ATEM MODULE 15: UTILITY BILLING A c c r e d i t e d T e x a s E n - PowerPoint PPT Presentation

ATEM MODULE 15: UTILITY BILLING A c c r e d i t e d T e x a s E n e r g y M a n a g e r

Who Really Checks Their Utility Bills? ❯ “While it may appear that most schools and local governments are monitoring their energy bills, the method and rigor under which they do so shows opportunity for vast improvement. Overall, most local governments (61%) and schools (48%) informally monitor their bills by simply looking at the bill each month, without any sophisticated analytical software that looks for trends over time or signals them when an irregularity occurs. ” - ”Texas School & Local Government Energy Efficiency Market Assessment and Baseline Study”; Prepared for CLEAResult, February 2010 A c c re d i t e d Tex a s E n e rg y M a n a ge r

If the Energy Department Doesn’t Check – Who Will? ❯ $69,444.45 = Average Monthly Cost of Utilities for K-12 public schools in the State of Texas You wouldn’t just pay your personal credit card without checking to see what you’re paying for…would you? A c c re d i t e d Tex a s E n e rg y M a n a ge r

Bottom Line… ❯ To maximize your energy usage dollar, you must understand your utility bill and the individual components that influence that bill A c c re d i t e d Tex a s E n e rg y M a n a ge r

Cost of Electricity – By Region A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Electric ❯ Electric COOP: Electric cooperative – -Utility company responsible for full-service provision of electricity to customers. Company is “owned” by the customers it serves, as member of the cooperative ❯ Municipality: City-owned utility company – -Full-service provider “owned” by the citizens of the community A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Electric ❯ Rate Schedule (or Tariff): -The set of formulas (approved by the PUC) that regulated entities of the electricity market, utilized to calculate electric utility billing charges ❯ www.puc.state.tx.us/ A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Charges on Your Monthly Electric Bill 23 BASIC Base Charge Current Energy Demand Recurring Non- New Service Charges Charge Charge Charge Charge Recurring or Product Charge REP Charge Meter System TDU TD Energy Advanced Competition Charge Benefit Fund Delivery Surcharges Efficiency Metering Transition Charges Cost Systems Charge Recovery Surcharge Factor City Sales Transition Rate Late Nuclear De- PUC Misc. Gross Amount Due Tax Charge Changes Payment Commission Assessment Receipts Tax Penalty Fund Reimbursem ent A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Electric ❯ Watt: unit of electrical power (volt-ampere) – Includes consideration of power factor (P = Volts * Amps * PF) [Note: Also multiply by  3, e.g. 1.732 if 3  power.] ❯ PF: Power Factor – Ratio of real power to apparent power, in an electrical system; always 0  PF  1 ❯ Kilowatt: 1,000 watts – typical unit of electrical demand ❯ Watt-hour: energy used over time – ex. 1 watt of energy used over 1- hour time = 1 watt-hour ❯ kWh: 1,000 watt-hours – typical unit of consumption indicated on an electric utility bill ❯ MWh: 1,000 kWh – 1,000,000 watt-hours A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Electric ❯ VA: volt-ampere, unit of electrical power – no consideration of power factor (P = Volts * Amps) ❯ kVA: 1,000 VA – typical unit for demand on some utility bills ❯ Demand: Maximum amount of power required by a facility, typically averaged over a 15 – 30 minute internal - NCP Demand: Traditional demand – the maximum power required by the facility in a given month - Billing Demand: Demand used on parts of the bill, if a ratchet clause is applicable (sometimes called “ rpfa ,” if PF penalty is applicable) - 4CP Demand: Average of NCP demand for June – September of the previous calendar year (sometimes called “ pfa ,” if PF penalty is applicable) A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Electric ❯ Ratchet Clause: An allowance in the rate schedule for the utility company to substitute the current monthly demand with a pre- determined percentage of the highest measured demand recorded in the past. - Example: The rate schedule states the ratchet clause is 80% of the highest demand measured in the past 11 months › Historical measured peak demand, July = 483 kW › Monthly peak demand, December = 295 kW › 80% of 483 kW = 386 kW; Utility bill utilized 386 kW, not 295 kW, for demand assessment on December bill A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Natural Gas ❯ BTU: British Thermal Unit – amount of energy required to raise one pound of water by one-degree Fahrenheit (1  F) ❯ CF: cubic feet – unit of consumption for NG ❯ MCF: 1,000 cf – typical unit on NG utility bills ❯ Therm: unit of energy – typically associated with NG, 1 Therm = 100,000 BTUs or approximately 100 cf ❯ Dekatherm: 10 therms – 1,030,000 BTUs or approximately 1 MCF A c c re d i t e d Tex a s E n e rg y M a n a ge r

Basic Terms – Natural Gas ❯ Heat Value: Quantity of BTUs represented by any given fuel. Varies for carbon-based fuels based upon location: -Typically: › Natural Gas = 1,030,000 BTUs/MCF › Propane = 91,600 BTUs/gallon › Diesel = 138.700 BTUs/gallon › Gasoline = 125,000 BTUs/gallon › #2 Fuel Oil = 140,000 BTUs/gallon › Electricity = 3,413 BTUs/kWh A c c re d i t e d Tex a s E n e rg y M a n a ge r

Checking the Bill: What You Need ❯ Gather the bills, calculator, large cup of coffee…and act happy about it ❯ Get a copy of the applicable rate schedules and riders (these get revised or updated approximately every 6 months and the cost variables do change) ❯ Update your Excel bill check spreadsheet with the new charges and values in each rate schedule your facility utilizes ❯ Plug in consumption and demand for the appropriate month’s bill A c c re d i t e d Tex a s E n e rg y M a n a ge r

Checking the Bill: What You Need A c c re d i t e d Tex a s E n e rg y M a n a ge r

Checking the Bill: What You Need ❯ Retail Electric Provider (REP): ❯ Transmission & Distribution Utility (TDU): -Entered the electric utility free- market on January 1, 2002 by -The “wires” company, owner of all legislative approval of Senate Bill 7 generation and distribution systems ❯ Major negotiable terms: ❯ Non-Negotiable: -Cost/kWh -Remains regulated by State of -Bandwidth Texas Public Utility Commission A c c re d i t e d Tex a s E n e rg y M a n a ge r

Retail Electric Provider – The Deregulated Side ❯ Length of contract is negotiable: 1 – 5 (or more) years -Necessary to balance market predictions over time -Do not just select longest terms to avoid having to re-visit contract negotiations next year -Length of contract may depend on pricing mechanism ❯ Pricing Mechanisms -Flat Rate Unit Cost -Market Index + Margin -Market Index + Benchmark Lock-In A c c re d i t e d Tex a s E n e rg y M a n a ge r

Market Timing – How Do You Know? ❯ The only solution is for someone serving the facility’s interests to watch the market, assess trends in the prices, and recognize that an offered price of $0.06319 represents a significant change in the recent price trends and should therefore be rejected for a contract price, for example A c c re d i t e d Tex a s E n e rg y M a n a ge r

Market Timing – How Do You Know? A c c re d i t e d Tex a s E n e rg y M a n a ge r

REP – Checking the Bill ❯ Bandwidth: A “cushion” of available consumption, usually expressed as a percentage, which is a nominated quantity of electricity, the REP project the facility to consume in a given month. The percentage of over/under flexibility that the facility has, before they are charged a penalty for consuming (or not consuming) a quantity of electricity outside the nominated bandwidth is a contractually negotiated percentage, typically ranging between 10% and 30%. A c c re d i t e d Tex a s E n e rg y M a n a ge r

Contract Negotiations ❯ How quickly can you respond? ❯ Many facility purchasing contracts can only be approved by the board of directors or trustees ❯ If the market changes daily, can the facility establish a system that will allow an agent for the facility to respond quickly to advantageous market conditions? ❯ Can you get authorization allowing specific staff to renew the contract at appropriate times, given board approved checks and balances? A c c re d i t e d Tex a s E n e rg y M a n a ge r

Transmission & Distribution Utility – The Regulated Side ❯ Checking the Bill – checking energy charges is simply a matter of multiplication: Consumption * Contractual Rate A c c re d i t e d Tex a s E n e rg y M a n a ge r

TDU – Checking the Bill ❯ You will find two different demands listed on the bill (rpfa and pfa) …BUT, you will not find an explanation of them. A c c re d i t e d Tex a s E n e rg y M a n a ge r

TDU – Checking the Bill ❯ Study the rate schedule and you will discover… - rpfa is what used to be called “ratcheted billing demand,” and… - pfa is what used to be called “4CP demand,” but,…they have been modified to reflect a power factor correction penalty, according to the following formula Demand Reading * 0.95 / Monthly PF A c c re d i t e d Tex a s E n e rg y M a n a ge r