Energy Planning Network: Get To Know Your Bills “Ventilation for Acceptable Indoor Air Quality,” (November 1999)
For years, energy and facility managers have been aware of the operational and economical benefits of systematically tracking and monitoring utility bills. Very often, this process, also known as energy accounting, is the most cost-effective and immediate way to reduce utility expenses.
Over the past few years, improved technologies and increased entrepreneurial involvement by organizations looking to ride the wave of the quickly changing electricity market have exponentially increased energy-buyers' options for paying closer attention to utility bills.
While the number of off-the-shelf utility tracking programs has increased, the power and capabilities of these systems have improved as well. In addition, service providers have concurrently linked their systems to the Internet, giving endusers the convenience of clicking on a particular bill and viewing the actual copy of the bill online.
With the improved technologies and services related to utility bill-tracking, energy buyers are more quickly finding savings that drop directly to their bottom line. By paying closer attention to utility bills, energy and facility managers are:
- Checking complicated pricing and quantity measures against regulated tariffs;
- Creating better energy benchmarking tools by systematically converting electric and gas usage information to a common unit of energy/sq ft;
- More easily creating accurate budgeting and management reports on organization-wide utility expenditures;
- Checking to see that utility bills are paid on time and eliminating late fees;
- Validating utility bills prior to payment (e.g., looking for meter malfunctions, incorrect meter readings, utility bill miscalculations); and
- Tracking the effectiveness of energy-related capital improvement projects by comparing usage trends at each facility.
First Step: Capturing DataThe first step is to capture utility billing information. Current options include:
- Change the current internal accounts payable process to extract more information from each bill;
- Purchase a software package that allows billing information to be entered for further analysis; or
- Have the utility bills processed by a qualified bill payment vendor that captures more that the typical accounts payable data.
In isolation, a single utility bill is not terribly valuable from a data standpoint. However, when one bill is networked with other bills (either previous bills for a particular location or bills from across the organization's many locations), it provides data that help to cut costs.
Now consider "networked" bills. This information raises important questions like: What has changed about this bill that shouldn't have? Why did the facility in Boston have an overall increase of 40% in utility expenditures last year? Why is the electricity cost/sq ft of one facility twice as high as a similar facility within the same utility territory?
To answer these questions, such billing data must be fed into a software tool that allows the organization to quickly pinpoint inaccurate bills, high-cost facilities, and high-cost vendors. To tackle this process, the following three general categories of tools and services are available in the market today:
- Boxes of bills services. Typically operated under a shared-savings approach, this service takes your paid bills and looks for overbilling that can be recaptured.
- Off-the-shelf software. This tool allows bills to be manually entered into a computer; or, a database of billing information can be imported into the software. Reports can then be generated that extract more actionable information from the raw data.
- Web-based services. These capture data when bills are paid, network that data into a web-based tool, and allow all utility costs to be tracked with a browser and a password. Web-based services are usually part of a bill-paying or bill auditing service.
Whatever the service, the overall goal of investing in utility information is to get the bills connected. As the electric industry changes over the next few years, technology is concurrently moving forward. Paper bills will become electronic, information will be pre-digitized, smart electric meters will become less expensive, and energy management systems will become smarter. While these transformations are occurring in tandem, you can save money by making your energy utility bills work for you.