Finding Cost-Savings Opportunities in Submetering
By James Piper, P.E. June 2014 - Energy Efficiency
Submetering a facility also creates cost-saving opportunities for managers, in addition to a straight reduction in energy use. One component of most facilities’ electric bills is for electrical demand. This demand charge is based on the highest rate at which the facility uses electricity during a billing period. It is measured over a set period at, say, 15– minute intervals.
For facilities with flat use rates, the demand charge is a relatively small portion of the bill. Few facilities have flat use rates. Most have peaks that are many times higher than their average rate of use. For these customers, demand charges can be a significant portion of the bill.
By installing a submeter directly in line with the utility’s billing meter, managers can monitor the electrical use and demand for their facility in real time. As the demand approaches a preset level, they can use their facility’s BAS to turn off electrical loads for short periods of time to reduce their demand for electricity, thus reducing that billing period’s demand charge.
With an established program for limiting demand, facilities can participate in special rate programs based on controlling demand. Typically called demand response programs, they allow utilities to notify participants when the utility needs to reduce the demand for electricity on the system. The facility then must reduce their electrical demand to a predetermined level.
Submetering data can help managers identify loads the facility can temporarily reduce to reach this level. The payoff for participating facilities is reduced rates for electricity. There is a penalty, though, if a participating facility fails to meet the established demand limit.
Submetering also makes it possible for facilities to participate in other utility programs that can impact the cost of electricity. Most of these programs require customers have accurate data on their daily, weekly, monthly, and annual load profiles. Armed with these profiles, managers can pick from the most beneficial rate structure available.
Once managers have established the initial program, they will have hard data they can use to quantify the successes and identify other opportunities. They also can use the data to make the case for expanding the program to the next level of energy-using systems. Success will create further opportunities.
The program requires constant monitoring. Managers need to make daily, weekly, and monthly checks of data to gain the greatest benefits. Submetering provides managers with powerful information, but only if they can translate that information into action.