Welcome to the second installment of this new bi-weekly column looking at the complex subject of Energy.

Firstly, my thanks for all the positive feedback from the last article. As requested, I have put in place an e-mail address info@bae.bm to save you chasing me around the supermarket to ask a question or make comments.

To get this energy diet underway — In the traditional diet we count the calories but in the energy diet we need to start ‘counting the kilowatts!’ The kilo – what’s? I hear you say.

Don’t panic, it’s quite simple, a watt is a unit of electrical power, kilo means a thousand, so a kilowatt is 1,000 units of electrical power.

To put watts in terms we are more familiar with, let’s think about traditional light bulbs, the bright ones we used in the kitchen or for reading were 100 watts, the softer ones for hallways and closets were typically 60 watts.

Now, utility companies (BELCO) sell energy by the kilowatt hour (kWh) so let’s define a kWh.

Simple, turn on ten bright lights, 10 x 100 watts = 1,000 watts = 1kilowatt. Now leave the ten lights on for 1 hour and you have just used 1 kilowatt hour (kWh) of energy.

Now that we know what a kWh of energy is let’s see how much it costs and this is where it gets a bit more complicated.

To help understand how the cost is calculated I’ve included the information from my August BELCO bill in the table.

The residential bill (we’ll deal with commercial billing another day) is divided into three tiers or blocks (billing charges) and they all come at a different cost.

 Most things in life that we purchase get cheaper as we buy in greater volume. This is evidenced by the growth of warehouse style shopping outlets in Bermuda over the last decade.

 We have learnt that buying in volume reduces the unit cost of the item.

However, what I’m about to tell you may come as a big surprise, but I promise it’s true. In Bermuda the more energy we buy the more expensive each unit (kWh) becomes.

Take another look at the example bill, and, in particular, the column titled RATES/kWh, it suggests the first 250 kWh’s cost $0.1575c each, the next 450 kWh’s cost $0.24c each and after that every additional kWh costs $0.2972c.

But that is only part of the story because there are two other charges we have to add to the number shown on the bill to get the true cost per kWh.

First is the dreaded Fuel Adjustment, which is currently $0.1850c per kWh and second the Facilities Charge (the monthly cost of being connected to BELCO) which is a flat fee of $33 per month.

True cost Because the Facilities Charge is a flat fee the best way to deal with it is to simply divide it by the total number of kWh’s shown on the bill, in this case 883, and that gives us an additional cost of 0.0374 cents per kWh for my August bill. Finally, when we add all these numbers together we can see the true cost of electricity in Bermuda.

In this example, the cheapest tier is $0.3799 per kWh and the most expensive tier is $0.5196 per kWh – less 5 per cent if I pay in time to get the discount!

So the true cost of leaving those 10 light bulbs on for 1 hour is at least $0.3609 cents if you use less than 250 kWh’s per month (I don’t know anyone who does) and at most $0.5196 cents if you use over 700 kWh’s per month (most of us!) and don’t remember to pay on time.

Multiply those 10 lights by six hours a day and again by 31, for the days in August, and all of a sudden those 10 lights have added up to $96.65 to the monthly bill!

Now tonight take a look around your house and see how many lights are turned on.

Don’t forget to look outside, and start counting the kilowatts.

Next time well examine where we can cut the most fat to get this Energy Diet rolling.