There are many items that go into the calculation of an electric bill in commercial buildings in New York City. To fully understand the charges, an understanding of the various items is essential. The following descriptions of the terms and items will explain the components used in the calculation.
Energy Charge – Energy is measured in kilowatt hours (Kwhs). This charge is for the actual usage of electricity during a billing period. ie. watts times hours divided by 1,000 equals kilowatt hours. 10 – 100 watt lamps burning for 10 hours = 10,000 watt hours or 10 kilowatt hours (10 Kwhs). The energy charge is broken down into four separate components:
Market Supply (or Commodity portion),
Parts (2), (3), and (4) equal the Delivery portion. The Utility Company has a different rate each month. The actual rate charged is a proration of the number of days of each month in the billing period.
System Benefit Charge – The System Benefit Charge is a charge used to help relieve Con Edison of its stranded costs before New York State insisted they sell their generating plants for the purposes of electric deregulation. This charge is determined by multiplying the system benefit factor by the Kwhs used in the billing period and is a part of the Commodity portion of the bill.
“MSC” & “MAC” Adjustment Factor – The adjustment factor (charge or credit) is based upon the monthly cost of fuel purchased by the Utility Company as well as the cost for purchasing power from other Utilities during periods of high use by the customers. The “MSC” Adjustment is applied to the commodity portion of the bill and the “MAC” Adjustment is applied to the delivery portion of the bill. This charge or credit is determined by adding the two adjustment factors together and multiplying by the kilowatt hours (Kwhs) used in the billing period. The changing adjustments are determined monthly by Con Edison and can be either a charge (+) or a credit (-).
Demand Charge – Demand is measured in Kilowatts (Kws). This charge is based upon the maximum amount of Kws used in ANY ONE HALF (1/2) HOUR PERIOD during the billing period. Whichever half hour period is the highest, during the entire billing period (month), is the amount that the charge is applied to. The Utility Company has to have power available at all times within the system so that when a switch is operated, the device controlled will function. This means that a certain number of generators must be ‘on-line’ at all times, the cables in the street must be able to carry the capacity for the maximum use, the transformers outside each building (or group of buildings) must be ready and sized for the maximum use, and therefore, all of this preparedness must be compensated. The Demand Charge covers this cost. There is a separate register within each commercial energy meter to measure the demand for each half hour period during the month. This meter is reset every month when the meter reader reads the meter and then a new demand usage period is established for the next billing cycle. The Utility Company has a different demand rate each month. The actual rate charged is a proration of the number of days of each month in the billing period. The demand usage usually drops off considerably due to tenants not using their air conditioning equipment. It becomes obvious that if all of the equipment is not used at the same time or the use of the equipment staggered , the demand charge would be reduced. For example: 10 – 100 watt lamps burning for at least a half hour would register 1,000 watts or 1 kilowatt (Kw). 20 – 100 watt lamps would register 2 Kw. Should you turn on all of your equipment for a half hour and register, say, 50 Kw, then if you turn everything off for the balance of the entire billing period, your demand charge would be based upon 50 Kws as this was the maximum amount of electricity you required during the billing period. Similarly, if you were to turn only half of your equipment on, say, 25 Kws and leave it on all month long, your demand charge would be based upon 25 Kws. The demand charge is broken down into four separate components: (1) Market Supply (or Commodity portion), (2) Monthly Adjustment, (3) Transmission, and (4) Distribution [parts (2), (3), and (4) equal the Delivery portion]. In many cases, the demand charges surpass the energy charges.
Rate Adjustment – The rate adjustment is based upon the taxes that the Utility Company must pay to the City of New York and the State of New York for their operation and is also known as the Gross Receipts Tax. There are two different factors of this adjustment: one applied to the commodity portions of the bill and one applied to the delivery portions of the bill. This adjustment will vary periodically.
Electric Lease Rider Adjustment – Any special adjustment specified in the electric rider to the lease agreement is added at this point in the calculation, prior to the application of sales taxes, as a part of the electric cost.
Sales Tax – The last item used in calculating the bill is the sales tax which is currently 8.875% of the sum of all components listed above, for commercial customers.
Proration of Bills – The charges in any billing period which are less than or exceed thirty (30) days will be prorated to the proper number of days in the period. This means that the demand charge in the rate schedule (which is based upon 30 days) is multiplied by the number of days in the billing period and divided by 30. Only the demand charge is prorated, not the number of Kws consumed.
All commercial energy registers are accumulative which means that the previous reading is subtracted from the present reading and the difference is the amount used during the billing period. The meters measure the energy consumed in kilowatt hours (Kwhs). There are two types of demand registers known as needle type and accumulative type.
The needle type demand register displays the recorded demand using a pointer on a graduated scale, or on dials (read right to left), or on a digital LCD readout. The needle type demand register is always reset to zero (0) to begin the next reading cycle.
The accumulative type demand register displays the recorded demand on dials or a digital readout and is reset prior to taking the reading.
As with the energy register, the amount of recorded demand is the difference between the present reading and the prior reading.
There are basically three methods of acquiring meter readings:
Physically reading meter dials (from right to left),
Physically reading a digital register, or
Downloading meter readings via computer telecommunications.
The first two methods require a meter reader, of course, and, therefore, are more prone to human error, but the hand-held recording devices they use are programmed to alert the meter reader if the reading entered does not fall within certain parameters and he must double-check the reading. The hand-held computer will not allow the meter reader to move on to the next meter reading until the parameters are satisfied or overridden, keeping reading errors to a minimum.
The last method of downloading the meter readings over a phone line (or dedicated line) are digitally transferred and the readings are error-free. This last method is basically infallible of recording an erroneous reading.
Bay City Metering (BCM) only sells “utility-grade” meters. This means that the meter we install is the same quality of meter used by the Utility Company to meter the entire property. Electric meters are more dependable than electric clocks and in our testing over the years of more than four thousand (4,000) meters, not one has been found to be operating fast. Some meters have been found to be dragging or jamming, but even this has been rarely found. Meters are accurate and remain that way for many, many years.
The only information Bay City Metering knows about your usage is what shows on the meter servicing your apartment. We do not sell electricity to your Corporation, as the Utility Company sells the electricity to your Corporation at the Bulk Master Metering Rate. Bay City Metering is only a service hired to read the meters and prepare the monthly billing. We do not share in ANY of the money you pay to your Corporation for the payment of the electric service. We will answer your questions, test your meter and repair or replace the meter if it found to be inaccurate. The only statement that can be made concerning the electrical charges is that the charges to the shareholders in a submetered cooperative are identical to the charges that the Utility Company would have charged for the same service, or less. By New York State law, charges must be the same or lower, never higher.
Like most of us, you probably use more electricity in the summer. We run air conditioners and fans to stay cool. Even your refrigerator works harder in warm, humid weather. And, when everyone demands more electricity, the market price can go up.
Here’s an area where know-how is important. Adjust the air conditioner’s control to 78o F, its most efficient setting. Lowering the temperature below 78o F can cost you 20 to 40 percent more for electricity.
Is your unit clean and well maintained? The filter should be washed or replaced as often as necessary to keep it clean.
How old is your air conditioner? New models are more efficient, so consider replacing an old unit.
Look for the Energy Star label, a designation on many appliances that they are designed for maximum efficiency.
Make sure the unit is the right size for the space you cool and that the doors to that space are closed.
Turn it off when you are out of the room or away. It costs less to re-cool air than to run the air conditioner continuously.
Here is where a little knowledge is your best ally in saving energy. Each month look carefully at your bill and note how much electricity you are using. If you aren’t using less, think of other ways you might save.
One of the most effective ways to save even more is with automatic timers and thermostats.
Consider installing motion sensors. They turn lights on when someone enters the room and off when the room is empty.
Replace ordinary bulbs with compact fluorescent bulbs. They use 40-60% less energy.
Turn off lights that aren’t necessary.
Use bright lights only where someone is reading or working. Sometimes a night light is enough.
When you buy new appliances, read EnergyGuide labels and look for the Energy Star designation.
There’s lots of new energy efficient products on the market. Don’t forget to throw out the old inefficient one!
A number of factors affect the amount of your energy bill. These factors include the varying number of days in a billing period, seasonal usage, whether the current or previous bills were estimated, if additional people are living in the household, the addition of new appliances, or the use of appliances for longer periods of time.
Energy bills vary for several reasons. For example, the number of days in the billing cycle can change, energy costs fluctuate, and your month-to-month energy usage can change. You are billed for the amount used in the previous billing cycle. In the summer, electric bills are higher due to the use of air conditioners or fans. If you use gas for heating, then gas bills will be higher in the winter.