Cost Avoidance special adjustments

A special adjustment (called a “non-routine baseline adjustment” in IPMVP) is needed if there has been a change in the energy use of a building meeting these conditions:

• Occurred AFTER the baseline year.
• Is NOT the result of an Energy Manager's actions.
• Is NOT weather related.

Such uncontrollable conditions, if left unadjusted, can make the energy management results unfairly appear better or worse than what the energy management program should receive credit for.

Special adjustments provide a means for fine-tuning Cost Avoidance to give credit for the appropriate level of energy savings. Many changes that take place in buildings today result in increased energy use. This increased use tends to cancel out energy savings, giving the appearance of low or zero savings. UtilityManagement's special adjustments can restore the true calculation of Cost Avoidance. 

Two types of special adjustments

• Continuous: An adjustment in effect year-round starting on a specific date.
  For example, add 50 kWh per day to the baseline beginning 9/2/2019 to an account for new computers that were not present during the 2018 calendar baseline year.
• Recurring: An adjustment in effect certain days of the year starting on a specific date.
  For example, add 225 kWh to the baseline from June 5th through August 12th to account for summer school, which was not held during the baseline year.

Examples

• Addition of new equipment.
• Changes in occupancy.
• Other special one-time, recurring, or continuous changes.
• Marginal pricing considerations.
• If 100 new computers were added after the baseline year, the energy used by these computers makes the energy management results look worse. This is not a fair indication of the actual energy management performance.
• If 4 portable classroom modules were removed after the baseline year, an adjustment should be made so that the resulting energy reduction does not over-inflate energy management performance (unless the removal can be credited to actions taken by the Energy Manager to consolidate floor area).

The order of special adjustments is important when a percent adjustment and fixed adjustment are both included. Adjustments are applied in chronological order and the last adjustment overrides previous entries.

Use an update spreadsheet to change the sequence of adjustments as needed.

Steps to add a special adjustment

1. Choose a category. This is used as a filter in Report 25 and in the Calculate Savings processor where you can ignore adjustments for a selected category, this can sometimes be helpful in savings analysis.
2. Choose a method of adjustment. (Explained below.)
3. Enter the adjustment value applicable to the selected method.
4. Choose continuous or recurring adjustment.
   • Continuous adjustment example: add 5,000 kWh to the adjusted baseline starting in March 2019 and continuing each month to account for the addition of a new IT training laboratory.
     • One-time adjustment example: add 50,000 kWh to the adjusted baseline in March 2019 because you hosted a conference and used more than normal energy that month. Use the continuous option for one-time adjustments.
   • Recurring adjustment: an adjustment that recurs each year for a certain date range. Add 50,000 kWh to the adjusted baseline each June and July to account for summer school which did not occur during the baseline year.
5. Enter a start date and end date of the adjustment, unless it continues indefinitely. If recurring, use the annual recurring cycle start and stop dates. The adjustments are applied to each day you choose, for example, January 1 through January 31 would apply the adjustment to 31 days.
6. Be mindful of order. Special adjustments are processed in order. If more that one special adjustment % applies to a given day, the order is important. All % adjustments provide different results when executed at different positions in a multi-adjustment sequence. Use a special adjustment update spreadsheet to set the sequence.

Common special adjustments

Add X.XXXX per day to the BATCC non-weather use

Use this for fixed loads unrelated to weather. For example, new equipment has been installed in a building.

The installed load is 10,000 watts, which is 10 KW. The equipment operates 12 hours a day, five days a week. 10 KW x 12 hours/day x 5 days/week = 600 kWh/week. On a seven day basis, this averages out to 85.7 kWh per day.

Add X.XXXX% to the total BATCC use

Use this for loads that vary in the same manner as the overall bill varies, such as with changes in the number of occupants, hours of occupancy, or floor area changes.

If the hours of occupancy increase by 10%, you may estimate that total energy increase is 10%.

Normally, you let UtilityManagement automatically adjust the baseline for floor area changes. When the floor area changes, UtilityManagement automatically prorates the baseline an equal amount, a 15% floor area increase causes a 15% baseline adjustment.

In some cases, you may want to use a different percentage. You may estimate that a 15% floor area increase only increases energy use by 9% because the new addition is more energy efficient. In this case, turn off the automatic floor area adjustment and create a special adjustment of 9%. The sequence of execution is important if a meter has more than one active adjustment, and one of them is a % adjustment.

No Loss No Gain (Savings equals zero)

This option turns off Cost Avoidance for a meter for a period of time or indefinitely. For example, a building has been leased out to a tenant. You want to keep the meters in the system so that historical use and Cost Avoidance appear on reports, but you don't want the system to calculate ongoing Cost Avoidance.

BATCC cost = BATCC use times X.XXXX user-defined unit cost

This option overrides the default value of average unit cost (which is calculated current average unit cost) and replaces it with a stipulated unit cost. Use this when today's calculated unit cost is abnormal/unreasonable or when savings is contractually locked to a stipulated unit cost.

Cost Avoidance = Avoided use times X.XXXX user-defined unit cost

This option is similar to the prior adjustment. This adjustment can be useful when a current bill has low use and a relatively high service charge.

For example, baseline water use was 1,000 kgal, with a cost of $200 service charge plus $1/kgal - $1,200 total. The current bill is 50 kgal because of a very effective summer shutdown.

Cost is $200 service charge plus $50 = $250 total, which equates to $5/kgal. This causes an abnormal AUC, so you want to use a user-defined AUC of $1/kgal.

Using the normal BATCC cost approach, BATCC is 1,000 kgal @ 1.00=$1,000. Cost Avoidance is BATCC cost - current cost = $750. Using the Cost Avoidance approach, Cost Avoidance = 950 avoided kgal @ $1.00 = $950. 

This is a better value because had you done nothing, the cost would have been the same as the baseline ($1,200), which is $950 more than what you paid.

Most bills have service charges that are negligible when compared with the total bill cost, so this is not a common situation.

Seldom used special adjustments

Cost Avoidance = Avoided use times calculated average unit cost

This option causes Cost Avoidance to be calculated as average unit cost (from today's bill) times the avoided use. This is different than the standard calculation because average unit cost is normally multiplied by the BATCC use to give BATCC cost, and then Cost Avoidance = BATCC cost - current cost. This special adjustment can be helpful in special cases where the normal calculation sequence is not suitable.

Add X.XXXX% to the weather (heating) BATCC use

This adjustment affects only weather-sensitive loads and is only active when a day has heating degrees AND there is a weather adjustment in effect.

Add X.XXXX% to weather (cooling) BATCC use

This adjustment affects only weather-sensitive loads and is only active when a day has cooling degrees AND there is a weather adjustment in effect.

Replace the total BATCC use with X.XXXX per day

This option discards the BATCC use created by UtilityManagement and replace it with another value. This can be used for one-time situations where you need to adjust a single bill. NOTE: A simpler way to make a single-month adjustment is with Trends, click a month for Explanation of Savings, and then Manually Adjust Savings and enter an override value for the entire billing period.

Replace the total BATCC cost with X.XXXX per day

Similar to the above BATCC use adjustment, affecting cost rather than use.

Multiply Average Unit Cost by X.XXXX% to approximate Marginal Unit Cost

Use this to de-rate the blended current average unit cost when the value of an avoided kWh is less than the blended unit cost because of demand charges. For example, an electric bill has a blended rate of $0.20/kWh. The bill is about 50% demand charge and 50% consumption charge. If your efforts have reduced use and demand by similar amounts, the $0.20/kWh is reasonable. However, if your efforts did not have a significant affect on demand charges, then perhaps an AUC factor of 75% or 50% is appropriate.

Special Adjustments related to demand are not yet fully implemented.