Electricity and natural gas prices are standardized units used to sell and consume energy. To get the best deals in the energy market, it’s important to understand how energy retailers use units like kilowatt hours (kWh) and gigajoules (GJ) to calculate your energy bills.
What is a kilowatt hour?
A kWh is a unit of measurement for electricity usage, equal to 1,000 watts of energy used in an hour. Different appliances use different amounts of energy.
Sample usage by electrical appliances
As earlier explained, different appliances use different amount of energy to operate. With 1 kWh, you could typically:
-Run your tumble dryer for 20 minutes
-Watch TV for 6 hours
-Use your electric stove for 20 minutes
-Use a fridge freezer for 3 hours
-Turn on a 60 watt bulb for 16 hours
Therefore, understanding which appliances use the most watts can help you reduce your energy bills.
How does this translate to my monthly bill?
At the end of each billing period (usually 1 month), your energy retailer calculates how many kWh you used and then multiply the total by the unit cost per kWh as agreed in your contract. In Alberta, an typical detached residential household use 7,200 kWh in a year but the monthly consumption may vary slightly based on seasonality. For the same annual usage, a household paying 6 cents/kWh would pay annual consumption cost of $432 while another on a rate of 7 cents/kWh would pay $504 for the same usage; paying $72 more in usage cost.
Therefore, being on the right rate is as important as controlling what and how you operate your household appliances. Check “How To Cut Your Energy Costs” for more on how to save on your energy bills.
What is a Gigajoule?
As with kWh, gigajoule is also used to measure the amount of energy used (electricity or natural gas). In Alberta and many other jurisdictions in Canada, natural gas usage is measured in GJ which is equivalent to 1 billion joules. Therefore, your energy retailer would calculate your natural gas consumption on gigajoule (GJ) basis.
One GJ of natural gas is equivalent to:
- 26 litres of gasoline
- 39 litres of propane
In household consumption terms, if your furnace has a rating of 100,000 BTU/hr. and you run it for 100 hours per month, you can calculate your natural gas usage in gigajoules through the following calculations:
- Total BTU usage per month:
100,000 BTU/hour X 100 hours
= 10,000,000 BTU
- This translates to how many joules?
10,000,000 BTU X 1,055 joules/BTU
= 10,550,000,000 joules
- Finally, let’s convert to gigajoule (GJ)
10,550,000,000 joules X 1,000,000,000 joules/GJ
= 10.55 GJ per month
As this translates to a usage of 10.55 GJ/ month and with a pricing of $3.50/ GJ, the natural gas usage would cost $36.93 for the month.
In Alberta, a typical residential household uses about 120 GJ/ year. Therefore, a customer on a $3.50/GJ fixed gas rate would pay $420 as annual energy cost of natural gas consumed while another on a higher rate of $4.00/GJ would pay $480 (i.e. $60 more for the same usage).
Therefore, comparing and switching to cheaper energy rates with our price comparison tool helps you save more money on your energy bills.
Steps to Switching your Energy
