Summer’s Effect on a Household’s Electricity Bill

Across the country, summer can bring sun, fun, vacations, and…higher electricity bills.

To combat the heat and humidity of summer, households across the country crank up the A/C, increasing the load an average home pulls from the power grid. But even beyond the extra electricity homes use by turning the knob on the air conditioner all the way up, summer brings other changes to energy use. Kids from kindergarten to college come home and use more electronics (and A/C!) during the long summer days. And all of this extra use is on top of what’s already needed to keep the refrigerator running, Netflix streaming, and lights on!

Greater residential electricity consumption drives a higher demand for electricity across the country. This ultimately means power plants need more fuel to generate electricity, which leads to higher fuel prices, particularly when supply is constrained. Moreover, the greater overall demand for electricity means power companies face higher pressure to make sure the grid is performing well so that electrons are reliably flowing to homes.

These higher costs tend to be passed from electricity providers to customers. The U.S. Department of Energy reported that average residential customers faced energy costs that were 0.74 cents/kWh more from May to September than from October to April in 2013 and 2014, more than a 6% increase. Those numbers are a national average and therefore do not easily capture potentially more dramatic regional variation.

Genability’s rate database reflects this seasonal differential too. Of the active, default residential tariffs in the database, 100 of them across 56 utilities distinguish rates by season. Using Genability’s data and calculator/API, we can look at a hypothetical residential customer in Phoenix, AZ, who gets electricity from Arizona Public Service. If this household uses 1,000 kWh of electricity for the first month of last winter (12/21/2014 – 1/21/2015) and the first month of this summer (6/21/2015-7/21/2015), they’ll pay $33.45 (almost 30%) more on the summer bill. And that’s assuming the same amount of electricity is used in both months! If the household uses even just 10% more energy in the summer to combat the >100 degree temperatures, they’ll have paid $51.14 (42.5%) more on the summer bill!

But all hope is not lost! A household can save money by changing some habits and hardware. Making sure that the A/C is on only when needed, which a programmable thermostat can automate, helps limit the load required by running the A/C all day, every day. Avoiding things that heat a home can reduce the need for fans and A/C too. This can be done by limiting the number of hot meals cooked (which raises the temperature of a kitchen) and making sure doors and windows are properly sealed (to keep the cool air in and hot air out), for example. More tips on reducing summer electricity use are here, and see Genability’s tools for info on some utilities’ rate plans and rebates that are intended to reduce summer bills.

Altogether, the average residential customer faces higher electricity bills in the summer, regardless of whether someone turns up the A/C or not. When factoring in the greater need for electricity many homes face in the summer, customers can quickly feel the squeeze of much higher electricity bills — but a number of changes primarily to habits and hardware can be made to limit this squeeze.

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