Looking past dollars to the number that really matters
When you get your power bill each month, what do you see first? Chances are it’s the bottom line: how much you owe. That’s understandable: money is the language of our world, and rising power bills are a real pain point when money is tight.
But when it comes to comparing bills between months and years, there’s actually a far more important and accurate number on your power bill than dollars.
First, here are three reasons why the dollar amount on a power bill is usually not a good basis for comparing between bills:
- Power rates change, so if you’ve had a recent rate increase, that distorts any comparison with a bill from before the rate increase.
- Billing periods can be different, varying from 28 to 33 days – a built-in difference of up to 20 per cent that distorts a fair comparison.
- Bills often include other products, services and charges, such as hot water heaters, dusk-to-dawn lights, monthly service charges and one-time adjustments that throw off fair comparisons of energy costs.
Because of these reasons, it’s entirely possible for a bill to be considerably higher than an earlier one even if actual energy consumption has not changed – a tough reality to swallow.
So – then how do you get past the dollars on a bill to really determine whether your energy usage really has or hasn’t changed?
For that, you need to determine the amount of energy you used, specifically the number of kilowatt-hours used per day. Just as gasoline is measured in litres, electricity is measured in kilowatt-hours – and the more you use, the higher your bill will be.
Unfortunately, it’s not front and center on most power bills. Fortunately, it’s easy to calculate from two numbers that will be somewhere on the bill: total power used, in kilowatt-hours, and the number of days covered by the bill. Divide the first number by the second and the result – kilowatt-hours per day – can be used to compare between bills.
And one last key thing to remember: winter power consumption is greatly affected by outside temperature. So even if you’re doing nothing differently in a given January, for example, your consumption may still be different than the January of another year, depending on how the temperatures of those two months compare.
Once you have kilowatt-hours per day, you can do comparisons – and if you see big differences year over year, it may be time to do a bit of detective work:
- Have there been any changes to occupancy, such as a baby, visitors or someone now working from home?
- Has any new equipment been installed, like a hot tub, pool, appliances or air conditioning?
- Have there been any changes to how you heat, do laundry or cook?
So the next time you receive a power bill, why not resist the temptation to compare just the dollar value, and instead use the number that really matters: kilowatt-hours per day!