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:
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:
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.
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:
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.
"In my opinion, the major advantage of ePoint is that it’s an excel-based platform. This renders it very accessible."
- Ward Deryckere, Group Energy Manager, Beaulieu International Group -
Our energy controlling offering comes in a complete suite of services that allows you to better control your energy spend:
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E&C is a boutique energy procurement consultancy with an international team of true energy entrepreneurs that offer a unique blend of global capabilities and local expertise.
Our offices in Europe, the US and Australia serve more than 300 clients from South-Africa to Norway and Peru to Australia that have an annual spend between 1.5 million and 1.5 billion dollar.
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