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Calculating Power Costs

Why your power costs may be more than you bargained for…

If you don’t know your average monthly kilowatt-hour (kWh) usage, you may be paying more on your electric bill than you originally thought you would when you signed up.

The average kWh usage level refers to the typical monthly energy your household consumes. Electric providers commonly charge different monthly rates and fees related to the usage level your household falls into. 500 kWh, 1000 kWh, or 2000 kWh.

Don’t be caught off-guard. The best way to ensure you aren’t overpaying is to start by understanding your household’s usage. Keep your power costs as low as possible by knowing this information when shopping for your electric plan.

Why your usage matters

Energy suppliers often advertise the rates associated with their highest usage level, as those tend to be the lowest prices offered.

However, these companies neglect to mention that the average household rarely consumes enough power in a given month to qualify for these cheap rates, leaving you paying more. 

Some apartments may use far less, while some larger homes may use far more. But given that the average usage is less than the rates advertised at the highest tier of 2000 kWh, many people are left with a higher bill than anticipated.

Here is an example from a real Electricity Facts Label (EFL).  

While this rate is a very good deal for a household using 2000kwh, it is not appealing for those using under 800 kWh monthly (that’s the cutoff level for this particular plan’s $9.95 usage charge).

It’s a natural tendency for providers to advertise their lowest rate, so it’s important that, as a consumer, you are aware of the issue at hand and are armed with the knowledge of what to look for.

Don’t be misled by tricky advertising.

Take the time to do your due diligence, and you will save more on your power costs. There are even options available to consumers to make this whole process simpler.

Using our comparison tools instead of shopping directly with each provider can make selecting an electricity plan fast and easy.

ComparePower lists the average prices at 500, 1000, and 2000 kWh usage, including fees and taxes, so you can see the true rate that will appear on your bill.

Calculate your monthly kWh usage

Kilowatt-hours (kWh), usage levels, low-consumption fees – all the industry jargon is enough to make you want to tear your hair out. You shouldn’t have to be an electrical engineer to know how much you will spend each month on power costs.

Here are a few more statistics to help you calculate your energy consumption:

• A 2-ton central air conditioner uses 1450 kWh per month
• A typical water heater used by a 4-person household consumes 310 kWh per month
• A dishwasher uses 30 kWh per month
• An oven range uses 58 kWh per month
• A microwave uses 16 kWh per month
• A 17-20 cubic foot refrigerator-freezer uses 205 kWh per month
• A washing machine uses 9 kWh per month
• A dryer uses 75 kWh per month
• Lighting for a 4-5 room residence uses 50 kWh per month
• A television set uses 27 kWh per month

(The above statistics are all based on average home use)

Save your hard-earned money

If you have access to some previous bills, use that to help determine which usage level you should be shopping rates at. It can make a difference in the effective rate you end up paying for energy.

We have observed many plans advertised at very competitive 2000 kWh prices end up costing more than 35% higher for users at the 500 kWh usage level.

Be smart – grab those previous electric bills, figure out your average usage, and shop at your average usage level accordingly. This alone could save you hundreds of dollars a year and is quite possibly the most important aspect of shopping for electricity.

Kilowatt-hour Costs FAQs