Facing lean economic times, homeowners need to find ways to cut spending. Evaluating the price electricity companies charge for service can uncover a wealth of savings, both through conservation or through renegotiating rate plans. Consumers who inform themselves about the ways utility companies price electricity and the range of alternatives available will find plenty of opportunities to save money.

Electricity is measured in a standard unit called the kilowatt hour (kWh). A kilowatt hour is simple the amount of electricity needed to provide 1000 watts of power for a one hour period. To find the power requirements of any electric appliance or light, simply multiple the item’s wattage (which should be labeled somewhere on the appliance) by the number of hours used and divide by 1000. So, if you are using a 50 watt light bulb for 168 hours (one week), you will use 8.4 kWh of electricity. To compare your usage to others, the average household in America uses 920 kWh per month.

Utilities price electricity as a cost per kilowatt hour. Cost/kWh varies based upon your area of the country, its overall demand and supply for energy service, and regulatory conditions. The Department of Energy provides information online about average prices for energy by state, if you are interested in finding out more about costs in your service area. Beware that utilities will quote a base price/kWh, but that additional fees and charges may inflate the actual cost. Careful examination of your past utility bills will tell you the actual price/kWh that you are paying.

Understanding the fees that can be added to the price electricity companies charge can be very helpful in reducing your overall spending. Demand charges are assessed based upon the maximum amount of energy you use at any one point during the billing cycle. If you are paying demand charges, you can work to reduce your maximum demand by running appliances sequentially or during cooler times of the day when your air conditioner is not working as hard. In some places, energy companies will offer an incentive for off-peak service by reducing the price/kWh at night, in which case operating energy-hungry appliances at night can also cut costs.

A variety of rate plans are offered that allow utility companies to price electricity in a more flexible, negotiable manner. Many companies use a tiered rate structure when pricing, which charges more per kilowatt hour for usage beyond a given threshold, or series of thresholds. For example, you may pay $.15/kWh for service up to 700 kWh, $.17 from 701-1000 kWh used, and $.20 for all use beyond 1000 kWh. With tiered rating, it pays to be aware of your typical use when agreeing to the contracted thresholds, so that you can negotiate ranges that benefit you based upon average consumption. Another advantage to tiered pricing is that as you implement energy conservation strategies, you will reduce electricity off of the top tier of the rate plan first, meaning that you’ll see significant savings with each reduction in usage.

The best way to reduce electricity spending is always through energy efficiency and conservation, but learning about how companies price electricity in your area can also help keep costs down.

If you decide to switch energy companies see if there is deregulation in your state. Shopping for
electric prices  or info on price electricity visit our website.

Please visit us at http://www.mxenergy.com/ for all your energy needs.

Author Bio: If you decide to switch energy companies see if there is deregulation in your state. Shopping for
electric prices  or info on price electricity visit our website.

Category: Home Management
Keywords: price electricity, utility provider, energy supplier, natural gas, electrical