ATEM MODULE 15: UTILITY BILLING A c c r e d i t e d T e x a s E n - - PowerPoint PPT Presentation

ATEM MODULE 15: UTILITY BILLING

A c c r e d i t e d T e x a s E n e r g y M a n a g e r

Who Really Checks Their Utility Bills?

❯“While it may appear that most schools and local governments

are monitoring their energy bills, the method and rigor under which they do so shows opportunity for vast improvement. Overall, most local governments (61%) and schools (48%) informally monitor their bills by simply looking at the bill each month, without any sophisticated analytical software that looks for trends over time or signals them when an irregularity

• ccurs.”
• ”Texas School & Local Government Energy Efficiency Market Assessment

and Baseline Study”; Prepared for CLEAResult, February 2010

A c c re d i t e d Tex a s E n e rg y M a n a ge r

If the Energy Department Doesn’t Check – Who Will?

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❯$69,444.45 = Average Monthly Cost of Utilities for K-12 public schools

in the State of Texas You wouldn’t just pay your personal credit card without checking to see what you’re paying for…would you?

Bottom Line…

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❯To maximize your energy usage

dollar, you must understand your utility bill and the individual components that influence that bill

Cost of Electricity – By Region

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Basic Terms – Electric

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯Electric COOP: Electric cooperative –

• Utility company responsible for full-service provision of electricity to
• customers. Company is “owned” by the customers it serves, as member of

the cooperative

❯Municipality: City-owned utility company –

• Full-service provider “owned” by the citizens of the community

Basic Terms – Electric

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯Rate Schedule (or Tariff):

• The set of formulas (approved by the PUC) that regulated entities of the

electricity market, utilized to calculate electric utility billing charges

❯www.puc.state.tx.us/

Basic Charges on Your Monthly Electric Bill

A c c re d i t e d Tex a s E n e rg y M a n a ge r 23 BASIC Charges Base Charge Current Charge Energy Charge Demand Charge Recurring Charge Non- Recurring Charge New Service

• r Product

REP Charge Meter Charge System Benefit Fund TDU Delivery Charges TD Surcharges Energy Efficiency Cost Recovery Factor Advanced Metering Systems Surcharge Competition Transition Charge City Sales Tax Transition Charge Rate Changes Late Payment Penalty Nuclear De- Commission Fund PUC Assessment

• Misc. Gross

Receipts Tax Reimbursem ent Amount Due

Basic Terms – Electric

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯Watt: unit of electrical power (volt-ampere) – Includes consideration of

power factor (P = Volts * Amps * PF) [Note: Also multiply by 3, e.g. 1.732 if 3 power.]

❯PF: Power Factor – Ratio of real power to apparent power, in an

electrical system; always 0  PF  1

❯Kilowatt: 1,000 watts – typical unit of electrical demand ❯Watt-hour: energy used over time – ex. 1 watt of energy used over 1-

hour time = 1 watt-hour

❯kWh: 1,000 watt-hours – typical unit of consumption indicated on an

electric utility bill

❯MWh: 1,000 kWh – 1,000,000 watt-hours

Basic Terms – Electric

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯VA: volt-ampere, unit of electrical power – no consideration of power

factor (P = Volts * Amps)

❯kVA: 1,000 VA – typical unit for demand on some utility bills ❯Demand: Maximum amount of power required by a facility, typically

averaged over a 15 – 30 minute internal

• NCP Demand: Traditional demand – the maximum power required by the

facility in a given month

• Billing Demand: Demand used on parts of the bill, if a ratchet clause is

applicable (sometimes called “rpfa,” if PF penalty is applicable)

• 4CP Demand: Average of NCP demand for June – September of the

previous calendar year (sometimes called “pfa,” if PF penalty is applicable)

Basic Terms – Electric

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯Ratchet Clause: An allowance in the rate schedule for the utility

company to substitute the current monthly demand with a pre- determined percentage of the highest measured demand recorded in the past.

• Example: The rate schedule states the ratchet clause is 80% of the highest

demand measured in the past 11 months

› Historical measured peak demand, July = 483 kW › Monthly peak demand, December = 295 kW › 80% of 483 kW = 386 kW;

Utility bill utilized 386 kW, not 295 kW, for demand assessment on December bill

Basic Terms – Natural Gas

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯BTU: British Thermal Unit – amount of energy required to raise one

pound of water by one-degree Fahrenheit (1F)

❯CF: cubic feet – unit of consumption for NG ❯MCF: 1,000 cf – typical unit on NG utility bills ❯Therm: unit of energy – typically associated with NG, 1 Therm =

100,000 BTUs or approximately 100 cf

❯Dekatherm: 10 therms – 1,030,000 BTUs or approximately 1 MCF

Basic Terms – Natural Gas

A c c re d i t e d Tex a s E n e rg y M a n a ge r

❯Heat Value: Quantity of BTUs represented by any given fuel. Varies for

carbon-based fuels based upon location:

• Typically:

› Natural Gas = 1,030,000 BTUs/MCF › Propane = 91,600 BTUs/gallon › Diesel = 138.700 BTUs/gallon › Gasoline = 125,000 BTUs/gallon › #2 Fuel Oil = 140,000 BTUs/gallon › Electricity = 3,413 BTUs/kWh

Checking the Bill: What You Need

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❯Gather the bills, calculator, large cup of coffee…and act happy about it ❯Get a copy of the applicable rate schedules and riders (these get

revised or updated approximately every 6 months and the cost variables do change)

❯Update your Excel bill check spreadsheet with the new charges and

values in each rate schedule your facility utilizes

❯Plug in consumption and demand for the appropriate month’s bill

Checking the Bill: What You Need

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Checking the Bill: What You Need

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❯Retail Electric Provider (REP):

• Entered the electric utility free-

market on January 1, 2002 by legislative approval of Senate Bill 7

❯Major negotiable terms:

• Cost/kWh
• Bandwidth

❯Transmission & Distribution

Utility (TDU):

• The “wires” company, owner of all

generation and distribution systems

❯Non-Negotiable:

• Remains regulated by State of

Texas Public Utility Commission

Retail Electric Provider – The Deregulated Side

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❯Length of contract is negotiable: 1 – 5 (or more) years

• Necessary to balance market predictions over time
• Do not just select longest terms to avoid having to re-visit contract

negotiations next year

• Length of contract may depend on pricing mechanism

❯Pricing Mechanisms

• Flat Rate Unit Cost
• Market Index + Margin
• Market Index + Benchmark Lock-In

Market Timing – How Do You Know?

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❯The only solution is for someone serving the facility’s interests to watch

the market, assess trends in the prices, and recognize that an offered price of $0.06319 represents a significant change in the recent price trends and should therefore be rejected for a contract price, for example

Market Timing – How Do You Know?

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REP – Checking the Bill

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❯Bandwidth: A “cushion” of available consumption, usually expressed

as a percentage, which is a nominated quantity of electricity, the REP project the facility to consume in a given month. The percentage of

• ver/under flexibility that the facility has, before they are charged a

penalty for consuming (or not consuming) a quantity of electricity

• utside the nominated bandwidth is a contractually negotiated

percentage, typically ranging between 10% and 30%.

Contract Negotiations

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❯How quickly can you respond? ❯Many facility purchasing contracts can only be approved by the board

• f directors or trustees

❯If the market changes daily, can the facility establish a system that will

allow an agent for the facility to respond quickly to advantageous market conditions?

❯Can you get authorization allowing specific staff to renew the contract

at appropriate times, given board approved checks and balances?

Transmission & Distribution Utility – The Regulated Side

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❯Checking the Bill

– checking energy charges is simply a matter of multiplication: Consumption * Contractual Rate

TDU – Checking the Bill

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❯You will find two

different demands listed on the bill (rpfa and pfa) …BUT, you will not find an explanation of them.

TDU – Checking the Bill

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❯Study the rate schedule and you will discover…

• rpfa is what used to be called “ratcheted billing demand,” and…
• pfa is what used to be called “4CP demand,” but,…they have been modified to

reflect a power factor correction penalty, according to the following formula Demand Reading * 0.95 / Monthly PF

TDU – Checking the Bill

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❯Review the Rate Schedule and Riders and verification of the T&D

becomes a matter of substitution:

TDU – Checking the Bill

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❯Rate Schedules – Where are they? ❯In the modern age of information technology, most rate schedules can

be found at the T&D company’s website, or at the Public Utility Commission of Texas website: www.puc.state.tx.us/

Ashley Williams, MCRP & ATEM

❯ Texas Energy Managers Association ❯ Director of Curriculum and Certification ❯ awilliams@texasema.org

questions

e n e r g y m a n a g e m e n t p r o g r a m : f u n d a m e n t a l s a n d d e v e l o p m e n t

Texas Energy Managers Association

❯ www.texasema.org