Lowering Your Facility's Electric Rates

Lowering Your Facility's Electric Rates

by Lindsay Audin


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Many energy practitioners are either uninformed or misinformed regarding how electricity is actually priced. Many are also unaware of how to properly calculate potential dollar savings from energy efficiency upgrades.

Designed for commercial/industrial/institutional (C&I) power customers, this book details ways to secure lower electric rates and pricing in both regulated and deregulated retail power markets. The range of options varies from simple methods (e.g., minimizing sales tax) to more complex techniques (e.g., intervening in regulatory rate proceedings). With 40+ years’ experience in energy services, Mr. Audin provides an excellent understanding of power pricing and ways to reduce it.

Product Details

ISBN-13: 9781138303140
Publisher: Fairmont Press, Incorporated
Publication date: 10/30/2017
Pages: 410
Product dimensions: 6.00(w) x 9.00(h) x (d)

About the Author

Lindsay Audin (CEM, CEP, LEED AP) has been engaged in energy services since 1974, helping his clients cut their energy bills through energy efficiency, energy procurement, tariff optimization, and deployment of renewables. In 1996, he formed Energywiz, Inc. to serve large customers (i.e., those paying at least $1 million a year in energy bills). His firm's clientele has included Fortune 500 corporations, major institutions, government agencies (both US and abroad), energy service companies, and other energy consulting firms. As energy manager at Columbia University (1988-96), he won various national and international awards while saving that facility millions of dollars a year. Audin was inducted into the Energy Managers Hall of Fame (maintained by the Association of Energy Engineers [AEE]) in 1996, and his work continues to save his clients millions every year. For his efforts helping others grow in the energy services industry, AEE awarded him its 2014 International Award for Professional Development. Over 200 of his articles and columns have been published in energy and building management magazines (e.g., Building Operating Management, Architectural Record, Engineered Systems) and technical journals. He also sits on several trade magazine editorial boards and a professional certification board. Audin teaches live and on-line seminars to energy practitioners under the sponsorship of AEE and other professional and educational organizations. He resides in Croton on Hudson, a suburb of New York City.

Table of Contents

Section I Background

Chapter 1 The Bottom Line 3

Chapter 2 Understanding The Basic Power System 5

Evolution of the Electric Utilities 5

Utility Geography 7

Utility Financial Structures Vary 8

New Players in the Power Game 9

How the Grids Expanded 10

The Three Main Functions Of Utilities 12

Retail Deregulation Impacts Some Utilities 13

Chapter 3 Understanding Power Pricing 17

Average Versus Actual Electric Rates 17

To Understand the Options, Learn the Lingo 19

Unbundling Electric Rates 20

Basic Electricity and Tariff Units 20

How Peak Demand May Be Measured 24

Why Understanding Peak Demand Is Important 26

Chapter 4 Typical Components in a C&I Electric Bill 29

Fixed Charges 29

Major Variable Charges 30

Program Charges and Taxes 32

Many Pieces in the Pie 33

Chapter 5 First Steps in a Rate Analysis 35

Tips to Make Analysis Easier 36

Break Down Dense Language 37

Use Utility Accounting Software 38

Review Alternative Rates 39

What Tariffs May Not Show 40

Section II Options for Rate and Cost Reductions

Chapter 6 (Mostly) Administrative Options 45

Avoid, Shift, and/or Reduce Taxes 45

Minimize Bill Processing Costs 47

Aggregate Meters /Accounts 48

Re-classify Loads/Accounts 50

Lower Service Firmness 52

Seek A CHP Deferral Option 53

Find Billing Errors Using a Professional Utility Bill Auditor 54

Utilize Financial Techniques 56

Chapter 7 Utilizing Metering and Dynamic Rate Options 59

How Utility Metering Is Changing 61

A Brief Tutorial on Interval Data 62

How to Get the Data 66

Evaluating a TOU Rate 68

Power Pricing Based on Utility Load Profiles 70

A Slightly Extreme Example 71

Who May Benefit from TOU? 72

Get It 'Wholesale' via RTP 73

Who May Benefit from RTP? 76

Chapter 8 Equipment/Technical/ Operational Options 77

Reduce or Eliminate a Reactive Power Charge 77

Convert Electric Loads to Natural Gas 78

Get Paid to Cut Load By Demand Response Programs 80

What DR is All About 80

Who Offers DR Programs/Tariffs? 83

Cut a Distribution Rate by Upgrading Voltage Service 83

Pursue Transmission Bypass 86

Buy Cheaper Power Generated On-site 87

Negotiating Cogeneration 88

Cash in on Options for Using Alternative Energy Sources 89

Section III Changing the Rules

Chapter 9 Negotiating with Utilities 95

IOUs: Often the Toughest Nuts to Crack 96

Munis and Co-ops May be Easier 97

Authorities Are a Mix 98

Possible Mechanisms for a Resolution 98

Negotiation Is Never a Simple or Easy Task 99

Sweat the Details of a Proposed Deal 101

Chapter 10 Intervening to Help Write the Rates 103

Introduction 103

Understanding Rate Proceedings 104

To Succeed, Don't Go It Alone 105

Section IV Competitive Retail Power Procurement

Chapter 11 Buying from Competing Electricity Suppliers 111

Introduction 111

Historical Background 112

How the Purchasing Process Works 114

Preparing for Retail Power Procurement 116

Chapter 12 Options for Competitive Supply Pricing 123

Price Content and Structure 123

Common Types of Power Products 126

Chapter 13 Managing Competitive Power Procurement 131

Finding and Choosing Retail Power Suppliers 131

RFI Content 131

Price Discovery Methods and Tools 134

RFP Content 138

Chapter 14 Ways to Save Money and/or Increase Value 141

Chapter 15 Negotiating/Improving a Supply Contract 157

How to Improve a Contract 159

Post Bid Options 162

Appendices 165

Glossary of Tariff and Energy Procurement Terms 219

Index 391

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