Hot Summer May Make Consumers Sweat Over A/C Bills
A hotter-than-normal summer could make consumers sweat—particularly over their rising energy bills.
The Energy Information Administration's short-term energy outlook, released Tuesday, expects the average residential electric bill will total $395 from June through August. That's 2.5 percent, or $10, less than 2012.
Part of the prediction: A summer National Oceanic and Atmospheric Administration forecast for a summer that, though hot, could be milder than last year. Consumers are likely to crank up the air conditioner on more days than in a normal year, leading to an expected 3 percent increase in the cost to cool homes and businesses, said Adam Allgood, a NOAA meteorologist.(Last year, the increase was more in line with 6 percent.) "There's been a trend over the past decade for the seasonal summer temperatures during the summer season to be warmer than normal," he said.
That said, it's an early estimate. In 2012, which NOAA reported was the hottest year on record in the lower 48 states, initial projections called for lower costs, too, through a combination of mild weather and cheaper electric rates from falling natural gas prices. This year, rates are edging higher, up 2.2 percent on average, according to the EIA.
Some analysts also expect the summer heat will exceed predictions. "We're expecting it to be one of the hottest summers across America," said Greg Guthridge, the head of research firm Accenture's Energy Consumer Services group. It's prudent for people to take steps to keep their bills manageable, he said.
Consumers may find that their utility should be their first stop for savings. More are offering incentives for customers who take steps to reduce their energy use. That might entail rebates for energy-efficient air conditioners or programmable thermostats, or agreeing to let the utility turnoff the air conditioning for brief periods during peak-demand weekday afternoons, said Rick Tempchin, the executive director of retail energy service for the Edison Electric Institute, an industry association.
In April, smart-thermostat maker Nest introduced Rush Hour Rewards, a program that uses the device's technology to communicate with your electric provider and automatically adjust the temperature during peak-demand periods. Users who opt in can earn credits on their monthly bill. Already, five utilities in seven states have signed up, offering savings ranging from $25 to $85 over the summer, said Kate Brinks, a spokeswoman for Nest. Some also offer rebates of $100 or better toward the cost of the $249 thermostat.
Of course, if the summer is as sweltering as experts expect,the feasibility of using programs will depend largely on your schedule—if kids or other family members are home during workday hours, it's a tougher call to OK shutting off the air conditioner. Some programs offer override capabilities, for reduced savings. Southern California Edison, for example, has four options for customers ranging from $50 to $200 in credits depending on how long they are willing to let the air stay off within a six-hour period and whether they want the ability to opt out for a few hot days. (The Nest program also allows override, Brinks said.)
Traditional standby strategies including regularly cleaning air-conditioner filters and closing curtains during the day can also help consumers make inroads in reducing their summer bills, said Tempchin. Avoid using heat-generating appliances such as clothes dryers and ovens during the day, which adds heat and forces the air conditioner to work harder.
Actually programming the programmable thermostat—a step many consumers somehow forget about—is another savings opportunity,Guthridge said. Setting it to allow warmer temperatures while the family is at work or asleep can save $180 a year, according to Energy Star. But the savings are less if the air-conditioner is totally off during the day. "You'll spend more to re-cool the space," he said. Many new thermostat models also sync with a smartphone, letting users remotely tweak the temperature as needed.
Whatever the summer energy-savings plan is, make sure to let the kids know, said Guthridge. According to Accenture, kids are the second most important influence of energy use in the home, particularly in the summer. With school out, kids have more time to use electronics that might otherwise be off or unplugged during the day. They're also more apt to crank up the a/c without telling a parent. "Children in particular don't resonate with energy efficiency as a term," Guthridge said. He suggests talking about energy waste instead,since kids are used to hearing parents lecture about wasted time and food. Just that switch in terms is enough to make 37 percent be more mindful, Accenture reports.
—By CNBC.com's Kelli B. Grant. Follow her on Twitter @KelliGrant.