The South Jersey Energy Blog

Energy Assessment: Breaking Down Your Business Utility Bills 201

Posted by Dave Granitzki on Nov 25, 2014

business-utility-billsEven if you’ve taken some sustainability measures to reduce your energy costs, you’re likely not seeing the savings you were hoping for. If you don’t have a handle on your business utility bills, reducing energy consumption and achieving long-term cost-savings is well out of reach.

True energy efficiency – that really helps lower utility bills – begins the moment your business makes commercial energy management a top priority. Putting resources into energy assessment programs results in understanding your business’s risk tolerance and setting goals for reducing energy consumption.

Energy assessment is the process of breaking down your business utility bill into two main components: delivery and supply. While you aren’t able to control the delivery charges on your bill, you are able to make beneficial changes to your supply charges.

The supply charges you see on your utility bill are directly related to the generation of electricity. For electricity, these charges include the cost of transmission from the generation facility to your local distribution system. On your gas bill, the supply charge is for the natural gas commodity, including the cost of interstate delivery to the local distribution system.

Here’s a sample breakdown of the supply charges on your business utility bill:
  • Distribution Charge: Charges for the use of local wires, transformers, substations and other equipment used to deliver electricity to consumers from the high-voltage transmission lines.

  • Customer Charge: A monthly basic distribution charge to cover costs for billing, meter reading, equipment, maintenance and advanced metering when in use.

  • State Tax Adjustment Surcharge: A charge, or a credit, for electric rates to reflect changes in various state taxes included in your bill. The surcharge may vary by bill component.

There are two ways to adapt your utility bill supply charges:
  • Reduce the number of units your business uses (dekatherms/kilowatt-hours)

  • Purchase your natural gas and power from a third-party supplier

When you purchase energy from a third-party supplier, you’re really looking to partner with a company that works with you to achieve future business goals.

Controlling the supply charges of your utility bill is most successful when you work with your third-party supplier to conduct an energy assessment to view your consumption data. You also want to identify every energy procurement option available.

With the right third-party supplier, you may achieve a lower utility bill for the long-term, which is going to positively impact your bottom line.

Ready to learn more about reducing energy consumption for a lower utility bill? Call 609-561-9000 or click here to speak with an Energy Advocate at South Jersey Energy.

Download Now: Free Guide: Commercial Energy Management: 7 Smart Tips For Reducing Energy Costs

Topics: commercial energy management, utility bills