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Read Your Electricity Bill
Home electricity is one of those things we just can’t live without. Often, I come across people that just pay the electricity bill and they don’t even know what they are paying for. At the same time, they think they have an amazing deal with their current energy company because they were brainwashed by the sales agent. Let’s take a look at your electricity charges so you can understand what are you paying for. Hopefully, you will understand those charges so you can make a better decision when looking for a new energy plan or company.
Most electricity companies break down the electricity statement into many parts and this is very confusing. Some items on our energy bill are unavoidable or we can’t save from them, I will explain in a few moments.
Also, it’s important to understand who is who as for how we receive our electricity at home. The difference between the utility company and the energy company. When you are searching for a new electricity service, you are reaching out to the electricity company, not the utility company. After the meter is read, that date is sent to the electricity provider and the electricity company sends us the bill.
Components of the Electricity Statement
There are 3 main components:
Delivery Charges
This is the most confusing part of our electricity bill. This is what we pay the UTILITY company to receive the electricity. It’s what we pay the utility to maintain the poles, wires, transformers, meters, etc. They are in charge of the meter readings to make sure of the safety of each electricity connection and to fix all power outages.
We can’t buy electricity from the utility unless we live in a regulated area where the utility and the energy company are the same entity.
The delivery charges are priced at a rate, which we can’t change. This rate is set for the whole utility and it can only change twice a year. This charge should be around 50% of our energy bill.
Energy Charges
This is the electricity supplier charge. This is what we pay for the kilowatts we use to power our lives; TVs, cell phones, game consoles, lights, appliances, etc. The Retail Electricity Providers (REPs) buy the energy in bulk (megawatts) add it to the grid and resell it to us. It’s up to them to give us a good deal regarding the energy rate. We can choose from many electricity companies and the rate will vary depending on; usage, credit, renewable, etc. This is about 45% of our electricity bill.
Taxes
Well, nothing to explain here.
After the meter is read by the utility, that data is sent to the electricity provider and the electricity company sends us the bill. The energy company is in charge of collecting it all in one bill, the energy charges, the delivery charge, and the taxes. The electricity supplier will distribute the money accordingly.
Know How to Read Your Electricity Bill
We can’t control the utility rate; it’s set for all of us in the same utility. However, we can choose a better rate with many different electricity suppliers. Most importantly, we can control our energy usage. If you know how to lower your energy usage, all the costs go down; delivery, energy, and taxes.
Save hundreds with a low energy rate, and save thousands knowing how to lower your energy usage.
Cheapest electricity service in Texas
Check our Power Blog for more ideas on how to save energy