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Utility Analysis and Audit

The most effective way to determine the accuracy of your utility billing and negotiate your maximum advantage is to analyze or audit a facility's electricity billing, and advise on important adjustments. Knowing what the components of utility bills mean and how they affect overall usage cost is important for building owners and their facility engineers and energy managers to understand. Analyzing the individual cost components of a monthly electricity billing may seem daunting to the casual observer especially when some of the terms seem like they were derived from a foreign language, but with help from a utility can be done.

Auditing utility bills and contracts can mean many things to many people. Perhaps the most commonly held view relates to finding mistakes that the utility company has made that cause the customer excess costs. There are many utility-bill auditing consultants in the field that do just that: Audit utility bills to find mistakes and in turn base their fees on a percentage of the customer's utility refunds that might be due to them as a result of utility-caused errors. Utilities do make errors, but not many; if they do make mistakes, they are a result of misinformation or honest miscalculations. Rarely do we find that mistakes are the result of a conscious effort on the utility's part to be dishonest.

What is more important in analyzing billing data is being able to understand the information buried deep within the monthly billing. The utility has the responsibility to place a customer on an applicable tariff rate classification; in turn, the customer is responsible for determining whether they are being served on the least expensive rate classification the utility has available. Surprisingly, the serving utility does not have the burden of putting the customer on the least costly rate. Since cost is heavily dependent upon the usage characteristics of each customer, there are opportunities for savings from changing to a different rate classification, or aggregating usage. The first area to investigate, therefore, is the one relating to alternate tariff rate schedules that may be available to a customer upon their request.

National Energy Technologies has expert field auditors familiar with the utility policies in that region to perform the audit or utility. Armed with the knowledge of what alternate tariff rates may be available from the utility and what the components of electric bill costs are, the analyst can begin the investigation.

Demand Charges, as it applies to the monthly electricity billing, is defined as "the reservation of the capacity the utility has to maintain for the customer 24 hours a day, seven days a week, expressed in kilowatts (kW) or kilovolt-amperes (kVA)." There is no usage of electricity purchased in this portion of the billing, only the reservation of electricity capacity. Peak or maximum demand charges are applied to the maximum demand for energy required by a system in a given period of time. Utilities charge a monthly fee based upon the maximum power (expressed as kilowatts, or kW) required in a given period of time, usually either a 15- or 30-minute interval. The peak or maximum demand charge can vary from less than $2 to over $18 per kW per month. A control strategy to reduce these peaks can result in sizable savings. Many times a revision in how and when equipment is turned on or off can be all that is needed to reduce the monthly demand charges. In other cases, a computer-controlled energy-management system can be used to sense impending peak demands and adjust energy requirements to reduce peak demands.

Phone bills in some organizations are so large that often large over billing errors are able to be claimed and retrieved. This errors can be permanently corrected to continue to save resources into the future.

These strategies can save a corporation hundreds of thousands of dollars in utility costs over time. Audits are often performed at no cost. the auditor will ask to share the savings with the client.