What is Energy Management? Your FAQs Answered

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Do you find the process of energy procurement and energy management a somewhat complex undertaking? You’re not alone! Energy management is a relatively straightforward task for an energy advisor and they can help you make the best decisions and save money. But when you first think of partnering with an energy consultant, you often have a lot of questions.

Today, therefore, we’ll answer many of the frequently asked questions we receive in the office. Let’s dive in.

What is Energy Management?

Although the phrase “energy management” appears everywhere, it’s one question that continually comes up. So, what is energy management?

Essentially, it’s the deliberate process by which your organization procures, converts, and distributes your energy across its facility. However, energy management must also meet environmental requirements and your economic goals.

Therefore, we can say that energy management has a lot to do with how you use your energy and how you apply best practices to improve your facility.

Power management in this way has many benefits. Let’s get into those next.

What Are the Benefits of Energy Management?

Some of these ways you can manage your energy include:

• Increasing corporate social responsibility by going green and reducing greenhouse gasses
• Reducing costs by accurately measuring your power factor (see below) and making sure your energy procurement is efficient while decreasing energy consumption
• Making better energy procurement decisions by strategizing and keeping an eye on the market and the best options for your business
• Tracking energy costs throughout your facility for better budgeting – while gaining insight into how your operational costs move up and down according to energy usage

From the above, you can see that energy management offers short- and long-term benefits that allow you to plan while keeping an eye on your organizational needs.

I’m in a Regulated Area: How Can I Manage My Energy Bills Better?

Your options for procurement are more limited in regulated areas as the utilities set the rates or tariffs with government oversight and approval. However, all is not lost. You can still gain some financial advantage in energy terms by

• monitoring your usage in various work areas to avoid wastage,
• considering your power factor (see below) and correcting it to improve the efficiency of the energy you do use, and
• installing LED lighting to reduce usage and maintenance costs.

What is Sales Tax Recovery?

The Texas comptroller allows tax relief on certain energy spends. You may not realize you have paid an unnecessary tax until your energy advisor points it out. However, if you did pay sales tax in error, prior to being certified exempt, we work with the state comptroller to ensure you’re refunded all owed dollars.

How Can I Use Less Energy in My Business?

Some ways to use less energy are intuitive, while others less so.

For example, simply turning off unnecessary lights and air conditioning can lower your energy bills. The not-so-intuitive solutions include:

• Using efficient lighting systems that reduce your energy consumption (more on this later)
• Conducting an audit for power factor correction (see below) to keep track of where you’re wasting energy needlessly with inefficient equipment
• Conducting an overall energy audit in your business

What is Power Factor Correction and How Does it Help?

Power factor correction is about improving energy efficiency within your facilities.

When measuring your power factor, an energy advisor looks at the percentage of energy used versus how much energy is being wasted.

Once you identify the amount of wasted energy, you can begin improving things by installing technology that helps reduce this “dirty power” wastage during your processes.

How Will an Energy Audit Help?

During an energy audit, an energy advisor gathers data to help you understand how efficient your energy usage is while identifying inefficiencies you can improve upon.

An audit also enables you to understand your energy bill and identify energy penalties you can opt-out of. In addition, it will determine which energy solutions can help reduce costs while lowering your carbon footprint.

Besides saving money and energy, an audit can also identify safety concerns you can immediately correct.

For instance, fitting new lighting systems can save you money and energy and improve safety concerns. We often get a specific question about lighting, so let’s address that one next.

Is it Worth Fitting LED Lighting?

Has someone recommended you change to modern lighting? There are multiple lighting choices for both commerce and industry. However, an energy advisor might well recommend LED retrofitting or installing new LED lights during an audit.

That’s because LED lights use up to 75% less energy than incandescent bulbs, which will affect your energy bill positively!

LED lights also have a longer lifespan than traditional light bulbs, which saves money on maintenance.

In addition, they improve lighting in areas where safety is a concern.

Is it worth fitting LED lighting? Yes!

Does an Energy Advisor Manage My Energy Use For Me?

No! An energy advisor acts as your partner and “energy department.” They will

• proactively monitor changes in the energy market affected by gas and electricity pricing to facilitate better future decisions,
• help you navigate the market,
• watch for price trends, and
• supply you with the information you need to make better decisions on your energy choices.

So they don’t take over energy management for you. The data they provide helps you through the process – but it’s your choice to take their advice or not.

However, you’ll find that whereas a broker will usually make the transactions on your behalf, an energy advisor goes in-depth to provide you with the best guidance.

First, they’ll audit your bill to find patterns you can immediately correct, like eliminating hidden fees. Next, they’ll advise you on low rates, reliable retailers, contract types, and energy sources. They’ll also take care of any customer service issues that might arise in the meantime.

However, the ultimate benefit of an energy advisor is their proactive approach to managing your energy so you always have information up front. Essentially, they’re keeping an eye on all aspects of the process as your in-house energy consulting department.

Do You Have Other Questions?

There are many aspects to energy management. We’ve only answered the main questions here to help you see how you might improve your processes and your energy procurement – either yourself or with the help of an energy advisor. We’re more than happy to answer any others you might have!

We Can Help

At Rapid Power, we are established financial advisors in energy procurement and sustainability goals – with an analytical mind and years of risk-management experience. We love to empower our customers to make the best decisions about their energy management. Get a free bill analysis today and start your energy management journey with us. Your pocket will thank you!

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