What every home owner should know about their electric bill

As a home owner, there are a few things regarding our home power usage and situation we should take a moment to understand.

For most, the power bill will be the biggest home expense other than the mortgage. It represents a huge part of the ‘economics’ of owning and operating a home.

Many of us find ourselves monitoring our power usage and have set up strict rules about when the air conditioning or heating can be used, turning off lights, maximizing dishwasher or clothes washer loads, etc.

Bottom line, the home’s power usage is central to the home. The comfort and convenience is interlocked with the electric usage and that usage is often driven by a desire to keep the bill ‘affordable’.

With this in mind, it is important for a home owner to understand a few things about the nature of the relationship they have with the utility company. Let’s dig in.

1. Inflation- Electric bills have, on average, doubled every 15 years over the last 60 years. A 100 dollar electric bill in the early 2000’s is now a 200 dollar bill. In another 15 or so years, that will be a 400 dollar bill. There’s no real way to predict it, but there’s a nearly guaranteed rise in electric bills coming because of inflation.

2. Monopolistic Utility- with the exception of very few places, a home has only one electric power provider that is ‘regulated’ by some sort of local Public Utilities Commission (PUC). Here in Arizona, the power companies are regulated by the Arizona Corporation Commission (ACC). These PUCs are the only thing that keeps the utility acting unilaterally on their own and taking advantage of their captive ‘customers’.

A home owner has zero choice. If there are price increases or poor service- there’s nowhere else the homeowner can get their power. It’s like a permanent/life-time open ended lease that you are locked into without having even signed a contract. Who would go down to the car dealership and accept a deal they can never cancel and the dealership can raise prices whenever they want?

3. Aging Grid- The monopolistic utility, generally, is responsible for keeping the grid in working condition. So they take care of the maintenance, repair, and upgrading- but pass on that cost to the consumers.

Broadly speaking, there’s enough new power additions to the grid nation wide in the works to nearly triple the power capacity of the grid. As those projects get approved and come online- the power bills for the affected utility will get the pleasure of an increased bill to cover the construction.

4. Carbon Tax- You’d have to be living under a rock to not be aware of all the fury about the climate, the Paris Accord, the Green New Deal, etc. The subject is the source of never ending drama and has become an incredibly politicized topic.

My point isn’t to start a climate ‘discussion’ but more aimed at just looking at what’s happened so far and extrapolating what is more likely to happen in the future.

Consider this- the Legacy Oil/Power industry is extremely profitable and established. There is zero chance that industry would allow anything to cut into their profits. They spend a lot of money in campaigns and lobby efforts to make sure their industry is ‘protected’.

Yet, here we are with huge tax incentives (public law) for ‘clean energy’ things for businesses and home owners that directly cut into Legacy Oil/Power’s industry…

Does anyone think the Carbon Tax that is often called for in the Paris Accord or Green New Deal will be (or even can be) stopped? I certainly don’t think so- the only thing left, it seems to me, is to ask what that will mean for me as a home owner.

I think it means that any power plant around the country that uses carbon emitting processes (burning fuels) will get taxed. Heavily. And since we all know the monopolistic utility will pass those costs right through to their ‘customers’- it means anyone who is getting all of their power from the grid will be paying for it.

In summary, there plenty of pressures pushing home energy bills higher and no way out for home owners to avoid it, unless they can find a way to generate their own power…

Which, of course, means some sort of residential solar or wind power power system that they can own and operate. That’s pretty much the only way out of the one-sided, no-choice, permanent lease type relationship they have with whichever randomly assigned monopolistic utility.

Unfortunately, Legacy Oil/Power has already been working on combatting the threat of solar and wind. There’s been plenty of campaigns to poo-poo both solar and wind and as a result there’s no shortage of skepticism among home owners.

Bottom line- Those of us who are home owners really need to get past our pre-conceived notions for a moment and really take a look at this situation for what it is. Try to remove any political or emotional reaction one might have to the climate ’discussion’ and evaluate what is really happening now and predict what might happen- and decide what to do about it.

- Home energy prices are going up because inflation, grid upgrades, and carbon taxes.
- There is no choice for home owners.
- The incentives to get rooftop solar will expire at some point.

The time is now to just look into rooftop solar. Don’t gotta buy it. Don’t gotta commit to anything. Just look into it so that later on, when bills have doubled or tripled, you were mentally prepared for it and have a plan…

If you are curious about rooftop solar for your home or business, I think you might be interested in my upcoming book. Click here to be notified when I release Tucson Solar Insider Desk Guide for Buying Solar.

Be Good!
Curtis