Why Is My Energy Bill So High?

Paying monthly energy bills is no one’s idea of fun, and it can be especially painful when you get an unexpectedly high bill. Several factors could be contributing to a higher-than-usual energy bill:

• Energy Prices Are Rising: Although wholesale costs of electricity and natural gas are projected to drop in 2024, those savings don’t always translate to your energy bill. Most energy providers are investing heavily to modernize systems, protect their infrastructure against extreme weather, and repair systems after climate disasters—and are passing these costs on to consumers.
• You’re Running Outdated Appliances: On average, an older refrigerator uses 35% more energy than an Energy Star certified model. An energy-efficient dishwasher, fridge, or washer and dryer can eventually pay for itself in energy savings. Some energy-saving appliances even qualify for rebates, making them more affordable.
• Your Home Has Air Leaks: Precious hot or cool air can escape through gaps in door and window frames, leaky ducts, or poorly insulated walls, attics, and basements. Your utility company may offer energy audits either online or in person to spot potential leaks, or you can do your own energy audit.
• Your Energy Usage Has Risen: Have recent changes to your lifestyle increased your energy usage? For example, kids home from college for summer break could mean soaring energy costs if they take long showers or crank up the A/C. Maybe you’ve shifted from an office job to working from home, so you’re using more energy during the day.

4 Ways to Pay a High Energy Bill

A surprisingly large energy bill could create chaos for your budget. Here are four options for paying a high energy bill:

1. Seek Financial Assistance

Before panicking about a high energy bill, contact your energy provider. Many providers offer financial assistance for customers struggling to pay their bills. For instance, Southern California Edison customers may qualify for:

• 12-month repayment plans for past-due balances
• An Energy Assistance Fund giving eligible ratepayers up to $300 once annually toward electricity bills
• Discounts through the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) programs

Your state may also offer assistance through the Low Income Home Energy Assistance Program, which helps low-income households pay their energy bills. Search for other state and federal financial assistance by visiting the 211 Network (or calling 211) or using the Benefit Finder tool on Benefits.gov.

2. Tap Your Emergency Fund

Don’t qualify for financial assistance? Consider tapping your emergency fund; after all, it’s meant to cover unexpected expenses. Just be sure to replenish your fund so you’re ready for the next emergency. Keeping your emergency fund in a high-yield savings account could help you grow your money faster.

3. Cut Back Elsewhere

You might be able to squeeze enough to pay the energy bill from your monthly budget. Look for places to cut back: Can you reduce food costs by cooking at home instead of eating out, using coupons when shopping, and building menus around what’s on sale? Lower your transportation costs by carpooling, walking, or biking when possible. Save on entertainment by hosting friends for a game night at home instead of meeting at a bar.

4. Pay With a Credit Card

You can generally pay a utility bill with a credit card, but it’s not always the best option. If you’re already struggling to pay the bill, you might not be able to pay off the credit card balance in full when your next bill comes due. In that case, any remaining balance begins accruing interest, ultimately making your energy bill even costlier. If you must use a credit card to pay your energy bill, have a plan to pay it off as soon as possible.

How to Reduce Your Energy Bill

Once you recover from the sticker shock of a high energy bill, take steps to keep it from happening again:

• Install a Programmable Thermostat: Starting at around $30, these devices let you program temperatures to adjust automatically at different times. Turning your thermostat seven to 10 degrees higher or lower than normal for eight hours a day can cut energy costs by 10%.
• Keep Your Home Systems in Top Condition: Regularly service your air conditioning and heating systems so they run efficiently.
• Reduce Electricity Use During Peak Hours: Energy companies often charge more when demand for power is high and less when demand drops.
• Shop Around: In deregulated states, consumers have a choice of energy providers. Compare prices to see if switching providers could save you money.
• Think Old School: Use natural methods such as trees, awnings, sunshades, or light-blocking curtains to keep your home cool in summer. Open windows and use fans to draw cool air inside at night or early in the morning when temperatures drop.
• Keep Tabs on Your Energy Usage: Many utility companies let you set up alerts when your energy usage is projected to surpass your average, giving you fair warning to cut back.

Frequently Asked Questions

How Much Is the Average Energy Bill?

The average energy bill varies widely depending on location, home size, and energy usage habits. It’s essential to compare your bill to similar households in your area to get a better understanding.

How Do I Get Help With a High Energy Bill?

Contact your energy provider to inquire about financial assistance programs. Additionally, explore state and federal assistance options such as the Low Income Home Energy Assistance Program.

Does an Unpaid Energy Bill Affect My Credit Score?

Unpaid energy bills can affect your credit score if they are sent to collections. It’s crucial to address any outstanding bills promptly to avoid negative impacts on your credit.