3 Ways to Tame a Yo-Yo Power Bill

I live in a state that experiences searing hot sun and temperatures in the summer, and moderately cool weather in the winter. I imagine most of you experience similar swings between seasons, even if that’s from temperate to bloody cold.

It’s really no surprise that during the summer, 50 to 75 percent of my monthly power bill can easily be assigned to temperature control. During the winter though, that probably drops to 10 to 25 percent.

Enter the yo-yo power bill

It’s not unusual to have a $150 summer bill followed by a $60 winter bill. We’ve come to rely on these swings for our budget planning and make sure we’re ready.

But this still stinks if you’re trying to create a solid, long-term budget. So today, I propose three ways we can squash the yo-yo and get a completely smooth power budget in place.

Strategy #1: Budget Billing

If you’re a set-it-and-forget-it kind of guy or gal, this is the strategy for you. Many power companies now offer “budget billing,” which attempts to bill you a very similar amount every month.

The budget bill is calculated through your power use history, and a running 12-month average is typically established. Enter a few obscure formulas and some fuzzy math (just kidding, power company) and out pops your monthly commitment that adjusts as you go.

This isn’t so great if you want complete control of where your money goes, but if you can’t be bothered to do it yourself, it’s probably your best bet.

Strategy #2: Sinking Fund

A sinking fund is nothing more than a personal savings stash that has as its specific purpose either saving for a large, infrequent expense or modulating irregular expenses. I use these types of funds to do both.

The idea is to do exactly what your power company is doing in #1 above, but keep the money yourself.

Start with a stack of your last 12 power bills and calculate the yearly power total. Then divide by 12. You now have an average amount spent per month on power throughout the year. That’s what you put in your power sinking fund every month, and pay your power bills only from that stash.

Hint: Start this in whatever season is your “low” end (as soon as your bill is lower than your sinking fund amount). Otherwise, you’ll always be behind on your fund.

Strategy #3: Lifestyle Modulation

Most of you could probably handle the first two with ease; this one takes considerably more effort. It actually requires some work on your part.

What I mean by lifestyle modulation is simply this: do that which requires the most power draw during your low-power months, and avoid doing it in high-power months.

Better illustrated in solid examples, here’s a few things I would do in my case to apply this strategy:

  • Spend most of the day in the summer outdoors and turn the thermostat up when I leave.
  • Adjust my sleeping time in the summer to correlate better with the rising and setting sun, and avoid using artificial light as a result.
  • Do heavy housework, such as major home improvements that need saw-cutting, drilling, or other power tools in the winter.
  • Turn my water heater temperature down in the summer and up in the winter (the pipe temperature actually has a considerable effect).

You get the idea…it’s not for everyone, but I thought I’d throw it out there.

Fixed rocks variable any day

When it comes to solid budgets, a fixed amount will knock the socks off a wild, unpredictable category any day of the week.

And now you have three ways to make that happen with your power bill! Have any other ideas for smoothing it out? Share them in the comments section!

Photo by rednuht

8 thoughts on “3 Ways to Tame a Yo-Yo Power Bill

  1. We did and still do the budget plan but that first year we got NAILED with an electric bill that was 3 times normal because the utility company failed to accurately guesstimate how much we were going to use

    1. In our area they “estimate” our bill almost every other month! But if we call and request an actual reading, they can’t bill us until they do come out and read the meter. The power is used has always been lower than they estimated.

      Of course, if they don’t make it, they send you a bill for just the meter (which is next to nothing). Then the next month your bill is read and you get hammered with a double amount. So you still have to keep an eye on the sneaky buggers!

  2. Electricity rates fluctuate according to demand. Some power companies offer a service that lets you access the daily/hourly rates so you can plan your usage accordingly. I’ve been meaning to sign up for the one in our area–thank you for the reminder!

    1. Great point, I think we pay more for electricity during the day than at night. Definitely goes with Strategy #3 above! 🙂

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