Tag Archives: demand

10 simple ways to save money in tough times, #9 Be more energy effecient


There are many ways to save energy and therefore money.  Some do a lot while others are more of a myth.

Time of Use plans

One of the best ways to save a lot of money is to select an energy plan for your house that fits your usage model.  When a utility makes electricity they do it in a few different ways.  Most power comes from what we call BASE power plants.  These are plants that are always on, day, night, 24/7.  Most of these are Coal and Nuclear.  This electricity is cheap and efficient.  Wind and solar energy are not really created under the control of the utility.  A utility tries to have enough base power to provide all the power that their customers need at least 80% of the time.  For the rest they turn to DEMAND power.  This is power that they can either buy or turn on as needed.  Hydroelectric is a great example.  These plants are mostly turned off during the night, but during the top of the demand time they could be at full force.  In addition power generated in cold climates can be sold to warmer clients during the summer and visa versa.

Because of the much higher cost of this DEMAND power electric companys want you to not use it, so they offer programs to encourage you to shift your usage to non peak times, and they also have programs to encourage you to use a more steady amount of power during these peak time.  So it is simple, here is in Arizona I have APS, and I use a program called Combined Advantage.  With this program I pay only 4 cents per kWh from 7pm until noon each day.  But from noon until 7pm on weekdays I pay 6 cents during the winter and 9 cents during the summer.  On top of that I have a demand fee of $13.40 per kW used during the highest 1 hour of usage during peak time.  What this means for me is that I can use almost as much power as I want from 7pm until Noon and pay almost nothing.  I just have to keep my usage down during the peak time.  I have been able to never go above 6kW during my peak hour.  By using this model I used 20% more power than last year but enjoyed bills over 30% LESS.  Last year I was on the 9pm until 9am program, but it had no Demand Charge.  I already had them look into how much it would cost if I was on the normal rate program and it would be over DOUBLE what I am paying now.   So change your plan and cut your power bill in half.

Space Heaters

Here in Arizona it does not get that cold.  We have found that it is not a good idea to heat the entire house.  When you heat with your large central heating system as much as half the heat you create escapes out of the unit itself or through the duct system.  Even if you have a very efficient Gas heater like I do it is still much cheaper to just heat the rooms you need, especially if you are on a time of use electrical plan and only use it during the off peak time.  When we stopped using the central heating system our gas bill went down by over $70 per month while our electric bill for the space heaters was only $10 more than the previous year.


Fans are another way to save money, a good ceiling fan will make you feel 5 degrees cooler than it actually is.  With a fan an 80 degree room will feel like 75 degrees and that fan costs just pennies a month to run.  Invest in ceiling fans and save money.  Another way to save is to have door and window fans to draw in the outside air during the times of day that it is cooler.

LCD Monitors

I am a computer guy so of course I need to talk about technology a bit.  An LCD monitor is much more efficient than the older CRT monitors, in fact the average 19″ CRT uses over 300W of power, while a LCD uses less than 25W, a HUGE difference.  If used 40 hours a week, at the normal power rates this adds up to about $9 per month per monitor.   With the cost of an LCD being about $120 that means that you would save about enough money in the first year to pay for the new monitor!  So why are you still reading this on an OLD CRT.

While we are talking about saving money with computers, modern computer use MUCH less power than older ones.  The NEW cpus use laptop technology to scale back power usage and use less power and less cooling.  A new computer could be faster while saving as much as $3-5 per month in electricity.  If you are like me and leave it on 24/7 that comes to more like $15-$20 per month.


Your car also uses power, in the form of Gas.  You can do all the normal things like Tune up your car, and keep your tires inflated and you will receive a good 20%+ boost in the amount of mile you can drive.  Of course you can also reduce unnecessary weight in your car, select routes that have fewer left turns but it turns out that one of the best things you can do is to NOT drive a steady speed.  Don’t accelerate too fast, I try to keep my RPMs under 4000 at all times.  It will use much less fuel if you accelerate for a time, then coast for a time, going back and forth, you could increase your MPG by 20% or more by doing this.

There are many more simple ways to save energy, many power companies will help you pay for an Energy Audit.  This is where an expert will come in, usually with a infrared camera, and look for cold or hot spots on your house where you leak energy.  Most energy is spent to heat of cool things so this is a real eyeopener.

The future of Real Estate

Many people are wondering if Real Estate will bounce back.   Well the answer must be “OF COURSE”.

It is all supply and demand.  The run up in 2002-2005 was simply due to huge demand.  This demand was caused mostly by very cheap lending rates and how easy it was to get loans.  During this time millions of people purchased their first house.  Another factor was the reduction of the value of the dollar.  Something can go up in price while keeping a steady value when the value of the currency it is measured in falls.  This is also what happened in the 2000-2006 years.

So what caused prices to go down in 2007?  Well supply and demand again.  In many places developers were very excited about the prices going up so they ramped up production to record levels. (Increase supply) Next came a credit crunch, and the cheap money and the easy money left the system.  This made most people not able to qualify to get the house they wanted.  (Lower Demand).   To make matters worse many people felt they were at the top and that it would be a good time to sell so they listed their house for sale.  (Increase Supply).  Then in many places like Phoenix, there was a huge crackdown on illegal aliens.  Tens of thousands left their houses, many did not sell they simply just left.  Most were renters and left their lease, making the landlord have issues. (Reduced demand, increased supply).   Some people were used to the easy credit and have been living well beyond their means for years now, and when that stopped they could not pay their bills, and that included their house and they could not sell or refinance so they were foreclosed on.  (Lower demand for ownership, higher demand for rentals.  Higher supply of homes)   So with all of these things working together there was no reason for prices to not go down.

So where do we go from here, Well prices must go back up.  Builders stopped most building in mid 2007, and most places have many more people moving there than houses being built.  (Decrease Supply)  Well the credit crunch seems to be letting up, more deals are getting approved, mostly with government support.  (Increase Demand)  The lower prices are making people think twice about selling now, and many houses are coming off the market and turned into rentals.  (Lower supply for ownership, higher supply for rentals)  The illegal alien mess will not be resolved any time soon but most the people who are going to move already have.  The number of loans that have payments that reset soon is going down, also the government is making new rules to help these people keep their houses, which will result in less foreclosures.

In 1974 the median home price was 32,000.
In 1984 the median home price was 72,400 (a 126% gain in 10 years)
In 1994) the median home price was 107,200 (a 48% gain in 10 years or 235% in 20 years)
In 2004) the median home price was 185,200 (a 72% gain in 10 years or 478% gain in 30 years)

During this same time the size of houses increased from less than 900 square feet to well over 1700 on average.

So it is now a great time to invest, everything is on sale due to these supply/demand factors.  But where do you invest?

There are a few underlying economic facts to consider when picking the location of your investment.  First you want to be in a place that is growing, meaning more people are moving there than moving out.  Then you want to see how many vacant houses are on the market.   If you look at a city with 50,000 vacant houses but 10,000 people move there each month (These are the numbers for Phoenix) you can see that soon the houses will be full.   A city like Detroit is not good because people are leaving, there is no growth.  You need growth for demand, and demand vs supply sets the price of real estate.

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