Understanding your electricity bill

Understanding Your Electricity Usage and billing

The distribution of generated electricity resources in the power sector, can be effected in either of two basic broad ways. It’s either consumers are getting power from the public utilities companies- which are mostly government run, or from the different private energy companies that exists.

However, irrespective of the electricity provider and other factors involved, there are always three recognized elements in the electricity industry. First and foremost, are the power generation plants where the resource is actively produced. Without the various adopted electricity generating means, there would be no electricity to distribute, and hence no need for the other elements.

On another hand, the distribution mediums and their characteristic implementation frameworks, talks about the different phases in which electricity is made to pass (through wires and poles), before it gets to the utilizing end. This is a big aspect of power generation and use, hence the reason why it is an indispensable element in the industry.

Last of the recognized elements, are the retailer outlets who monitor and sell electricity to individual households and businesses. The inclusion of this element is what has allowed for market choice and flexibility for consumers, and hence the rate of competition- which is ideal for sector advancement and boost in innovative service tendencies. That is why this aspect of electricity generation and use, is only prominent in the private- since the public utility sector tries to carry out all three aspects of the system.

Note that although electricity distribution had always been a public utilities concern, the trends seems to have changed significantly. Nowadays, electricity distribution to consumers is becoming more of a private sector business, with many initial public electricity firms currently being privatized. Consequently, there are a number of contrasts between the way private utilities service operations are implemented, and these may be of advantage to the electricity end users.

However, even as much as the public and private electricity providing sectors would not operate the same way, there are still common inadequacies that would prompt consumers to seek alternatives. The inadequacies have been found to stem largely from dissatisfaction in unreasonable utility pricing in public utility providers, to transmission and distribution issues in the private arm. All of these are the reasons why consumers have individually resorted to alternatives such as solar energy generation, and use of electricity storage batteries.

What to expect in metering

Every home using a metering unit would usually use either of the older analog version, or the modern digital meter. Sometimes, this depends on the area where the building is located, or by implications of the decisions made by the previous occupants of the house.

However, the basic difference between the two types of meter, is just the way they would individually log electricity usage data. Although the basic digital meter looks more efficient than the analog, it doesn’t always provide the desired information that could help the user monitor their energy usage, per time.

This is why the HEMS energy metering solution is being considered appropriate, and a most valid option for homes and businesses. The vantage qualities of the device include the fact that it is able to record individual appliance’s energy consumption, as well as average energy demands and other useful data that could help the user in effectively monitoring and controlling their energy use. All of the data log recorded by HEMS, is saved off in cloud and accessible for future references.

How to determine energy consumption

If you want to achieve an effective energy management and optimization pattern, then it is most likely true that you’re also concerned about cost minimization for the short and long run. In order to achieve these objectives, it is important for users to understand the concept of the kilowatt and kilowatt-hour, as well as how this relates to their everyday energy consumption.

Now, while the amount of energy used is measured in kilowatt-hour (kWh), kilowatt (kW) on another hand refers to the actual rate of electricity used by a consumer in a specific period of time- which is their demand.

In order to calculate the amount of energy consumed in a day- which is in kW, simply sum up the amount of energy (in kWh), used by all your appliances. For instances, if 15 light bulbs used up 500W per hour, the total amount of energy used in 24 hours would be equal to 12kWs.

Understanding how energy consumption is being charged (tariff)

One of the most undesirable approaches to energy consumption, is to be ignorant of how the billing is being arrived at. The disadvantage in this, is that it makes the user completely unaware of how to implement a control scheme for their energy use.

While there are different possible tariffs by which you can be billed, there are also stipulated charges that applies to all. These charges are known as the supply bills, and you’ll have to pay the daily fixed sums, for as long as you’re connected to the electricity supplying infrastructures.

However, the basic tariff types are as listed thus:

The flat rate tariff

In this type of tariff, you pay fixed sums for fixed amount of energy. This may be on daily basis, and it doesn’t matter what time you decide to make use of the supply.

Flat rate is the simplest type of energy use tariff, that currently exist.

Flexible rate tariff (based on time of use)

The flexible rate tariff charges differently, and based on certain influencing conditions. It allows electricity users pay differently at specific periods of the day, hence allowing them decide on what time of the day to make use of electricity and when not to (since payment are high during the peak hours, and lower at other times).

Implementing this type of payment schedule, requires a metering device that would be able to perform some level of automation- based on user’s pre-configuration.

Block rate (or step) tariff

This tariff charges users based on their consumption rates for each day. Hence, as energy consumption increases, the price per kilowatt of energy also increases. The rates are fixed in formats called blocks, such that when a certain block is reached, a price change takes effect.

Demand charges

Demand charges are sometimes made as payments for the stress imposed on the general grid, when the user draws energy at a certain rate. For instance, you may be billed each time you make use of a blender, an air conditioner, a washing machine etcetera, all at the same time.

Although this bill was initially imposed on businesses, it has extended to households too. Demand charge depends on both of the kilowatt expended, as well the time duration for which it lasted. Once the amounts have been calculated, they are added unto the next bill payment that would be made by the user.

The HEMS framework is holistic in its approach. The end objective is to ensure that the user is able to minimize costs and save more, irrespective of their tariff type. This is why the HEMS unit has been described as the best innovation yet available for these purposes.