For those in deregulated markets where you have a choice as to where you buy your energy (and by “energy,” I mean everything from electricity to natural gas to other commodities), energy management doesn’t just start once the contract is signed. The decisions you make about how you purchase energy today can have a big impact on your usage and spend in the future, so it’s important to understand those implications and what your options are before the ink hits the page.
Energy procurement is a complex process that factors in many variables—your tariff(s) and rate structure(s), market vagaries that determine commodity pricing, what your load curve looks like, your overall anticipated consumption for the year, the various cost components of your energy supply, your willingness to trade some budget certainty in exchange for potentially securing more favorable rates, and more. It’s a lot to wrap your head around, resulting in a process that’s time-consuming at minimum and completely overwhelming at worst.
Better energy intelligence can help you understand how various cost components impact your bill and see how your energy is getting spent, so you can make more informed budgeting (and purchasing, where applicable) decisions for your business. Keep reading to understand how a data-driven, software-based approach to how you buy energy can help you…
Ditch the Spreadsheets
For most organizations, getting historical data from your utility bills and putting it into a format that’s actually usable is difficult. Considering what a significant portion of operating budget is spent on energy, it is surprising that this area of business is still largely managed in spreadsheets. But there is a better way. Enter utility bill management (UBM) software.
UBM is a critical component to better energy management because it gives you basic visibility into how much you’ve historically spent on energy, analyzes trend data, and then uses that information to inform forward-looking purchase strategies, forecasts, and budgets, removing uncertainty from your financial planning equation.
- Accurately budget and plan for the future, thanks to an accurate understanding not only of what you’ve spent on energy but of what you’re projected to spend going forward.
- Identify and resolve individual bill problems and anomalies, verifying bill accuracy via a multitude of checks and then tracking identified and achieved savings across your entire portfolio.
- Compare sites across usage and other key performance indicators, helping you identify outliers against internal and external peer groups of buildings, and prioritize opportunities for efficiency improvements.
- More easily report on key metrics, through downloading a simple email of supporting data that shows your boss how much energy you’re using, where, and what’s driving the total spend – without spending hours manipulating data in spreadsheets. UBM also provides one centralized, cloud-based system of record.
- Streamline carbon and ENERGY STAR reporting, calculating site or portfolio carbon footprint and pushing your information to Portfolio Manager.
Getting your utility bills in order is essential to better energy management. An energy intelligence software (EIS) platform can help check for errors, accurately manage how much money you’ve spent over time, and help you plan and budget accurately for the future. It can also manage suppliers, aggregating agreements in one location, helping to manage costs, contracts, and other administrative issues that when left unorganized can be costly–directly in terms of dollars wasted and indirectly via the time and energy you or others on your team allocate to the task.
Use Data to Mitigate Risk
We’ve talked about the importance of developing a strategic plan for energy purchasing before, but the key to a robust plan is robust energy data analytics. Digging into your meter-level interval data helps you understand your load curve and its variations, so that you can accurately implement a block and index purchasing strategy, for example, or simply know when your periods of peak usage are and, when compared against how you are billed, inform operational changes you might make to use less energy at certain times.
When it comes to a well-thought-out purchasing plan, energy data is much more than just information–it’s crucial knowledge that’s necessary to improving business intelligence and driving a competitive advantage for your business.
Don’t Be in the Dark About Your Tariff
Whether you’re in a deregulated energy market or not, another way you can be proactive about how you buy energy is by understanding your tariff and exactly how you are billed (if you are in a deregulated market, you have many more choices and options–but also a whole new level of complexity, making it all the more important to have checks that guarantee you know your tariff ins and outs). And if you operate with more than one site and multiple commodities, it becomes orders of magnitude more complex.
It doesn’t happen often, but there are situations in which we’ve found customers to be on the incorrect tariff. To make sure you are on the right tariff, you have to understand both how you use energy (your demand, your load curve, your overall consumption) and how you’re billed for energy. Energy dashboards and profiling tools will show you the shape of your load curve, but unless you connect the energy data with information about how you’re charged, then the information isn’t particularly actionable. Real-time data connected to your specific tariff, coupled with the historical data from your energy bills, can create a robust picture for what an optimal tariff structure for your particular organization should look like.
