How to Analyze a Utility Bill
Today’s blog is dedicated to those who find themselves doing energy management on a part-time or volunteer basis, perhaps because no one else would or could do it, but it still needed to be done.
Your professional training may be limited and your experience may be slim, but you are still determined to be a good steward of your organization’s energy resources. THANK YOU for the effort you have put into what can often be a thankless task.If you don’t think you can make much of a difference, read this case study about a part-timer who saved her City hundreds of thousands of dollars by tracking utility bill information.
And if you feel like you might be closer to the bottom of the energy management learning curve, here are six tips on analyzing your utility bills. Perhaps you will find a concept that will be valuable and applicable in your unique situation. If you’re a veteran energy manager, please consider adding additional value to this post by sharing some tips of your own using the Comment option at the bottom of the page.
Tip 1: Review Estimated Bills
- Keep track of your estimated bills.
- Flag bills that are estimated more than one month in succession.
- Call the utility and find out WHY the bill is being estimated.
- Pay particular attention to larger accounts.
Tip 2: Check Units of Measure
- Garbage in – garbage out! Make sure that your utility bill database is set up to accurately record every bill with the correct unit of measure. And remember – you can’t manage what you don’t measure!
- Pay particular attention to natural gas and water, which have multiple units of measure that may vary from vendor to vendor or even account to account.
- Examine your organization’s training processes for utility bill ‘handlers’, and improve training where needed.
- Standardize on a global unit of measure for tracking energy use from multiple commodities across the entire organization.
Tip 3: Don’t Double-Count Usage
- The same use value may appear in several different locations on your utility bill.
- Recognize and accurately record charges for generation and distribution (deregulated accounts).
- Consider tracking other utility bill information, such as load factor and demand charges.
Tip 4: Check Your Load Factor (electric commodity only)
- Load factor is just a number—a ratio, and here’s the Load Factor Formula: Load Factor = Monthly kWh/(monthly peak KW Demand * days in billing period * 24 hours)
- Track your load factor monthly for trend analysis. The value should always be between 0 and 1 (or 0-100, if you convert to a percentage). If it’s not, then something is wrong!
- Load factor trends should usually be steady or seasonal.
- Determine a typical load factor for each building type.
- Remember – higher load factor numbers might be a sign of building control problems, or even billing or meter problems.
- Low load factor generally indicates “spikey” use that could be costing your organization big money in demand ratchet charges. Look for equipment problems that might be contributing to the load fluctuations.
Tip 5. Understand your Power Factor (electric commodity only)
- Refers to the ratio of real power flowing through a circuit to apparent power (product of current and voltage).
- Expressed as a dimensionless number between -1 and 1.
- “Sweet spot” for power factor is generally above .8-.9. If power factor dips below 80 or 90 percent, your utility may assess power factor penalties.
- If you observe a problem, discuss the issue with your electrical engineer and utility provider.
Tip 6: Know Your Rate Schedule and Options
- There is real value in matching the rate schedule to the performance aspects of each meter.
- You do have alternative rate options in most cases.
- The utility will seldom tell you which option is in your best interest.
- Energy University (maintained by Schneider Electric) offers courses on electric rate structures.
Hopefully these tips have given you some ideas for analyzing your utility bills. If you’d like more detailed information, read our eBook on the topic!