Americans are paying more for just about everything these days. Inflation is the highest it’s been in 40 years.
But unlike pork chops or tickets to a basketball game, where consumers have the option of buying different meat that’s cheaper or watching the game on TV, when it comes to your electricity and gas bill, you’re more or less stuck with the company that services your area.
But that doesn’t mean there aren’t still opportunities to save money, experts told MarketWatch.
Compared to last November, Americans paid 25.1% and 6.5% more for gas utilities and electricity, according to data from the Bureau of Labor Statistics. For gas, that’s the largest annual increase since around 2008, and for electricity, it’s the largest since 2009.
These increases come as more than 11% of employed Americans continue to work from home because of coronavirus, according to BLS data. And at the same time, demand for gas has gone up but supply has been slower to catch up, which is pushing prices up.
As a result, Americans can expect to pay 30% more on average to heat their homes with natural gas or 6% more to heat their home using electricity over the course of this winter compared to last winter, according to Energy Information Administration’s “Winter Fuels Outlook” report.
How does your provider calculate your bill?
Besides turning off your heat altogether and unplugging everything, learn how your electricity or gas provider calculates your rate, said George Zavaliagkos, vice president of technology home-energy monitoring company, Sense.
For instance, some providers have a flat rate each season that doesn’t vary as much on a day-to-day basis. While other providers work like Uber
meaning their rates vary significantly day-by-day based on demand, traffic and weather conditions.
If your provider takes the Uber/Lyft approach you can almost be certain that electricity or gas costs are going to go up when it’s snowing outside, for instance, given that more homeowners will be at home using the heat, Zavaliagkos said.
“Some providers’ rates vary significantly daily based on demand, traffic and weather conditions.”
So to avoid being a sitting duck, you should preemptively start heating your home a couple of days before a forecasted snowstorm so that you can lower your thermostat the day of the storm since your house will already be at a comfortable temperature.
Also, it’s worthwhile to inspect windows, vents and doors around your home to see if any cold air is seeping in. If it is, an easy and relatively cheap fix is getting a draft protector that blocks out the cold air coming in. Is your home — that is, the walls and roof — properly insulated?
What is the breakdown of your power usage?
If your provider gives you the option to see a breakdown of what’s contributing the most to your monthly electricity bill you should “absolutely” take advantage of it, Zavaliagkos told MarketWatch.
You may discover that “the 30-year-old beer fridge you have in your garage is an energy hog,” he said. Meaning that it’s very energy inefficient and, therefore, it’s costing you a lot more money to run it than it would if you bought a newer more energy-efficient fridge.
But if your provider doesn’t give you a breakdown, you can install monitors like Sense that will identify your home’s energy hogs.
Are you eligible for federal assistance?
The American Rescue Plan, which passed in March this year, allocated $4.5 billion more funds for the Low Income Home Energy Assistance Program.
The program, which has been around for 40 years, is federally funded but is administered by states. It’s designed to help households pay for heating and power as well as minor energy-related home repairs.
“We have more money to help families this year than we’ve ever had,” said Mark Wolfe, who heads the National Energy Assistance Directors’ Association, the policy organization for state officials who administer federal energy support.
A lot of people who think they wouldn’t qualify may in fact qualify, Wolfe said. Income thresholds vary by state and household size, you can find more information here.
But even though energy costs are higher, Wolfe said he isn’t seeing a big uptick in applications. “That is a concern,” he added. He suspects that people who are eligible for the program aren’t applying “because it’s called a low-income program. When people hear that they’re thinking, ‘Surely I’m not eligible.’”