Frequently Asked Questions
Explore our most frequently asked questions related to energy management.
The following are some frequently asked questions about NUS Consulting Group and its Energy Management Services.
NUS Consulting Group is an independent energy management consulting firm. Since 1933, we have been privately-owned and therefore free to focus exclusively on servicing our clients’ long-term needs rather than the short-term priorities of a large conglomerate or energy company.
Energy brokers provide procurement for a commission – a supplemental charge applied to your price of energy. This commission is added to every unit of energy you consume – the more you consume the more the broker makes. An energy broker’s advice is always the same – you need a long-term contract. This maximizes the broker’s fees and minimizes their work. In contrast, energy consultants provide a range of services (invoice processing, on-line data information services, analysis, procurement, risk management, budgeting, CO2 tracking) for a fixed fee. A client retains and pays an energy consultant so long as it continues to be a value-added partner.
Energy markets are complex, energy price volatility is increasing and, if you have numerous sites, collecting and managing energy data is resource intensive. Rather than building your own dedicated energy management department and developing your own energy data management tools (both non-core to your business), it is more cost effective to outsource this process to a specialist with the expertise and leading-edge systems to support your needs.
It is easy to implement an energy management program, but the on-boarding process depends on your current situation. If you do not have a program in place – the implementation process involves the collection of your most recent year’s energy invoices and supply contracts and some basic accounting information. If you have an existing program in place –your historic energy data can typically be transferred from your old vendor to your new vendor along with your energy supply contracts.
Invoice processing and bill payment are similar in that both receive your invoices directly from your energy supplier, capture bill data and code invoices with your accounting information. After that the processes diverge. In bill payment your vendor asks you to prefund the payments by transferring funds to their account – they hold your funds and then pay your invoices. In invoice processing your vendor sends you a payment data file with your invoices (including accounting codes) that need to be paid – you upload the file to your accounting system and pay the invoices. The big difference between the two solutions is (i) with invoice processing you keep control of your money and (2) invoice processing vendors are focused on capturing all of our energy billing data not just the required payment fields.
Typically, energy management service consultants get paid a fixed monthly fee for services. This monthly fee is dependent upon the scope of services to be provided, the number of sites to be managed as part of the project and the number of states/countries in which the sites are located.
When you are switching energy management service providers it is best to arrange for a short period of overlap between vendors – typically 1 or 2 months, depending upon the size and scope of the project. This allows for the orderly transfer, upload and review of your energy data, procurement and risk management positions, and other project related information.
In a regulated energy market there is no competition. In short, you have no option to shop between energy suppliers. Local regulated energy providers, however, typically provide several different rate and tariff options to consumers. In these markets, the way to save money is to analyze and optimize these various options against your site’s demand profile. Once you have completed your initial optimization, you need to continue to monitor your site’s profile and the local supplier’s rate/tariff options for changes.
A good energy management program will include energy invoice processing – i.e., capturing images of invoices as well as all the invoice data fields and using this information to validate the energy bill. Aside from ensuring that you are paying only validated invoices, this energy invoice data can be used to calculate your carbon emissions and forms the bedrock for compliance with both government regulations and voluntary reporting schemes.
A comprehensive and accurate energy database is an invaluable asset. It will assist in identifying facilities that are outliers with regard to energy consumption and cost so corrective action can be taken. Also, it is a vital tool in supporting energy related capital allocation decisions – i.e., investments in lighting and solar, building retrofits or equipment replacement, etc.
Energy risk management is not a “one size fits all” type of thing. Each organization’s procurement objectives and risk tolerance are different. As such, the best risk management strategy is one that identifies and considers your organization’s particular requirements and is tailored to meet your goals.
A good energy management program should, at a minimum, pay for itself while also allowing you to focus your time and resource on your core business. Most good providers return a few multiples of their annual fee. When measuring an energy management service program, you must consider both indirect (avoided costs, process improvements, benefits from shared energy data) as well as direct benefits (refunds and savings).
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