Measure your energy-savings progress

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It’s said that every journey begins with one step, but that’s not actually true because it assumes you know where you are when you begin. This article will help you figure out where the starting line is so you can measure your energy-saving progress. Whether you have one restaurant or a dozen, the method is essentially the same, although multi-unit operators can take the process one step further by comparing similar units to each other.

Begin by gathering your electricity bills for the last year so you’ll have a benchmark for every month of the year. Like year-over-year revenue, this will allow you to compare like months, adjusting for normal seasonality and other factors. It tells you how much you spend on energy each month, but so much more. It also tells you when and how you spend those energy dollars.

Before you begin your analysis, it’s important to understand the difference between energy (kWh) and power (kW). Energy is equal to the amount of power a device uses over a given period of time. For example, a 100 Watt (W) light bulb (remember those?) burning for 1 hour uses 100W x 1hr, or 100 Watt-hours (Wh). 1,000Wh equals 1 kilowatt-hour (kWh). A kWh is a basic unit of measurement for how much electricity you use. The light bulb’s power rating (100W) describes how much power it consumes when running; it’s a measurement of the rate at which energy is being used.

When your electricity bill refers to demand, it is referring to the peak power (kW) your facility required from the utility at any given time over the previous billing period. Usage on your bill refers to the total amount of energy (kWh) your facility used over the billing period.  

With that difference in mind, following are some additional terms to help you understand your bill:

• Energy Charges (kWh) – Your utility meter tracks the total energy (kWh) you use in a monthly billing cycle. Utilities charges for energy usage are based on kWh consumed. For example, if a business uses 20,000 kWh in one billing cycling, and energy costs $0.10 per kWh, the Energy Charge for the billing period would be 20,000 kWh x $0.10 / kWh, or $2,000.  In many cases, the price per kWh changes depending on the total amount of energy a business consumes.
    
• Demand Charge (kW) – Demand represents the greatest amount of energy used in 15-minute or 30-minute intervals during a utility’s billing cycle. Different utilities have different intervals for measuring peak demand. To measure demand, electric meters record the average demand usage over each 15- or 30-minute period and record the peak period for the month. Utilities charge a fee based on the peak demand over the month to cover the costs of investing in infrastructure (generation, transmission, and distribution) required to meet the business’ peak power demand.  
    
• Monthly service charge – The fixed monthly fee that covers the utility’s administrative charges such as billing, processing payments, metering and meter reading.

One you understand these terms, you can compare your costs in a number of ways and, again, you must compare like with like. If you look at a January 2013 bill, it best to compare it to the same bill in January 2012, 2011, etc. Most likely you can also compare previous years easily since most utility bills include the amount used for the same billing period the previous year, giving you a two-year history.