Understanding & Managing Your Organization's Electric Power Costs
After a lengthy period of low prices, electric power costs have become more volatile in certain markets. And, from a procurement perspective, that certainly merits your attention. But, there’s a lot more to your electric bill than the cost of the power itself. As much as 70% more, in fact.
That’s because the commodity cost – the actual energy that powers a facility – can be as little as 30% of an electric power bill. The other portion is made up of non-commodity charges. A breakdown of an average electricity invoice shows the real cost and where potential savings may exist.
In fact, with power – and data – ﬂowing, not just off the grid, but increasingly onto the grid, today’s power markets are evolving faster than ever. History suggests that the pendulum will eventually swing in the other direction – from relative stability to high volatility. But when is that likely to happen? And how do organizations prepare and minimize their exposure to unstable markets?
These questions are crucial for energy managers and procurement professionals. But, with the growing pressures of sustainability efforts, renewable opportunities and government regulations, they’re also becoming important to the C-suite, ﬁnance directors and even public relations teams.
In an era of increasing energy complexity, organizations need a more strategic, data-centric approach to cost containment. And, that can mean taking a second – and much more thorough – look at your energy cost drivers.