Transmission and Distribution Energy Audit Helps Alberta Businesses and Farms Save Money
Written by: Deanna McArthur
We often hear how mad consumers are over their electricity bill. ‘The cost of energy isn’t the problem – it is all the other fees’. Above and beyond the cost of electricity you consume, have you ever wondered what all of those extra charges are?
You are not alone.
Utility bills can be confusing and it can be difficult to understand where all of the charges are coming from and how they are calculated. Here’s what many don’t realize, you may actually be able to reduce the amount you pay for those extra fees.
NewGen Energy, an Alberta based Energy Marketer, has been competing against the ‘Big 5 Retailers’ in Alberta. Since 2012, NewGen has been offering great rates for electricity and natural gas, but most importantly, they have also been helping businesses, farms and acreages to reduce their electricity bill by performing Transmission and Distribution (T&D) Audits.
Understanding Your Utility Bill
First, lets look at how a utility bill is broken down.
The charges a consumer sees on their electricity bill can be split into two categories, regulated and de-regulated. De-regulated charges vary depending on which provider you choose to supply you with electricity. Regulated charges are set by the Wires company and submitted to the Alberta Utilities Commission for approval, these will stay consistent no matter which provider you choose to supply you with energy.
De-regulated charges include:
- Cost of electricity consumed (?/kWh)
- Administration Fees
Regulated charges include:
- Balancing Pool Allocation
- Transmission & Delivery Charges
- Local Access Fees
For most businesses, farms and acreages the cost of transmission and delivery ranges from 40% to 60% of their overall monthly utility bill. If these fees are out of proportion, that can mean a significant amount of extra money coming out of their pocket each month.
“The transmission and distribution charges are poorly understood by most people and even fewer know how to find the anomalies and change them when they are wrong,” said Larry Peters, Vice President of Business Development, NewGen Energy. “So much of what you see is cloaked in acronyms and obtuse wording, that to most people, it may as well be another language.”
There are a number of reasons why a consumer may be charged more than is required for transmission and delivery including:
- Wrong codes or rate schedules have been applied to an account
- Metering issues
- Improper KVA settings have been set
“Additional costs for demand charges, changing demand profiles and a host of other issues very quickly overtake the costs of just electricity consumed,” said Peters. “From a T&D Audit we may even be able to save our clients money by identifying unusual consumption patterns, erratic power use, and even phantom power drains that will make a dent in both the energy used and the transmission and distribution costs. In many cases we have been able to save our clients more money in this way than the money they were actually paying for the electricity consumption portion of their bill.”
Significant Savings for Albertans
How significant can the savings be? Take a look at three examples of previous customers NewGen Energy was able to help through the T&D Audit process.
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Heavy Equipment Manufacturer, Leduc Alberta:
The client came to NewGen even before their buildings had been completed. They had already signed an agreement with the wires carrier to lease the transformer for their new location in Leduc. Unfortunately, they had already signed a 15-year agreement for a transformer which was almost double the size they actually needed.
NewGen was able to renegotiate the terms of the agreement on behalf of the client and was able to save them more than $800/month for the next 15 years. That works out to almost $150,000 in savings over the life of the agreement.
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Acreage owner, south of Okotoks Alberta:
The owner felt their current T&D costs were unrealistic. On further investigation, NewGen discovered that the acreage owner had been assigned a rate schedule which was typically used for intensive livestock farming, where larger quantities of power are consumed.
NewGen was able to have this service reclassified, and in doing so reduced the monthly T&D costs by $75. That adds up to about $900 in annual savings. Additionally, the amount NewGen was able to save the owner on the T&D portion of the bill more than paid for the cost of the monthly electricity component.
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Small Business, Red Deer Alberta:
The business moved out of their existing building into a more convenient location. The new location was virtually identical in size to the pervious one. The owners were shocked to discover that their electricity bills had taken a significant jump.
When NewGen investigated, they discovered that the previous tenant had been a welding shop with extremely high demand rates because of their high consumption and inconsistent use of power. The new tenant used very little power in relation to the previous tenant and their power consumption was constant. NewGen was able to aid in identifying this anomaly and helped the client straighten out these issues with the wires service provider.
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“We have seen a wide range of clients who can take advantage of the T&D audit, but those that can benefit the most are business, farms and acreages,” said Peters. “Their consumption levels are considerably higher than residential and they are more likely to be incorrectly identified based on rate codes and transformer sizes.”
Getting started with an audit is simple. A representative from NewGen will ask for basic information such as where the farm or business is located and what activities the location is used for. From this information they will do a cursory review of the utility bills.
“The first glance at a bill offers a macro view of a client’s consumptions patterns and costs,” said Peters. “If there aren’t any glaring issues we will recommend keeping an eye on the bills moving forward. If we see what we believe are some inconsistencies which do not align with what we believe should be happening, we will ask for permission to be the primary contact with the wires owner and ask for more information.”
The next steps involve an analysis of the characteristics of the billing patterns, including when power is used, how much is used, and other commonly seen traits. With this information in hand, NewGen then begins the negotiation stage on behalf of the client.
Currently, NewGen is offering new customers who sign up before February 15 a FREE T&D audit. To sign up to receive your free T&D Audit click here and use referral code T & D Audit.
More About NewGen Energy
Founded in 2012, NewGen Energy is made up of a team of individuals who have many years of experience in Alberta’s electricity market.
“We began NewGen, under the umbrella of UTILITYnet’s energy retailing business, with a strong belief that the utility industry should provide more than just a commodity,” said Peters. “Our goal has always been to deliver the kind of service that provides value. The T&D audit is just one part of our broader offering. For example, we will perform energy audits for our clients and give them an understanding of what their return on investment is if they change things in their operations.”
“NewGen is unique in the Alberta energy industry,” siad Nick Clark, co-founder of Utility Network and Partners Inc. “We have watched them, over and over help companies reduce their utility bills. They are good at what they do. If you want help in identify savings hidden in the D&T tariffs; this is their niche.”
Even more than these extra services are all the little things about NewGen Energy that make a difference.
Alberta Based: If you call NewGen’s Customer Care Team, you are actually speaking to someone in Alberta. A real live person that lives in Alberta, pays their taxes and raises a family here. NewGen has not outsourced any of its operations, which is something that cannot be said for some of the large utility companies operating in Alberta.
Pick a Date Program: Clients can choose the date they are billed so it coincides with their monthly income. This simple option isn’t offered by the major utilities, but because NewGen is committed to value, they have made it available.
Green Energy Options: in partnership with Green Alberta Energy it is possible for customers to reduce their carbon footprint by choosing to green a percentage of their energy consumption from 5% all the way up to 100%.
To learn more about NewGen Energy, click here.