How to Pay Less for Electricity This Summer


Chilling out at home might inflate your electricity bill even more this summer, as the National Weather Service forecasts increased probabilities of above-normal temperatures across much of the country. But you can save money in two ways: use electricity more efficiently, and pay at a lower rate.

Retail sales of electricity typically peak around July and August, according to records from the Energy Information Administration. For example, households bought almost 360,000 megawatt-hours of electricity last July, or 32% more than in April 2015.

Average electric bills vary drastically among different states. In 2014, the national average was $114.09 per month, according to the EIA’s latest report. But bills were as high as $187.59 in Hawaii or as low as $77.79 in New Mexico.

Regardless of where you live, here are some tips to help you save:

• Shop around for the cheapest rate. If you live in Washington, D.C., or one of these 15 states — California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Texas — congratulations, you have an option in the rate you pay. That’s because the retail electricity providers there are allowed to compete with utilities to serve residential customers. At least 17.2 million households, or 13% of the total electric customers, have switched from utilities to competitive retail suppliers, according to the EIA.

But choosing a supplier and the right electricity plan can be a headache. Suppliers offer an overwhelming array of plans that differ in rates, fees, length and bundled goods and services, from Nest thermostats and smart lighting to home warranties and heating and cooling maintenance and repair. It’s almost like shopping for a cellphone carrier, said Cullen Hay, general manager of U.S. energy at Direct Energy, one of the largest retail providers of electricity, natural gas and home services in North America. The rate of each kilowatt hour itself no longer defines the value of a plan, he said.

Consumers should take into consideration their monthly budgets as well as their need for both electricity and related devices. Consumers should also be mindful of the terms of the plans, because the rate will change from the contracted rate — usually fixed — to a monthly variable rate when the plan expires. Among Direct Energy customers, “the saving that’s created by being on a fixed contract is meaningful,” Hay said.

• Take advantage of programs offered by the utilities. Even if you don’t have a choice in the price you pay for electricity, you can still save money by enrolling in various incentive programs. Depending on the utility company, common programs include energy savings credits, which lower your bill if you reduce your electricity usage during peak hours; cooling cycle rewards, which pay you to have your A/C cycled off-and-on for a few hours on hot summer days; and various types of energy assessments, which help homeowners understand their consumption patterns and provide suggestions to increase energy efficiency.

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Source: USA Today | Athena Cao