An Energy Bill Breakdown

Utilities bills are an enigma for many companies (and the world at large). In order to accurately examine a bill, organizations need to look at not only the cost of the kilo- or megawatt-hours of electricity consumed, but other components as well. Especially since these “other components” make up more than 50 percent of an invoice on average.

Taxes and levies. Network usages charges have been relatively stable in the past few years, but the share of energy taxes is growing on companies’ bills. This comes down to the need to fund renewable and sustainability support schemes across the globe, including renewable portfolio standards.

Power penalties. This includes power factor and demand charge penalties — premiums most companies pay because how and when they use energy is below or above thresholds utilities set. The fees also include the continuing implementation of capacity markets set by governments to help cope with issues of peak demand and intermittent renewable generation.

Grid management. These are the usual suspects such as transmission, distribution and service charges. Plus, there are all sorts of regional nuances and associated costs.

How can companies take control of their bill and start to address all the charges in the “other” category — a.k.a., non-commodity costs? By establishing a strategy plan to manage their portfolio, and making changes to reduce overall use and avoid scenarios that lead to unnecessary spend. Organizations with larger footprints need to assess individual sites as well, and make sure their energy needs and challenges are appropriately addressed.

It’s time for an energy bill breakdown — and savings advice — before there’s a breakdown due to energy bills.

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