What are Common Utility Bill Errors?

Utility Bill

Utility bills aren’t pretty – and it can be quite an undertaking to identify billing discrepancies and issues without professional help.  In our experience, as a utility bill auditing firm, we see very frequently that individuals and companies do not see this process as mission critical to their business.  However, billing issues are more frequent than one thinks, and can amount to significant monetary loss.  Here are just a few:

1. For businesses’s that switch providers in a deregulated market, it is important to ensure all relevant account information, lie tax exemptions, are carried over and that the new contract starts when the older one expires – with no overlap.

2.  An error in a rate assignment could add up to substantial lost money over time.

3. Meter misreads and clerical errors are common sources of overcharges.

4. Invoice issues, such as billing period overlaps, duplicate charges, and/or credits not being issued.

5. One may be charged on incorrect rates, or there may be more beneficial rates available.

Reviewing your utility bills for inconsistencies can be very profitable, however they can be complex and hard to decipher.  Forensic utility bill auditing firms can be a truly beneficial resource in finding issues not typically seen by the naked eye.  In fact, it is possible to go back and analyze historical data up to 6 years to identify current AND past billing issues.  Customized algorithms allow auditing firms to dive deep into data to locate discrepancies others almost always miss and can even flag potential future issues.

For more information on the importance of a utility bill audit or how UtiliSave can help – visit our website at www.utilisave.com or call one of our industry experts at (718) 382-4500.

Energy Production Increase Proves Positive

Energy production in the United States has changed quite a bit over the last 20 years, and what is most compelling is that it has grown in almost every field – demonstrating a strong and growing energy economy.

According to Energy.gov, U.S. energy production has increased by 16% between 1993 and 2012, which they illustrate in their graph below.  The unit of energy used is called quads (quadrillion BTU).  Some common equivalents to 1 quad are 8,007,000,000 gallons (US) of gasoline, 293,083,000,000 kilowatt-hours (kWh), and/or 970,434,000,000 cubic feet of natural gas.

Energy-Production-Increase

Energy.gov does not have total data from the past two years, but recognizes that nuclear energy has grown steadily, while other types of energy have experienced volatile production year-to-year, such as coal and renewable energy.  Virtually non-existent biofuels in 1993 have grown from 0.17 to 1.8 quads and natural gas has increased by 33% from 2005-2012 alone.

The increased production of energy means good things for American families and small businesses as it creates more jobs, lowers costs, and reduces our dependence on foreign countries.  The House Committee on Natural Resources note that for every penny the price of gasoline increases, it costs consumers an additional $4 million per day ($1.4 billion over an entire year).  This is prevented by the United States producing its own energy resources – oil, natural gas, coal and nuclear, as well as alternative sources such as wind, solar, hydropower and geothermal.  With that, the proof is in the numbers that we are on the right track to doing so.

Creating a Sustainable City through the NYC Carbon Challenge

NYC Carbon Challenge

Climate change is no longer an issue that can be ignored.  Hurricanes Sandy and Irene, and along with other natural disasters that have plagued the world in recent years have illuminated the dangers of climate change and made addressing the risks associated with it a top priority.

In 2007, Mayor Michael Bloomberg released a plan for New York City’s sustainable future called PlaNYC, which outlined specific goals and initiatives to address the challenges.  One of which was the NYC Carbon Challengewith the aggressive target of 30% carbon reduction citywide by year 2030.  With this, Mayor Bloomberg challenged NYC’s universities and hospitals to match the City’s goal to reduce greenhouse gas (GHG) emissions at an accelerated pace of 30% in ten years.

April of 2013’s New York City Mayor’s Carbon Challenge Progress Report states, “Because 75 percent of New York City’s emissions come from its buildings, and 80 percent of the buildings that exist today will still be here in 2050, increasing the energy efficiency of existing buildings represents the greatest opportunity to meet this goal.”

Since 2007, 17 of New York City’s leading universities (such as: Fordham University, St. John’s University, Columbia University, Berkeley College, and Fashion Institute of Technology); 11 of the largest NYC hospital organizations (such as Memorial Sloan-Kettering Cancer Center, New York-Presbyterian Hospital, Mount Sinai Hospital, and Maimonides Medical Center); 12 global companies (such as Google, Goldman Sachs, JP Morgan Chase, and JetBlue); and 17 of the largest residential management firms (such as RY Management Co., Inc., Metropolitan Pacific Properties, and Century Property Management) – have accepted the NYC Carbon Challenge.

PROGRESS

The NYC Carbon Challenge Progress Report states:

  • Six participants have already achieved the 30 percent goal: Barnard College (Barnard), the Fashion Institute of Technology (FIT), New York University (NYU), The Rockefeller University (Rockefeller), New York Hospital Queens (NYHQ), and Weill Cornell Medical College.
  • In five years, the universities have reduced their emissions intensity by a total of 12.8 percent. Six universities cut their emissions by 15 percent or more.
  • In three years, the hospitals cut their emissions intensity by 6.1 percent. Five hospitals cut emissions by 15 percent or more.

Participants have achieved results by pursing system upgrades and replacements, as well as improved operations and maintenance, retro-commissioning of building equipment, investments in public education aimed at awareness and behavioral change, and switching to cleaner sources of energy.

As the Challenge expands and more organizations take accountability for their role in climate change and action to cut GHG emissions – NYC will demonstrate its leadership in efforts against climate change and eventually becoming a sustainable city.

Are Smart Meters the Smart Move?

Smart Meters

Picture illustrates an analog meter (left) vs. a smart meter (right).

Smart meters are the next generation of gas and electricity meters that automatically capture and send energy data from homes and businesses back to the electric companies – rather than having meter readers go in to every building and manually read analog meters. As the demand for energy continues to increase, it is becoming more and more important to manage our energy more efficiently.

Smart meters are a way to support the new wave of smart appliances, vehicles and renewable resources while providing consumers with real-time energy consumption data.  This allows consumers to easily monitor their energy use over the course of the day, week, or month so they can review, track and make more informed energy choices.  Third parties can also tailor their products to consumers’ specific usage, allowing for more efficiency.

Smart Meters seem to be the way of the future, however, all technology has its benefits and drawbacks.

Benefits of Smart Meters:

  1. Allows utility companies to enable dynamic pricing (raising / lowering the costs of electricity based on demand).
  2. Helps manage the demand on the grid and increase service and reliability. Providing real-time data to utility companies is useful in balancing electric loads and reducing power outages.
  3. Eliminates the cost to utility companies for meter reads and the inconvenient process for consumers.
  4. Offers consumers more detailed feedback on energy and more control of monthly costs.
  5. More accurate bills and eliminates overpaying (or underpaying) for your energy.

Drawbacks of Smart Meters:

  1. Eliminates the meter reader job position.
  2. Viewed as a vulnerable infrastructure and a cybersecurity threat.
  3. Utility companies will need to manage and store vast quantities of meter data and ensure its’ security.
  4. Personal data of consumers will be potentially up for grabs to purchase by third parties.
  5. Additional fees for a new meter may apply.
  6. Concern that pulsed radiation of smart meters can cause serious health problems.

Local Law Calls for Efficiency and Transparency: How Do You Rate?

Energy Efficiency

A building utility benchmark is the comparison of a building to others of similar characteristics, measuring   utility use in an effort to shed light on how they are performing relative to each other.  With a benchmarking tool, you can rank your building on energy and water use – if it receives a low score then it may be inefficient, and if it scores high, it is more efficient on a relative basis.  By comparing the results, one is able to identify areas that could be strengthened and improve overall efficiency.

According to Energy Star, a score of 50 is typical, while a 30 indicates the building is only more efficient than 30 percent of peer facilities.  A score of 75 or higher means the facility is a top performer and eligible for Energy Star certification.  Once you have used a benchmarking tool to score your building(s) you can target a low score with an energy audit that can identify the causes of low benchmark scores.

In some jurisdictions, utility benchmarking is mandated by local law. For example, NYC Local Law 84 (LL84), which went into effect in 2009, requires owners of large buildings to annually measure and report their energy and water consumption to Energy Star.  The following is required under NYC’s LL84’s benchmarking process:

  1. Determine if a building needs to be benchmarked by checking the Covered Building List.
  2. Measure the building’s energy and water use with an online benchmarking tool.
  3. Submit usage data through Energy Star’s Portfolio Manager.

Further enhancing the increase in efficient, high-performing buildings, LL84 law was followed by Local Law 87 (LL87) which mandates ASHRAE Level II Audits.  This is periodic energy audits and retro-commissioning measures for buildings 50,000 gross square feet or larger.  PlaNYC Green Buildings & Energy Efficiency states that the audit and retro-commissioning information includes the following:

  • Basic team information
  • General building information
  • Existing equipment inventory
  • Energy end use breakdown
  • Energy conservation measures identified from the audit
  • Retro-commissioning measures

In alignment with annual benchmarking, these measures required by LL87 will identify specific efficiency projects and work to optimize a buildings’ energy performance – yielding efficiency and long-term savings.

The following ten cities, two states, and one county in the United States have adopted energy benchmarking and transparency laws.  Even though all laws require building owners to track the energy use of their property, each vary in their specific regulations, such as the type of buildings they apply to, how the data should be disclosed, etc.  Click on each to learn more about their individual policies provided by BuildingRating.org.

A recent study conducted by the Environmental Protection Agency (EPA) found that buildings consistently benchmarked reduced energy use by an average of 2.4% per year for a total savings of 7%.  And, buildings that started out as poor performers saved even more.

The ability to measure and manage is the first step in improving utility efficiency and increasing cost reductions.  As more and more legislation incorporates energy mandates, the analysis of utility data becomes an invaluable tool to comply with local law, measure impact as a consumer on the environment, and manage overall use and spending.

UtiliSave, LLC has been addressing their client’s energy needs for over 25 years.  In addition to performing utility audits to identify operational inefficiencies and uncover refunds and savings, UtiliSave also provides benchmarking and assistance with ASHRAE Level II Audits at no cost.  For more information, contact UtiliSave at (718)-382-4500 or email at info@utilisave.com

Why Smart Grids are the Smart Move

Smart-Grid

When the media or energy providers reference “the grid” they are referring to the infrastructure that delivers electricity from power plants to a home or business, made up of a network of transmission lines, transformers, substations, etc.  According to SmartGrid.gov, our electric grid consists of more than 9,200 generating power plants with more than 1 million megawatts of generating capacity connected to more than 300,000 miles of transmission lines.

Our electric grid was built in the 1890’s and although we have improved upon its’ technology through time – like the VCR and CD player – it will eventually need to be updated / replaced.  The growing demand for power, increasing environmental regulation, and focus on renewable energy resources is creating a strain that building additional power plants can no longer support.

The “Smart Grid” is a new and improved power grid that uses advanced technology for two-way interaction between utilities and its customers.  The Smart Grids’ capabilities allow for immediate digital responses to the ever-increasing electric demand, tighter security, the integration of more renewable power sources, and real-time energy usage data to customers.

Some examples of the Smart Grid’s positive attributes:

  • In the event of an emergency that causes power failure, the Smart Grid would allow for automatic rerouting of energy (to say, emergency services first) and minimize widespread outages and their effects.
  • The Smart Grid positively impacts the environment and reduces the effects of climate change.  The U.S. Department of Energy estimated that if our current power grid was merely 5% more efficient, our energy savings would equal the emissions from 53 million cars.
  • The Smart Grid allows consumers to save money through two-way communication between the utility and the customer.  This allows for tailored rate design as utilities would be able to bill customers by their individual usage patterns.
  • The Smart Grid puts a customer’s real-time utility usage data in their hands, rather than waiting for their billing statement.  A smarter grid will allow customers to conveniently interact with appliances such as their home or business’ thermostats, A/C, heater, lights, etc. which will lead to significant cost savings through monitoring and management.

Although our current power grid has proved reliable for over a century – the transition to the Smart Grid will take us into a new era of reliability, availability, and efficiency which will contribute to our overall economic and environmental health.

Understanding Demand Charges

power lines

Understanding your energy charges is no walk in the park as there are many different components and variables, not to mention contract terms and tariffs that make up your bill.

It is important to know that charges are based on your total consumption per month and your demand, which is based on the highest capacity you required during that billing period.  This is because as a consumer, you not only pay for the electricity itself, but the costs incurred by the energy company for delivering the electricity to your property and maintaining a sustainable grid.

How Demand Charges are Determined
Depending on the rate structure, peak demand charges can represent up to 30% of a utility bill.  The term “demand” is the capacity of energy needed in reserve determined by the energy consumer.  Because energy cannot be stored, utility companies must maintain facilities with sufficient capacity in order to meet the maximum requirements.  The utility company – such as Con Edison, or another LDC (Local Delivery Company) – must calculate how much it will cost them to maintain enough capacity for their customers and then prorate that cost for all different service classes which is reflected in the demand charge.

How Demand Charges are Calculated
Here are some terms you should be familiar with:

Kilowatt (kW):    Rate of using electricity
Kilowatt-Hour (kWh):    Electricity actually used

Consumption is measured at your specific rate based on kilowatt hours (kWh), and demand is measured in kilowatts (kW).When demand is higher – high intensity for a short time – demand charges will be higher than when you use the same amount of electricity at a lower intensity for a longer period of time.

Residential vs. Commercial
Residential users typically pay one rate including both consumption and demand because on the grander scale, there is not much variance from home to home.

With Commercial and Industrial energy users – consumption and demand vary greatly.  Some need large amounts of electricity, while others do not.  Some need energy constantly, while others sporadically.  As mentioned prior, the only way to meet all needs is to keep a vast array of expensive equipment – transformers, wires, substations, generating stations – on constant stand by.  Because of this, charges for both consumption and demand for Commercial and Industrial consumers are usually broken out.

How to Reduce your Demand Charge
Whether you are a residential or commercial energy consumer, here are some tips to help reduce your demand and overall energy bill:

  1.   Become familiar with your energy data.  Looking at it in real-time will show you when your demand for electricity is  greatest and will allow you to develop strategies for lowering those peaks.
  2.   Schedule your utilities based on their high / low intensity.
  3.   Spread load over a long period of time (i.e.:  do not turn all heavy machinery on at once when possible)
  4.   Reduce energy by dimming your lights, adjusting your thermostat, shutting down equipment, and using generators where applicable.

Fixed Rate Isn’t Always Clear Cut: The Importance of Understanding your Energy Contract

Fixed Rates 3

There are several options for businesses when it comes to choosing the right electricity supply contract – which tend to fall under either fixed, variable, or hybrid.

With a fixed contract, customers essentially pay the same price per kilowatt hour (kWh) during their contract term.  Variable pricing allows the price to rise or fall monthly based on the wholesale cost of electricity or natural gas.  Hybrid pricing is a cross between variable and fixed, where the contract period and/or supplies can be split between both rates.

In a 2013 survey of approximately 1300 mid-sized business managers taken by the Energy Research Council (ERC), it was found that 73% of executives prefer a fixed-rate supply contract for budget certainty.

However, fixed-rate isn’t always clear-cut.  There are a number of important things to consider when deciding on a fixed-rate contract:

  • It is important to compare apples to apples.  There are many different components to review and consider, such as capacity costs, ancillary charges, and adders to name a few.
  • It is essential to review and understand each supplier’s contract conditions, clauses, change-in-law provisions, fees and expirations that apply as these can tack on unexpected costs to the end charge.
  • Keep the possibility for consistent extreme weather in mind when deciding on a fixed-rate contract as change-in-law provisions or “pass-through costs” can cause an increase in bills.

As seen in January of 2014, the extreme weather events caused many regional transmission organizations (RTOs) to incur higher ancillary costs.  With instances like these, those additional costs can be passed to electricity suppliers who can then either absorb or pass them through to their customers.

In the same survey previously mentioned by the ERC, 49% of executives did not know if their current electricity supplier contract had a change-in-law provision.  For those who understood that their contract did have this clause – 32% believed that no pass-through fees are associated with it.

Many are calculating the winter of 2015 to be one for the books, and according to the 2015 edition of the Farmers’ Almanac, we are expected to see below-normal temperatures.  Unforeseen and uncontrollable weather may be the new norm, and it is imperative to understand contract clauses, and how they can greatly affect electricity prices as they impact RTOs, suppliers and in-turn, you – their customers.

The bottom line is, a fixed contract may not truly be fixed.  You are paying a premium for locking in a rate, but the non-rate component may make the perceived benefit of such moot, or severely diminished. Fixed price contracts are not a sin, but they can potentially be an expensive habit.

What is the Utility Company’s Place in the Sustainable Energy Revolution?

Sustainable Energy Revolution

Since 2011, power companies have been selling less and less electricity.  Current trends in the industry illuminate the possibility of an ever-increasing dip in electric use as homes go solar, appliances become more efficient, electronic gadgets do more with less power, and cloud computing allows companies to rely on less energy-sucking servers.  The U.S. Energy Information Administration (EIA) also lends itself to believe that U.S. homes and buildings are using less electricity because structures are better insulated, and the warmer winters and cooler summers reduce demand.

Solar power and distributed energy have caught on, and although solar is still a small part in the over-all energy industry of America – making up just over 1% of the total national generation capacity – it has quadrupled in 2010-2014.  These numbers are compelling and are the challenge staring utility companies in the face.  As solar power becomes less expensive, it allows for more and more panels to be installed in homes.  With the decrease in use of electricity, the utilities’ rates for remaining customers will go up, making solar energy even more appealing.  This is the vicious cycle that threatens to weaken utility companies and lends itself to the potential risk of decentralizing America’s power system in the future.

This cycle, however, does not spell immediate doom for utilities, and the power company’s potential shift in power may have a silver lining.  Today, Americans spend about $1.4 billion on fuel for their vehicles which was an abundant market that the electric companies could not tap into.  However, in the new era of sustainable energy, by providing charging systems and contracting with owners to buy back energy stored in vehicles’ batteries, the increase in plug-in vehicles could be the new business model utility companies need.

Plug-in cars can easily be underestimated.  At a mere 250,000 electric cars now on American roads, they account for only 1% of vehicles sold, which doesn’t seem much on paper.  However, sales have only risen with each year.  And, the good news to utility companies is that homes that own a plug-in car typically consumes 58% more electricity.  By riding the wave of efficient energy use and the increase in electric powered cars, it may be a game-changer for utility companies to ensure their existence in America’s future transportation infrastructure.

A downside to this wave of efficient energy use in America is that it could possibly lead to the overall population investing in solar energy for their homes which leaves little room for utility companies as people would rely on “home-brewed” energy for their everyday needs.  It is imperative that the sustainable energy revolution be taken seriously by utility companies and that they embrace the impending change in America’s energy use.  The industry of sustainable energy has untapped growth and potential, while utility companies must begin thinking of innovative ways to stay alive and prevalent in the new energy era.