Why are our energy bills clear as mud?

While the world of energy doesn’t produce a lot of unanimous opinions. One unanimous opinion might be that energy costs have gone up and that seems likely to continue.

At a time when inflation is putting pressure on families around the world, those families make choices on how to save money at the grocery with maybe more potatoes and less steak for example as they can physically see and feel the cost of those choices.

But our home energy bills are different, especially electricity.

While there are rare exceptions most electricity bills will have at least 5 line items from energy to transmission to distribution to riders and pool references.

But in the vast majority of cases, only one of those lines will actually show the math that produces the cost and that’s energy, as in 1200 kWh’s @ .12 cents per kWh. The rest of the lines are left to the imagination.

Can you imagine if every time you went to the grocery store they would itemize the pricing of only some of your purchases. 5 apples @ 50 cents an apple and your other vegetable just summarize as 27 dollars and 85 cents. You would wander around the store thinking I think that’s expensive and last time we had it our bill was higher I think.

What’s worse is during this great challenge of decarbonization and electrification there will be historical amounts of money spent on that grid infrastructure needed to support it. And yes that will add to the cost of that mystery basket of prices on your bill. But a big part of that money spent is going to be due to the simple fact that a lot of our infrastructure was designed to be able to handle peak power in your neighborhood. The power lines, the transformers and all of the protection and controls were designed for that peak load that was determined by engineers. Now we are going to increase those peaks which impact that grid cost.

But just like your energy bill, the best way to mitigate that cost is actually behaviour.

For example, most of the people I talk to that run businesses or own homes that are considering solar or lighting upgrades or even more efficient appliances are very intelligent people. They make statements like they have looked at their energy costs and they think if they do X or Y they can save this amount of money. As the discussion evolves it almost goes to the same place as we discuss their plans. I say “it seems like your math only includes the energy cost on your bill, the 12 cents per kWh let’s say, is that correct?” And they look at me with a look of confusion and say “yes, what else would we include?” As I start to break down the per kWh charges for example on their bill or the peak charges on another bill (usually a business). They always say the same thing. Why don’t they show the math, I thought these were charges I couldn’t impact.

The fact is understanding these charges really matters. Every family has a line where they will do things differently from leaving fewer lights on to make sure their dishwasher is full to hang drying more clothes or even making technology investments like LED lighting, Solar, high-efficiency appliances etc.

In Alberta, a group of companies operating as franchises under the Utilitynet company have this crazy policy where they show the math, line by line

It’s a low bar, but making choices with your finances starts with understanding them.