Many major operational costs follow a straightforward pricing model: Your company pays for the amount of product it uses. End of story. Makes sense – right?
Unfortunately, energy consumption is one operational cost that follows a different model. Instead of simply paying for the amount of product you use, you’ll also pay different rates according to how and when you consume the energy. Factor in the ever-changing incentives and regulations that frequently come and go in the electricity market, and staying on top of an energy reduction strategy can feel like a full-time job in itself.
Is your company aware?
Picture it like driving a car: Even the best drivers have a blind spot. Add a line of sight to those areas you can’t see and you’ll instantly increase the safety of your drive. Similarly, adding visibility into, and control over energy cost drivers can instantly increase overall productivity and profitability.
The Spark Power EnergyAware program provides clients with a 360-degree view of the factors that affect power infrastructure, as well as insight into how power infrastructure can impact your bottom line. While the proverbial “low-hanging fruit” of lighting retrofits and HVAC improvements can certainly yield results on your monthly energy bills, Energy Aware points your company to additional savings opportunities that were previously underutilized. Some of the factors that Energy Aware takes into consideration are:
Peak Demand is the time during which the greatest strain is being placed on the grid and the hours during which customers are charged the highest rates for their electricity. Altering usage patterns during times of Peak Demand can yield significant savings on your monthly energy bill.
The Global Adjustment (GA) fee covers the cost of maintaining and repairing existing power infrastructure in Ontario, as well as supporting new, green generation projects. Your GA fee is calculated based on the amount of energy you consume, as well as the time/day you consume it. In 2015, the GA accounted for roughly 70% of your monthly energy bill.
Is your equipment utilizing all the power that it draws? Many types of equipment require energy to start or maintain power, in addition to the power required for the intended functioning of the machine. Power Factor is the ratio between the power drawn, and the power consumed. Inefficiencies in this ratio result in Low Power Factor, an unnecessary expense.
Billing Rate Class
The Industrial Conservation Initiative (ICI) was designed to counter rising costs for industrial consumers. It presents a payment model that calculates an industrial consumer’s GA based on their share of the total demand during the top 5 peaks of the prior year (your Peak Demand Factor, or PDF). Your PDF dictates your rate class as either Class A or B.
Cap and Trade
Beginning this year, the Ontario government implemented a Cap and Trade system that incentivizes the reduction of carbon output for the province’s biggest polluters. Companies that go above the set carbon cap are fined, while companies that successfully reduce their carbon footprint are provided with financial compensation (“offset credits”) that they can either keep or trade via market auction.
With so many factors coming into play in calculating energy spend, it’s easy to see the benefit of gaining insight into savings opportunities. The goal of our EnergyAware program is threefold:
- Reduce Consumption By examining inefficiencies and participating in incentive programs.
- Reduce Costs By reducing consumption and/or altering consumption patterns.
- Improve Reliability and Infrastructure Quality By introducing new equipment and usage methods.
Who is Spark Power?
Spark Power is a community of thinkers and doers. We believe that everyone should have access to the resources that enable more efficient and reliable energy use. That’s why we provide a full spectrum of energy solutions, leveraging best practices developed over the last 8 years working alongside our customers and partners.
We’ve transformed energy management for some of the globe’s leading businesses through custom solutions built on a wealth of experience. For more information on the Energy Aware program, contact our team today.
 Global News, “What is the Global Adjustment Fee? The Mysterious Cost Ontario Hydro Customers Must Pay”, http://globalnews.ca/news/2839995/what-is-the-global-adjustment-fee-the-mysterious-cost-ontario-hydro-customers-must-pay/
 Vicor, “What Does Power Factor Mean and Why Must We Correct It?”, http://powerblog.vicorpower.com/2013/02/what-does-power-factor-mean-and-why-must-we-correct-it/
 Ministry of Energy, “Ontario’s Industrial Conservation Initiative”, https://news.ontario.ca/mei/en/2016/09/ontarios-industrial-conservation-initiative-ici.html