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How to calculate your electricity costs for your business

29 July 2024

Understanding your electricity bill is essential for managing energy expenses effectively. In Alberta, Canada, electricity rates can vary, making it important to know how to calculate your costs accurately. This article provides a step-by-step guide to help you navigate through the components of your electricity bill, from usage charges to additional fees.

Understanding your electricity bill is essential for managing energy expenses effectively. In Alberta, Canada, electricity rates can vary, making it important to know how to calculate your costs accurately. This article provides a step-by-step guide to help you navigate through the components of your electricity bill, from usage charges to additional fees. By understanding these elements, you can better anticipate your monthly expenses and identify opportunities for cost savings. Whether you’re a new resident or looking to optimize your energy use, this guide will simplify the process of calculating your electricity costs in Alberta.

In this step-by-step guide, we will break down the process of calculating your electricity bill in Alberta. From understanding your usage to deciphering the various charges and fees, each step is designed to provide you with a clear and accurate picture of your monthly energy costs. Follow along to gain control over your electricity expenses and make informed decisions about your energy consumption.

A step-by-step guide to calculating your electricity bill

Understanding your electricity bill is essential for managing energy expenses effectively. Here’s a step-by-step guide to help you calculate your electricity cost:

1. Identify your consumption

  • Check your meter reading: Record the current meter reading and subtract the previous month’s reading to find your consumption in kilowatt-hours (kWh).
  • Billing period: Determine the billing period covered in your statement.

2. Understand the charges

  • Energy charge: Multiply your total consumption (kWh) by the energy rate provided by your supplier.
  • Delivery charge: This covers the cost of delivering electricity to your business and maintaining the grid. It is usually a fixed rate or a variable charge based on consumption.
  • Administration fees: Fixed charges for managing your account and other administrative tasks.
  • Regulated rate adjustment: If you are on the Regulated Rate Option (RRO), this amount reflects adjustments based on market prices.

3. Additional fees

  • Taxes and government fees: Include any applicable taxes, environmental fees, or local government charges.
  • Other adjustments: Review any credits or additional charges, such as late fees or rebates.

4. Calculate the total cost

  • Add all the above components to determine your total electricity cost for the billing period.

5. Compare and optimize

  • Benchmarking: Compare your total cost with previous months to track trends.
  • Energy efficiency: Implement measures to reduce consumption and lower costs.

 

Example calculation:

If your business consumed 12,000 kWh in a month, with an energy rate of $0.10 per kWh, a delivery charge of $500, administration fees of $10, and taxes amounting to $150, your total cost would be calculated as follows:

  • Energy Charge: 12,00 kWh * $0.10 = $1,200
  • Delivery Charge: $500
  • Administration Fees: $10
  • Taxes: $150

Total Cost = $1,200 + $500 + $10 + $150 = $1,860

How DNE can help

At DNE, we assist businesses in optimizing their electricity costs by analyzing consumption patterns, negotiating better rates with suppliers, and providing tailored energy solutions. As a comprehensive energy consulting firm, we offer the following services:

  • Historical usage analysis to identify problem areas and energy usage patterns
  • Supplier vetting and negotiation to find the best-fit energy supply plan for your business
  • Energy contract implementation to ensure a smooth transition to your new supplier
  • Ongoing monitoring to ensure billing accuracy and optimal energy savings

Contact us today to learn how we can help you manage and reduce your energy expenses effectively.

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