When Electric Bills Give You the Third Degree
The Scene: Your financials were just distributed. Ten minutes later your email box is blowing up with ALL CAPS emails asking why your electricity expense is 23% higher than what was
budgeted. You look at the bills and the rate is the same but the usage is excessively high
compared to last year and the year before. What happened?
Unless you’re allowing a department store to hook up to your power line, it is likely due to a
change in the weather. Sounds like a good explanation but how do you explain that to your
supervisor or deliver that message to an owner that has unmistakable credibility? Understanding the impact of degree days is critical.
Explaining Degree Days: Degree days is a measurement that explains the difference between
the average daily mean temperature and what it will take to heat or cool a building or facility to meet the desired building point temperature (BPT).
For example, if the average outside temperature per day is 59 degrees Fahrenheit for a month and your BPT is 65 degrees, than the heating degree days (HDD) = 65-59 X the number of days in a month or period of heating degree days.
Heating degree season begins: July 1
Cooling degree day season begins: January 1
65F-59F= 6 HDD x 31 days in the period = 186 HDD in the period
Consequently, if last year the average temperature was 62 degrees for the same period, the
number of heating degree days was less:
65F-62F= 3 x 31 days in the period = 93 HDD in the period
Or, a 50% increase in HDD year over year for the same period.
The same concept applies for cooling degree days (CDD). If the average temperature is above
65F then there will be additional cooling degree days.
75F – 65F = 10 x 31 days in the period = 310 CDD in the period
The prior year, same period;
70F – 65F = 5 x 31 in the period = 155 CDD in the prior year
Or, a 50% increase in CDD year over year for the same period.
For the full article, click here: http://www.minolusa.com/pdf/Why-Degree-Days-Matter.pdf