Why Is My Factory’s Electricity Bill So High When Nothing Has Changed?
Your production levels are much the same. You have not added a new production line. Operating hours have not changed significantly.
So why has your electricity bill suddenly gone up?
The first assumption is often that the factory must be using more electricity. But electricity consumption is only one part of the bill.
Tariff changes, Maximum Demand, poor Power Factor, changes in operating patterns, equipment problems and even the way your meter has been read can increase costs without an obvious change in production.
Before you spend money trying to fix the problem, you need to work out what has actually changed.
Why Can Electricity Costs Increase When Production Hasn’t?
There are several reasons why two months with similar production figures can produce very different electricity bills.
Some have nothing to do with what is happening inside the factory. Winter tariffs can make electricity considerably more expensive for businesses on time of use tariffs. Eskom tariff increases take effect in April, while municipal increases generally take effect in July. Utility companies can also restructure tariffs, changing the way individual billing components are calculated.
Then there are meter readings. Utilities and municipalities may sometimes bill on estimated consumption when actual meter data is unavailable. When an actual reading is eventually taken, the account may need a substantial correction.
Other increases come from changes inside the factory that are easy to overlook.
For example, production may gradually start earlier or finish later. If those additional operating hours fall into peak periods on a time of use tariff, the financial impact can be significant, particularly during winter months.
You may also be producing the same amount while using more electricity to do it.
Common causes include
More machines operating simultaneously, increasing Maximum Demand
Compressed air leaks causing compressors to work harder
Equipment remaining on when it is not required
An increase in the factory’s base load outside production hours
Deteriorating Power Factor Correction equipment
Motors becoming less efficient after being rewound
Heating or cooling systems working harder because of ambient temperatures or control settings
Changes in raw materials that require more energy to process the same output
The production report might say nothing has changed. Electrically, quite a lot may have changed.
Could Poor Power Factor Be Increasing Your Bill?
Power Factor is often overlooked when businesses investigate an unexplained increase in electricity costs.
Depending on your tariff, poor Power Factor can affect your account in different ways.
If your bill includes a reactive power component, poor Power Factor can increase reactive energy charges. If your tariff includes demand or network access charges, it can increase the amount of kVA being billed.
Having Power Factor Correction equipment installed does not automatically rule this out. PFC equipment can deteriorate over time and may no longer be providing the reactive compensation your factory needs.
If you already have a PFC system, check the controller for error messages and record your Power Factor during peak load conditions. If it is below 0.95, the system should be inspected, serviced and repaired where necessary.
If you have online metering, look at the historical data too. Changes in the load profile can help identify when performance started deteriorating.
What Else Could Be Happening in Your Electrical System?
Power Factor is only one part of the picture.
Electrical problems can increase energy consumption without immediately stopping production or causing an obvious failure.
Partial earth leakage, phase losses on large motors, unbalanced supply voltages, overvoltage, undervoltage and problems with refrigeration or heating controls can all affect electricity usage.
Metering itself may also need to be investigated.
If you have reason to question the consumption recorded by your utility, you can ask the utility to install a verification meter or install your own verification meter.
The point is not to assume that any one of these problems is responsible. It is to recognise that an unexplained electricity increase can have several possible causes.
Check the Evidence Before Spending Money
When electricity costs increase, it is tempting to jump straight to a solution. That is risky.
Ideally, start by analysing your load profile over the previous 24 months. You are looking for trends, changes and anomalies that can help establish when the problem started.
If detailed load data is not available, your electricity bills can still provide a useful starting point.
Check
kWh consumption rather than only the Rand value of the bill
Reactive energy consumption where applicable
kVA demand and whether it has increased
Whether your current tariff is still appropriate for your usage pattern
Whether base load has increased outside production hours
Whether equipment is being started earlier than necessary or left running unnecessarily
Whether heating and cooling settings have changed
Whether existing PFC equipment is maintaining the required Power Factor
Also look around the factory.
A compressed air leak does not require a sophisticated investigation to spot, but it can still contribute to higher electricity consumption. Equipment sequencing is another area worth checking. There is little benefit in starting every machine at the beginning of a shift if some equipment will not be needed until later in the production process.
These relatively simple checks can help narrow down the problem before you commit capital to fixing it.
Stop Comparing Only the Rand Value
If your bill increased from one month to the next, comparing the total amount tells you that electricity became more expensive. It does not tell you why. The tariff may have increased even though consumption stayed the same.
This is why you need to look behind the Rand amount and compare the units being billed.
Has kWh consumption increased? Has reactive energy changed? Has your kVA demand gone up?
Those trends give you something you can investigate.
You have very little control over the price the utility charges for each unit of electricity. You have far more influence over how many units your factory consumes or demands.
When Do You Need More Detailed Measurements?
Electricity bills can show broad trends, but they have limitations.
Online metering provides considerably more information because it allows you to see when electricity is being consumed and how that pattern changes over time.
When that still does not explain the increase, high speed load profiling can provide a much more detailed view of what is happening inside the electrical system.
Rather than relying on typical 30 minute averages, high speed recordings can capture electrical behaviour at much shorter intervals.
This can help identify base load waste, reactive power consumption and opportunities to move production away from expensive time of use periods.
Detailed measurements can also reveal power quality problems such as harmonics, voltage imbalance, excessive neutral currents, overvoltage, undervoltage, transients, sags, surges and interruptions.
That information matters because it allows you to confirm or rule out possible causes rather than guessing.
It also allows potential losses to be quantified. If an electrical solution is being recommended to save your business money, there should be enough data to support the expected saving and assess the return on that investment.
Follow the Data Until You Find What Changed
If your factory's electricity bill has increased while production appears unchanged, start with the information you already have.
Look at your electricity bills and compare the underlying consumption, reactive energy and demand figures.
If you have online metering, use it to determine when changes are occurring.
If the cause still is not clear, detailed load profiling and power quality measurements can provide the information needed to investigate further.
The answer could be a tariff change. It could be a gradual shift into peak periods, rising Maximum Demand, higher base load, poor Power Factor, an equipment problem or an electrical fault.
What matters is finding the real cause before deciding how to fix it.
Find Out What Is Driving Your Electricity Costs
An unexplained increase in your electricity bill should not automatically be accepted as another unavoidable cost of running a factory.
Start with the data. Find out what changed. Then decide what action makes sense.
If you suspect your business may be losing money through electrical inefficiencies, take our free 3-minute assessment to discover whether hidden energy waste could be contributing to your costs.
If you need a more detailed investigation into rising electricity costs or power quality problems at your site, contact Alpha Power Solutions to discuss what you are seeing and what should be measured next.
