Climate Corps: Demystifying Energy Bills to Save Companies Money
<p>Deciphering corporate utility bills presents a challenge for the uninitiated, but understanding the rate structure will offer clues to how much companies can save through energy efficiency.</p>
[Editor's note: This is the first in a series of blogs from the 2009 Climate Corps fellows. The program, from partners Environmental Defense Fund (EDF) and Net Impact, pairs MBA students with companies to identify energy efficiency opportunities and develop actionable strategies that help host companies reduce costs, energy use and greenhouse gas emissions.]
I’ve almost finished my first month working as a sustainability analyst for SunGard in Philadelphia.
I’ve seen through my studies and research with the Erb Institute for Global Sustainable Enterprise how vital top leadership engagement on sustainability is for companies to make real change. My impression is that CEO Cris Conde has indeed made sustainability a priority.
SunGard has not only joined the World Business Council for Sustainable Development, but more than one role within the company has been directed to focus on sustainability, including a senior manager of corporate responsibility and a director of infrastructure compliance and green initiatives. It seems that the sustainability message is spreading throughout the organization.
Perhaps most importantly, the real push for SunGard to become a more sustainable company was started at -- and continues to be driven from -- the employee level. Support on both sides of the spectrum appears to be the key to maintaining momentum.
At their headquarters, the company has already implemented a fair number of energy efficiency measures, so I’m digging deeper into the company’s operations to find new efficiencies.
One challenge I’ve encountered is deciphering the utility bills from PECO, the local utility. There are a few nuances to the billing structure that have taken more than one conversation with SunGard facilities managers and PECO account managers to understand.
For example, utilities charge large customers for their energy usage (in kWh) over a given month, as well as the total “peak demand” based on the maximum load in kW the customer requires over any 30-minute period.
In the case of PECO, usage is charged over multiple tiers with different cent/kWh rates for each, with the first chunk of kWh charged at the first tier rates (which can be several times more than the second tier rates). For PECO, demand is not an additional charge, but rather it’s used to determine the size of the first (more expensive) tier -- the higher the peak demand, the more kWh hours charged at the higher rate.
The bottom line: Companies getting their electricity from PECO can cut their energy costs by both reducing the kWh they use and reducing the size of the costlier first tier by reducing maximum load. Understanding this billing structure (I found a good explanation by TRF Energy) is important for companies to understand how much they stand to save through energy efficiency.
More to come as I dig further into ballast factors, BTUs, rate schedules and rebates. And stay tuned to see what I learn when I interview SunGard’s CEO later this summer.
Ryan Whisnant, a 2009 Climate Corps fellow and Net Impact member, is pursuing a Masters of BusinessAdministration degree at the University of Michigan. This content is cross-posted on EDF’s Innovation Exchange blog.
Image licensed by stock.xchng user clix.