Energy controlling to better control your energy costs

Energy controlling

The total cost of energy depends on more than contracting and energy trading.

Energy controlling goes beyond bill validation. An energy entrepreneur needs to be able to rely on good information on his/her energy spend in order to take decisions. Your total cost of energy isn’t just the result of your contracting and trading activities. It’s also the product of your consumption as well as your non-commodity cost components: the utility rates, grid fees and taxes. Energy buyers and/or financial controllers spend a considerable amount of time setting up budgets, checking spend versus budgets and validating bills. Still, they are often caught by surprise when unexpected increases occur.

Controlling energy budgets is a process that requires the involvement of several staff members:

  • Have you established clear channels of communication between the relevant stakeholders?

  • How are energy invoices processed by your company and how are they shared with those involved with the energy budget?

  • Are you sure that you have access to the right external information in order to set up budgets and check bills?

  • Are you organizing your information in a way that allows the whole company to be kept informed of energy costs?

  • Is this information presented in a format that allows you to use it to perform other tasks, such as checking your volume requirements, feeding financial data into your energy efficiency programs, or managing your load management programs?

  • Are the reports on energy cost from your different sites standardized so that you can produce company-wide reports?

Move swiftly through the energy budgeting process

Energy budgeting is a time-consuming chore that must be repeated every year. Bringing together all the information from inside and outside your organisation can be difficult. And as energy is an important cost, exceeding the budget can lead to strong reactions. Energy budget stakeholders often lack insight into the complexities of energy pricing and blame you for events that were out of your control. Being held responsible for an unexpected increase in consumption or changes in the regulated price component is not just a problem for you as an energy buyer, it can also cause your organization to make the wrong decisions.

A good energy budgeting program effectively manages communications between internal and external resources. It will also provide access to all information regarding markets and regulations to allow for accurate estimates.

When setting up an energy budget, important decisions need to be taken:

  • Do you want the commodity part of the bill to be 100% fixed, or will you allow some variations to keep prices open for spot market opportunities?

  • How will you treat future changes in energy consumption or regulated price components? Will you view these as contingencies or will you include a margin in your budget estimates?

You’ll only be in a position to take these types of decisions once you have a solid understanding of the different energy cost components and the factors that drive them.

Get more value from your bill validation process

Energy bill validation requires much more than just validating consumption and unit prices. Energy consumption comes in combinations of capacity and consumption parameters. The pricing is carved up into many different components. Some of those can be checked in the supplier contract. Others can be found in utility tariffs or in judicial rulings.

Invoice validation means that you have to be capable of breaking down the different components of your invoices. However, despite the transparency requirements present in many countries, not all energy invoices are detailed enough to make this possible. As a backup, you need to gather all information from your contracts and regulated tariffs to perform this analysis.

We find mistakes in 0.5% of all invoices across our client portfolio, with important differences per country and supplier. If mistakes are detected, you can start the reconciliation process. If the mistake is to your advantage ( 50% of all mistakes are), you should make sure the mistakes are rectified on the next supplier bill.

Stay on top of energy regulation

Energy market regulation drives your energy costs. Even if markets are deregulated, there’s still a considerable amount of regulation that determines the price you pay, the non-commodity component of your energy price. First and foremost, these regulations determine how the market is organized. They also have a more tangible impact in that they set the tariffs for the regulated price components. And they create possibilities for exemptions. If you can exploit these opportunities, you can achieve important cost savings.

Reading legal jargon isn’t everyone’s favourite pastime. Moreover, regulations change. When these changes occur, they are often preceded by lengthy negotiations the outcome of which is difficult to anticipate. Are you sure that:

  • You have a good insight into all the regulations that currently drive your grid fees and taxes and thus pricing?

  • Your resources will allow you to be kep abreast of these changes?

  • You have detected all possibilities for obtaining exemptions and taken all steps to benefit from them
    Moreover, are you sure that the information you receive is unbiased and aimed at protecting you, the consumer, rather than serving lobby interests?


Energy controlling by E&C

E&C’s unique model of centralized international consulting makes it an excellent choice for setting up a centralized energy controlling program. We offer a truly unique array of expert resources for better controlling your energy bills. Moreover, our ePoint platform allows us to present this information to you in whichever reporting format you choose. We provide all of this through spreadsheets that are shared in a transparent manner, with all formulas and calculations included.

Our energy controlling offering comes in a complete suite of services that allows you to better control your energy spend:

  1. We collect your invoices, contracts and files directly from your suppliers and bring them together in one centralized platform that can be accessed by the different stakeholders within your organization.
  2. We extract the data from those invoices to generate tables and graphs that give a detailed insight into the components of your energy pricing.
  3. We make tailor-made reports in line with your internal and external reporting requirements.
  4. We help you in the budgeting process by:
    • Preparing the budgeting process with all information that is already known: past consumption (trends), commodity pricing as it stands at the moment of budgeting, the status of regulated tariffs, and expected changes.
    • Summarizing this information in a comprehensive report so that your internal stakeholders only need to make a few key decisions to set the budget.
    • Adapting ourselves to your internal process for budgets, delivering all required reports, and supporting you in meetings.
  5. We perform the monthly spend versus budget checks.
  6. We validate your bills, checking whether they are correct not.
  7. When bills are not correct, we help you get a rectification from your supplier.
  8. When an invoice mistake is to your advantage, we help you make provisions for an eventual correction by the supplier.
  9. We check consumption factors that can have an impact on your cost, such as:
    • Consumption trends versus contractual volume obligations and restrictions.
    • Use of reactive energy.
    • Capacity optimization possibilities.
  10. We perform an audit of your energy bills, checking for possible exemptions to your regulated price components.
  11. We assist you in the administrative process for obtaining exemptions.
  12. We keep you informed of all changes in energy regulation that have an impact on your energy cost:
    • On your ePoint, the grid fees and taxes section gives you an overview per country.
    • We prepare a presentation on regulations per country and keep it up to date.
    • In case of changes, you receive an e-mail alert.
    • Your consultant calculates the impact of regulatory changes on your energy spend; he/she will contact you to comment on these changes and suggest a course of action.
  13. We provide you with the energy invoice data that you need for your energy efficiency or load management efforts.

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