13 Simple Ways to Lower Your Electric Bill

By Kelli B. Grant


FORGOING THE FAMILY road trip will spare you from getting dinged by sky-high gas prices this summer, but staying at home in the air-conditioned comfort of your living room may not result in the cost savings you expected.

That's because the same commodity cravings that are driving up oil prices have also jacked up the costs of coal and natural gas — prime fuels needed to generate electricity. Increased demand from China and India, coupled with weather-driven supply setbacks, have nearly doubled market prices for both coal and natural gas this year. The two, along with oil, have become a triple-threat for the electric industry. Where electricity producers once may have switched from one fuel to another to cut costs, now every option is pricey.

As a result, electricity prices are expected to increase 2.7% this year, according to the Energy Information Administration's Short-Term Energy and Summer Fuels Outlook. Those estimates, however, could easily prove to be conservative. Regions that rely on coal, natural gas or petroleum to generate electricity — by EIA estimates, about 70% of power plants in the United States — could see more substantial price increases, says Steve Rosenstock, manager of energy solutions for the Edison Electric Institute, an industry group.

"The other big unknown is the weather," adds Neil Gamson, an economist with the agency. EIA's estimates are based on the National Oceanic and Atmospheric Administration's expectations that it will be a mild summer, with fewer scorching days than last year. But an unexpected heat wave — and a subsequent spike in demand for electricity — could quickly incite price increases. So could worse-than-expected summer hurricanes, by putting a temporary halt to natural gas production.

Heat wave or no, here are some simple strategies to keep your summer energy bills from overheating.

Fine-Tune Your Equipment

Arrange an HVAC inspection. Hire a certified technician to check that your heating, ventilation and air-conditioning system is operating at peak efficiency. A worn-out filter or unsealed duct could reduce the unit's energy efficiency by as much as 20%. Make an appointment before the hot weather hits, urges Ronnie Kweller, a spokeswoman for the Alliance to Save Energy. An inspection will usually set you back $50 to $100, but that could easily be offset by the energy savings you'll reap over time. Plus, if you schedule your appointment before contractors are swamped with repair requests, you could possibly snag a 10% early bird discount.

Shop for size. If you're in the market for a new room air conditioner, use Energy Star1 guidelines to assess how powerful a unit you need. A too-powerful unit will cost more in both initial purchase price and ongoing energy bills, says Kweller.

Keep it clean. Whether you have central air or an individual window or wall unit, be sure to clean the air filters every month. Dirt and dust hinder air flow, reducing efficiency.

Program your thermostat. Programming your thermostat to give your air conditioner a break for the eight hours you're at work — even by just a degree or two — could cut your cooling bill by up to 10%, says Jennifer Thorne Amann, a senior associate at the American Council for an Energy-Efficient Economy.

Seek out incentives on appliances. Energy Star-certified products are not only guaranteed to be more efficient than their conventional counterparts, but they can also cost less. Many utility companies and local governments offer rebates on such purchases. Austin Energy in Texas, for example, offers $50 back on window air conditioners with an energy-efficiency ratio of at least 10.7. That's a 22% discount on a $230 Kenmore 7,800 BTU single room air conditioner.

Hunt Down Heat Sources

Seal up your home. Pricey cooled air can leak through cracks along window and door frames. Invest in some caulk and weather-stripping to plug up these drafts as you notice them. You could spend as little as $10 on the project, which would more than pay for itself over the course of the summer, says Kweller.

Change your light bulbs. If you haven't swapped your incandescent bulbs for compact fluorescents yet, get to it, says Amann. Not only do CFLs use 75% less energy than conventional bulbs, but they also generate 70% less heat.

Close your blinds. It's a simple concept: Rooms get hotter without shades or curtains to block the sunlight.

Use fans. A breeze makes the room feel a few degrees cooler. Just be sure to turn it off when you leave. "Fans cool people, not rooms," says Kweller.

Unplug. Gadgets like your cellphone charger and microwave suck energy — and generate heat — as long as they're attached to a power source, says Amann. Plug them into a power strip that can be turned off when not in use.

Assess Utility Suppliers

Check alternate suppliers. If you live in a state where the electric industry is deregulated, shop around for a different energy provider, says Rosenstock. Savings can be as substantial as 20% a month, and many of these companies use renewable energy so they are much less dependent on the whims of oil, coal and natural gas prices. Most will also fix billing rates for a year or more — a definite bonus as energy prices creep up. Visit your state's Public Service Commission to determine your options. Just be aware that most providers require you to commit to at least a year and charge a hefty fee if you duck out early, advises Rosenstock.

Consider time-of-use plans. A growing number of electric companies are offering so-called time-of-use plans, which offer lower rates for energy consumption during off-peak hours (usually from midevening to early morning). The catch? You'll often pay more for peak-hours use, so consider your schedule before signing up. Arizona-based SRP, for example, regularly charges 9.65 cents per kilowatt hour. On the time-of-use plan, it charges 18.13 cents for on-peak hours (1 p.m. to 8 p.m.) and 5.18 cents during the rest of the day.

Fix your bill. Ask your utility about fixed-bill plans, which charge the same amount every month for a set period, regardless of your electricity use. You'll pay a premium rate per kilowatt hour to hedge against price increases and seasonal spikes, so make sure to crunch the numbers against your total 2007 energy bills to see if you'll really save, advises Kweller. Also, keep in mind that these plans periodically reconcile, which can leave you with a big bill if you've used more than the supplier anticipated.

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