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The Big Problem with Sub-metering Energy Usage -- and a Cost-cutting Alternative

Follow this simple sub-metering startup plan to ensure that your efforts are a boost, not a bust, for your organization.

You know you need to do something to manage energy use at your plant, so you call an energy management information systems vendor. You sign up for a sub-metering plan with way too many energy usage points -- maybe as many as 350. Within three years, 20% of your meters aren’t working as you originally planned, because no one is monitoring them. You end up shelling out $150,000 to put in better control and monitoring, but you still don’t see the benefits. Your EMS system never reaches 80% utilization. You quickly become complacent.

With this common sub-metering scenario, is it any wonder that management isn’t jumping to fund your other energy projects?

Ed Birch

Through my decades in energy management, I’ve seen sub-metering become a point of contention at more manufacturing facilities than I can count. The goal of an EMS is to provide metering, sub-metering and monitoring functions that allow managers to gather data and make informed decisions about energy use.  This is great in theory, but unfortunately, most EMSs are more robust than an organization can integrate into their performance improvement.

Even the General Service Administration sees the issue with sub-metering. They put it this way: “Sub-metering by itself does nothing to reduce energy use…or costs…[but] thoughtfully designed sub-metering programs generate data that can guide management strategies, operational and investment.”

As the GSA explains here, sub-metering alone isn’t enough. In order to measure ROI and show your management that energy management has a high value proposition; your organization needs a well-designed strategy. Follow this simple sub-metering startup plan to ensure that your efforts are a boost, not a bust, for your organization.

The 5-point sub-metering strategy

One of the biggest issues with the status quo sub-metering strategy we’ve discussed above is that it involves biting off more than you can chew. In some cases, 350 points more! To get your sub-metering off on a strong foot, and create a sustainable program, follow these five simple steps:

1. Construct an energy value stream map.

Create a simple, block diagram that connects your energy streams to the manufacturing process.  Identify readily available information for the manufacturing process like motor horsepower.  Begin to create a strategic energy management document that defines your current energy use and evaluates the energy efforts that have been made in the past. With this overview, you can put your real energy use into perspective and identify key areas that are driving up your energy use—and thus draining your budget.

2. Identify three energy hogs, and monitor them closely.

Too many times, I’ve found that companies pour lots of money into creating energy assessment reports that end up in someone’s filing cabinet with many action items but no action taken. Don’t let that be you. Instead, put your energy value stream map to practical use by finding the three machines or processes that use the most energy. Then, install sub-metering for these areas. Not all of them—just these three.

3. Verify your sub-meters are all reading correctly.

They say that what gets measured gets done, and with this process it’s no exception. Document your calibration methods and create a standard procedure for what do if your numbers go too high or too low. And most importantly, designate someone to manage the sub-meters, energy use and budget spend to ensure that your hogs are running efficiently.

4. If you can manage this, move forward with more meters

Refer back to your energy value stream map and your sub-metering data to determine some other energy hogs in your facility. Then, add sub-meters for those machines or processes, and repeat Step 3.

5. Remember the energy management Golden Rule.

Sub-meters don’t monitor themselves, and smarter energy management can’t occur unless you take action. Progress only happens when you get your butt out of the chair and take action. Follow your plan and hold people accountable for monitoring and tracking your energy use.

By following this simple sub-metering strategy, your plant has the potential to increase its energy savings by 10-20%—boosting your bottom line and reassuring your stakeholders that energy management truly does drive a competitive advantage.

Now, get off your computer and take some action!

A seasoned manufacturing executive, Ed Birch’s expertise in organization change is rarely found in the energy management sector. Birch’s corporate turnaround and organizational change initiatives help Strategic Energy Group clients achieve persistent, organizationwide energy savings. Birch has spearheaded SEG’s continuous energy improvement programs for over 200 industrial and commercial organizations in North America. Prior to SEG, Birch served as Chief Operations Officer for Unicep Packaging and Litehouse Salad Dressing, Inc. Through these leadership roles, he implemented lean manufacturing strategies and instituted ISO standards while overseeing daily operations and logistics.

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