Answers to frequently asked energy management questions.
You Have Questions, We Have Answers
Q: What is the difference between NUS and its competitors?
A: 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.
Q: How do energy brokers and energy consultants differ?
A: 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. Energy broker always give the same advice – you need a long-term contract. This maximizes their brokerage fee 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.
Q: Why outsource energy management?
A: Energy markets are complex and unique. While commodity price becomes more volatile, non-commodity costs continue to increase across the markets. It takes time, resources and market expertise to collect, manage and monitor energy data for multiple sites, especially internationally. Since neither the energy management department nor energy data management tools is core to your business, it is more cost-effective to outsource the entire energy management process to an energy specialist with the expertise and leading-edge systems to support your needs.
Q: How difficult is it to implement an EMS program?
A: 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.
Q: What are the differences between invoice processing and bill payment?
A: Invoice processing and bill payment are similar in that both receive your invoices directly from your energy suppliers, 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 supplier payments by transferring funds to their accounts – 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. Big differences between the two solutions are (i) with invoice processing you keep control of your money, and (ii) invoice processing vendors are focused on capturing essential energy data not just the required payment fields.
Q: How should EMS consultants get paid?
A: Typically, energy management service consultants receive a fixed fee for services provided. This monthly fee is dependent upon the scope of services 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.
Q: What is the best way to transition between EMS providers?
A: 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. The short overlap allows an orderly transition of services between vendors, including the transfer of energy data, supply contracts, trading positions, risk management documentation, sustainability targets, and other related information. It also ensures that no critical path items are missed in the handoff between vendors.
Q: How do I reduce my energy costs in a regulated market?
A: In a regulated energy market, there is no competition. In short, you have no option to shop among energy suppliers. Local regulated utilities, however, typically provide several rates and tariff options to consumers. In these markets, one way to save money is to analyze and optimize these various options against your site’s energy demand profile. Another way is to evaluate both energy efficiency and renewable energy options, including energy audits and on-site generations.
Q: How does an EMS program support sustainability reporting?
A: A good energy management program will include energy invoice processing – i.e., capturing images of invoices as well as essential invoice data and using this information to validate your energy bills. Aside from ensuring that you are not overpaying invoices, this energy invoice data is used to support your sustainability reporting.
Q: How can I use my energy data?
A: A comprehensive and accurate energy database is an invaluable asset. It will help identify facility outliers with high energy consumption or cost and take corrective actions quickly. Also, an energy database is a vital tool is supporting energy-related capital allocation decisions, i.e. investment in lighting and solar, building retrofits or equipment replacement.
Q: What is the best energy risk management strategy?
A: Energy risk management is not a "one size fits all" solution. Each organization's procurement objectives, sustainability targets, 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.
Q: What ROI can I expect on an EMS program?
A: 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).