10 THINGS MANUFACTURERS CAN DO TO CONTROL ENERGY COSTS
Virtually every manufacturer wants to cut its energy costs and optimize its energy use and improve its sustainability footprint in the process. EnStar Energy visits industrial facilities nearly every week attempting to help facilities reduce their energy costs. All too often, the same set of root causes to are found to exist. Many could be reduced or eliminated by taking a few fundamental steps to control how energy is used and paid for.
So, here goes our effort to provide a little advice based on our experience with numerous plants of all sizes.
First, let’s start by stating that every facility needs to have have an energy manager. Someone needs to be responsible for insuring that energy is used cost effectively, and that utility bills are minimized. This does not mean that the facility has to have a full time dedicated energy manager, but someone must dedicate some time each month to reviewing energy use and costs and be in a position to cause corrective action. Many industrial plants don’t really have anyone filling this role. Without someone managing energy, use and cost how can you expect to control it?
Now regarding energy use and those utility bills:
Your plant’s energy manager must sees every utility bill, every month. You can’t manage what you don’t know. Too often utility bills go to accounts payable and are not seen by anyone in production.
Don’t just review an accounting summary of utility invoices. Review the actual bill. The bill total does not tell if there are charges on the bill that are wrong, can be reduced or eliminated or if any line item of energy use is higher than it should be.
Establish a 12 month budget for each utility service by month. When utility charges vary from the budgeted amount beyond a reasonable amounts (say 10%), find out why. Is it caused by a change in utility rates? Is it due to an increase or decrease in production? Is weather a factor? Was new equipment added? Is there something wrong with some of the equipment or the production process?
Be certain your facility is on the most cost effective rate offered by your utility given your operating characteristics. Things change over time. Many facilities at one time operated three shifts and cut back later to one or two shifts. What was the best rate then, may not be now. Be aware the utility will only tell you which rate is best when your service is started. After that you are on your own.
When checking for the right rate, be aware that electric rates with peak demand charges need to be evaluated on a 12 month basis, especially if your plant operations have an element of seasonality.
If your Company is served on electric utility rate tariff with demand charges, check to see if you are paying a “power factor” penalty. Power factor is the ratio of real to apparent power. It measures how much a facility is drawing a magnetic field from electric current that is unmetered but must be made up by the utility. It is caused by such things as large numbers of motors, welding, etc. The penalty is generally 2 to 3 percent of the total bill and can generally be corrected by adding capacitors to the system. It requires a study and capital investment, but can have a short payback.
If you are served on a demand metered rate, avoid creating power spikes. Do not start everything at once when the shift starts or schedule simultaneous processes if it can be avoided. Schedule runs of major electric using equipment during “off peak” periods as much possible.
Check your gas bill to insure you are not being served under Gas Customer Choice by a supplier someone signed up years ago. All too often once the purchase is made it is ignored. This often results in the purchase continuing for years after the contract expires and often at prices way above the current market. If it happened to you, get another supplier. Good suppliers don’t do that.
Consider receiving natural gas service under a “Transportation Rate”. Transportation is an ala cart service offered by most gas utilities. The utility just delivers the customer’s gas. The customer must manage its own gas supply. Essentially all the customer has to do is read the meter once a week.
Be certain you have a valid industrial processing sales tax exemption in place. Many manufacturers are paying the full 6% sales tax rate on their utility bills unaware that they are eligible for an exemption. EnStar, MMA’s energy consultant, can help with these and other energy issues when needed.
