You may be familiar with the wattage of appliances in your home or business, but your utility bill shows energy usage in kilowatt hours (kWh). This number covers the cost of the electricity supplied and the transmission and distribution costs.
The best electric company in Fort Worth charges based on your energy consumption, so knowing how this is calculated can help you make smarter decisions about appliances and behaviors.
Rates
The terms and acronyms used on your energy bill can be confusing and intimidating, making it difficult to fully understand the energy costs associated with your home or business. But, with a little time and effort, it’s possible to decipher your bill and learn about the components that make up your total energy costs.
You must first understand the concept of a kilowatt-hour or kWh. A kilowatt-hour is equal to 1,000 watts of power sustained for an hour. This unit of measurement is used to quantify your total energy consumption and can be found on your meter or utility statement.
To determine how many watt-hours you use each month:
- Start by listing all the appliances and devices in your home or commercial building that need to be powered at any time.
- Add up the wattage ratings of each device and appliance.
- Convert the number of watts per day to kilowatt-hours by multiplying by the number of days a month.
- Divide the kilowatt-hours of usage by your electricity rate to find your monthly consumption and costs.
Your energy rate may vary depending on whether you live in a regulated or deregulated state and the type of electricity plan you choose. Some plans offer fixed rates that remain constant throughout your contract, while others may change monthly based on market conditions. Some plans also include demand charges based on peak energy usage, making calculating your energy usage and rates trickier.
In addition, the season and weather can influence your energy bills. Summer is a time of higher demand, while winter requires more heating and cooling than normal. These factors are why some electricity providers offer time-of-use plans that charge different rates based on the hours of the day when demand is highest.
Demand rates are usually reserved for larger residential developments, commercial clients, and industrial facilities, but they can also be offered to some small commercial or residential customers. These rates are added to normal energy rates and are intended to discourage peak demand periods by charging more for electricity at the most expensive times of the day. However, some electricity providers combine these rates with a standard energy rate and are easier to calculate for consumers. This helps to keep your bill simpler and less complicated.
Metering
The consumption charge on your electric bill represents the electricity you used during a billing period. It’s typically listed in kilowatt-hours or kWh. One kWh is equal to 1,000 watts sustained for an hour. Regardless of your specific rate plan, the kilowatt-hour cost will vary depending on your energy company and location. For this reason, figuring out your energy costs can be challenging. Luckily, there are ways to make the process easier.
The best way to determine your consumption is by checking your past electric bills. Since your usage can change based on the season, reviewing at least 12 months of past bills is important. Once you have a good idea of your average monthly consumption, it’s time to start calculating your costs.
Your electric bill has two components — the consumption and demand charges. The latter is usually more difficult to figure out, but it’s also crucial for understanding how to control your business’s energy costs. The first step is to calculate your business’s total consumption. You can do this by looking at your past energy bills and estimating how many kW hours each device used. This number is then multiplied by the price per kW of electricity in your area to determine your monthly costs.
Another factor to consider when calculating your business’s power consumption is the time of day that you use most of your devices. For example, suppose your business uses many electronic devices in the evenings to watch TV and use the internet. In that case, your consumption will likely be higher than during the mornings when you’re working. If your business’s peak demand times coincide with utility peak rates, you’ll be charged a premium for using so much power.
Finally, the type of business you operate will influence your business’s overall energy usage. For example, a manufacturing plant will require more electricity and natural gas than a small retail store. Additionally, the hours your business is open will impact your usage as well – a restaurant that’s open 24 hours will consume far more energy than a store that’s only open 10 hours per day.
Suppose you want a more precise breakdown of your electricity consumption. In that case, get a home energy monitor that tells you exactly what each appliance consumes at any moment. These devices connect directly to your electrical panel and recognize each appliance’s unique electrical signature. Then, they can provide detailed real-time information about your appliances’ energy consumption via an app or website. However, these products can be expensive and require a professional installer.