It is no longer acceptable to track only the cost of energy in an accounting system. We need to track the consumption and the utility bill data in order to understand utility expenses.
For a firm with an old-fashioned, “accounting-system only” approach, rate increases, estimated billings, and errors in meter readings may require a major investigation; however, a firm with a utility bill database can get to the meter level instantly and, in most cases, click on a PDF of the utility bills. The difference in billing approach can involve thousands or tens of thousands of dollars.
In an old-fashioned paper system, past utility bills for Building 999 are filed away in an archive, and probably by date vs. by payee. Electronic records become very useful in straightening out a metering or billing matter. Your utility company can supply the last 24 months of detailed metering/billing data; if given time to pull its records, the utility can go back many more years.
Additional Benefits of Utility Databases
If your company is interested in the environment, you can track your energy consumption and carbon footprint via your new management tool. Other potential benefits of a utility database include support for your supply-side energy management efforts. If you purchase energy commodities in deregulated markets, it’s helpful to have a database to track your consumption. In energy procurement, your “load profile” (what you use and when you use it) has a direct impact on the price you pay for energy. If you use 98 percent of your natural gas in winter, you will pay a higher cost per dekatherm. The utility database can also be used to budget and identify consumption and cost trends that require the facilities manager’s attention.
Most companies that are serious about energy management and utility cost control eventually move toward an internal or external utility database. Since the Internet has become a common business tool, many of the records can be placed online so various people within your company can access records and automated energy-management reports.
On your authorization, a third-party bill-payment service can redirect utility bills to its mailing address and enter bills by OCR into your utility database. Prior utility bills can also be faxed or scanned and e-mailed to the service, but this greatly slows down the process. Because the cost of the electronic bill handling software system is spread across many thousands of customers, it’s more cost effective than trying to duplicate this service on your own. The outsourcing process makes your life easier and makes the simple utility bill into a useful management tool. You have built-in tools to analyze year over year, year to date, quarter to date, etc. You can add occupancy, production, and other data to view your utility costs as your other business measurement tools change.
A good bill payment and administration service automatically audits every utility bill, which can involve checking 20 to 50 separate elements. If the automated system finds a problem, it creates an exception report for a service bureau to investigate. The service bureau can contact the utility company and inquire about the questionable data or billed amount and get it corrected with no effort from you. If occupancy drops (e.g. summer months at a school), but utility consumption doesn’t drop, your new energy-management tool identifies this and starts the process of fixing the problem.
There’s more to utility bills than just paying them. Successful energy management uses data, financial analysis, and independent energy engineering to develop an effective program that contributes to ROI, net present value, asset appreciation, and financial health.
Richard G. Lubinski is president of Think Energy Management LLC, an energy consulting firm in Silver Lake, OH.
