Metered vs. Billed: A costly market dynamic that businesses need to understand
1. The Problem: Energy Costs Are Complex
Energy costs are a primary expense for commercial and industrial consumers. But there may be a difference between how much electricity you are using and how much you are paying for. This difference could be costing you a lot of money. “Inefficiency” penalties can comprise a large portion of your monthly electricity costs. These penalties aren’t even detailed on your bill. They are simply folded into a higher cost/Kilowatt-hour.
2. How to Know if You Are Paying Penalties: Decoding Your Energy Costs
Log on to your online account with your electricity provider and look at your usage data from the last 12-month period. (If you do not currently have an online account with your electricity provider, it is worth your time to set one up.) Look across at the columns and you will see there is a difference between Metered KWH and Billed KWH and between Metered Demand and Billed Demand.
- Is your Billed KWH greater than your Metered KWH?
- Is your Billed Demand greater than your Metered Demand?
If you answered yes to one or both of the above, you are being penalized for “inefficient use of power.” These penalties are added to your charges every month and contribute to a higher than necessary cost/Kilowatt-hour.
3. What Is “Inefficient Use of Power?”: The Utility Company’s Secret Margin
So, what is “inefficient Use of Power?” It’s not what you might think. It has nothing to do with the Energy Star rating on your break room appliances, or the LED’s you just installed over the manufacturing floor. It has nothing to do with “renewable energy”, in fact, solar and wind often make “efficiency” penalties worse. And while shutting lights off when you leave the room helps you consume less power, it doesn’t equal “efficiency.”
In this case, efficient or inefficient is a measure of how convenient or inconvenient your electricity needs are for the utility company as it works to maintain a stable power supply for all its consumers. Confused? Join the club. Consumers are simply unaware of essential information about how the energy market functions and how their costs are determined.
4. An Easy Solution: Tactical Energy Group
Tactical Energy Group can uncover opportunities to save you money by helping identify and get rid of penalties and capture incentives instead. If you want to save money on utility costs, you may as well do it without spending any.
