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High Electric Bills and the Battle Against Increasing Energy Costs

Written by Nickel - 33 Comments

Wow. We just got a whopper of an electric bill for August. For background, we live in a 3,000 square foot, entirely electric house in the relatively deep South. We’ve also been experiencing a scorching summer with numerous record-setting days, especially during the month of August. So how bad was it? $376,73. This is despite our best efforts to reduce our electrical usage by doing things such as switching over to compact fluorescent light bulbs throughout our house, insulating our garage door, and a variety of other energy saving tricks. We also have a relatively shady, somewhat wooded lot.

In terms of historical usage (see graph below, keeping in mind that we’ve only been in our house for a little over a year), we actually used more electricity last February when we went through a cold spell and wound up burning 4,317 kWh. At the time, however, our bill was “only” $329.06, or $0.076/kWh. This past month, we used 25% less electricity than during February (3,223 kWh) yet our bill was roughly 15% higher ($376.73). This disparity was driven by a per unit increase of more than 50%, resulting in us paying $0.117/kWh in August. Ouch.

When we moved into this house, one of my goals was to reduce our electrical usage relative to that of the previous owners. Unfortunately, I didn’t have their actual usage data. Rather, I knew what their average bill was over the previous 12 months. As I reported earlier this summer, we actually managed to hold even relative to the prior owners in terms of our electric bills, even in the face of rising energy prices. While this almost certainly translates into lower overall electrical usage, I’m always looking for ways to do better.

One of our major limitations when it comes to reducing our electrical usage is the size of our family. We have four young boys, which translates into lots of laundry, lots of dishes, and lots of bathing. All of these things use hot water, which comes straight out of our electric water heater. Moreover, my wife is a stay-at-home mom. Thus, we can’t really back off on our heating or A/C during the day without creating an uncomfortable environment. Finally, we’re planning on a housing addition. While it’s not going to be a huge addition (roughly 300 square feet), it certainly won’t help when it comes to reduce our heating and cooling costs.

On the upside, we’re planning on replacing our current washer and dryer with high efficiency front-loaders when our new laundry room is done. We’re also working on teaching the boys to be more efficient when it comes to bathing — as it stands, they often get lost in their thoughts in the shower and we have to prompt them to finish up and get out. Hopefully our plan for instituting shower timers will work out. I’m also planning on replacing their shower head with a low-flow version. These changes will actually be doubly-beneficial, as they’ll not only reduce the amount of work that our hot water heater has to do, but they’ll also reduce our overall water usage.

In the long run, we’ll probably end up changing out our heating and air for a more efficient system, as that’s our largest energy drain. That, however, is a relatively large expense, so we’ll need to make sure that it makes sense before we take the plunge.

Published on September 11th, 2007
Modified on July 6th, 2008 - 33 Comments
Filed under: Energy, House & Home

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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33 Responses to “High Electric Bills and the Battle Against Increasing Energy Costs”

  1. 1
    Blaine Moore Says:

    Nickel,

    A friend of mine, Chuck Hazzard, has a keen interest in going green. He is supporting a project for finding a cost-effective way to install solar energy in people’s homes. It might be something that is worth looking into.

    It will not necessarily save you a ton of money since they base it on your average kwh cost at the time you sign up with them, but the energy costs never go up. That can be handy…

    The company is called The Citizenre Corporation; unfortunately my house is completely shaded to the southern sky so I don’t think they’ll be able to do much for me. Some friends just bought a house that gets a lot of sun light though and they are going to look into it.

  2. 2
    nickel Says:

    Interesting. I’d love to hear from people that have personal experience with Citizenre…

  3. 3
    Chris Says:

    Turn off your water heater. That’ll save electricity and ensure the quickest showers possible!

  4. 4
    David Says:

    Wow, that’s a huge electric bill. Are you heated by electric too, come winter?

  5. 5
    nickel Says:

    David: Yes, fully electric. That’s what caused the spike last February. This also means that our clothes dryer is electric. On the upside, there’s no gas bill to contend with.

  6. 6
    David Says:

    Wow…gas is cheaper, but to change over would be a pain in the…

  7. 7
    nickel Says:

    Changing over would be virtually impossible out where we live… Unless of course I was willing to pay to have the lines run from in town. We don’t have gas service at all in our neck of the woods.

  8. 8
    PiggyBankBlues Says:

    whoa! one of the few, very few, reasons to be thankful for my 900 sq. ft. apartment.

    i would definitely check out solar panels if i lived in the south or southwest. i like all the energy saving tweaks you did to your house.

  9. 9
    David Says:

    What about an external or buried natural gas tank? I know that where we are planning on moving in Feb (Taos) most people have tanks on their property…

  10. 10
    dong Says:

    You can do all you want, but really the only way to make a serious dent in the electric bill is to the cut the AC. I work in the electric industry, and can’t tell you how truly expensive electricity is on the hot summer days. What you as a consumer see is an average cost. The fact is something like one tenth of the total cost of producing electricity comes from only a couple days in the year. The wholesale price of electricty on the hottest summer day is about 20 times what it costs on most days. If you knew what it really cost to run the AC on that hot summer day, I’m sure you’d shut it off and be uncomfortable. Electricty dergulation hasn’t worked very well in the US because there isn’t enough price transparency.

  11. 11
    nickel Says:

    David: That’s possible, but it would cost a ton to convert. We have a 100 pound tank for our gas fireplace, but for our furnace, water heater, and clothes dryer we’d have to have a pretty sizeable tank, and we’d have to replace all of those things in our house. I can’t imagine it being worth the investment. Then again, if/when we replace our heating/cooling a gas furnace is something to consider.

  12. 12
    Mike Says:

    Nickel,

    Some things off the top of my head that we’ve done or are in the process or doing:

    1. We had single pane windows, so we had the windows tinted. It’s similar to car windows, but a higher quality film, and much cheaper than replacing the windows. We had it done last fall, and I can see a difference in the power bills. This would’ve worked for your garage.

    2. Get a Kill-a-watt power meter and check for phantom loads around the house. Don’t want to get the meter? Put your hand on electronics you’re not using and see if it feels warm. I found an unused TV in a guest room that burned power just sitting there. It’s on a power-strip and gets turned off when there’s no guests.

    3. If your house is older, it may not have a radiant barrier in the attic. There are companies that sell radiant barrier paint that allow for a simple upgrade to older houses. Disclaimer: I havn’t done this yet. YMMV, yada yada.

    4. Figure out the efficiency for your AC unit. It may be worth while to replace it. Most power companies offer rebates for new AC units, and the Feds are offering tax credits.

  13. 13
    John Says:

    Hawaii is sneaky, they advertise one of the lowest electric rates in the country – around 8 cents per KwHr, but when you add in all their service fees, etc it works out to about 23 cents.

    My actual electric usage cost is around $5 but after adding fees its now around $45. There is no direct gas service, and it would be costly to change the refrig and washer dryer to gas…

    Its time to get independent of government monopolies but hard to do in a condo.

  14. 14
    Mrs. Micah Says:

    Whenever Mr. Micah and I spend part of+ the day out, we turn down/off the AC. If we’re coming back soon, we just turn it down, but if we’re not coming back until evening we turn it off.

    The might be something to try if you don’t already. When you come back it’s a bit warmer, but so far it’s never been as bad as outside, so it feels good. Then it cools down and feels really good. (but it’s less of a shock than a frigid house on a hot day)

  15. 15
    Brenda Says:

    My dad has been a laundryman and drycleaner for 40 years and I’ve learned from him to use a frontloader, wash in cold water, and hang clothes up to dry if your climate will allow it. You save energy and the clothes last much longer. Of course, that means less business for him if everyone does it!

  16. 16
    Eric Says:

    We’ve cut our electric bill just about in half (from 350 to 180 approximately). We used to keep it very cold in the house (around 72 in the summertime) and we’ve raised the temp to 80 now. At the same time, we unplugged lots of electronics around the house, cut our TV watching time to less than an hour a day, and replaced the incandescents with CFLs. We did the math on the CFLs and they only account for a little bit. The big change was raising the temp and switching to fans. Do you know the SEER rating on your AC unit?

  17. 17
    nickel Says:

    Eric: No, I don’t know the SEER rating of our A/C off the top of my head, but I’m sure that it’s the major culprit. After all, August was an especially hot month, and our bill spiked during that month. Likewise, February was especially cold and it spiked then, too. We’ve gradually raised the temp from where the previous owners kept it (they were at 72, while we keep it at 76-77) but we haven’t been able to get up into the 80 degree range without it getting too uncomfortable. A big part of the problem is the humidity around here – the dehumidification that comes from the A/C is nearly as important as the cool air for keeping the house comfortable.

  18. 18
    Eric Says:

    If you’ve got below a 13 SEER, I’d consider upgrading. 13 is the federal minimum now. They have up to 19 but I think those are pretty pricey.

    One other thing we have, that came with the house, are solar screens. I don’t know how much a difference they make in energy usage, but they are supposed to block out a lot of the heat if you are getting direct sunlight.

    I hear you on humidity. I’d probably keep it at 76 if we had higher humidity here. 80 is the absolute top here (without humidity), with 78 being much more easier to tolerate.

  19. 19
    nickel Says:

    Eric, my best guess is that it’s 10 SEER, though I’d have to check to be sure. So yeah, this is why we’re considering the change. Since we’re adding on, we may have to anyway (the current plan is to leave the old system in place and see how it handles a 10% increase in space).

  20. 20
    Ebony Says:

    Have you insulated your water heater? That can help some.

    I was going to suggest that you convert over to an on-demand hot water system – that way you’re not storing and constantly heating hot water. They do make electric models.

    A whole house fan in the attic can help keep the house cooler, then you don’t have to run the A/C so much.

  21. 21
    nickel Says:

    While whole house fans are great in some areas, they aren’t particularly useful where we live due to the high humidity.

    As for the water heater… No, I haven’t insulated it at our new house (though we did at our previous house). This is especially helpful in the winter when the crawl space (where the water heater is located) can get pretty chilly.

  22. 22
    Livingalmostlarge Says:

    I never leave my A/C on below 80. I just use it to remove humidity for the same reason as you. Electric is what runs my house.

    However to circumvent this I just invested $4k in a gas fireplace insert trying to save myself money on heating during the winter. I’ll let you know how it goes.

    Since I’m in a townhouse my neighbor who didn’t have gas line accesibility went with an electric heat pump. We’ll see who saves more money us or them, especially since we both paid $4k to install two different solutions on 2 identical units.

  23. 23
    ntguru Says:

    Don’t feel too bad — our bill has been in the same $350 range as well. We’re further north and about the same size house. Our killer is that most of our ceilings are 12-16ft so while square footage is around 3,000, I bet our volume (ft^3) is closer to an average 4,500 ft^2 home. Our stat is normally set to 73-74 during the day and down to 70 at night.

  24. 24
    Chris Says:

    We bought a programmable thermostat, which immediately lowered our bill. We keep the house at 85 all day, then lower it to 80-82 while we are at home and use fans to circulate the air. We do some other simple things like use seasonal sheets – a heavy set for winter and a thin set for summer. During the day we make sure all our window blinds are closed tight, keeping the house dark and cool during the day without needing the AC.

    Some good habits we taught ourselves was to keep all the lights off in the house unless we are in the room. Sometimes we just leave a tiny lamp on if we are going to pass through a main room frequently – rather than keep on the main lights.

  25. 25
    Chris Says:

    Oh, and we never turn the lights on when we are home during the day – except one room that doesn’t get much sun. We just adjust the shades to let in the natural light.

  26. 26
    Rachel Says:

    We had solar vents installed on our roof this July, and I can see a difference in my bill. Last July we paid $227.81 for electric and this year we paid $123.23. And for August 2006 $157.63, 2007 $132.39. Not only does that help our upstairs get a little cooler but it helps to keep our cost down too.

    **We are located in MI and our house was built in 2005

  27. 27
    George Says:

    Hi Nickel,with regard to CitizenRe I can only say that I joined this company in January and cancelled when it became very clear that the company was not going to meet timeline objectives for producting and installing solar panels by August 2007. I wish the company well and may consider signing up again for the free solar panel installation when they get things on track.

    All of what CitizenRe is trying to do may be replaced in a couple of years by a new technology breakthrough I heard about on a local TV station last week. Solar cells will be printed on a special paper on our home computers. According to the news spot, this would allow all of us to create our own solar panels on demand for a fraction of the cost of installing solar panels.

  28. 28
    Akhtar Says:

    here’s some things that may help keep your energy costs down

    double glazing windows – prevents heat from escaping through the windows

    loft insulation- keeps heat in the house

    energy efficient boiler – go outside the house near the flue and ask the wife to turn on the hot water tap (the boiler will kick in) can you smell the gas? if so get a condensing boiler (90% efficient)

    freezer – when putting foodstufs in the freezer/fridge try to use clear plastic foodbags as much as possible, your fridge/freezer works overtime trying to maintain a adequate temp, having glass bottle/redundant packaging does’nt help

  29. 29
    Matt Says:

    Try getting your electric from PG&E in CA. 2000kwh costs me $600. My average bill is around $500, and I live in a 2300sf house. It’s crazy.

  30. 30
    tyler parsons Says:

    nickel,

    My uncle sells Logix insulated concrete forms. essentially styrofoam giant legos that you connect together – about 3 inches of styrofoam with plastic braces that hold them together and you fill with concrete. The walls have are something like R50 insulated. The initial cost is much higher, but you would be amazed at energy savings.

    I have read articles of energy companies filing complaints against costumers accusing them of stealing energy and cheating the company, only to find that they are in the wrong. I helped deliver them for several years and I’m totally sold. Construction is incredibly quick and easy.

    another money saving tip. On a hot day, take the kids to the pool or to a public place like the library, a museum, or a movie during peak hours and use their energy, meanwhile turning your energy down. They usually keep it in the low 70s.

  31. 31
    Carma Says:

    The Energy Information Administration found Americans use 60% more
    electricity today than they did 20 years ago. Some examples of the
    amount of energy you use and how much it costs you are in the
    following examples:

    iPod Docking Station – Uses three watts charging and five when it’s
    playing music. This costs you a penny a day!

    Big Screen TV – When the TV is on it can use 210 watts, when off 64.
    It costs you 11 cents a day just having the TV plugged in at your
    house!

    Game Systems – Can use 2 watts when the system is off but uses 145
    when it’s on. This costs you about one penny an hour!

    Digital Video Recorder – This can pull 83 watts all day long. That
    means just having one of these plugged in the wall in your home can
    cost you 15 cents a day! *

    *From Edmonds Scientific site – watts dectector

  32. 32
    Simon Maders Says:

    Have you thought about getting timers fitted on your electrical power strips, we have them at work and out off office hours they shut down electrical suppy.

  33. 33
    P. Hall Says:

    I live in a 1700 sq ft house in the Florida panhandle. My last two electric bills have been about $370. My husband recently put in another air intake vent for the AC and made the vents bigger on the original one. Does anyone know if that could contribute to a higher electric bill.

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