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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 Gulf Power 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" periods 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 the 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 Gulf Power expenses that aren't directly related to your energy usage. Examples are Gulf Power's phone-support staff, and the hold music you hear while waiting for phone support. The service charge doesn't change day by day. It's only about 11% of a typical family's total monthly energy bill ($19 out of $171/mo).

The energy charge

Unlike the service charge, the energy charge is based on actual usage. What's the energy unit that Gulf Power 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 have 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 Gulf Power charge to keep this single kilowatt-hour (kWh) of light bulbs on for an hour? They charge 12¢ per kWh. One kWh multiplied by 12¢ per kWh equals…12¢. If the 100 light bulbs were kept on 24x7 for a month (720 hours straight), Gulf Power would charge $86.40.

100 lightbulbs x 24/7 x 12 cents = $86.40
What's a typical Gulf Power customer's energy bill?

A typical family in Gulf Power territory uses 1,395 per month on average (for perspective, they'd get to the same total by keeping 32 typical laptops on 24x7). They pay $171 per month for those 1,395 kilowatt-hours. How does your home compare?

How do Gulf Power rates compare to the national average?

Gulf Power rates are a little lower than the national average — the average Gulf Power rate for a family with typical energy usage is 12¢ (including the service charge). The average national residential rate is 13¢.

Would we have a lower bill on a different Gulf Power 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, Gulf Power 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.

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What are our current Gulf Power energy rates?

Assuming you're on Gulf Power'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: April 1, 2018
Fixed Charge: Service Charge: $19.46
All Year Rate: $0.109

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 Gulf Power rates. Here are the nitty gritty charges we've accounted for: energy-demand charge, energy conservation cost recovery charge, environmental cost recovery charge, fossil fuel and purchased power cost recovery charge, purchased power capacity cost recovery charge, customer charge.
Rates can be verified here.

How do I work out if I am on the cheapest Gulf Power 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 Gulf Power Bill.

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