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Everything You Need to Know About Your Energy Bill to Save Smart This Winter

In such a highly digitized age, it only makes sense for consumers to have the option to digitize the process and methods in which they pay their monthly bills. In fact, 75% of today’s consumers are enrolled in automatic payments (often referred to as “auto-pay”) for at least one bill, according to data shared by the Vice President of Digital Payments at Fiserv, a multinational financial services company. 

All in all, auto-pay provides consumers with a greater level of convenience, as well as the security of knowing that outstanding balances can be scheduled regularly and paid on time. And this is all done without having to lift a finger from month to month. 

But not all bills are created equally when it comes to using auto-pay, as suggested by financial experts in the industry. Utility bills, for example, fall into the category of variable, often-fluctuating expenses that are better suited for manual online (or physical mail-in) bill payment.

Besides — when it comes to energy bills, the National Energy Improvement Fund (NEIF) encourages you to become acquainted with the numbers you see each month. In order to save both dollars and energy, you’ll have to sit down and review the bill(s) that hit your email inbox or mailbox to get a sense of your household’s usage.


Common Terms & Measurements
  • Kilowatt-hours (kWh) — These are the units of measurement typically shown in electric bills to represent how much energy has been used. A kilowatt-hour is a measure for using one kilowatt of power for one hour. A clothing dryer, for example, uses 2.79 kWh for a standard one-hour load of laundry, where a coffee maker uses 0.1 kWh for a one-pot serving (taking 0.1 hour), according to Penn State research.

  • Cubic feet (Ccf) — Depending on the fuel used to heat your home, quantities of natural gas are typically measured in cubic feet. To determine energy content, the amount of heat generated from the fuel, British thermal units (Btu) are measured.

  • Liquid gallons — According to the 2020 Residential Energy Consumption Survey conducted and released by the Energy Information Administration (EIA), 4% of U.S. households rely on propane for heat, and another 4% use oil. Since propane is stored and supplied under high pressure, it becomes a liquid; therefore, usage is often expressed in liquid gallons. Fuel oil is stored similarly to propane and is also sold by the liquid gallon. 


Reading Rates, Usage & Misc. Charges

The actual composition and structure of a standard energy bill will vary from utility to utility. However, there are a few items that are generally universal:

  • Rate
  • Usage
  • Taxes
  • Other Charges


Rate on a utility bill indicates the amount you are being charged per unit of energy used. These usage charges typically comprise the majority of your total energy costs per month, so understanding what you are charged (and how) is important.

Usage charges are exactly what they sound like: calculations found by multiplying your energy usage in a given month by the rate for a type of energy (electric, natural gas, fuel oil, etc.). Electric tends to be more complicated to follow on your utility bill, as there are a few different rate plans that suppliers can utilize, most commonly including fixed and tiered rate. 

A fixed, or simple, rate plan indicates that you’ll be charged a set dollar amount per kWh of electricity consumed. Where calculations get more complex, however, is through a tiered rate plan, which essentially means that suppliers can charge a higher rate once a certain threshold of energy usage is met and exceeded. 

Just like other expenses in life, a percentage of your utility bill goes to taxes. Depending on where you are located, some utilities will also include adjustments for state taxes.

Miscellaneous charges also differ based on utility, and can include additional fees for making online payments, for not making online payments, and/or paying via phone.


Other Considerations

Now that you have a better understanding of the charges and costs that make up your total payment, many utilities make this information easily digestible for consumers by using colorful line graphs, bar charts, and pie graphs.

With these visuals, you can more easily compare usage between previous months and start formulating a plan for your household to cut back where possible and applicable.

Your utility bill should also display relevant information, should you need it, regarding your local utility department’s office, your individual account number, and other customer help resources.


SOURCES: CRMU, Energy Information Administration, Penn State Extension, PYMNTS, Virginia Energy Sense, We Are Bluegrass