Monthly Newsletter - September 6, 2017
THG Responds to Hurricane Harvey
THG's Austin-based employees are leading a support effort in conjunction with Samaritan's Purse disaster relief units. THG will be on-location in Victoria, TX from Sept. 7-9.
Samaritan's Purse is a nondenominational evangelical Christian organization providing spiritual and physical aid to hurting people around the world. Samaritan's Purse helps meet the needs of people who are victims of war, poverty, natural disasters, disease, and famine with the purpose of sharing God's love.
Tulsa-based employees are
engaged with Red Cross volunteer efforts, as well as other organizations.
Our hearts, prayers, and now, people, go out to all those impacted by Hurricane Harvey.
Pay Attention to Electric Demand and Pay Less
Understanding Your Demand is the First Step Toward Big Savings
Highest rate of electrical power (kW) required to meet the needs of a property's operation. Electric demand is the rate at which you use electricity as opposed to the quantity of electricity you consume (kWh). Using a water analogy, we are filling the same size bucket - using the same amount of electricity. However, the faucet on the right is doing it 5 times faster, or 5X the demand.
Utilities measure and record demand so that they can adequately meet their customer's actual and expected instantaneous power requirements. They will determine your demand based on the highest 15 or 30-minute average usage recorded on the electricity meter each month.
A higher demand usually results in higher demand fees. Demand charges comprise 30-40% of a commercial building's total electricity bill, and demand is estimated to account for 10-20% of all electricity costs in the United States. Demand charges, alone and as a percentage of the utility bill, are only expected to increase. For example, average demand charges by the California IOUs have increased 20% over the last three years, so it's a significant controllable cost in operating a building (ENERGY STAR).
THG tracks both measured (actual) demand and billed demand, which may be different depending on rate structure, such as ratchet charges. Measured represents the highest rate of electric demand during the monthly billing cycle. That is, the highest measured demand from the building, irrespective of when it occurs relative to the utility's peak.
Why is electric demand important?
Although energy prices in the US are generally decreasing, demand charges are increasing. This is particularly common in areas that are capacity-constrained or undergoing maintenance and infrastructure updates. As such, demand charges on your bill can exceed 50% of your total electricity spend.
That said, demand charges can be difficult to understand and control. Depending on your contract and size, utilities bill you under many different pricing mechanisms. They include seasonally differentiated peak demand pricing (summer and winter peak pricing), declining/interruptible pricing blocks, as well as pricing ratchets - where the billed demand charge is based not on actual demand, but on a % of historical peak demand. This latter practice makes it important to track demand because under a price ratchet, your highest demand in a single month can set your demand costs for the rest of the year.
How can you reduce demand?
- Tracking demand monthly across your building portfolio is the start of understanding the impact of demand on your energy costs.
- Learn where more granular metering and time-of use-bill analysis is warranted - when peak happening and why.
- Low-no cost operational strategies (reduce the peaks)
- Load shifting/peak shaving and shedding
- Longer-term building efficiency upgrades (reduce total use)
- Efficient and right-sized equipment
- Understanding the building's demand profile can also help inform energy purchasing/procurement in deregulated energy markets.
Tracking monthly demand over the course of a year is the start to understanding the demand profile of a building, which can inform where more granularity in metering intervals is warranted. This facilitates energy and emissions reductions from both short-term operational strategies and longer-term building upgrade strategies
To get started tracking electric demand in your portfolio, contact your dedicated Account Rep, Business Development Manager, or for general inquiries:
Special On-boarding Promotion In Progress!
Friends, PLPs, Customers: Lend Us Your Meters
From now until the end of the year, THG is offering deep discounts for onboarding accounts in bulk quantities. For the rest of the year, THG has excess capacity to onboard new utility accounts and we're extending that surplus to our customers.
The on-boarding process is one of the most laborious and time-consuming aspects of our SaaS-based Energy Intelligence Suite. It includes building each account, acquiring/loading 24-months of historical data, integrating weather data, square footage, tax information, rates, and many other items on a checklist. It's the reason we normally charge $20 per account to on-board - competitors charge more.
If THG can fully on-board, test, and deliver in 2017 orders of:
- +250 accounts, special offer: $3 per account
- +100 accounts, special offer: $5 per account
- +75 accounts, we'll offer: $10 per account
If you use THG to manage natural gas, now is the time to add electricity - or vice versa. If you already track your energy accounts in the Energy Intelligence Suite, now is the time to give the CEO an early 2018 surprise and kick-start a holistic sustainability plan by adding water, recycling and waste.
Our monthly rates are low, so if you've ever wanted to add a new commodity type or benchmark your entire building portfolio, there's never been a better time!
September and October is the best time to push a bulk order through, but we can squeeze one into November too. After that, it gets tougher. Remember, this discount is valid only if the accounts are fully on-boarded in 2017! Verbal commitments or in-progress meters do not qualify.
Contact your dedicated Account Rep, Business Development Manager or
for more information. Please refer to this promotion to claim the temporary discount.
THG Company Updates
Stepfanie Shaulis, P.E., C.E.M., Sr. Project Engineer and Manager of Data Services. In August, THG received its Certificate of Authorization from the Oklahoma State Board of Licensure for Professional Engineers and Land Surveyor. This certification allows THG to provide engineering services, such as approving ENERGY STAR certifications, in Oklahoma. Now, THG's professional engineer, Stepfanie Shaulis, can approve ENERGY STAR for Building applications that score above 75 on ENERGY STAR Portfolio Manager's 1-100 scale. firstname.lastname@example.org
If your building scores 75 or above, you are eligible to go for official certification. The last step is to have a licensed professional engineer, like Stepfanie, perform the required verification. A professional engineer must verify all the information because some buildings may manipulate their data in Portfolio Manager to boost their ENERGY STAR score.
The professional engineer will verify the building's physical and operating characteristics during an on-site assessment of the property. The professional engineer will also look over utility bills and verify that the entire building's consumption has been properly recorded. Any discrepancies discovered will need to be rectified before the professional engineer approves and stamps the application.
The professional engineer verification also includes a detailed assessment of the indoor environment. Why? A building can save energy by cutting back on ventilation, operating at uncomfortable temperatures, or reducing lighting levels to the detriment of the occupants.
The professional engineer will verify that the building meets industry standards for ventilation, thermal comfort and lighting. These standards include ASHRAE Standard 62.1, ASHRAE Standard 55 and the IESNA Lighting Handbook. The professional engineer must use calibrated instrumentation to measure parameters such as temperature, relative humidity, air velocity, carbon dioxide and foot-candles.
Max Green, Business Development Manager - Western Region. Max joined THG in May of 2017. As part of the western business development team, he is based out of Los Angeles, building business relationships with new customers across the state of California. Max is a graduate of the University of Kansas, where he earned degrees in Communications and Spanish. He also received audio engineering certification from the SAE Institute in NYC, where he worked for years in the TV/Film industry as an Audio Engineer and Re-Recording Mixer. email@example.com
Alex Pettigrew, Applications Engineer. Alex comes to THG after 2 years of working in the Building Efficiency division at Johnson Controls. Working in both project management and sales of building controls and systems, Alex has experience taking projects from inception to completion, and ensuring the customer's needs are met every step of the way. Alex holds a Mechanical Engineering degree from the Texas A&M University. firstname.lastname@example.org
Jordan Wheeler, Applications Engineer. Jordan is joining the class of 2019 at the University of Texas at Austin Cockrell School of Engineering. Jordan is pursuing an Executive Engineering Masters degree in mechanical engineering. This degree program concentrates on equipping professional engineers with advanced skills in their field of work. Program topics will cover detailed analysis of control systems, as well as the thermodynamics of commercial applications, like chillers and HVAC units. email@example.com
Jim Westover, Business Development Manager - Western Region
. Jim spends most of his time scouring the Great State of California in search of customers eligible for demand response incentives through CAISO. Jim used his spare time in August to study for - and pass - AEE's prestigious Certified Energy Manager (CEM®) program for professional certification. The CEM® is a systems integrator for electrical, mechanical, process and building infrastructure, analyzing the optimum solutions to reduce energy consumption in a cost-effective approach. CEM's are often team leaders and help to develop and implement their organizations' energy management strategies. CEM's are highly recognized within the energy industry and THG has strengthened its competitive edge by having another CEM on staff. As a CEM, Jim joins more than 16,000 professionals who comprise a "Who's Who in Energy Management." Bravo, Jim! firstname.lastname@example.org
Congratulations to '17 Scor3card Participants
31 Sustainable Tulsa Businesses Celebrate Third Year, Save $1,000,000
Sustainable Tulsa celebrated it's final Scor3card event at the B2B Case for Sustainability series, now held a Tulsa Community College Center for Creativity. Over 30 participating companies shared successes that have saved on the bottom line, increase employee engagement and reduce their impact on the environment!
As a Scor3card Business Coach, THG supported US Cellular's local regional office navigate the program. US Cellular's efforts were verified at the Silver level. The Coaching program consists of professional and student volunteers who are trained on the aspects of the Scor3card program, which consists of +150 sustainability items, a web-based scoring tool, and educational events.
We also wanted to give a shout out to other THG clients who participated in the Scor3card this year: Bama Foods, Oral Roberts University, Tulsa Zoo, Grogg's Green Barn, Langon Publishing, Covanta Energy, and AAON manufacturing.
THG supports Sustainable Tulsa's programming efforts with behind-the-scenes data and utility benchmarking services for companies who want to participate in the Scor3card program but might not have the time, staff, or domain experience to efficiently manage utility bill information.
Solar: The Reason for Negative Electric Prices?
Solar Gets All the Attention, But Another Explanation Plays a Role
Even during extreme promotions like "Black Friday" and "Cyber Monday", it is rare to see anything sold for a negative price. Low prices, sure. But truly negative prices are rare. You only see this when a seller is really desperate to get rid of something. 1-800-GOT-JUNK made $200 million in revenue last year getting paid to haul away junk. Turns out all that stuff in your attic isn't priceless after all - it has a negative price.
This Spring, California electricity generators have been doing the electricity market equivalent to calling 1-800-GOT-JUNK. Between
March and July, there were over 100 hours in which wholesale prices were below zero. These negative prices have received lots of attention, and the discussion has almost universally attributed negative prices to California's ramp up in solar generation.
Solar is indeed part of the story, but another explanation is at least as important. Over the last decade, hydro, not solar, has been the primary driver of negative electricity prices in the United States. The year 2017 is no exception. Spring 2017 was among the rainiest in history, and it is this combination of hydro and solar that has pushed prices below zero.
Let's Look at the Data
So far in 2017, California wholesale electricity prices have been negative in 2.5% of all hours, more than 130 total hours.
Note: This figure was constructed by Lucas Davis (UC Berkeley) using hourly wholesale prices from SNL Financial. The underlying data are complete for NYISO, MISO, PJM, and ISONE, but start in 2009 for CAISO, and in 2010 for ERCOT so there may have been negative prices in those markets prior to those years. Also, for 2017 data is only available until mid-August, so the percentage is calculated over only part of the year.
Increased solar generation is definitely part of the explanation for what's happened in California in 2017. Solar capacity in California, including both distributed and utility-scale systems, has grown from less than 1GW in 2007, to 14 GW today. Also, the timing of negative prices in 2017 points squarely at solar. Negative prices peaked in March and April between noon and 5pm, on sunny days with high levels of solar generation.
Make it Rain
But the big surprise in the figure above is 2011. Although it didn't receive as much attention, there were over 100 hours during 2011 with negative electricity prices in California. But why? Back in 2011 there was just a fraction of the solar generation that we have today. So what pushed prices below zero?
The answer is hydro. The two wettest years in the last decade? 2011 and (probably) 2017. During just the first 5 months of this year California has already generated 22 million MWhs from hydro, about equal to typical hydro generation for an entire year. If the rest of 2017 matches hydro generation from last year, 2017 will end up being the second highest hydro year in the last decade.
Note: This figure was constructed by Lucas Davis (UC Berkeley) using annual California hydroelectric generation from EIA. The prediction for 2017 uses actual generation Jan-May and Jun-Dec generation from 2016.
Interestingly, the negative prices in 2011 are very different from the pattern in 2017, and very much fit the pattern for hydro. In 2011, negative prices peaked in May and June, considerably later in the year than in 2017. Also, 60% of negative prices in 2011 occurred between 4am and 6am, wee morning hours when electricity demand is at its lowest level.
California, Oregon, and Washington lead all U.S. states in hydroelectric generation and it is no coincidence that negative prices have occurred most often in these states. Contrast this with Texas, for example. In the first figure above, your see virtually no negative prices in ERCOT. Texas has twice as much installed wind capacity as any other state so you might have expected to see negative prices during high wind periods. This may well happen in specific transmission-constrained locations (e.g. West Texas), but negative prices throughout the state are rare.
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