Monthly Archives: June 2012

Monopoly electric companyThe high level concept of energy deregulation is defined as when government reduces its role and allows industry greater freedom in how it operates. Similar to deregulation in other industries like telecommunication and transportation, energy deregulation involves the purchase of electricity and natural gas through a competitive market. In a regulated market, commercial, industrial and residential users of electricity and natural gas are forced to buy energy through the utility without competition.

The lack of competition in the market increases the cost to the end user because the utility can charge any rate it can justify to the regulatory authorities and the suppliers are not forced to compete for the business. Deregulated markets promote competition between suppliers because it permits customers to choose the lowest cost supplier with the most advantageous contract terms. Many would argue that deregulation lowers costs for the end user and has stimulated suppliers to create advantageous product offerings for consumers.

How It Works

Electricity and natural gas bills contain charges and rates for demand and supply. The demand or distribution charge is paid to the entity, typically the local regulated utility, who owns the lines and/or pipes that distribute the electricity or natural gas to customers. The demand charge is regulated by a Public Utility Commission and the delivery is guaranteed by law. A common question from first time procurement customers is “Could I lose access to electricity and natural gas by switching to a competitive supply contract?” The resounding answer to this question is: “NO”. You do not risk losing access to electricity and natural gas because you choose to take advantage of deregulation. The transmission and delivery is guaranteed by the PUC and the local utility that owns the transmission lines and/or pipes.

Customers can save by taking advantage of deregulation because it allows supply firms to compete for your business and aggregate usage with other customers creating economies of scale and lower pricing. The typical supply charge savings ranges from 5-20% on average compared to purchasing supply through the utility (owner of the lines/pipes). Many factors can impact the savings including the contract length, natural gas, oil and other commodity pricing fluctuations, the float  provided for in your supply contract, and various outside influences that can negatively or positively affect commodities markets.

USACE, Sembach develop net-zero energy master plan

USACE, Sembach develop net-zero energy master plan by USACE Europe District on Flickr

Building energy audits can be performed on commercial and industrial buildings to assess the amount of energy currently being used and assist in prioritizing and implementing energy-efficiency projects. Energy audits use a variety of techniques to evaluate energy efficiency and identify potential efficiency improvements to lower utility bills and increase comfort. Energy Star rating is just one method of establishing a comparative baseline of the energy usage of a building. Energy audits will assist building owners and property managers in identifying ways to help lower operating costs and create a more competitive position for their building in the real estate market.

Energy audits can be obtained at no cost to the building owner and at a minimum should include a review of the building envelope and building operations.

Typical energy audit reports will include similar recommendations in the following areas:

  • Building Envelope and Building Operations
  • Lighting Systems
    • Occupancy sensors for lighting in amenity areas
  • Heating and Cooling
    • Scheduled start and stop of HVAC equipment and lighting
  • Water Heating
    • Reset boiler hot water temperatures based upon outside air temp
    • Lower domestic hot water temp to 120 degrees
  • Energy Management Systems and Controls
    • Repair/ Replace defective zone control valves
    • Controls to lock out central cooling below 50 degrees
    • Controls to lock out central heating above 65 degrees
  • Set space temperatures during unoccupied times up to 85 degrees/ set back to 65 degrees at night
  • Annual Maintenance
    • Changing filters, cleaning coils and cleaning tubes/duct-work
  • Heat Recovery Operations

Sample Energy Audit Recommendations

Low Cost/ No-Cost Energy Conservation Measures

  • Install Programmable thermostats
  • Insulate interior hot water pipes
  • Install photocell control of parking lot and exterior lighting
  • Global Control for computer monitors “off” after 15 minutes of inactivity or at night

Retrofit or Upgrade at next replacement cycle

  • Evaluate potential savings for alternate Power Systems – Variable Frequency Drives
  • Install low flow faucets, and toilets
  • Install higher efficiency heating or cooling systems
  • Increase roof insulation
  • Evaluate window replacement
  • Replace higher efficiency lighting in common areas, exit lighting and stairwell lighting

Higher efficiency lighting in room areas, especially to replace incandescent bulbs

Get Going

  • Take advantage of DOE’s Energy Star – energy benchmarking software to easily get started and help you establish priorities.
  • Contact a deregulated energy broker in your area and request a free energy audit
  • Contact your local utility company and request a free energy audit
  • Review, prioritize and assign energy conservation measures and energy efficiency measures to ensure all high impact ROI and Low Cost projects are assigned and implemented first.

Contact your local energy broker to provide a list of all available energy rebates and tax incentives.