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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 Clay Electric Cooperative (Clay) 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.

Quick note
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.

A "Time-of-Use" rate plan is an electricity plan where the amount charged per kilowatt hour (kWh) is determined by the time of the day and the season of the year in which it is used.

Time-of-Use plans will typically have "peak" periods with higher rates and "off peak" with lower rates.

The idea behind time of use billing is to get customers to use less power at peak periods (when most people use a lot of power). Peak periods put a lot of strain on the grid. This is why time of use billing is being implemented by all major utilities. It is an attempt to encourage consumers to help spread out the load, and thus reduce investment needed to support brief periods of extremely high usage.

If customers can adjust their habits to use appliances at non-peak times they have to potential to significantly lower their electricity bills. Although, as power at peak times is much more expensive, if you continue to use lots of power at peak times your bill could be higher.

How does our rate plan work?

Your energy bill has two parts:

  1. A service charge
  2. 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 Clay expenses that aren't directly related to your energy usage. Examples are Clay'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 22% of a typical family's total monthly energy bill ($23 out of $105/mo).

The energy charge
Unlike the service charge, the energy charge is based on actual usage. What's the energy unit that Clay 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).

1 kilowatt x 1 hour = 1 kilowatt-hour (kWh)

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 Clay charge to keep this single kilowatt-hour (kWh) of light bulbs on for an hour? Under the standard rate plan (code name: R), they charge 12¢ per kWh on average (for a home with typical usage). One kWh multiplied by 12¢ per kWh equals…12¢. If the 100 light bulbs were kept on 24x7 for a month (based on 30 days = 720 hours straight), Clay would charge $86.40.

100 lightbulbs x 24/7 x 12 cents = $86.40

Clay customer's energy bill?

A typical family in Clay 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 $105 per month for those 874 kilowatt-hours. How does your home compare?

How do Clay rates compare to the national average?

Clay rates are a little lower than the national average — the average Clay rate for a family with typical energy usage is 12¢ (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), Clay 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 default rate plan (code name: R) is tiered. Energy in the second tier is 20% 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). The total cost to run it in the first week—at the cheaper tier-1 rate—is: 66¢. The cost to run it in the last week—at the more expensive tier-2 rate—is: 79¢. So Clay 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 Clay rate plan?

Clay offers a "Time-of-Use" rate plan that you could voluntarily switch to. Under the time-of-use rate plan, you'd pay a different rate depending on when you use energy over the course of a day. Time of use gives you more control over your energy bill. Depending on how you use energy, it could start saving you money immediately.

Newer type of rate plan
Typically referred to as: Time of Use
Abbreviated as: TOU

The next article in this series will go into the time-of-use rate plan in more detail, and will show you how to leverage time of use to cut your bill.

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!

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What are our current Clay energy rates?

If you're on Clay's default residential rate plan (code name: R), here are the rates you currently pay:

Default plan's rates

Plan Name: Residential (R)
Last Update: January 1, 2018
Fixed Charge: Service Charge: $23
Rate per kWh
Tier1: $0.094
Tier2: $0.113
Energy in Tier
Tier1: First 1,000 kWh
Tier2: Above 1,000 kWh

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 Clay rates.
Rates can be verified here.

We're already on time of use — what are our current rates?

If you're already on Clay's optional time-of-use rate plan (code name: RT), here are the rates you currently pay:

Time-of-use plan's rates

Plan Name: Residential - Time of Use (RT)
Last Update: January 1, 2018
Fixed Charge: Service Charge: $24
Summer (April 1 to October 31)
Rate per kWh
Off-Peak: $0.073
Peak: $0.198
Weekday Times
Off-Peak: Midnight to 4pm, 9pm to midnight
Peak: 4pm to 9pm
Weekend Times
Off-Peak: 12am to 4pm, 9pm to midnight
Peak: 4pm to 9pm
Winter (November 1 to March 31)
Rate per kWh
Off-Peak: $0.073
Peak: $0.198
Weekday Times
Off-Peak: Midnight to 6am, 10am to midnight
Peak: 6am to 10am
Weekend Times
Off-Peak: 12am to 6am, 10am to midnight
Peak: 6am to 10am

How do I work out if I am on the cheapest Clay 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.

 

Interval Data
Green Button data

 

Interval or Green Button data is your electrical usage data for the last 12 months in one hour (or even shorter) intervals. This data is available from your utility provider.

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 Clay Cooperative Bill.

Ready to stop reading and start cutting (your electric bill)? Click HERE to see how much you can save by switching to a time-of-use rate plan. The Cut My Bill calculator is free and easy.