When you check your electric bill each month, you probably wonder where all that energy (and money) goes! Your utility bill might seem like it’s written in Greek, but understanding the details is key to unlocking potential savings. We’ll break down each part of your electric bill in simple terms so you can figure out exactly where your money is going and how to start saving.
Your Commercial Building Electric Bill Explained
Once a month you receive your business’s electric bill, check the bottom line for the grand total, and probably wonder why it’s so high. Is there something going on in the building that’s causing my rates to climb? How can I lower my commercial electric bill? These are common questions held by many commercial building owners who briefly check the line items on an electric bill but do not fully understand them.
Let’s go through all the details on your electric bill and dive into exactly what they mean. So the next time you receive your electric bill, you’ll actually be able to make sense of it and take steps towards saving money.
All electric bills are formatted similarly, you will see individual line items, each with its own charge amount, all adding up to the total bill. Here are the line items:
KWh
Oh, the acronyms! What is KWh? Kilowatt-hours is the unit measurement. Basically, it’s the amount of power (watts) something uses if left on for an hour, divided by 1000. You’ll see the units of electricity that you use listed in kilowatt-hours (KWh) and how many “cents” for each KWh you use.
For example. let’s say your rate is $.010 for each KWh. If your central air conditioner uses about 3,500 watts per hour. If that air conditioner runs for 12 hours a day, it will use 42,000 watts or rather, 42 KWhs and will cost you $4.20 a day or about $125 a month.
Knowing and understanding KWh can help you determine how to better control your usage. By identifying how much you’re currently paying in “cents” per KWh, you can potentially shop around for a better rate with a different energy supplier.
Delivery vs Supply
Next up are your delivery and supply charges. The average commercial building electric bill is split into two parts:
Delivery
Fixed and set by your local utility company, delivery rates cover the transportation of the electricity from where it gets generated to your business. The maintenance of power lines, natural gas pipelines, transformers, and other infrastructure needs are all supported by your delivery charge payments.
Here’s a breakdown of your basic delivery charges:
- Customer Charge: this covers customer service-related things such as meter reading, billing, and administration costs.
- Distribution Energy Charge: the cost of delivering your electricity from its generated source to your building where it is consumed. The path of distribution includes the electrical substation and power lines, to your home. Based on how much electricity is consumed, this charge is tiered. If you have multiple meters you will see a charge for each one.
- Transition Charge: this charge allows the utility company to recover costs associated with meeting the state’s legal requirements.
- Transmission Charge: the cost to deliver electricity from power-generating facilities (natural gas, coal or nuclear power plants) to the utility’s electric substations, and to the beginning of the utility’s distribution system.
- Energy Conservation Charge: this charge is related to a state program that helps fund utility energy efficiency measures.
- Renewable Energy Charge: a state program charge to help fund state renewable energy measures.
- Distribution Demand Charge: this may or may not appear on your bill. This charge only applies to commercial buildings that pay time-of-use rates or have certain bill sizes. It is based on the highest 15-minute average usage recorded via the utility meter within a billing period. The more electricity you request during peak periods, the higher your demand charge can be. Demand charges can comprise between 30-70% of a company’s electric bill.
Supply Charges
Delivery charges do not really fluctuate based on your energy consumption, but supply charges do. Supply charges refer to how much electricity you use and the rate each KWh costs.
Unfortunately, in some states, you do not have an option as to where your power supply comes from, or what company supplies your energy and so you pay whatever rate is set by your utility company.
However, deregulated energy market exists in many states. That means you as the business owner can choose what supplier you want to get your energy from. This creates the opportunity to take advantage of competitive energy prices. Even if you’re already using the best LED lights for commercial buildings, you can still save money. Lowering how much each KWh costs will reduce the overall supply portion of your electric bill.
Together, the delivery and supply charges make up the total cost of your commercial building electric bill. Saving a cent or two per KWh can really add up to big monthly savings!
How to Lower Your Commercial Building’s Electric Bill
When it comes to lowering your electric bill, anything you do to cut your energy usage can lead to amazing savings. You might think that only an overhaul will lead to reduced costs, but even easy small changes can save your company money. Here are five simple things you can do to help you lower your energy bill:
1. Audit Your Energy Efficiency
An energy audit should be your first step towards lowering your building’s utility bill. What is an energy efficiency audit? An energy professional will check out your building’s average usage and find ways to reduce it. For example, they may identify outdated lighting or insulation issues, and then recommend more efficient energy-saving technology. US manufactured LED light by Energy Bank is one popular energy saving system on the market right now. Ask a BizReps team member for more information about renewable energy LED lighting!
2. Try an After-Hours Audit
To conduct an after-hours audit, you won’t even need to have professional help. When the business day is done, you simply walk the building and check what stays on and plugged in after closing time. Without any advance notice to your employees, randomly select a day and after all employees have left, wait a coupe hours. Wait time is important because it allows anything that’s on a timer to power down, and computers to go into sleep mode. Next, take a walk through the building and see what appliances are still on. You might be surprised to see lights still running, technology plugged in, or laptops left on.
Take notes during your walkthrough and identify some areas that you could cut energy waste. Inform employees what you have found ask them to unplug and power down their appliances each night. A helpful follow up would be to repeat this audit on a weekend.
3. Revamp Your Office Behaviors
Saving energy is not just about radical change, it’s in the everyday choices and habits. Here are just a handful of small behaviors your business should consider revamping:
- Reduce light use: Remind employees to shut off the lights when they leave rooms. Oftentimes, light can stay on all day in common spaces like conference rooms, kitchens, and copy rooms. Encourage people to take advantage of natural light whenever possible.
- Keep doors shut: Your climate control system has to work overtime when doors are being left open, cracked, or ajar or a regular basis. Warm summer air and cold winter gusts are let in, throwing off the HVAC system.
- Offer flexible hours: A significant way to reduce energy use is to lower a building’s usage during “peak demand.” An office’s peak demand is when energy usage is at its highest. This point usually occurs from 9 a.m. to 5 p.m. each day. Letting employees stagger their workdays means less energy gets used at any one time. Fewer people will be working at any one time, so usage won’t spike as much.
4. Switch to the Cloud
Does your business operate on a local server? This means you require a dedicated computer room. Stationary computers are notorious for producing excess heat and spending unnecessary amounts of energy. As a result, it’s essential that server rooms are kept cool to protect the system from overheating. Switching to the cloud is a very cost-effective solution because it eliminates the need to host an IT room.
5. Invest in Energy-Efficient Technology
One of the best ways to cut down on energy costs is to use equipment that uses less energy. In general, energy-efficient technology will have a higher price point than less efficient models. However, the savings on your energy bill pay for these items quickly! Check out the 2021 Energy-Efficiency Lighting Guide for Businesses and Building Owners for great ideas for how to update your inefficient lighting system. Here is the best technology to try:
The EnergyBank FUSION system is by far the best solar-powered LED lighting on the market right now. It has both commercial and industrial applications, from office troffers to production area high bays. Its efficiency outranks any other LED office lighting. FUSION LED systems can provide all or a majority of light from solar panels when electricity costs are at their highest.
What makes this product the best solar-powered light? Its innovative technology, which garnered the Plant Engineering 2018 Product of the Year Award. The FUSION Energybank LED system features:
- Photovoltaic solar
- Solid-state lighting
- IoT (Internet of Things)
- Environmental stewardship
ENERGY STAR-rated appliances: ENERGY STAR is a government program to promote energy efficiency. The initiative rates air conditioners, computers, and other equipment that is energy efficient. Purchasing products with this rating as you retire old ones is a sure-fire way to bring down energy costs. Also, there are several tax breaks available such as the Solar Tax Incentive or ITC for purchasing ENERGY STAR-rated equipment. Ask a BizReps team member about how to get the 179D Commercial Buildings Energy-Efficiency Tax Deduction. These government grant programs can help you save big on the switch to USA-manufactured LED lighting.
Ready to learn more about analyzing your energy bill and cutting costs with energy-efficient solar LED lighting? Book a call with our team at bizreps.ca/schedule! We work with companies that are ready to take the next step into better lighting, more efficient lighting that’s going to save money and energy. There are many possible LED lighting solutions that we’re ready to share with you.