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How to Read Your Energy Bill and Start Saving Money

Posted by Kelly on Feb 23, 2016 3:18:56 PM


Energy bills. Nobody likes getting them in the mailbox, but understanding them can help you save money. We’re here to show you how to read your energy bill, decipher what it is telling you about your usage, and what you can do to keep a few more of those dollars in your pocket. 

How About This Weather?

The first thing you need to know about understanding your energy bill is that the weather outside plays a huge factor in how much energy you use.

Keith Hill, technical support manager at Minnesota Air, says that weather plays a role in how much heat your home loses, and, in turn, how much energy it takes to replace that lost heat. You’ll be able to see that information on most utility bills listed under HDD – or heating degree days. It basically shows you the difference between the weather outside vs. the average thermostat setting. In summer, they use CDD – cooling degrees days.

“Most utilities publish HDDs on the utility bill. The data can also be found on the National Weather Service Office /NOAA  website,” says Keith.

Think of it this way, it will take a lot more energy to keep your home at a constant 70 degrees when it is -10 degrees outside. Your HVAC needs to work extra hard to make up the 80 degrees difference between the outside temperature vs. your ideal indoor temperature. Now compare that to a 40-degree day in early winter or spring, and your HVAC only needs to make up a 30 degrees difference to keep your home at 70 degrees. And furthermore, once it heats up to 65-70 degree days, there will be no need to even turn on your furnace – saving you money on energy.

That’s why weather plays such a big role in what you pay each month, or even each year, if you have a particularly harsh or mild winter.

What Does Fuel Cost?

If you notice a bigger jump in your bill from month to month or year to year, it may not be because you are using more energy. It may be because the cost of fuel has gone up.

You’ve seen a fluctuation in price happen at the pumps with the gasoline you fill your car with, and the same goes for the energy/fuel you use at home. The price of fuel needed to keep your home warm varies with supply and demand.

Keith says that depending on the utility, some of the fees and costs vary with season. You’ll see that electric bills usually charge by KWH – or kilowatt hour – and gas is usually charged by MCF – or thousand cubic feet.

How Do You Stack Up To Your Neighbors? 

Another very helpful feature that you’ll notice on more and more bills is the neighborhood comparison. Let’s call this the ‘peer-pressure effect.’

Many utility companies have begun listing how your home’s energy use stacks up to your neighbors. They’ll often show on a scale from 1-100 where you fall in the percentage of energy usage. A home at 1% would be one of the most efficient homes in the neighborhood. Compared to someone in the 99th percentile, who would near the most energy consumption and may want to look at ways to cut costs, reduce energy use, or purchase greener appliances. If you’re near the top of the scale, with a few simple changes could move you to a much lower percentage in a few months. And just like that, peer pressure saves you money!

 Click here for more tips on lowering your heating bill, and here for ways to lower your electric bill.

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Topics: HVAC