Most of us just pay our electricity bill without really looking at it, discarding it without a second glance. For those of us who are stringent about our bills, we probably think we already know how to read our bill. Because of this, it’s rare we think twice about it. But in reality, we may actually be making several mistakes as we go through the document. Sometimes, your multi-unit hydro bill might be divided wrong, or an extra zero may find its way into a proposed increase and in the worst case, it might not be a mistake. Here are some tips on how to make sure you understand what you’re looking at when your bill comes.
Understand what monthly billing plan you’re on
Are you being charged for your monthly usage or are you on a budget billing plan? If you’re being charged monthly for your usage, you’ll receive a bill for the number of hours your household used electricity that month at the prevailing rate. Things work a little differently on a monthly budget billing plan. For this, your utility takes the number of kilowatt hours you consumed last year and creates a monthly average for you to pay. This allows your utility to spread out the total costs you pay for power over the course of the entire year. It is important to understand this part of your bill. You’ll be able to comprehend how and why you are being charged each amount given the type of billing plan.
Understand your billing system
Depending on where you live in the country, your electricity bill can come bundled in amongst a lot of other standard and municipal bills. So, make sure you know what you’re looking at, don’t mix up the utility you are being charged for. Electricity is measured in kilowatt hours (kWh). Your water bill is measured in gallons or litres and gas usage is measured in BTUs (these all depend on where you are situated). These units of measurement should serve as an easy indicator of where your electricity bill ends, and where your hydro bill begins.
Learn what charges make up your final electricity bill
Your payment is not only for the electricity you consume. In addition, it is for aiding the utility, maintaining the grid and paying the salaries of its workers. So, look for charges related to supply, delivery, taxes and fees on your bills. Doing this will help make sure you understand exactly how much you’re paying for each line item.
Know how many hours of electricity you use per month
Ensure you’re correctly calculating the amount of power you use in a given month. Many bills will break out your daily use, or simply show you how your monthly usage changes over the course of the year. Make sure that you’re calculating and assessing your usage on the same periodicity that you’re billed on. For most people, this means checking in monthly to make sure everything is up to speed.
There you have it! Those are some of our tips on how to understand your electricity bill. If you’re looking for more tips, check out the rest of our blog. There are great tips on how to understand your loans, how to make some extra money, what mortgage might be right for you, or anything in between.