily the case.

The Complexity of Your Utility Bill

As it turns out, the way in which a customer is billed for electricity is astonishingly complicated with many nuanced rules and conditions that affect the price of each unit of electricity consumed.

While many providers have similar overall structures, each rate structure has its own unique flavor of convolutions.

Rarely do consumers actually seek out the tariffs that outline these rules, and even when they do, they are often met by a frightening document spanning hundreds of pages and detailing many different rates for different types of customers.

These rates all have their own rules.

Often times, the pricing for each month is determined by how and when energy was consumed over the previous year.

There are almost always seasonal rates, and there are often special conditions that apply to the whole year based on consumption behavior during certain months in particular.

The inherent complexity of these tariffs is generally enough to make most people lose interest and give up trying to understand their bill.

Making Sense of Your Utility Bill

The complexity of rate structures may seem like a horrible curse for the customers.

A cruel joke played on them by the utility providers.

It may not be easy to spot them, but this inherent complexity often presents hidden opportunities for the consumers to save money by changing the way that their building consumes energy.

Some structures reward the customer with lower pricing of each kilo-watt- hour of energy consumed throughout the year by basing the price on usage during a certain month.

Sometimes the cost of usage can be a function of a customer’s peak demand.

There are rates that have what is referred to as a ‘time of day rate’ which means that pricing of energy and demand changes throughout each day, thereby rewarding customers who shift their behavior to avoid consuming as much energy during certain times.

These are just a few of the sorts of twists and rules that determine how a customer might be charged throughout the year. 

Getting The Right Help to Understand Your Utility Bill

Having a firm understanding of your rate structure can be a very valuable thing indeed.

Whether you can figure it out on your own or you seek professional consultation, it’s imperative to understand how you are billed so that you can take full advantage of opportunities to save money.

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