What's an Average Electric Bill?

 

 

A few times a week someone asks me what an "average" electric bill should be. Good question, but it's a bit like asking the gas station attendant how much gasoline your car should use in an average month. There are a number of variables to consider such as house size, family size, and so on. The following discussion will help you see how your electric bill is calculated. You might want to print this page for future reference.

FIXED CHARGE: Your residential electric bill from Ravalli County Electric Cooperative starts with a rural "fixed charge" of $26.70.** Even if you use no electricity at all your bill includes a monthly $26.70** fixed charge. Every utility tries to set its fixed charge at a level that reflects its real cost of delivering service, whether that service is used or not. It's not a coincidence that city utilities have low fixed charges while rural utilities have higher fixed charges. In a city a power company can invest in one power pole and one transformer to feed several homes or a whole apartment complex. Out in the country a power company might need to install 3 or 4 poles and one transformer to feed only one home.

The fixed charge helps pay for the pole, transformer and wire, ongoing maintenance and eventual replacement. It's common for city and country utility customers to compare power bills without realizing that the city utility has 5 to 10 times as many customers per mile of power line.

USAGE CHARGE: Your usage charge depends upon the actual amount of electricity you use each month. Obviously, the more electricity you use, the more you pay. Our electric rate is 5.36 cents per KWH (kilowatt- hour) for each and every KWH. The average rate throughout the country is about 9 cents per KWH. Some areas in California pay over 20 cents per KWH. At a little more than a nickel, our rate is quite reasonable. Most Montana residential electric rates are higher than REC's 5.36 cents per KWH.

Let's look at a typical summer electric bill:
In July you receive a bill for $88.00. Subtract a the $20.00 portion of the fixed charge and you have $68.00. So you used $68.00 worth of energy. Your hot water was about $20. Your refrigerator was about $4. Your freezer was $6. Your microwave was $1. The oven was $5. Sprinkling the lawn was about $2. The new TV in the living room was $3. The old TV hooked to the Nintendo was $3. The computer was $3. The clothes dryer was $5. All your lights were about $5. Miscellaneous items use up the remaining $11.00.

Total usage of $68.00 translates into approx. 1268 KWH at 5.36 cents per KWH, or about 42 KWH per day. That's $2.25 a day, the cost of one hamburger a day.
Of course, these dollar figures will vary widely from family to family. An old refrigerator installed in a hot garage might cost you $10 a month. An efficient new one installed in your kitchen might be $4. Hot water might be $35 a month with an older tank set to 150 degrees, especially if you include what we call "the teenager factor." And it might be $15 with an efficient tank set to 120 degrees. Your lights might be $8 and they might be $3. But these numbers are in the ball park.

Now let's look at a winter bill:
In January you receive a bill for $107.10. Your fixed charge is the same.**  So you must have used $87.10 worth of energy. Even if you use no electric heat, your January KWH usage will probably be 10% to 20% higher than your July "normal" usage. During winter we all use more of the basics: more lights, more TV, more hot water, and so on. Beyond that, some of us have auto engine heaters for our cars. Some of us have a water trough heater for the horse. Many of us have Christmas tree lights. It's "normal" to use more electricity in the winter.

Total usage of $87.10 translates into 1625 KWH, or 54 KWH per day. That's $2.89 a day, the cost of one cheeseburger a day.

If you do have electric heat, your January bill might be $170.00. If we use the above example, that means $95 was for fixed charge, lights, TV, etc. and $75 was for electric heat. That's an extra $2.50 a day to heat your home.

IF YOU HAVE CONCERNS ABOUT YOUR ELECTRIC BILL it's best to start by reading your meter once a day at the same time everyday. How many KWH do you use daily? Which days do you use more? Which days less? Did you do laundry today? Were the kids home from college? If you want to be scientific about it, read the meter twice a day at 12 hour intervals. If you AVERAGE 40 KWH per day, you'll notice that some days are higher and some days are lower. You'll begin to see where it's going.

(By the way, If your meter is marked "X10," that means it's a "times 10" meter. If you have a times 10 meter, calculate your KWH usage as follows: Let's say Saturday at noon your meter reads 6510 and Sunday at noon it reads 6514. You did NOT use 4 KWH. You used 40 KWH. You must multiply times 10.)

WARNING: Beware of generic "THIS IS WHAT ELECTRICITY COSTS"-type pamphlets or advertisements meant to sell everything from light bulbs to wood stoves. Every electric company has a different fixed charge and a different KWH rate. Year after year I see penny-wise, pound-foolish decisions made by local folks on the basis of what electricity costs in New York City. Remember, we're 5.36 cents per KWH, not 12 cents.

**Actually, the "Local Maintenance" and "Local Services" lines on your electric bill total $26.70 in fixed charges, but 125 kWh of energy are included. 125 kWh at 5.36 cents per kWh is $6.70. And $26.70 minus $6.70 is $20.00. Residences with greater than 200 amp services pay an extra $5 per month fixed charge due to the greater cost of maintenance of larger services.

Now, let's focus on the usage of a few "average" and not-so-average appliances:
Once or twice a year someone will tell me that they stopped using their electric carving knife, "and the bill is still too high." This statement tips me off that this individual does not know how little electricity an electric carving knife uses. A nickel's worth of electricity would probably power a carving knife for 20 years of average use. There's no way that using one or not using one will affect your bill unless you have 100 carving knives and you use them 24 hours a day.

I see some folks avoiding the use of certain appliances, but not saving a great deal, while, at the same time, they waste energy in other areas purely because they don't know an appliance's "average" usage.

Let's start with the cost of some mini-users:

• Clocks and radios use maybe 10 to 25 cents per month worth of electricity.
• Toaster -- 20 cents per month.
• Vacuum cleaner -- 15 cents per month.
• Coffee maker -- 30 to 80 cents per month.
• Sewing machine -- 5 cents per month.
• Iron -- 60 cents per month.
• Hair dryer -- 15 cents per month.
• Electric blanket -- 2 dollars per month.
• Electric toothbrush -- 10 cents per month.

A combination of these mini-users taken together might total as little as $2 to maybe $5 a month. Doing without any one of them won't reduce your electric bill significantly.

Next, let's look at some larger energy users that can confuse your electric bill:
Water Beds use between $5 and $15 per month. If you have 3 water beds, each using $10 a month, that's $30 added to your bill every month.

Stock tank heaters are easy to overlook when you're trying to figure out what's driving up your electric bill. The heaters come in two main types. The plug in variety is usually rated at around 1000 watts. They are thermostatically controlled, but chances are yours is on 24 hours a day from November 15th till March 15th. A 1000 watt heater that's on for 24 hours a day for 30 days a month, uses $38.50 a month. (A little over $1.28 a day.) Permanent insulated stock tank heaters are usually rated at only 250 watts. If it's on all the time for a full month, that's $9.65. If you have stock tank heaters, check the wattage. You might have a heater as low as 200 watts or as high as 1500 or 2000 watts. Consider installing a timer so the heater comes on for only a few hours instead of 24.

Engine heaters are similar to stock tank heaters in that most folks don't consider them as much of an energy user. A 1000 watt engine heater plugged in for 8 hours a day, 30 days a month costs $12.86 per month. Your engine heater might be rated as low as 500 watts or as high as 1500 watts or more. If you have 3 vehicles with 1500 watt heaters, two plugged in for 8 hours a day, the third plugged in for 24 hours a day, that's $96.49 for a month. Here again, check your wattage and consider adding timers.

blankets, irons, hair dryers, water beds and engine heaters increase our comfort and save time and effort. But our standard advice still goes: use what you need, and make sure you need what you use. Don't hesitate to call if you have questions about your bill.

We think electricity is a bargain for all of us. We hope you agree.

What's a Fixed Charge?

 

 

Your residential electric bill from Ravalli County Electric Cooperative includes a Fixed Charge of $26.70. ** Fixed Charges are sometimes called Service Charges, Minimum Charges or Base Charges. The Fixed Charge is what you pay regardless of usage. Every utility tries to set its Fixed Charge at a level that reflects its real cost of delivering service, whether that service is used or not. It's not a coincidence that city utilities have low Fixed Charges while rural utilities have higher Fixed Charges. In a city a power company can invest in one power pole and one transformer to feed several homes or a whole apartment complex. Out in the country a power company might need to install 3 or 4 poles and one transformer to feed only one home. Look out your window and count the homes fed from your pole.

The phone company charges you around $30 a month as a Fixed Charge for phone service whether you make or receive any calls at all. That $30 is completely independent of usage. That $30 helps pay for wire, poles, postage, taxes, outages and fixed monthly overhead that does not stop when people stop making phone calls.

We are much the same. This non-profit electric cooperative charges you $26.70** a month as a Fixed Charge for electric service no matter how much or how little energy you USE. That $26.70** helps cover the monthly cost of keeping your electric lines energized. And it assures this non-profit co-op a stable monthly income that does not rise or fall with warm or cold weather.

Every electric utility charges a Fixed Charge. The size of the Fixed Charge depends mostly upon something called "density": the number of customers divided by the number of miles of power line. High density electric companies serve city centers. (Lots of customers per mile mean lower Fixed Charges.) Low density electric companies serve rural America. (Fewer customers per mile mean higher Fixed Charges.) Many rural electric Fixed Charges are over $30 a month.

**Actually, the "Local Maintenance" and "Local Services" lines on your electric bill total $26.70 in fixed charges, but 125 kWh of energy are included. 125 kWh at 5.36 cents per kWh is $6.70. And $26.70, minus $6.70 is $20.00.

Also, services with greater than 200 amp services pay an extra $5 per month fixed charge due to the greater cost of maintenance of larger services.

Here's an example of how a small irrigation ditch company might establish a Fixed Charge: Let's say 4 neighbors dig a mile-long irrigation ditch. Now it's time to split up the costs of keeping the ditch in service year after year. They create a ditch company and then they hire an employee to keep the ditch clean and under repair. Labor and materials come to $1000 a year no matter how much water is run in the ditch. So, all 4 neighbors pay a Fixed Charge of $250 a year or $20.83 a month for ditch maintenance. All 4 neighbors use different amounts of water, and they pay for that water separately. But everyone pays an equal share of the fixed costs.

There's no question that the fellow who uses only a few gallons of water each month may feel he's paying too high a Fixed Charge. But think about it: It costs the ditch company just as much to maintain his 1/4 mile of ditch. The Fixed Charge has nothing to do with how much water he uses. Without a separate Fixed Charge, maintenance costs would have to be added to the cost of water. That way, the small water users would be subsidized by the more-than-average water users. That wouldn't be fair to those who actually USE the water.

In short, power poles, transformers and lightning storms all cost money. The Fixed Charge distributes the costs as fairly as possible.