Understanding Your Electricity Bill

Rates For Residential Electric Service Have Two Parts:

  1. Customer Charge: This charge covers a portion of the electric company’s fixed costs that it incurs to serve each residential customer. The costs included in this charge are customer specific charges such as meter reading costs, billing costs and costs to place and maintain each individual residential customer on the electric distribution system. This charge appears monthly on a customer’s bill regardless of usage.
  2. Commodity Charge: This charge covers all other costs to operate the business. For example, salaries, a return on investment, coal and natural gas for generating electricity and any other cost for running the business. The total amount of this charge varies based upon the amount of electricity used by the residential customer.

All electric utilities regulated by the Missouri PSC have higher rates during the summer season. Summer rates are higher due to the higher cost of electricity generated during times of peak usage.

Tips For Reducing Your Electric Cooling Bill

  • For cooling, set the thermostat at 78 degrees Fahrenheit during the day and turn it up or off when you are away or on vacation.
  • Install a clock thermostat for your heating/AC system that turns the AC setting up automatically when you are away and brings the temperature back to a comfortable level before you return or get up.
  • Close draperies to keep the sunshine out on bright days. Consider using insulated draperies and shades. Open windows at night when temperatures drop into the 60s.
  • Insulate to keep the heat out of your living space. The attic is one of the most important places to insulate. The insulation's R-value is the measure of how well insulation keeps warm air from escaping through it. The higher the number, the greater the insulating value.
  • Stop air leaks and cut air drafts. Gaps and holes where plumbing pipes and wires enter the home and around exhaust fans and vents as they exit the home should be caulked and stuffed with insulation. If you can see daylight or feel a draft through a crack under or over a door, you may want to consider weather stripping.
  • Plant shade trees on the south and west sides of your home, but not directly under electric wires.
  • Invest in a more efficient air conditioning system. Air conditioners with a higher SEER rating are more efficient and less costly to operate.
  • If you have a fireplace, keep the damper closed. Glass doors on the fireplace can help stop air leakage.

Purchase Energy Efficient Appliances For Your Home

When you are shopping for new electric appliances, look for the EnergyGuide label with information on operating costs and energy efficiency. The information displayed on the label should include:

  • Estimated yearly energy cost;
  • A range of estimated yearly energy costs of competing models in the same product category;
  • A statement that energy costs will vary with local rates and individual use patterns;
  • A table showing the energy cost of the appliance based on a range of utility rates and, when applicable, on consumer use patterns.

Ask your salesperson to show you how you can use this EnergyGuide label to compute the payback time for energy-efficient appliances. You must know the price you pay per kilowatt hour (kWh) of electricity. Do this by dividing the total amount of your bill by the total amount of kWhs used.