We Helped a Client Save $12,000 a Year Without Touching Their Building
A client recently told us their energy budget was about $30,000 per year short of their actual energy costs. We helped close that gap by roughly $12,000, without replacing a single piece of equipment.
Sometimes the best energy savings opportunity is hidden in your utility rate.
A Tale of Two Tariffs
This client was billed under Nova Scotia Power's Charitable Organizations rate, which charges a flat price per kWh with no demand charges. For many non-profits, that can be a good option. However, eligible organizations can also choose Nova Scotia Power's General Demand (Rate 11) tariff, which includes both energy and demand charges.
How do You Know Which Rate is Better?
It largely comes down to your building's load factor, which is a measure of how steady or "spiky" your electricity use is. Buildings with a high load factor use electricity more consistently throughout the day and typically benefit from demand-based rates. Buildings with a low load factor often do better on flat energy rates.
For Nova Scotia Power's current tariffs, a load factor above roughly 40% generally favours the demand-based rate.
Because we’ve analyzed the electricity bills for many similar buildings, we suspected this client's load factor would be around 60%. The challenge was that their utility bills didn't include demand readings, making it impossible to calculate load factor from the bills alone.
The Devil’s in the Details
Fortunately, the building had a smart meter.
Using interval data from the meter, we calculated the actual load factor and found it was consistently around 60%. We then modeled what the client's bills would have been under both rate structures.
The result? They were paying about $10,000 more per year than necessary.
We shared the analysis with the client, who worked with the utility to switch rates. We've been tracking the results since the change, and the actual savings have closely matched our projections. In fact, we now expect annual savings of approximately $12,000; about 11 percent of their annual electricity cost.
Is Your Building on the Right Rate?
If you have the option to choose between a flat energy rate and a demand-based rate, a similar analysis can quickly reveal which one is right for you.
And if you're already on a demand-based rate, try our Load Factor Calculator to see how steadily you're using electricity.
Because if you're not managing your energy, who is?
2-Minute Payback is GRCL’s blog of energy-saving tips and tools for busy building managers. This post was written by Chuck Faulkner.
