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Understanding Your Farm Energy Bills   arrow

Energy Bill Basics

All Colorado farms have an electric bill, and many also have either a propane or natural gas bill. One of the most important things to look for on electric or natural gas bills is your energy consumption. For electric bills, this will be listed in kilowatt-hours (kWh). One kilowatt-hour equals (10) 100-watt light bulbs run for one hour. For natural gas bills, energy consumption may be listed in therms, hundred cubic feet (ccf), or thousand cubic feet (mcf). A therm is equal to a ccf, whereas one mcf equals 10 therms/ccf.

Calculating Energy Costs

Because monthly charges for energy use can fluctuate based on the cost of energy and other variable charges, comparing actual consumption from month-to-month and year-to-year can allow you to see trends. That said, it can also be important to understand how much you are paying per unit of energy (i.e. kWh, therm) to be an informed consumer. The simplest way to calculate total costs per kWh or therm is to:

  1. subtract your fixed service cost (sometimes called a Service/Facility Fee) from your total bill
  2. divide that number by your consumption (kWh, therms, etc.)

In some cases, irrigated farms pay for electricity on a much more complex irrigation rate. These rates can include “regressive blocks” that charge more for your first block of kWh used in a year and less for subsequent blocks.

Demand Charges

In addition to paying for every kWh of electricity you consume, some farms also pay for power demand as measured in kilowatts. This “demand charge” is typically determined by the maximum amount of power called for across any 15-minute period. Some utilities will use this ‘peak demand’ as your demand charge for the month, while others will use peak demand as your demand charge for an entire year. You can tell what you are charged for by looking at your electric bill and sometimes just by the name of your rate.

Last updated: October 19, 2017 at 14:19 pm