Installment 5 of 6
Next to last installment. Actions 23 -26 deal with cutting utility costs.
- Shop for the Best Deal on Utilities – did you know that 28 states allow you to select an electric and/or natural gas provider? (Click here to check whether your state offers such a program.) If so, spending a few minutes several times a year could cut your utility bill by hundreds of dollars. There are two components to a utility bill: the supplier portion – the actual gas or electrical power consumed – and the transmission or distribution charge. The distribution portion is billed by your local utility and the price set by state regulators. However, you may be able to select a supplier with lower prices. Generally, each provider offers a guaranteed rate for a given term: 3 months, 6 months, a year, or more. The shorter the term, the better the price, but that means shopping for rates – probably switching suppliers – several times a year.
To give you an idea about how it works, here’s an example from our PECO electric bill (Philadelphia area – kWh = kilowatt hour):
| Annual Electricity Consumption: | 12,000 kWh |
| ‘Default’ Rate from PECO if no supplier chosen: | 7.467 cents per kWh |
| Our supplier’s rate for a 3 month contract: | 4.150 cents per kWh |
| Estimated annual savings: | $398.04 !!! |
Note this is just the ‘commodity’ portion of the bill. PECO charges an additional $8.43 per month plus 6.795 cents per kWh for distribution charges. Ouch.
One caveat: The 3 month terms are something of a ‘teaser’ rate. Once the term ends, the rates could really shoot up, probably even higher than the utility’s default rate. Be vigilant about renewing with another supplier when your contract ends. You could choose a 6 or 12 month contract but at a higher cost. On the other hand, even a penny saving per kWh would result in a $120 annual savings for 12,000 kWh consumed.
- Check with your local utility about energy-saving incentive programs — These could include:
- A home energy audit free or at a reduced cost
- Rebates for purchasing energy-efficient appliances, furnaces and air conditioners
- Discounts or rebates for programmable and smart thermostats (see #25 below) Here’s an example of ConEd’s (New York metro) program.
- Recycling of older appliances – PECO, in fact, will haul away your old refrigerator for free and pay you $40!
- Install a programmable or smart thermostat – depending upon which study, programmable and smart thermostats can reduce heating/cooling costs by 10 – 20%. Note: while smart thermostats cost up to ten times what conventional, programmable thermostats cost, they do not necessarily provide any greater energy savings. Furthermore, there are some security concerns about Internet of Things (IoT), of which, smart thermostats play a part.
- Swap out heavily-used incandescent light bulbs for LED bulbs – the cost of LED light bulbs have dropped so far and the energy savings is so great, you should be replacing all the frequently-used incandescent bulbs in your home. NOW! Don’t even wait for the existing bulbs to burn out before replacing. Do you need more facts to convince you? Review FW&W posts Dawning New Light – LED Light Bulbs Can Brighten Your Finance Part 1 and Part2 as well as the LED Bulb Calculator.
Congratulations, dear readers. You have just about made it through longest month of the year! But I still owe you five more Essential, Frugal and Wise actions. Sorry about that. The last installment will be posted in a day or two.
Cheers, Paul
© 2017 Paul J Reimold