How the Observer’s Paradox Lowered my Gas and Electric Bill

Mrs. Moose and I live at 8,100 feet above sea level. In these mountainous parts, winters get cold and last a long time. Our house is small. We have two bedrooms, 2.75 baths, and 1,631 square feet of living area. A natural gas boiler heats baseboard registers located in three zones: a walkout basement, a main floor, and an upstairs loft. We have huge windows that don’t insulate very well. But when clouds form and the flakes start to fall, we feel like we live inside a snow globe.

I provide these details because I have a confession to make. Until I retired, I never paid much attention to our home’s utility bill. I certainly was careful about other, larger areas of spending—groceries, restaurants, vacations, insurance, taxes—but gas and electric were never top priorities. We were both out of the house most of the time anyway. With everything turned off while we commuted and worked, I didn’t think we could save very much on energy costs.

So when I retired in 2008, I worried that our utility bills would skyrocket. After all, now I’d be home 24/7. The natural gas and electric meters would spin full time instead of taking breathers during the day.

For the first time I started paying attention to our energy use. I opened a spreadsheet to track our electricity, which is measured in kilowatt hours (KWhs). I opened another spreadsheet to track natural gas, which is measured in Therms (one Therm equals 100,000 British Thermal Units). To create a baseline, I reviewed old statements and typed in two years’ worth of historical data. Then, as each new bill arrived, I entered the latest KWhs and Therms.

That’s when a funny thing began to happen. Instead of jumping to new heights, our energy usage steadily dropped. During 2006-2008, which were my last years chained to a desk, we averaged 6,990 KWhs per year. During 2009-2013, while I stayed home, we averaged only 5,194 KWhs—for an unexpected plunge of 25.7 percent. Our gas use also fell, even though much of it depended upon winter temperatures that we couldn’t control. Pre-retirement, gas averaged 1,353 Therms per year; post-retirement it averaged only 1,230 Therms—for a solid drop of 9.08 percent.

What caused these surprising savings?

I credit the Observer’s Paradox. If you’ve ever taken a sociology course, you’ve probably heard about the Hawthorne Study, which was conducted at a Western Electric manufacturing plant during the late 1920s and early 1930s. The manufacturer hired a business professor to see whether worker efficiency would improve if the plant’s lighting was brightened. Long story short, productivity increased, but not because of anything to do with the lights. Instead, workers elevated their output because they knew they were being watched and this alone altered their behaviors. In other words, the mere fact of observation itself triggered changes in the subjects’ habits, a/k/a the “Observer’s Paradox.”

In the case of our gas and electric bills, our initial worries about my retirement paid off. We began by tracking our consumption. If we hadn’t made this initial commitment to observe, we never would have acquired the motivation to save. But once we became close watchers of our consumption, we started making important changes.

On the electricity front, we replaced tube TVs with more efficient LED models. We updated to new satellite TV boxes that used less energy. We added CFLs to more light fixtures. We activated sleep modes on the computer, switched off printers and scanners when not using them, used cold water for washing clothes, dried clothes on racks instead of the dryer, and air dried our dishes instead of using the dishwasher’s drying cycle. A complete list of our adopted tactics is attached. To see it, click here.

On the natural gas front, we lowered thermostats to 63°F during the day and to 60°F while we slept (a heated mattress pad kept things cozy). We installed indoor window insulation kits. We put insulated drapes and blinds on several windows. We used efficient portable electric heaters. When watching TV, we snuggled under heated throws. We wore sweaters. To save on hot water, we swapped in low-flow showerheads. I didn’t shower every day (rest assured, I always did on days I exercised). When we took summer vacations, we turned off the boiler. When we took winter vacations, we lowered the water heater’s thermostat. To see the complete list of changes, click here.

We made all these changes because we knew our energy use was under close observation—even though we ourselves were the observers.

The Observer’s Paradox opens up a wide swath of possibilities when it comes to adopting a frugal lifestyle. For mainstream consumers, the main impediment to spending less is ingrained habit. Routinely, mainstreamers spend without observation. Once money is out the door and out of sight, it’s out of mind as well. But when observation enters the picture, even if it’s merely self observation, pathways open for key behavioral changes. Even the freest of free spenders can make a simple observation: “I am now looking at this line item and this is what I see.” Such basic scrutiny is often the first step needed to alter expensive habits. As any good carpenter would say: “measure first, cut later.”

So today’s takeaway is this. If a particular line item of spending is causing you worry, you don’t have to immediately embark upon a course of disruptive change. Start small. Begin by measuring how much you spend on whichever line item is bothering you. Keep track as time passes. The measurement process itself will provide an important source of motivation. What you see will make it easier for you to change. And if it doesn’t, consider bringing in impartial witnesses who are close enough to care—spouses, siblings, and friends. For once the Observer’s Paradox kicks in, you’re well on your way to spending less.

*   *   *

A postscript. The process of observation works best, I think, when it’s focused on a few line items of spending at a time—as it was when we focused on our gas and electric bill. There’s no need to dilute one’s observational powers by undertaking too many subjects at once. Start with whichever one or two spending categories are causing the most discomfort and concentrate efforts there.

And finally, for my fellow number nerds it’s time for a utility data crunch-a-thon. For your consideration, here’s a chart that reports our monthly kilowatt consumption for the past eight years. We’re proud of our steady progress. At some point we’ll replace our circa 1991 Amana refrigerator with a new EnergyStar model. When that happens, we should save an additional 500-600 KWhs per year.

KwH: 2006-2013
Month

2006

2007

2008

2009

2010

2011

2012

2013

Jan

841

1,191

867

905

1,158

533

491

566

Feb

768

971

727

597

829

519

479

369

Mar

778

865

674

598

744

584

462

475

Apr

726

438

760

540

489

425

390

376

May

438

561

503

392

410

373

318

384

Jun

379

346

413

347

339

383

358

337

Jul

314

289

270

401

349

288

288

345

Aug

252

326

324

312

271

346

278

109

Sep

383

332

354

318

285

278

262

121

Oct

495

478

473

538

316

366

310

373

Nov

679

496

715

765

369

419

233

280

Dec

985

761

799

853

452

517

486

270

Total

7,038  

7,054  

6,879  

6,566  

6,011  

5,031  

4,355  

4,005  

Elec Cost

$637.29

$646.68

$696.70

$646.93

$648.25

$615.58

$488.78

$486.50

Av. KwH Cost

$0.09

$0.09

$0.10

$0.10

$0.11

$0.12

$0.11

$0.12

And here’s our home’s monthly history for natural gas.

Therms: 2006-2013
Month

2006

2007

2008

2009

2010

2011

2012

2013

Jan

228

225

260

221

251

205

223

254

Feb

171

216

233

161

169

192

207

187

Mar

156

134

196

141

184

185

191

190

Apr

141

131

169

140

112

112

109

144

May

77

138

121

90

84

102

61

160

Jun

48

73

72

34

47

71

61

53

Jul

22

26

22

21

25

28

19

23

Aug

11

22

26

16

15

16

14

0

Sep

28

29

31

17

16

13

9

10

Oct

58

52

70

48

18

47

39

28

Nov

120

118

99

117

96

109

95

113

Dec

196

191

150

156

166

202

166

169

Total

1256

1355

1449

1162

1183

1282

1194

1331

Gas Cost

$1,214.65

$1,126.51

$1,310.80

$904.03

$870.87

$876.17

$831.82

$878.75

Av. Therm Cost

$0.97

$0.83

$0.90

$0.78

$0.74

$0.68

$0.70

$0.66

Elec + Therm:  $1,851.94  $1,773.19  $2,007.50  $1,550.96  $1,519.12  $1,491.75  $1,320.60  $ 1,365.25

 

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3 Responses to How the Observer’s Paradox Lowered my Gas and Electric Bill

  1. J. Money March 24, 2014 at 6:28 PM #

    I can’t believe you’ve tracked it for that long! Haha… that is awesome!!

    (And so is this paradox you speak of, having never heard of it before)

    • A Noonan Moose March 24, 2014 at 6:49 PM #

      J$,

      Thanks for stopping in again!

  2. Free to Pursue March 28, 2014 at 6:41 AM #

    Thanks for sharing your stats Noonan. Pretty sexy numbers! More proof that “what gets measured gets done”. With the crazy cold winter this year, I’m curious to see what your 2014 figures looks like.

    We track net worth monthly (income, expenses, net savings), which helps a lot, so we have all the data. I think I’ll be adding a few spreadsheet tabs to see where we stand on energy, telecommunications and entertainment.

    Thanks for the nudge!

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