Electricity isn’t something that most of us can do without. And depending on where you live, the price you pay to have working lights can be quite high. As you watch your electric bill become more and more expensive, you might be wondering how yours compares to everyone else’s. We’ll tell you how high the average electric bill is and explain how you can save money on a daily basis.
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The Average Electric Bill
In 2014, the average residential monthly electric bill was $114.09, according to the Energy Information Administration (EIA). That figure is based on data collected from over 100 million consumers who on average used 911 kilowatt-hours (kWh) per month and paid roughly 12.52 cents per kilowatt-hour. It’s over 3% higher than the cost of the average monthly bill in 2013 ($110.21).
The EIA expects residential electricity prices to be a bit lower in 2016 than they were the previous year. In 2015, the average monthly rate for the U.S. was 12.7 cents/kWh and for 2016, the agency predicts that it’ll be 12.6 cents/kWh, on average. Retail prices of electricity are expected to rise slightly in 2017 to about 12.9 cents/kWh.
Electricity costs, of course, vary widely by location. Although they used less electricity than residents in most other states, consumers in Hawaii paid the most for electric power. In 2014, they had average monthly rates of 37.04 cents/kWh and average monthly bills of $187.59.
Households in Washington state had the cheapest monthly electric rates and paid 8.67 cents/kWh, on average. Those in New Mexico had the smallest electric bills and paid roughly $77.79 per month, on average.
Breaking Down the Average Electric Bill
Multiple factors affect the size of your electric bill. But the two most important things that determine how much you pay are energy consumption and electricity rates.
The more people you have in your household, the more electricity you’ll likely use. So if your cousin or your best friend from college plans to shack up with you for a month, be prepared for a more expensive electric bill. If you can’t decide whether to buy a house or continue renting, consider the fact that you’ll probably see your electric bill go up if you choose to become a homeowner.
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Weather plays a role as well. You might pay the most for power in the summer when rates are higher due to an increased demand for electricity and the higher cost that comes with needing to generate more electricity. If bad weather knocks down power lines or more people need to use electricity to keep themselves warm during a snowstorm, your bill could be higher than normal.
Electricity rates can also change depending on fuel costs and the cost of delivering electricity and keeping power plants running. While the price of supplying electricity can rise and fall from one minute to the next, in most cases, that cost is based on seasonal averages. Rates differ by region and state due to factors like differences in climate, ease of distribution, local price regulations and access to natural gas.
The electricity rates that utility companies charge are measured in kilowatt-hours. A single kilowatt-hour provides enough power to keep a 100-watt light bulb shining for 10 hours. That’s the equivalent of using a computer for five to 10 hours and watching 10 hours of TV.
How to Lower Your Monthly Bill
If you’re sick of spending a large chunk of your income on electricity, you can do something about it. It’s a good idea to keep track of your electric bills so you can see how your prices vary over time, particularly if your rates aren’t fixed. If a competitor offers better rates, you might want to consider switching over.
If your utility company charges different rates at different times of the day, that’s something that you’ll need to be aware of. For example, electricity rates tend to be higher earlier in the evening and in the afternoon when the demand for energy tends to be higher. Using less electricity during those hours might reduce your bill significantly.
Believe it or not, your devices can use up electricity as long as they’re plugged in, even if they’re turned off. Certain appliances and electronics, like computers, are known to suck up more energy than others when they’re on standby mode.
Plugging devices into surge protectors that you turn off can make a big difference. So can washing clothes in cold water, turning down your thermostat and buying energy efficient bulbs and appliances. There are even apps like MyEarth that make it easy to monitor your energy consumption.
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Based on the numbers, we can predict that average electricity rates will rise in the near future for households across the country. While the prices that your electricity provider charges might be out of your control, you can reduce the size of your electric bill by making a conscious effort to unplug what you’re not using and picking up other habits that save energy.
And if saving money is at the forefront of your mind, you might also consider working with a financial advisor. While it might seem counterproductive to pay someone to save money, a financial advisor can help you with tax planning, income planning and retirement planning to make sure you’re making the best financial decisions along the way. The SmartAsset matching tool can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and your goals. Then the program will narrow down your options to up to three financial advisors who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.
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