Electricity Cost

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Electricity Cost principles involve looking at how much electricity consumption and we have to understand how it's measured.

Electricity Cost is determined at any moment and is measured in watts consumed. For example:

  • A 100-watt light bulb uses 100 watts.
  • A typical desktop computer uses 65 watts.
  • A central air conditioner uses about 3500 watts.

To know the Electricity Cost and how much energy you're using you have to consider how long you run your appliances. When you use 1000 watts for an hour, that's a kilowatt-hour. For example:

  • Ten 100-watt light bulbs on for an hour, is 1 kWh
  • Ten 100-watt light bulbs on for 1/2 an hour, is 0.5 kWh
  • Ten 50-watt light bulbs on for an hour, is 0.5 kWh
  • One 60-watt light bulb on for an hour, is 0.06 kWh (60/1000)
  • Running a 3500-watt air conditioner for an hour is 3.5 kWh.

The average U.S. household used 10,654 kWh a year in 2001, or 888 kWh/mo. (Dept. of Energy) The U.S. as a whole used 3,883 billion kWh in 2003, or 13,868 kwH per person based on a population of 280 million. (Dept. of Energy)


For smaller items we use the term watt-hours instead of kilowatt-hours. For example, we say a 60-watt light bulb uses 60 watt-hours of electricity, not 0.060 kWh.

Note that the "-hours" part is important. Without it we'd have no idea what period of time we were talking about.

If you ever see a reference without the amount of time specified, it's almost certainly per hour.

If your device lists amps instead of watts, then just multiply the amps times the voltage to get the watts. For example:

2.5 amps x 120 volts = 300 watts

Trivia: On a peak day in 1999, California used 50,743 megawatt-hours of electricity, or 50,743,000,000 watt-hours.

How much does electricity cost?

Electricity Cost depends on where you live, how much you use, and possibly when you use it. There are also fixed charges that you pay every month no matter how much electricity you use. For example, I pay $6/mo. for the privilege of being a customer of the electric company, no matter how much energy I use.

Check your utility bill for the rates in your area. If it's not on your bill then look it up on the utility's website.

The electric company measures how much electricity you use in kilowatt-hours. The abbreviation for killowatt-hour is kWh. Note that on your bill there can be multiple charges per kWh (e.g., one for the "base rate", another for "fuel") and you have to add them all up to get the total cost per kWh.

Most utility companies charge a higher rate when you use more than a certain amount of energy, and they also charge more during summer months when electric use is higher. As an example, here are the residential electric rates for Austin, Texas (as of 11-03):

First 500 kilowatts 5.8 per kilowatt hour (kWh)
Additional kilowatts (May-Oct.) 10 per kilowatt hour
Additonal kilowatts (Nov.-Apr.) 8.3 per kilowatt hour

These figures include a fuel charge of 2.265 per kWh.

The average cost of residential electricity was 9.86/kWh in the U.S. in March 2006. The average household used 888 kWh/mo. in 2001 and would pay $87.56 for it based on the March 2006 average rate. (Dept. of Energy)

The cost of electricity varies by region. In 2003 the price ranged from 5.81 in Tennessee to 12 in California, 14.314 in New York, and 16.734 in Hawaii. In Summer 2001, electricity was a whopping 20/kWh in parts of California.

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