Energy Payments


Part 1: The Core Components of a U.S. Energy Plan

An energy plan is a strategic roadmap that outlines how an entity will manage its energy procurement, consumption, and generation to achieve specific goals like cost reduction, sustainability, reliability, and compliance.

Here are the key components, tailored for the U.S. market:

1. Energy Assessment & Baseline:

  • Utility Bill Analysis: A deep dive into 12-36 months of electricity, natural gas, and other fuel bills to understand usage patterns, demand charges, and rate structures.

  • Site Audit: Identifying energy waste through building envelope inspections, HVAC systems, lighting, industrial equipment, and operational schedules.

  • Carbon Footprint Calculation: Quantifying greenhouse gas (GHG) emissions (Scope 1, 2, and optionally 3) to establish a baseline for sustainability goals.

2. Goal Setting & Benchmarking:

  • Financial Goals: Target percentage reduction in energy costs, fixed-cost budgeting, or avoidance of future price spikes.

  • Sustainability Goals: Committing to targets like Carbon Neutrality, 100% Renewable Energy, or Science-Based Targets (SBTi). This is heavily influenced by ESG (Environmental, Social, Governance) pressures.

  • Reliability & Resilience Goals: Ensuring critical operations continue during grid outages (e.g., via backup generation or microgrids).

3. Supply-Side Strategies (Energy Procurement):

  • Deregulated Markets: In states with deregulated electricity (e.g., Texas, most of the Northeast, Illinois, Ohio), consultancies help with:

    • RFPs (Request for Proposals): Soliciting competitive bids from retail energy suppliers.

    • Contract Negotiation: Securing favorable fixed, index, or blended rates and contract terms (length, renewal clauses).

    • Renewable Energy Procurement: Sourcing Renewable Energy Credits (RECs), negotiating Power Purchase Agreements (PPAs) for off-site solar/wind, or enrolling in utility green tariff programs.

4. Demand-Side Strategies (Energy Efficiency):

  • EE Measures: Identifying and prioritizing cost-effective retrofits (LED lighting, high-efficiency HVAC, insulation, smart thermostats, industrial motor drives).

  • Incentives & Financing: Maximizing rebates from utility programs and federal/state tax incentives (e.g., IRS 179D Commercial Buildings Energy Efficiency Tax Deduction, Investment Tax Credit (ITC) for solar).

  • Financing Models: Evaluating Energy-as-a-Service (EaaS), Energy Performance Contracts (EPCs), and traditional capital financing.

5. Distributed Energy Resources (DERs) & On-Site Generation:

  • Solar PV: Feasibility studies, financial modeling (ROI, NPV, payback), and navigating interconnection agreements with the utility.

  • Energy Storage (Batteries): For demand charge reduction, backup power, and arbitrage (buying cheap power, using expensive power).

  • Combined Heat & Power (CHP): For large facilities with simultaneous thermal and electric needs.

  • Electric Vehicle (EV) Charging Infrastructure: Planning for fleet transition and employee/customer charging.

6. Implementation, Monitoring & Continuous Improvement:

  • Project Management: Overseeing installation, ensuring quality, and managing contractors.

  • Measurement & Verification (M&V): Using building automation systems (BAS) and sub-metering to verify energy savings (often following the International Performance Measurement and Verification Protocol - IPMVP).

  • Ongoing Energy Management: Continuous monitoring, re-commissioning, and employee engagement programs.

Part 2: The Consultancy Process: A Step-by-Step Guide

A consultancy provides expertise, market access, and objectivity. Here’s how they typically structure their engagement.

Phase 1: Discovery & Assessment

  • Client Intake: Understand the client's primary drivers (saving money, ESG reporting, resiliency), operational constraints, and financial appetite.

  • Data Collection: Gather utility data, facility information, and operational schedules.

  • Baseline Reporting: Deliver a report detailing current energy consumption, costs, and carbon footprint. This becomes the benchmark.

Phase 2: Strategy & Roadmapping

  • Develop Scenarios: The consultancy creates multiple "what-if" scenarios.

    • Scenario A: Aggressive efficiency + off-site renewables (PPA).

    • Scenario B: Moderate efficiency + on-site solar.

    • Scenario C: Basic efficiency + renegotiated supply contracts.

  • Financial Analysis: Each scenario is modeled with clear financial metrics (CAPEX, OPEX, ROI, payback, net present value).

  • Risk Analysis: Evaluate risks related to energy price volatility, regulatory changes, and technology performance.

  • Prioritization: Work with the client to prioritize projects based on their goals and capital constraints. The output is a multi-year Energy Roadmap.

Phase 3: Implementation Support

  • Procurement & Vendor Management: The consultancy can manage the RFP process for energy suppliers, EPC contractors, and engineering firms. They ensure the client gets competitive bids and understands the proposals.

  • Incentive Management: They handle the paperwork and applications for utility rebates and ensure the client captures all available tax benefits (often working with the client's tax advisor).

  • Financing Assistance: They can help structure projects to be financeable and connect clients with capital providers familiar with energy projects.

Phase 4: Ongoing Management & Optimization

  • Energy Market Advisory: For clients procuring energy, consultancies provide ongoing advice on when to enter the market based on price trends. This is a huge value-add.

  • Performance Tracking: Monitor implemented projects to ensure they deliver the promised savings.

  • Strategy Review: Annually review the Energy Plan against changing goals, technologies, and market conditions.

Key U.S.-Specific Considerations for Consultants

  • Regulatory Patchwork: Rules vary dramatically by state and even utility territory. A consultancy must have localized expertise.

  • Inflation Reduction Act (IRA): This is a massive catalyst. Consultants must be experts on its tax credits (ITC, PTC), grant programs, and bonus credits for energy communities and domestic content.

  • ESG Reporting: Frameworks like SEC climate disclosure rules, GRESB, and CDP are driving corporate action. Consultants must align energy plans with these reporting requirements.

  • Grid Modernization: Understanding utility time-of-use rates, demand response programs, and wholesale market participation (e.g., ERCOT in Texas, CAISO in California) is critical for maximizing value.

Example Energy Plan for a Mid-Sized Manufacturer in Ohio

  • Year 1: Implement Low/No-Cost Measures. Behavioral changes, set-point adjustments. Negotiate a 36-month fixed-rate electricity supply contract in Ohio's deregulated market. Secure utility rebates for an LED lighting retrofit.

  • Year 2: Execute LED Retrofit. Install submeters on production lines. Begin feasibility study for rooftop solar.

  • Year 3: Install a 500 kW rooftop solar array, using the 30% federal Investment Tax Credit (ITC). Evaluate battery storage to reduce demand charges.

  • Ongoing: Purchase RECs to match remaining electricity consumption with renewable sources, claiming 100% renewable energy for ESG reports