After 30 years of publishing energy management software, our Founder and CEO Steve Heinz has learned a lot about the energy management business. In a recent webinar, he shared five surprising lessons he had learned in 30 years, and we wanted to summarize them for you:
There are several factors contributing to this difficulty. Legacy utility billing systems are expensive, and there is often little incentive for utilities to replace them. The public-private nature of many utilities means that they are impacted by legislation more than other businesses, and may require increasingly complex pricing structures to navigate a path toward profitability in a climate of legal restrictions and requirements.
And customer choice programs add to the already complex smorgasbord of rate schedules, rebates, and other energy options. Companies that can navigate this energy information successfully will have an edge on those who can’t.
Unless your company is ahead of the curve, the good news is that there is still low-hanging fruit to be had with your energy management program. Rate schedule optimization offers real month-to-month opportunities for savings. Many electric accounts can save money on cheaper rates. New rates are available that didn’t exist when the account was created. And if your building electric load has changed, it may qualify for better rates.
Do you have accounts that are receiving estimated bills month after month? That may be a sign of faulty meters or blocked access. One large county government discovered that 8 percent of all electric bills were being estimated.
The top three types of billing errors haven’t changed in 30 years:
EDI 810, the electronic utility invoices standard, launched in the mid-1990s as a U.S. Department of Commerce initiative, has not been widely adopted due to a variety of factors. These include the deregulation movement, and the cost and technical challenges associated with EDI 810 implementation on both the vendor and customer sides. There are notable successes for organizations that decide electronic bills are right for them, but these are still the exceptions and not the rule.
To put it another way, energy management is cool. It’s the “in” thing and the proof is all around us. Mandatory energy benchmarking and reporting legislation is popping up in states and municipalities around the country. Dozens of new energy management software products and services are available. Over 30 billion square feet of non-residential floor space is benchmarked in the EPA’s ENERGY STAR Portfolio Manager. All this interest points to increasing value for businesses that use energy information wisely—to control costs, promote energy efficiency, or develop products and services based on the growing value of energy information.
California has already mandated Time of Use (TOU) rates for many customer classes. These types of rates may be moving to a utility near you, so be on the alert for ways to cope by reducing demand during “on-peak” periods and shifting that demand to “off-peak” periods. The Boy Scout motto is applicable here: Be Prepared! For larger companies that are adept in this practice, there may be very significant financial opportunities for participation in the demand response programs being offered by many utilities.
Will these lessons ring true 30 years from now? Stick with us and find out.