Most companies have whole departments for sales, to control expenses, to manage employees, manage leases and other contracts. However, one area that many firms do not devote any time or resources to is energy. Many feel that energy is not controllable. We need lights and can’t function without them or need various motors and complex equipment, but we can’t do anything about their energy use. Some feel that energy is a small cost to them compared to salaries, rent, etc., so why spend resources on it.

Energy usage and costs are significant and are manageable. Perhaps business leaders feel otherwise because they never learned about it in business school. Nothing seen; therefore, not a factor. However, efforts to reduce energy usage, if done smartly, will usually lead to financial gains, paying back the cost and effort to implement the cost reduction strategy in a reasonable timeframe. Energy can be managed and minimized without impacting operations. While energy costs are lower than payroll and rent for most companies, that does not mean they should be ignored.

Perhaps you don’t have the labor, resources, or the will to develop a whole new group for energy, or even one person devoted to this. That is understandable. But there are simple things you can do to study and improve energy usage to gain these benefits.

The first thing to do is gather basic data. How much energy does your company use? What form (electricity, oil, gas, steam)? Is the use/need consistent or does it vary by time or season? Does it correspond to certain operations? Are their trends (energy use rising or falling)? Answers can lead to smart strategies to reduce energy use and costs.

How to gather such data? There is one item which your firm receives that is a treasure trove of information on your energy use – your energy bill. If your firm gets your monthly energy bill and just passes it on to Accounting to pay and that’s it, that is not good. You should begin to scan and save electronically your energy bills and invoices (such as oil deliveries) and set up spreadsheets with basic data from these bills. How many kilowatt-hours does each facility (meter) use monthly? Does it change over time and correlate to particular needs of your operations (i.e., greater production or sales? weather?)? By managing data, you can see trends and elicit control over your energy use.

One item that most overlook is your rate class. For example, I worked with a religious institution that for decades just paid its monthly energy bills without reviewing them. I saw right away that their rate class for electricity was of an industrial source, not the discounted rate of a religious institution. Nobody noticed this. Fortunately, the utility had a 6-year lookback program that paid the religious institute the overcharge with interest. Was this religious institution happy when it got a check for $84,000 from the utility! Sometimes buildings change functions, but nobody knows to change the rate class appropriately. Take a look at your utility bill and make sure you are charged properly.

Electricity, gas, etc. bills are typically divided into 2 parts, supply and delivery. By law, the utility can only deliver; it cannot supply the electricity or gas. Utilities, therefore, allow you, the user, to pick a supplier. If you do not pick one, then the utility will pick one for you; and – trust me – it will not necessarily be the cheapest! You can save significant energy costs at no cost to you by researching and selecting a lower-cost supplier.

The final simple item to look for is that most utilities not only charge you for electricity usage for the entire period (usually in kilowatt-hours), but also for your peak demand (kilowatts). What is the most electricity drawn for a short period (often 15 minutes) during the billing period? The utility had to provide you that amount of power through their lines during that short period and if it is high, then you will pay a high rate for this, even if usage is otherwise low. So, study your usage and peak demand charges. Do you have periods of very high electricity demand where several high energy-usage equipment is used at the same time? If there is any way to spread out your operations to lower the short-term peak demand? Can certain operations be done at night or early in the morning instead of in the middle of the day? You can save significant cost. For example, using your air conditioning systems more at night (when the peak demand charge is lower) and less during business hours or performing mechanical operations at night and less during the day will save you significant energy costs.

While these are simple tips that do not require great expertise, they can result in significant energy cost savings. Perhaps you can try this, have some success, show your upper management, and they can see that energy savings can be significant and manageable and worthy of a more sophisticated program. Good luck on this in 2020.

CCES has the experts to help your firm manage your energy use and reduce costs and provide greater flexibility for you in operations. Contact us today at 914-584-6720 or at karell@CCESworld.com.