Virtually every manufacturer wants to cut its energy costs, optimize energy use and improve their sustainability footprint. This can be achieved by taking a few fundamental steps to control how energy is used and paid for.

Energy Use and Utility Bills:

1. Establish an “energy manager” who sees every utility bill, every month. This does not require a full-time person dedicated to this task but you can’t manage what you don’t know. Too often utility bills go to accounts payable and are not reviewed by anyone in production.
2. Don’t just review an accounting summary of utility invoices. A review of the actual bill will reveal incorrect charges or if any line item of energy use is higher than it should be.
3. Establish an annual budget for each utility service by month and investigate variations. 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?
4. 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.
5. 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.
6. If your company is served on electric utility rate tariff with demand charges, check to see if you are paying a “power factor” penalty. Studying and potentially adding capacitors to the system can help avoid penalties that drive up your total bill, with a short payback.
7. 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 as possible.
8. Check your gas bill to understand your Gas Customer Choice. Contracts with choice suppliers should be reviewed regularly to ensure prices are aligned with current market conditions.
9. Consider receiving natural gas service under a “Transportation Rate.” Transportation is an a la cart service offered by most gas utilities in which the utility delivers the customer’s gas and the customer manages its own gas supply. You, as the customer, will have to read the meter once a week.
10. Be certain you have a valid industrial processing sales tax exemption in place. Many manufacturers are paying the full 6 percent sales tax rate on their utility bills unaware that they are eligible for an exemption. You can claim a refund for the last four years of sales tax paid erroneously.

By putting these steps in place, you can improve your facility’s energy efficiency, optimize your energy budget and boost your bottom line.

Save Money by Controlling Your Energy Bills

Enstar Energy is MMA’s partner to help Michigan manufacturers navigate today’s complex energy markets to control energy costs and reduce the impact on your budget. For a full energy bill audit, send your contact information and a copy of your energy bill to mmaenergysavings@enstarenergy.com to start saving.

About the Author

Don Johns is Enstar Energy’s Founder and President. He is a legend in the energy field, having worked at the Michigan Public Service Commission for 22 years before founding Enstar with a group of partners. He may be contacted at mmaenergysavings@enstarenergy.com.

Don Johns is Enstar Energy’s Founder and President. He is a legend in the energy field, having worked at the Michigan Public Service Commission for 22 years before founding Enstar with a group of partners. He may be contacted at mmaenergysavings@enstarenergy.com.

EnStar Energy LLC is an MMA Premium Associate Member and has been an MMA member company since May 2014. Visit online: enstarenergy.com.