How Sustainability Leaders Can Get a Grip on Their Utility Data
How Sustainability Leaders Can Get a Grip on Their Utility Data
As sustainability leaders continually step up their game when it comes to tracking, managing and reducing energy use, they almost always hit a significant roadblock: Actually getting their energy use data from utilities.
Energy use data (kWh for electricity, therms of natural gas, etc.) rarely exist electronically in companies. Paper utility bills are received and manually processed monthly, which can mean hundreds of bills per month for a large company with hundreds or thousands of locations.
As a result, more and more companies are looking to utility bill management vendors for assistance -- and the vendors are also stepping up their game. These vendors are in a very good position to help companies build and maintain a company-wide database or "system of record" of energy use and cost.
Companies will need to determine if one or two vendors are required to satisfy their utility bill management, carbon management, and energy needs, and I'm here to help you take stock of this growing market.
The Scope of the Problem
The difficulty in getting hard energy-use data, in electronic format, takes on an additional burden because of the importance of those data to mission-critical sustainability initiatives, including:
- Calculating a company's carbon footprint for CSR reports,
- Completing surveys for groups like the Dow Jones Sustainability Index,
- Submitting information to registries like the Carbon Disclosure Project, and
- Complying with surveys from customers like Walmart and IBM
This information is not typically available electronically because energy use information is rarely collected in financial accounting systems, such as those from SAP or Oracle.
The default approach is manual data entry into a spreadsheet or database by facilities, EHS, sustainability, or finance teams. Not only is this process almost always laborious and error-prone, it can also be problematic, as it takes time to identify the right individual and to obtain the necessary approval to get this task added to a person's job description. This manual approach is further complicated by personnel turnover.
One apparent solution is to obtain the energy data electronically from the utilities, but few utilities actually offer this data electronically -- and this situation doesn't appear likely to change much in the next 3–5 years, even with the increased use of utility smart meters.
Next page: Utility bill management vendors come to the rescue
Carbon accounting software does not directly solve this data capture problem either. These products offer sophisticated capabilities for calculating carbon emissions and analytics. Along with useful import capabilities, most offer workflow for forms-based data entry, but an employee is still needed to retype data from a paper utility bill.
So sustainability teams are left with a large data capture problem, and few obvious solutions.
Utility Bill Management Vendors to the Rescue
Frustrated by these impediments, more sustainability leaders are now turning to utility bill management vendors for solutions.
Utility bill payment vendors have been around for years. Their services aggregate utility bill data, look for errors, and enter data into software, which provides analytics and sends data electronically to a customer's financial system. In some cases, they also actually pay the bill. (The latter is particularly helpful if a firm is plagued by late payment charges).
Their typical business model charges a monthly service fee, and this service is typically sold to the finance department.
Leading utility bill payment vendors include Advantage IQ, EnergyCap, Entech, National Information Solutions Cooperative (NISC), Pace Global, Summit Energy (part of Schneider Electric), and others. Offshore firm Infosys and others have also recently entered this market.
In leveraging this electronic database of energy use and cost, leading utility bill vendors have added carbon footprint calculation capabilities to their offerings. Four of them, in fact, were included in our list of top EECA vendors -- Advantage IQ, Entech, NISC, Pace Global and Summit Energy.
These vendors differ in breadth of services (some also offer energy procurement services), global reach, and vertical strength (some are leaders in retail, while others work with industrial firms).
Several firms choose to invest in a utility bill payment solution rather than a carbon management solution because their major need is capturing energy use data cost-effectively, not sophisticated carbon calculations or reporting.
Utility Bill Management vs. Carbon Management
Utility bill management and carbon management vendors have different historical starting points that affect their product offerings. Increasingly, vendors who are strong in one area also offer services in other areas.Utility Bill Management Carbon Management Key Features Bill data entry Manual entry with workflow Bill analysis Carbon emission calculation Bill payment Standard report Representative Vendors Advantage IQ Credit360 EnergyCAP EnerNoc Entech Hara Pace Global I H S Summit Energy SAP (Carbon Impact) … many others … many others
A third category of vendor applications are solutions based on submetering, which gathers energy use typically every 15 minutes directly from consuming asset (a building, lighting, furnace, etc.), and this energy use data is sent to energy management software. Submeter solutions involve vendors such as Cimetrics, E-Mon, SquareD, Schneider Electric, and many others.
Recommendations for Companies
While no solution is perfect and each approach has different strengths and weaknesses, utility bill management vendors are powerful solutions for firms with many facilities and need basic scope 1 and 2 carbon footprint calculations.
Sometimes, the right solution is a hybrid approach. It is not uncommon to find companies that have used a leading carbon management firm, such as Credit360, ENXSuite, and Hara, which have rich carbon management features and strengths, and pulled energy use data from leading utility bill management vendor. We have seen such hybrid solutions banking, retail, and industrial settings.
Other firms use carbon management software, utility bill management software, or energy management software to manage their submetered data.
Clearly, this vendor market is fluid and developing.
Utility Bill Management Firms Still Find Themselves in a Good Position
Yes, utility bill management vendors are in a very good position. Most firms have basic data carbon reporting needs and cannot justify the expense of submetering at all of their facilities. Utility bill management solutions offer a cost-effective approach to building a company-wide database of energy use and cost.
Within the next two years, look for traditional utility bill management vendors to add services for energy procurement and sustainability, and look for traditional carbon management and energy management vendors to add utility bill management services.
At our Enterprise Smart Grid conference on November 2, you can learn more about how Staples (a retailer), Genzyme (a biotech manufacturer), Beacon Capital Partners (a real estate investment firm with dozens of large commercial office buildings), Precision Cast Parts (an industrial conglomerate), and Harvard University use different software products to meet their utility bill payment, carbon management, and submetering needs.
Photo CC-licensed by Allen Ellison.