Demystifying energy bills to maximize energy efficiency

By Ryan Whisnant, MBA candidate, University of Michigan, 2009 Climate Corps fellow at SunGard, member of Net Impact

In my last post, I talked about how SunGard has both upper-management support and grassroots engagement around sustainability within the company, including improving energy efficiency.  At their headquarters, the company has already implemented a fair number of energy efficiency measures, so I’m digging deeper into the company’s operations to find new efficiencies.

One challenge I’ve encountered is deciphering the utility bills from PECO, the local utility. There are a few nuances to the billing structure that have taken more than one conversation with SunGard facilities managers and PECO account managers to understand.

For example, utilities charge large customers for their energy usage (in kWh) over a given month, as well as the total “peak demand” based on the maximum load in kW the customer requires over any 30-minute period.

In the case of PECO, usage is charged over multiple tiers with different cent/kWh rates for each, with the first chunk of kWh charged at the first tier rates (which can be several times more than the second tier rates). For PECO, demand is not an additional charge, but rather, it’s used to determine the size of the first (more expensive) tier – the higher the peak demand, the more kWh hours charged at the higher rate.

The bottom line: Companies getting their electricity from PECO can cut their energy costs by both reducing the kWh they use and reducing the size of the costlier first tier by reducing maximum load. Understanding this billing structure (I found a good explanation by TRF Energy) is important for companies to understand how much they stand to save through energy efficiency.

More to come as I dig further into ballast factors, BTUs, rate schedules, and rebates. And stay tuned to see what I learn when I interview SunGard's CEO later this summer.

This content is cross-posted on GreenBiz.com.