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Energy bills can be complicated and mysterious. While the cost of apples (for example) is the number of apples times the price per apple, utilities slice and dice their energy "apples" (or units) in a variety of ways. And many utilities don't make it clear how much their whole apples cost you (they instead tell you the price for every little slice).
The purpose of this article is to help you understand your Atlantic City Electric (ACE) energy bill. So you can take control and cut it. The next article in the series will show you quick and easy ways to cut it.
To see your current energy rates, click here to scroll down.
This article is focused on your electric bill. When we say energy, we mean electricity. The article doesn't consider natural-gas heating.
A "Tiered rate plan" is a rate plan where the amount you pay per kWh for electricity increases as the quantity of electricity consumed increases. Generally there is a baseline allowance of a certain number of kWhs (kilowatt hours) per month that are charged at a cheaper rate, and then usage above this allowance is charged at a higher rate.
How does our rate plan work?
Your energy bill has two parts:
- A service charge
- An energy charge
The service charge
The service charge is the same for all households — whether they run a single desk fan or a hundred air conditioners. It covers ACE expenses that aren't directly related to your energy usage. Examples are ACE's phone-support staff, and the hold music you hear while waiting for phone support. The service charge doesn't change month by month. It's only about 3.1% of a typical family's total monthly energy bill ($4.95 out of $159/mo).
The energy charge
Unlike the service charge, the energy charge is based on actual usage. What's the energy unit that ACE uses? Like other U.S. utilities, they charge per kilowatt-hour, abbreviated as kWh.
Let's use the classic light bulb example to understand kilowatt-hours:
100 light bulbs x 10 watts per light bulb = 1,000 watts. A "kilo" is a thousand, so 1,000 watts = 1 kilowatt.
…If the light bulbs are left on for 1 hour, that's 1 kilowatt x 1 hour = 1 kilowatt-hour (when in doubt, just squish words together).
Let's make sure you got that.
How many kilowatt-hours are used if you leave one hundred 10-watt light bulbs on for an hour?…1 kilowatt-hour.
Here are the steps:
100 light bulbs x 10 watts each = 1,000 watts.
Divided by 1,000 = 1 kilowatt (there are 1,000 watts in a kilowatt).
Left on for 1 hour = 1 kilowatt-hour.
Standard energy unit
Unit name: kilowatt-hour
Abbreviated as: kWh
Now let's talk money.
How much does ACE charge to keep this single kilowatt-hour (kWh) of light bulbs on for an hour?
They charge 18¢ per kWh on average (for a home with typical usage). One kWh multiplied by 18¢ per kWh equals…18¢. If the 100 light bulbs were kept on 24x7 for a month (based on 30 days = 720 hours straight), ACE would charge $129.60.
ACE customer's energy bill?
A typical family in ACE territory uses 874 per month on average (for perspective, they'd get to the same total by keeping 20 typical laptops on 24x7). They pay $159 per month for those 874 kilowatt-hours. How does your home compare?
How do ACE rates compare to the national average?
ACE rates are much higher than the national average — the average ACE rate for a family with typical energy usage is 18¢ (including the service charge). The average national residential rate is 13¢.
What are rate tiers?
To complicate things (we're talking about energy bills after all), ACE doesn't just charge the same flat rate for every kWh of energy. They increase the rate when energy thresholds are reached across the month. In other words, the rate plan is tiered. Energy in the second tier is 11% more expensive than energy in the first tier.
Let's connect this to life with a 1 kW espresso machine (which draws 1 kW of power at any given moment). Let's say the machine is on for an hour every morning. That's 1 kW times 7 hours per week, which equals 7 kilowatt-hours (we'll pretend it's on non stop). With summer-season rates, the total cost to run it in the first week—at the cheaper tier-1 rate—is: $1.23. The cost to run it in the last week—at the more expensive tier-2 rate—is: $1.36. So ACE is charging an extra 13¢ for the same amount of energy.
Is it worth foregoing espresso in the last week to save 13¢? Never.
Would we have a lower bill on a different ACE rate plan?
Many utilities now offer an optional "Time-of-Use" rate plan. Time of use gives you more control of your energy bill. Unfortunately, ACE doesn't offer this newer type of rate plan (yet).
Newer type of rate plan
Typically referred to as: Time of Use
Abbreviated as: TOU
The good news is that you don't need a different rate plan to cut your bill. The next article in this series will walk you through other bill-cutting opportunities.
Find out how much you could save with time-of-use. Get personalized results with the Cut My Bill calculator. It's Free and Easy!Calculate
What are our current ACE energy rates?
Assuming you're on ACE's default residential rate plan (code name: RS), here are the rates you currently pay:
Default plan's rates
|Plan Name:||Residential (RS)|
|Last Update:||June 1, 2018|
|Fixed Charge:||Service Charge: $4.95|
|Summer (June 1 to September 30)|
|Rate per kWh|
|Energy in Tier|
|Tier1:||First 750 kWh|
|Tier2:||Above 750 kWh|
|Winter (October 1 to May 31)|
|Rate per kWh|
|Energy in Tier|
Are the rates shown here accurate?
Determining the actual rates charged by a utility can be daunting, so websites typically just publish general estimates. Cut My Bill is different — we're showing you your real up-to-date ACE rates. Here are the nitty gritty charges we've accounted for: BGS reconciliation charge, transmission service charges, distribution charge, non-utility generation charge, securitization charges, societal benefits charge, regional greenhouse gas initiative recovery charge, customer charge, CBT factor, SUT factor.
Rates can be verified here.
How do I work out if I am on the cheapest ACE rate plan for my usage pattern?
To do an exact comparison on how much you would save from switching plans requires collecting your detailed usage data for the last 12 months. This is known as Interval Data and sometimes also called Green Button Data.
What are the best ways to cut our bill?
We're glad you asked. Let's continue to the article: Three Best Ways to Cut Your Atlantic City Electric Bill.
Ready to stop reading and start cutting (your electric bill)? Click HERE to see how much you can save by installing solar panels. The Cut My Bill calculator is free and easy.