Understanding your electric bill

The first step toward efficiency is to understand how your facility is using energy. An in-depth knowledge of energy costs can lead to better decisions on which areas to address – such as lighting, gas, etc.

Your utility bill contains valuable information regarding rate charges, metering methods, and the types of fuels your building consumes. At first glance, it may be difficult to navigate the various rate charges. The small print and string of numbers may blur together – leaving you no choice but to find the “amount due” line.

However, as the old adage “knowledge is power” goes, here are a few tips on understanding your electric bill :

Service Charge – This monthly charge has nothing to do with your energy consumption, it is a fixed rate that helps cover the administrative and maintenance costs for the utility.

Energy Charge – This charge takes the intensity of the energy used, factors in how many hours it’s being used, and multiplies that by a rate charge. Obviously, the more intense the energy consumption (inefficient bulbs), the higher the cost of operation over time. Warning! This rate may not stay fixed. Some utility companies charge according to “blocks”. For example, if you surpass your 20,000 KWH block, you may be charged at a higher (or lower) rate!

Power or Fuel Cost Adjustments – In some cases, a utility may pass extra costs that were unaccounted for through this charge. These “extra costs” can be fluctuations in energy prices spurred by demand, or lack thereof.

Demand Charge: This charge is dependent on energy used during “peak hours”. Peak hour energy use varies by utility. Some utilities may have their peak period during the summer, while others may have it during the winter. Understanding your utility’s peak hour period can help you make informed decisions on when to use energy, or what energy systems to implement.

Now that you’ve taken the first step to understand how energy is used in your facility, step two is to act! Contact us for a complimentary energy assessment!