If you run a business, then you will know how confusing your electric bill can be. You may find that it is just a jumble of numbers and charts, but if you can interpret it properly, then you may find that it is easier than ever for you to save a great deal of money. Whether you are running a warehouse, a restaurant, an office, or a manufacturing facility, learning how to decode your utility bills can help you to regain control over your energy expenses while helping you to have more confidence in what it is you’re paying for.
Understanding Energy Charges
This is the total cost for the electricity you’re using during the billing period. This is charged based on kWh, and it’s split into peak usage and off-peak usage. Peak usage refers to the electricity you’re using during demand hours, and off–peak is the energy you’re using during low-demand hours. Some utilities might only have one blended rate per kWh rather that distinguishing between on and off peak times or seasons.
Demand Charges Explained
This is one fee that tends to be overlooked. Demand charges tend to be based on the highest level of power that your facility uses at any given moment in a billing cycle. One thing to take note of is that this is not the total energy you are consuming. It’s more like the maximum load that your company is placing on the grid. If your business suddenly turns on lots of HVAC units, equipment, or machinery all at once and you notice the peak demand spike, so will your demand charge. This is the case even if it’s just for a few minutes at a time.
Delivery and Transmission
This covers the cost of delivering electricity from the grid to your business. This is often regulated, and it can include things like line maintenance, administrative fees, and even metering.
Taxes and Fees
Environmental surcharges, taxes, and government-mandated charges may also show up. While they are usually not negotiable, if you can take the time to understand them, then this can be helpful when trying to forecast your expenses as a whole.
How to Save Money on Your Utility Bills
If you want to save money on your utility bills, then the first thing you need to do is understand demand charges. These tend to be determined by your peak usage windows each month. If you want to lower them, then you need to stagger your equipment use. Avoid running any high-load appliances at the same time. You also need to install energy management systems and automate when your devices operate, as this is a good way for you to avoid peak overlap. You can also use battery storage. Some businesses offset peak demand by using batteries, which are charged during off-peak hours or from solar.
Review Usage Patterns
Another thing you need to do is try and analyze your usage patterns by the time of day, or even the time of week. Shift your operations so they are more during peak hours if you can, as this is when electricity rates tend to be lower. Use smart meters as well, as this is a good way for you to monitor your real-time energy usage.
Check for Errors
Billing mistakes happen, and it’s important to be aware of them. You need to go through your bills so you can look out for duplicate charges, inaccurate meter readings, and even unexpected spikes. If something appears to be off, then be sure to bring this up with your utility provider, as they should be able to help. Outliers in utility consumption can also signal early equipment failure and signal in-time maintenance needs.
Alternative Rates
A lot of companies will offer you a pricing plan if you are a commercial user. You may be able to get lower rates during off-peak periods, and you may also be able to take advantage of demand-response programs. Switching plans is often the best way for you to benefit your bottom line if you know that your operation is flexible.
Strategies You Can Adopt Moving Forward
Upgrading your lighting is one of the best ways for you to lower your energy bills. Switching from incandescent or even fluorescent lighting to LED will dramatically reduce your energy consumption. You can also upgrade your HVAC system. Heating, ventilation, and air conditioning systems all use a lot of energy. If you replace these outdated systems, then you will find it easier to take advantage of more energy-efficient models. You should also give thought to your production equipment. Outdated machinery is not only less efficient but also prone to breakdowns. If you invest in newer and higher-efficiency models, then this will increase your productivity while also helping you to be more energy-efficient as a whole.
On-site generation, including solar panels, can also be a good way for you to offset grid energy, while reducing your peak demand. You can also compare your facility’s energy to industry standards. There are a lot of tools you can use here, including the Energy Star Portfolio Manager. This allows you to understand the energy you are using while also giving you ways to set reduction goals. From there, you can also measure the ROI on any upgrades moving forward.
Final Thoughts
So overall, your commercial energy bill is about more than cost. It is also your roadmap to savings, and by understanding it is one of the best ways for you to reduce expenses while improving your bottom line. Whether you are making operational changes or simply looking to save on energy infrastructure, every single insight you adopt is the best way for you to bring your business closer to energy efficiency and sustainability. It also allows you to take control of your energy so you can stop spending as much when you just don’t need to, which can be a very powerful thing moving forward. If you want to find out more about this, then all you need to do is call us at Wolf River Electric. You can call us at (763) 229-6662, and when you do, our team will be more than happy to advise you on anything you need to know.
