Understanding Your Energy Bill; Essential Steps to Saving You Money

Build Awareness!?A great first step of change management is creating awareness across your organization of what the current situation is and where there is potential!

(For more details on Change Management review the 4 key principles here!)

Building awareness throughout your organization of how your energy bills work and how much you are currently spending is a great first step on your journey to becoming more efficient. How your rate is structured will dictate how to save money and reduce your CO2 footprint!?

Become aware of all the resources available to you, I can’t reiterate this enough, your utility providers have amazing resources. Take advantage of them as they are typically FREE!? Stop reading now and give them a call. A few questions to ask them are listed below:

Can you perform a rate study to ensure that we are on the most cost effective rate???

• 25% of the breweries we’ve talked to are on the wrong rate and costing them an additional 20%! Most of these are breweries <750bbl too, so that can have a huge impact on their bottom line
• Switching over to a new rate is easy?

What electrical audits are available?? Can we schedule someone to come out and take a look around to help us reduce our usage?

Do you have any rebate programs available that are applicable to us as we start driving down our electrical usage?

What granularity is available around our electrical usage?? Do you have our usage detailed minute by minute or hourly???

• Most of the time only monthly totals are available, encourage them to provide more detailed analysis
• Utilities may have smart meters available to provide additional granularity
• See what’s available for additional information about your usage partner

Are we billed for peak demand? If so, could you please explain how that works? And do you have any details around when our peaks occur?

Electric Bills:?

An electric bill can have multiple components, but the main drivers are your usage or kWh and your peak demand or kW (based on your peak 15 minute usage for the month). Look at your bill and determine if you have a rate for both your kWh and your kW. Below we have an example of a bill that has a demand component.

IMPORTANTLY, if you are an XCEL customer and draw less than 50kW monthly, you may be on the incorrect rate structure. Switching to a usage only rate could lead to substantial savings, 15 - 20%.?

What is usage, consumption, and kWh?

Each electric bill has a portion that tracks how much electricity you have used in that month, which is measured in kilo-Watt Hours or 1,000 Watt Hours. This is your consumption or usage for the month.??

Usage is measured by how much electric your facility draws, kW multiplied by the amount of hours it is used.? For example, a 60 Watt light bulb left on for 10 hours everyday for a week would consume 4.2kWh (60 Watts x 10hrs x 7 days = 4,200Watt Hrs or 4.2kWh). This usage is multiplied by the rates your provider offers in $ / kWh, ranging from $0.05 - $0.20 / kWh.??

What is Peak Demand and How Does it Work?

Peak demand is typically calculated by your utility company using your peak 15 minute usage period, but the specifics vary by utility. This is done by adding up the energy consumed (kWh) and then dividing by the interval of time (typically 15 minutes or 0.25 hrs), giving units of power, kW. The highest average 15 minute period of demand over a month is known as peak demand.? For example, if you used 60kWh in a 15 minute period, that would calculate out 60kWh / .25hr = 240kW.??

If you theoretically only used a piece of equipment that drew 100kW for a single 15minute period and only used 10kW the rest of the month, your bill would be based on that single 15minute period of 100kW. ? Your utility is charging you based on your one time peak 15 minute usage instant draw for the month. The flatter your usage curves (less spikes), the less impacts peak demand will have on your bill.

Demand is part of your bill as it provides your utility with an understanding of how big of infrastructure they need to maintain.? Being able to provide you with 50kW is much different than 500kW.???

Biggest factor in saving money is your Demand, kW!

In our research of breweries in Colorado, the demand portion of a monthly electric bill can be more than 65% of a total bill! That means 65% of your spend is dictated by a single 15 minute period during an entire month.??

So dive into your bill, discover resources available to you and start reducing your spend and impacts on the environment!??

A-Bay wants to help!

Let's dive into an energy bill together! We can look into your current rate structure and explore resources available with your utility provider to get the savings process started. Schedule a free introductory today call today.? We are excited to meet you!