For decades now the facilities and building management industry has had to grin and bear the inability to accurately reconcile energy consumption to end users across a facility.
This has lead to the practice of writing off significant portions of their buildings’ billed energy as a line item called “fugitive energy,” a blatant write-off that is attributed to the base building consumption. This inefficient industry practice is problematic for two reasons. Firstly, high base building loads equate to lower NABERS ratings which are detrimental to the revenue earning potential of any building. Secondly, this energy cost is passed on to unsuspecting tenants at cost price through variable outgoings. As this is a cost that cannot be marked up for direct billing to the correct tenants, many building owners and managers miss out on additional revenue.
The main culprit for this sad state of affairs is the humble power meter, or more to the point, analogue power meters past their prime. The majority of meters currently installed in buildings are in excess of 15 years old, which means they are often badly calibrated and no longer record energy consumption accurately. To make matters worse, most power meters are manually read, even those with automation capabilities, which introduces a large number of human error factors, as well as issues with reading dates aligning. To provide a common example: an energy retailer sends a bill that covers May 1st to June 1st which the building manager receives and then commissions a Meter Reading Company to manually read the meters. The meter reading takes place on June 3rd, introducing two days’ worth of extra consumption. This misalignment of reading times and dates prevents an accurate reconciliation and correct billing of energy use.
Any energy that cannot be accurately accounted for and allocated to end users, is typically pushed back to the overall building account and incorrectly billed as a variable outgoings charge.
According to sustainability experts and accredited energy consultants working in the assessment space for building ratings in Australia, a surprising number of building meters have been incorrectly installed or programmed from day one. While there are current initiatives to ensure quality meters are installed in new buildings (e.g. GBCA Green Star), there are no regulations, reporting schemes or legislation which exist to prove the meters are programmed, installed, commissioned or working correctly in existing buildings at the time of building handover or during the life of the building.
In one new construction project in the Perth CBD, an investigation identified that over 66% of the electricity meters had been incorrectly installed or programmed. The errors prevented the building from being commissioned correctly and resulted in $120K per annum being incorrectly allocated to variable outgoings as base building energy consumption. If the energy had been clearly identified as tenant consumption, the owners could have onsold it to the tenants at a 20% margin (approx.) The metering errors also reduced the NABERs rating as the $120k of energy, largely consumed by tenants, had to be accounted for as base building load. The source of the error: incorrectly programmed meters and a misunderstanding of the metering relationships.
As would be expected, metering errors are rife in older buildings where building managers tolerate years – even decades – of fit-out contractors incorrectly adapting the building’s energy network.
To avoid the pitfalls of fugitive energy caused by meter inaccuracies, Facility Managers need to make sure their buildings’ meter data is accurate and comprehensive. However, there are three key factors that weigh heavily against them in today’s metering space.
1) A general lack of awareness about meters losing calibration over their lifetime and the effect this has on a building’s financial performance.
2) A lack of competition amongst meter reading providers in a marketplace which still favours manual meter reading, (despite the fact national schemes such as NABERS and Green Star are driving competition within the market for a better service).
3) A low prioritisation of metering infrastructure upgrades.
Despite all the issues Facility Managers face, gaining true visibility over their building’s power output, as well as the competition in the marketplace around meter reading technology is improving. It is important to remain educated and mindful of the issues and challenges that exist, while keeping an eye out for new mete reading products and technologies that allow complete visibility and control of energy in your buildings.
**This article originally appeared in the December 2014 issue of FM Magazine