Power & Energy Measurement: Understanding Your Bill

People often use the terms “energy” and “power” interchangeably, but they’re actually quite unique properties. We’ll help you understand the difference between energy and power, answer the question “what is power measured in?” as well as offer some real-world examples of energy and power use and measurement. After reading this guide, you won’t feel lost in the dark the next time you see your energy bill!

Energy vs. Power

Unless you’re a utility provider—or physicist—you likely haven’t had to ask yourself, what is the difference between energy and power? While the differences may seem subtle, knowing the distinction can improve your understanding of your energy bill. Let’s go over the definitions of energy and power to give you a better idea of what we’re talking about.

What is energy?

Energy is the ability to do work—or put another way, to create change—via physical or chemical processes and resources. When it comes to the energy in your home, the work done results in power to your electric devices (e.g. lightbulbs, television) and heat from your gas-powered appliances (e.g. furnace, water heater).

There are many different types of energy, including chemical, thermal, nuclear, electrical and gravitational, which fall into two main categories of energy: potential and kinetic. The types of energy that flow through your home are, for the most part, chemical, thermal and electrical. Chemical and thermal energy are potential and kinetic, respectively, and electrical energy is a little bit of both. Let’s take a closer look at these different energy types.

Potential & Kinetic Energy

There are two main types of energy: potential and kinetic.

Potential energy is stored-up energy. It is the potential for something to do work or create change. Chemical energy, which the energy that holds molecular bonds together, is an example of potential energy. When the bonds break, that chemical energy is released.

Kinetic energy is motion. It can be anything from the movement of atoms and waves to a moving car or body. Thermal energy, which creates heat through the rapid movement of air particles, is an example of kinetic energy.

Energy can convert from one type to another, and natural gas is a perfect example. Upon extraction, natural gas is full of chemical energy. The chemical energy holds together the molecular bonds in the methane, ethane, and other types of natural gas compounds that make up the natural gas you receive at home.

When a heat source—say the pilot flame in your home furnace—warms the gas, it breaks up those molecular bonds. When the bonds break, the chemical energy converts to the thermal energy that flows throughout your home to keep it warm and cozy.

Electrical Energy

When it comes to the electricity you use in your home, electrical energy is at play. Electrical energy can be potential or kinetic depending on its state. Electrical potential energy builds when atoms in your electrical wires build up a charge. As soon as you activate an electric appliance or turn on a light, for example, that potential electrical energy converts to kinetic as the charged atoms move through the electrical wire. Remember, kinetic energy is motion!

What is power?

Rather than being a completely separate entity from energy, power is actually dependent upon energy. At its core, power is the flow of energy over time; when we measure power, we are measuring the rate at which an appliance uses energy. If energy is how much work is being done, power is how quickly that work is being done. Because it takes speed into account, power is measured in units like watts (joules per second) that include time as a factor.

As far as your utility bill goes, you will likely see power describing your use of electricity and not your natural gas use. In regard to electricity, power is related to voltage, or the pressure that pushes electrons to move and create a sustained charge. Electric power is voltage multiplied by the volume of those moving electronics, known as the current. The higher the voltage, the more electrical power you have.

What is energy measured in?

So, we know that energy reflects work—both potential and physical. But what unit is energy measured in that can capture both of these aspects? Joules measure energy. We have a whole guide to help you better understand what a joule is, but we’ll quickly break it down here.


Electricity’s main unit of measurement is power, which is the rate of energy consumption. If a watt (power) is one joule per second, then a joule of electrical energy is one watt-second. In the next section, we’ll cover what power is measured in with more detail.

As far as natural gas goes, you can use joules to measure the amount of thermal energy your oven requires to bake a cake, or furnace requires to heat your home. But on natural gas-powered appliances, you’ll likely see a BTU (British Thermal Unit) rating and not a joule rating. For ease of conversion, one BTU is equal to 1,055 joules. If your furnace has a BTU rating of 100,000 BTU/hour it uses 105,500,000 joules of energy per hour.

A joule of energy is relatively small, so your utility provider likely measures your natural gas use in gigajoules (GJ). One GJ is equal to one billion joules; for context, it takes about 100 gigajoules to heat a new, average-size single home in Canada for one year.

What is power measured in?

Since power relies on energy, the makeup of this measurement also relies on units that measure energy—specifically, the joule.

Power is measured in watts; a watt is equal to one joule per second. What does that mean in the real world? Returning to our example of turning on your lights, watts measure the amount of energy your lightbulb uses for every second the light switch is on. So, if you have a 60-watt lightbulb, it uses 10 joules of energy for every second it is turned on.

A single watt is a very small unit of power. Therefore, to measure the power usage of larger machines and appliances (like your electric stove or entire home lighting system), power is usually measured in kilowatts (kW)—1,000 watts.

When your electricity provider is measuring your electricity use, they need to know the number of kilowatts consumed over a specific period. That’s where the kilowatt-hour (kWh) comes in, and is likely what you’re familiar with seeing on your energy bill. Differentiating kW vs kWh is simple: a kilowatt is a unit of power, whereas kilowatt-hours measure the energy consumed by that power output.

Understanding Your Energy Bill

When it comes to understanding your energy bill, you just need to multiply your monthly electricity and natural gas use by the rate charged by your utility provider. Energy companies typically charge for electricity on a price-per-kWh basis and natural gas on a price-per-GJ basis.

Let’s say you have a 600-watt treadmill you use for two hours each day. To figure out how much you’re paying to exercise on your treadmill each month, start by:

  1. Converting watts to kilowatts (kW).

    600 watts 1000 watts = 0.6 kW

  2. Multiplying kilowatts by daily use

    0.6 kW X 2 hours = 1.2 kWh

  3. Multiplying daily use by 30 days (one month)

    1.2 kWh X 30 days = 36 kWh/month

Finally, multiply your monthly usage by your electricity rate. If, for example, your electricity supplier charges $0.13 per kWh, you’ll owe $4.68 ($0.13 X 36 kWh/month) in energy charges for your treadmill use in a month.

For calculating natural gas costs, let’s use the example of a 100,000 BTU/hour furnace and say you use it for 150 hours in a month. First, we need figure out how many GJs of energy you’re using to heat your home:

  1. Multiply BTU rating by hours of use.

    100,000 BTU/hour X 150 hours = 15,000,000 BTU

  2. Convert BTU to joules.

    15,000,000 BTU X 1055 joules/BTU = 15,825,000,000 joules

  1. Convert joules to gigajoules.

    15,825,000,000 joules 1 billion joules = 15.825 GJ

The final step to finding how much it costs to heat your home is multiplying GJs by your natural gas rate. For this example we’ll say it’s $3 per GJ, which means you’d owe about $47.47 in energy charges for the month.

Additional Items on Your Energy Bill

Now that you know the units used to reflect your household’s power and energy consumption, your monthly energy bill should seem a little more straightforward. But there may also be a few additional line items that need definition:

  • Transmission or delivery charges reflect the cost of moving electricity or natural gas from the source through the transmission system, wires for electricity and pipelines for natural gas, including upkeep of power lines, towers and pipelines.
  • Distribution charges account for the process of delivering electricity and natural gas to your home or business from the transmission system, including the upkeep of power lines, electricity polls, and distribution pipelines.
  • Riders are adjustments needed by the transmission or distribution utility reviewed and approved by the Alberta Utilities Commission.
  • Federal carbon tax is the charge the federal government has instituted on greenhouse gas emissions related to your natural gas consumption.
  • Administration fees cover the costs of providing you customer service when you need us and the costs of calculating and delivering your bill.

As your energy provider, we’re always here to help you understand your power and energy consumption, as well as help demystify your energy bill!