While competition in the electric industry is expected to decrease the overall cost of the use of power, the future of the electricity market holds much more than simple price reductions.

According to the Building Owners and Managers Association (BOMA) International's newly published "Power Shopping II: Generating Value" booklet, facility managers should understand their load profiles, consider load-shaping options, and become knowledgeable on financing options.

Understanding Load Profiles

Since the demand for power generally changes with the time of the day, day of the week, and by season, we can expect the average price to also change with time and use unless its controlled by other factors (discussed below). As a result, load profile shapes (i.e., a graph of power vs. time) will influence pricing, with flat profiles generally having the lowest average cost.

While most non-industrial building power demand varies with time, it usually does so in predictable patterns.

Tip #1: Know the shape of your typical load profile.

This can often reveal ways to cut the present and future cost and price of power, while helping your power supplier offer the best and most secure pricing.

Load-Shaping Options

While most have existed in one form or another, deregulation will allow marketers to help endusers gather (and segregate) their loads more readily through metering and contractual means.

Tip #2: Consider coincident metering.

Coincident metering has been used to cut the average cost for power at facilities with many meters on different accounts held by one customer.

Tip #3: Investigate load isolation.

Load isolation can allow an enduser to segregate loads that would be cheaper under utility tariff-based power than under market-based power.

Tip #4: Look into demand cooperatives.

Demand cooperatives offer a way for endusers to work together, typically through an organizing vendor, to obtain lower utility rates by pooling their interruptible loads and agreeing to curtail them when requested.

Tip #5: Research the potential application of district-wide systems.

District-wide systems serve multiple customers with, for example, chilled water from a central facility that, in effect, transfers many individual electric chiller loads (lowering load factor) to a high load factor central facility that uses both electric- and gas-driven units to minimize total cooling costs.

Tip #6: Evaluate bill consolidation.

Bill consolidation allows many accounts held by one customer to be gathered for both coincident metering and attainment of cheaper energy block load rates.

Tip #7: Look into aggregation.

Aggregation involves gathering different customer accounts through a third party for purposes of bulk power purchasing, coincident metering, bill consolidation, transmission capacity reservation, and expert load analysis.

Understand Financial Tools

The successful energy buyer not only understands his/her load profile and how to manage it, but also is keenly aware of financial tools that can cut or "levelize" energy costs. As deregulation evolves, both marketers and financial firms will provide access to futures, options, and payment plans that ensure prices do not exceed a predetermined level.

  • Electric futures (now available in several parts of the nation) are tradable contracts for monthly blocks of firm power, purchased in advance of need, that will later be provided during normal business hours at a predetermined price.
  • Options (typically in the form of "calls" and "puts") are contracts between suppliers and marketers that allow a user of power the knowledge that he can call for power and be ensured supply; or, the seller of power can be ensured of a buyer when he puts out an offer to sell, both at predetermined prices.
  • Payment plans can ensure predetermined monthly bills (not just pricing) through risk-management techniques.

The best energy cost-control program considers new and existing technologies, and blends them with a mix of pricing and load-shape options.ES