Knowledgebase: EC Enterprise
EC Enterprise: Normalizing Commodity Data with Bulk Deliveries for Cost Avoidance
Posted by John Pierce, Last modified by Joel Brickell on 29 June 2012 04:49 PM
Question - I have a commodity that is delivered in bulk, such as Fuel Oil, Propane, or Wood, and would like to have EnergyCAP calculate the Cost Avoidance for this commodity.  As this commodity is used to heat my building(s), I also need EnergyCAP to correlate the consumption with weather severity.

Answer - EnergyCAP handles the correlation between a bulk delivery of a commodity and weather severity (Degree Days) well when the bulk deliveries are approximately monthly.  If the bulk deliveries of the commodity are infrequent (a handful of times per year), or very frequent (several times per month) with approximately the same amount of delivered commodity, EnergyCAP does not handle the correlation between the commodity consumption and weather severity well.  Yes, EnergyCAP will track when you receive the delivered commodity and how much you paid at that time, but there is no mechanism to say that the delivery is replacing the commodity that has been consumed over the past several months.  An additional complication is not knowing how much of the previously delivered commodity is still in the tank, or on the ground, when the current delivery is made.

Our first recommendation is to install some sort of flow meter to track how much of the commodity is being consumed during the month and to use this meter data, along with a Calculated Account/Meter to generate monthly EnergyCAP bills for use with Cost Avoidance.

If flow meter data is unavailable, our recommendation is to come up with a reasonable estimate for the commodity consumption on a monthly basis.  For infrequent deliveries, a reasonable estimate can be constructed by dividing the total delivered quantity for the year by the appropriate annual number of Degree Days.  For example, if Fuel Oil is used primarily to heat the building, divide the quantity of Fuel Oil delivered in the Baseline Year by the number of Heating Degree Days for the Baseline Year.  Once you have calculated the Gallons/HDD (or Lbs/HDD) value, create monthly bills in the Baseline Year by multiplying the Gallons/HDD (Lbs/HDD) by the number of HDD in the Baseline month.  For very frequent deliveries of approximately the same amount of delivered commodity, review the Trend Chart (Cost Avoidance\Use vs Weather\Monthly View), which is rolled-up by month, to confirm that the consumption looks reasonable and is weather sensitive.  If so, sum the multiple deliveries per month into a monthly bill in both the Baseline Year and for current bills, as it will be a better approximation of monthly consumption and removes the influence of the tank size or truck size on the service period length  It also avoids the need to slice out a 5 or 6 day bill from the Cost Avoidance analysis, because that one bill looks unusual when compared to the other bills during the month.  Understandably, these approaches take some effort and are easier to implement when there are only a few Accounts like this.  If you have hundreds of Accounts like this, the return may not be worth the investment.

An additional item to consider is to have the Account/Meter that is tracking the infrequent, or very frequent, bulk deliveries in a portion of the Facility and Cost Center Tree that is excluded from normal analysis and have the Account/Meter that has the calculated monthly bills in a portion of the Facility and Cost Center Tree that is included in the normal analysis.

Last Edit:  09/07/2010 by John Pierce
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