Thankfully, we have no shortage of information when it comes to energy saving related projects that churches can take on these days to meet their planned facility objectives.
Whether it’s an attempt at overall operational cost cutting, a proactive approach towards going “green,” reducing emissions, or some combination of each, we’ve gotten remarkably better over the years when it comes to making these projects pay off in shorter time durations, depending on the age of the property.
And as most of us know, church buildings tend to have some additional challenges in tackling energy efficiency projects, simply due to the architectural design of most (high ceilings, lots of exposed glass, etc.) buildings.
Some projects make sense, others not, but when it comes to diving into this operational line expense for the organization, it’s as critical as ever for church leadership to understand the main components of their energy costs.
I can’t imagine spearheading a new energy efficiency project without having a solid grasp of how the church is billed (via the consumptions electrons flowing through the various meters) and what that means to the overall bottom line.
In the excitement of a proposed efficiency project, there can be a part of the equation that is overlooked, but if the primary goal of the cost savings for the church, there isn’t much that carries more weight than the multiplier(s) that are used to calculate the monthly energy bill (or for natural gas).
For electricity invoices, this includes both the energy (commodity side) charges, as well as the demand side charges on the invoices.
Simply put, your organization’s monthly energy bill is typically the sum of the two equations below:
- Quantity (kWhs) x Energy Rate ($0.000 per kWh) = $ Energy Cost
- Demand (kW / kVA) x Demand Rate ($0.000 per kW / kVA) = $ Transmission/Distribution Cost
Energy efficiency projects tend to address either the Quantity or Demand equation above (or both in ideal projects), but let’s say that the Energy Rate side has never been addressed.
A church can undertake a substantial investment in time, capital expenditures and new equipment to achieve a reduced quantity of kWhs used, but if they’ve never addressed the rate side of the equation, a lot of effort could be wasted.
For example, let’s use an example of a medium size church building, assuming a baseline usage pattern of 75,000 kWhs per month and assessing a project that’s projected to drop the monthly energy consumption by 20,000 kWhs (-26.67%):
| Monthly Consumptions, kWhs | Energy Charge $ per kWh | Monthly Energy Charge | ||
| 75,000 | $ 0.08 | $ 6,000.00 | ||
| 55,000 | $ 0.08 | $ 4,400.00 | ||
| 75,000 | $ 0.06 | $ 4,500.00 | ||
| 55,000 | $ 0.06 | $ 3,300.00 |
Note that strictly from a cost standpoint, a 20,000 kWh usage reduction is nearly the same result as being billed at $0.06 cents per kWh, versus being billed at $0.08 cents per kWh. The cost of the project to get that reduction could easily climb towards the six-figure mark or more.
It’s possible that the church could be paying for that energy efficiency project for the next decade or so, when they could’ve achieved nearly the same (cost) outcome by being diligent about their energy rate.
As with operational costs for things like insurance, etc., it pays to shop around if you have the ability to, not only for electricity, but for natural gas, as well.
According to data from the EIA, as of December 2022, about 20 different states have restricted electricity markets and a similar number of states have choice with natural gas providers.
For the purposes of brevity, I’d suggest a quick online search to determine whether you fall within a deregulated market, or a regulated one.
I understand that not all parts of the United States have electricity or natural gas choice when it comes to their energy supplier.
For those in fully regulated areas, that doesn’t mean it’s not worth doing a little research to ensure that the meters belonging to your church are being invoiced on the correct tariff schedule.
Most utilities/municipalities/co-ops have these rate/tariff schedules regularly published (per state rules), and while some can seem overwhelming, it can also prove to be cost effective if it’s discovered that any of the meters are incorrectly coded. Perhaps a tech-savvy member of the congregation can use a tool like ChatGPT to assist.
Utilities are generally very good at what they do, but they certainly aren’t infallible, and, occasionally, meters are coded (and subsequently invoiced) incorrectly. If an invoice seems really out of line with historical usage patterns, most utilities will conduct an onsite visit to ensure that the meter is functioning correctly when prompted.
For those in a regulated area, it can also be worth investigating what utility rebate programs are available for recent equipment and appliance upgrades, if applicable.
These tend to play an outsized role in the calculation of efficiency project ROI, but nearly ever utility in the United States has a program in place to encourage its customers to use their product more strategically. If not well advertised, they can easily be overlooked.
A good starting point is the DSIRE (Database of State Incentives for Renewables & Efficiency) database, which can be found online at www.dsire.org.
If you happen to be one of the fortunate ones that is a restructured area, consider yourself lucky to take advantage of savings opportunities, but also be aware that it’s just another operational line item to manage (like insurance costs). And, the downside to poor oversight could be expensive.
Also, these markets tend to have an influx of participants all vying for a portion of margin on consumers energy bills and it can be difficult to determine who is genuine and trustworthy and who is just a fleeting, unreliable operation.
Given that dynamic, plus the complexity involved in most of the deregulated markets, it pays to bring in an outside expert to both help the executive church leadership with their decisions and understand the entire energy billing equation.
Travis Cooke is managing director of Alden Energy Consulting LLC, a full service, independent energy consultancy and brokerage firm based in Addison, Texas. They are focused on saving clients’ money through enhanced procurement methods or through energy conservation projects and help organizations navigate volatile markets, price swings, and manage overall energy risk, www.aldenenergy.com.
