**My Latest Electricity Bill…**

Well the time has come where we are getting closer to paying the true cost of power. Despite my confusion in my recent bill, in general I am one of those crazy people who believes we should be paying a higher cost for our power. A cost that represents the true cost of electricity for one. So despite peoples attempt of making this into a political issue I will try and make sense of it.

I find that if I understand an issue more then my resistance to the change is lowered. And if I understand what my options are then I will be more willing to change my behaviour. My end goal is to pay less for electricity while learning how I can decrease my usage.

Last months energy bill from Ottawa Hydro spiked out at a whopping $339.57 from July to September. This is a big jump almost doubling our usual bill ($176 to $339 = $163). And for a household of 2 people this is getting a little ridiculous. For a tree hugging techie environmentalist this is also confusing. So of course it is worth checking into.

Maybe there is a leak in our power lines and we are electrifying our grass blades. I thought our lush lawn was due to the compost and ample rain this summer.

Even though our bill almost doubled (92% increase) our usage did not double. It went from 2046 kHh (Killawatt Hours) to 2438. This is a change of 392 kWh or 20%. So this raised a question why so high. So of course I call Ottawa Hydro and these were the following reasons for they gave for the increase.

* Everyone’s bill increased due to air conditioning usage

* The HST now applies to Electricity

* We are billed extra outside our base 1200kWh at a higher rate

* Rates increased in May

So lets look at these and see where the issue is. Beyond this point I assume no responsibility for any of the math. I like to keep things simple (lots of rounding). A decimal point here and there can alter things substantially. I highly recommend you verify the math and apply it to your own bill. The idea here is to highlight where the changes are coming from.

Furthermore, with respect to the equations I am not trying to replicate the info on the bill. I am trying to learn what is not on the bill. There are many elements that have affected my bill so many assumptions are made. For instance I use mainly the current rates for comparison. A proper scientific approach would be to calculate a new bill for each of the variables listed above. This may help you, but I am trying to move on quickly from a sore spot on my bill.

**Air Conditioning**

Our air conditioning usage did probably increase, this is a challenge to track as it is automatic. We do however adjust for day and night usage and also for weekend usage. We thought this was going to decrease costs, so perhaps we would have been worse off without this change. I would like to learn more about tracking our use of AC and also heating and Hot water (heating and Hot water are Gas related issues for another blog).

Did we double our air conditioning usage though? If we did that would be reflected in an increase in kWh of which only changed by 20%. At the increased premium above 1200 kWh that would work out to 392 kWh * $.075/kWh = $29. So we are not quite there yet.

Lets assume for a moment that all of our other habits remain the same, a change in air conditioning usage only accounts for $29 increase or 18% increase in cost. Where are the other $134?

**Inclusion of HST in Electricity Bill**

So of course we had the Harmonized Sales Tax (HST) added to the electricity bill. But do remember we already had taxes applied to our electrivity bill. Ottawa Hydro did warn us of this additional tax in the Summer issue of their Currents publication.

So before HST we paid 5% in tax and now we pay %13. So a change of 8%. If we apply this to our total usage of 2438kWh at a rate of $.075 then we see that we now pay an extra $14.63 . So this $14.63 increase is roughly 8.9% of our new bill. So we are still hunting for $119.37

**Changed Electricity rates**

The Ontario Energy Board sets both natural gas and electricity rates in our province. You can check out current and historical rates through their website.

At a glance

Date > Lower Tier (cents)> Tier Threshold (kWh) > Higher Tier (cents)

May 1, 2010 > 6.5 > 600 > 7.5

Nov 1, 2009 > 5.8 > 1000 > 6.7

These rates change throughout in May and November. Check their site for more historical prices. But for now back to our situation. So lets assume we are looking at cost for the upper tier to keep things simple. We increased 392 kWh from 6.5 cents to 7.5 cents and 5.8 to 6.7. That is an increase of $0.0080 per kWh for the first 600kWh and $0.0090 for the second tier.

This represents an extra $9.60 on our first tier and $11.14 on our second tier. In total the increased rates represents approx $20.75 on (12.7%) or our new bill. So we are now hunting for $98.62

**Other Charges**

Well we addressed for the mian part the three main reasons cited by the person on the phone at Ottawa Hydro being increased hydro usage due to Air conditioning (18%), HST (8.9%) and increased rates (12.7%). For the remaining $98.62 (60%) of the bill we look at the extra charges section. This includes Delivery Charges, Regulatory charges and Debt retirement. HST is listed as an extra charge but we already looked at that one.

Delivery Charges increased from $52.62 to $96.03 (83% increase)

Regulatory Charges increased from $7.71 to $17.26 (123% increase)

Debt Retirement charges increased from $7.81 to $16.36 (109% Increase)

So these two fees I don’t quite understand. I look at the back of the bill and they provide “explanations”. There is a severe lack of info such as a basic equation. So I check out the Ottawa Hydro Rates and Conditions site to find some more info.

__Delivery Charges__

Transmission $0.0109/kWh

Hydro Ottawa Delivery $0.0206/kWh

Hydro Ottawa Fixed Charge $10.20/month

Low Voltage Services Charge $0.0002/kWh

Total: $10.20 + $0.0317/kWh

My bill should be: $97.69

My bill is : $96.03

A possible math error on my part (should use a spread sheet next time). Almost forgot that I got charged $10.02 twiche for the two month period

__Regulatory Charges__

Regulatory Charges: $0.0068725/kWh

Admin fee: $0.25

My bill should be and is: 17.26

Again, almost forgot the second 25 cent admin fee. But I guess my math isn’t that bad after all.

__Debt Retirement__

Debt Retirement Charge $0.00694/kWh

my bill should be $16.92

bill is: $16.35

This difference must be in the amount of decimals they carry or something in their calculations. A $0.57 gift is alright I guess. But I wish things would be consistent so my math works out so I can better understand what is happening.

Conclusion

This is the most in depth I have ever looked at a hydro bill. Perhaps the most thorough look at any utility bill.

After this excercise though I am curious if I can replicate the numbers in a spread sheet. As I mentioned above a more accurate scientific approach would be to evaluate the change of one variable at a time. So maybe some day I will do that and see what variable changes the bill the most.

The HST is here to stay so that won’t change in the future I hope. This is something I have no control over, so maybe looking at my income tax to find some mechanism to increase my tax credits can offset this.

The rate changes will continue to increase over time, so that is to be expected. This is something else I can not control. So maybe I need to start getting some energy stock that can help offset the increase in costs. I think they call this a hedge fund.

The amount of energy I consume seems to be the only thing in my control. This opens up many questions related to how I can decrease my energy costs. So I started an energy audit of my house today and will share some findings as time goes on.

My first finding that I will share is my computer. After gathering numbers from a EM100 Energy meter for 5 hours I learned my computer, running 24 hours a day for a year costs a mere $5. This is ok because I run a virtual machine on it for my non-profit Computers for Communities. So I consider that a donation for operating costs. Much cheaper than web hosting, even if I upgrade to using a UPS.

So let the hunt begin for the power monsters in my house. Stay tuned.