Energy Solutions | Seven smart strategies for reducing costs
Creating a comprehensive energy management plan that saves money for your organization entails much more than just finding the lowest rate. You can't create an energy management strategy that meets all your organizational goals without knowing what those goals are.First, determine what you’re trying to accomplish by asking:
• What are my organization’s values?
• What are our long-term goals?
• What is our tolerance for risk?
• How flexible is my energy budget?
• How does our energy strategy affect our customers?
Armed with the answers to these questions, you can tackle the seven strategies and uncover cost-savings opportunities you didn’t know existed.
Take advantage of deregulation by shopping around. With multiple suppliers competing for your business, you can customize your power purchases to meet your unique business needs. You can choose amongst products and terms which allow you to gain budget certainty or flexibility, to manage risk or take advantage of volatility, depending on what you’ve determined is right for your organization.
Find money hiding in your bill. Costly overcharges are all too common, but can be avoided by auditing and verifying meter readings and costs with utility data management applications available online. Utility data management can also help you identify opportunities to adjust energy usage behaviors and reduce costs.
Get paid to use less. Demand response (DR) programs manage electricity “demand” from customers in “response” to limited supply conditions, or in response to high wholesale market prices. If your facility is eligible, you may be able to earn money for making your electricity load subject to interruption, even if it never becomes necessary to actually interrupt your supply.
Improve efficiency. Your facilities can undergo an energy audit to identify where energy is being lost. Automatic controls, compact fluorescent lighting, and HVAC upgrades can help maximize efficiency and reduce costs. Although the upgrades require an outlay of capital, the costs can be recouped over time in the form of reduced energy bills.
Stop overpaying taxes. Utility sales tax overcharges can add as much as 8.25% to your overall energy costs. Energy used in manufacturing or producing a product may be exempt, and you may even be eligible for a refund of up to 48 months’ back taxes. A predominant use study can establish your exemption status. Non-profit organizations can also take advantage of tax exemptions.
Conserve. It couldn’t be any simpler—use less, pay less. Look for easy ways to conserve energy. Desktop computers use 160 watts/hour. At a rate of $0.18/kWh, shutting down computers at the end of each day can save $75 per computer per year. Turn lights off and raise or lower temperature set points when facilities are unoccupied for painless savings.
Monitor the market. Even once you’ve procured contracts and implemented solutions you’re satisfied with, the key to staying ahead is maintaining an awareness of factors affecting pricing and remaining vigilant for new opportunities—technologies, products or services—to further reduce costs for your facility.
Lastly, consider enlisting the help of an energy advisor who will act as a neutral and unbiased advocate for you, getting multiple suppliers to bid for your business, minimizing transaction costs, and alerting you to a comprehensive range of energy management solutions.
Ben Parker is director of national accounts and director of commercial and industrial accounts, New England region for Tradition Energy in Woburn. He can be reached at bparker@traditionenergy.com.
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