Sunday 3 August 2008

A look at our household electricity costs

While I was filing away our utility bills I decided to tabulate the last five years worth of electricity bills to see how things had changed. As expected, the cost of electricity has been increasing each year, and has gone up by around 25% over the past four years. I expect future increases to be even more substantial, given the rising cost of fossil fuels (most of NSW electricity generation is coal-fired power stations).

What was unexpected was the massive increase in our daily energy use in the past two years. It probably shouldn't have come as a shock, as we would have started using a lot more electricity running the clothes dryer and hot water system after DS2 was born two years ago. Hopefully we can reduce our electricity use a bit over the coming year!

Financial | Total | Annual | Daily | Cost
Year ____ | MWhr_ | Cost__ | kWhr_ | c/kWhr
2003-2004 | 12.33 | $1,134 | 34.25 | _9.20
2004-2005 | 10.62 | $__997 | 29.50 | _9.40
2005-2006 | 10.44 | $1,072 | 29.00 | 10.30
2006-2007 | 12.24 | $1,286 | 34.00 | 10.50
2007-2008 | 14.85 | $1,713 | 41.25 | 11.54

On the other hand, our electricity is costing less than $5 per day to run computers, electric piano, TV, CD player, hot water system, electric lights, reverse cycle air-conditioner/heater, cooking equipment etc. for a family of four, so it's pretty good value for money.

I wonder if it would be worthwhile hedging the cost our energy use (petrol and electricity) for the next 10-20 years by buying some oil CFDs?

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1 comment:

Anonymous said...

What sort of index do these oil CFDs track? If it's a futures index at some American futures exchange, then it may not reflect Australian energy prices. You will need to do some currency hedging as well.