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Understanding Your Business Energy Bills   arrow

 Energy Bill Basics

Most Colorado businesses have an electric bill and a natural gas bill. One of the most important things to look for on these bills is your energy consumption. For electric bills, this will be listed in kilowatt-hours (kWh). One kilowatt-hour equals (10) 100-watt light bulbs run for one hour. For natural gas bills, energy consumption may be listed in therms, hundred cubic feet (ccf), or thousand cubic feet (mcf). A therm is equal to a ccf, whereas one mcf equals 10 therms/ccf.

Calculating Energy Costs

Because monthly charges for energy use can fluctuate based on the cost of energy and other variable charges, comparing actual consumption from month-to-month and year-to-year can allow you to see trends. That said, it can also be important to understand how much you are paying per unit of energy (i.e. kWh, therm) to be an informed consumer. The simplest way to calculate total costs per kWh or therm is to:

  1. subtract your fixed service cost (sometimes called a Service/Facility Fee) from your total bill
  2. divide that number by your consumption (kWh, therms, etc.)

Demand Charges

In addition to paying for every kWh of electricity you consume, some businesses also pay for power demand as measured in kilowatts. This “demand charge” is typically determined by the maximum amount of power called for across any 15-minute period. Some utilities will use this ‘peak demand’ as your demand charge for the month, while others will use peak demand as your demand charge for an entire year. You can tell what you are charged for by looking at your electric bill and sometimes just by the name of your rate.

Businesses that pay for demand can save money by reducing the power they call for at any one time. To reduce peak demand, you must first identify when your peak demand is occurring and what is using electricity at that time. Then you can:

  • stagger times in which electricity is used
  • put large appliances or machines on timers
  • use large appliances or machines on lower settings
  • use more efficient lighting, appliances, and machines
Last updated: October 18, 2017 at 10:58 am