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ARCHIVED - Step 1: Calculate Your Energy Costs and Consumption

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To prepare an energy management plan, you must first know the types and amounts of energy your facility uses. The chart on page 9 will help you and, since your energy consumption is measured in a number of different ways, it will also convert your consumption to a common figure – gigajoules (GJ). (See "What Is a GJ?" on page 9.) The results will help you compare your facility against others in Canada in Step 2.

Use your records from any recent 12-month period (last 12 months, calendar year or fiscal year). If you or your accounting department do not have the necessary energy information, most utilities retain customer data for at least 12 months. To create a baseline from which you can track your progress, fill out the chart every year and compare it with these initial numbers.

For a more detailed analysis, consider hiring an energy consultant to conduct an energy audit of your facility. A GJ calculator can be found at

What Is a GJ?

A gigajoule (GJ) is the equivalent to 1 billion joules. A joule is a measure of the energy required to send an electrical current of one ampere through a resistance of one ohm for one second. One GJ is equal to 277.8 kilowatt hours (kWh), 1.055 million British thermal units (Btu) or 0.17 barrels of oil. Burning 1 million wooden matches completely at one time releases one GJ of energy. One GJ of electricity could make 1000 pots of coffee or keep a 60-watt light bulb continuously lit for six months.

A GJ can measure energy from various types of power, such as electricity, natural gas and oil. Similar to equivalent kilowatt hours, the GJ provides a standard measurement that lets you calculate a single energy-intensity figure – a number you can then use to compare with those of other facilities.

To convert from kWh to GJ, multiply by 0.0036. To convert GJ to kWh, multiply by  277.8. There is a GJ calculator at

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Chart 1. Calculating Your Facility's Energy Costs and Consumption
Source Annual Cost Annual Consumption With Conversion Factor Annual Consumption (gigajoules)
Electricity* $ _______ ________ kWh × 0.0036 = _______ GJ/yr.
Oil No. 2 (light) $ _______ ________ L × 0.0387 = _______ GJ/yr.
Propane** $ _______ ________ L × 0.0266 = _______ GJ/yr.
Natural Gas*** $ _______ ________ m3 × 0.0372 = _______ GJ/yr.
Steam** $ _______ ________ kg × 0.0023 = _______ GJ/yr.
Other $ _______ ________ = _______ GJ/yr.
Total $ _______   = _______ GJ/yr.

Annual Energy Intensity by Floor Area****
Total cost ___________ m2 = $ ___________ per m2/yr.
Total GJ/yr. ___________ rooms = ___________ GJ/m2/yr.

* Electricity prices are blended costs that include demand charges (kW or kilovolt amperes [kV.A]) and other service charges billed by electrical utilities above the regular cost per unit in kilowatt hours (kWh).
** Propane and steam figures are typical factors.
*** Some utilities bill in GJ, no conversion required.
**** To convert sq. ft. to m2, divide your total floor area in sq. ft. by 10.76.

Calculations Example

Here are the calculations for a department store that has a floor area of 14 000 m2. The facility uses 2 500 000 kWh of electricity (at $0.07 per kWh, including demand charges) and 200 000 m3 of natural gas (at $0.26 per m3) every 12 months.

Source Annual Cost Annual Consumption With Conversion Factor Annual Consumption (gigajoules)
Electricity $175,000 2 500 000 kWh × 0.0036 = 9000 GJ/yr.
Natural Gas $52,000 200 000 m3 × 0.0372 = 7440 GJ/yr.
Total $227,000   = 16 440 GJ/yr.

Annual Energy Intensity by Floor Area
$227,000 14 000 m2 = $16.21 per m2/yr.
16 440 GJ/yr. 14 000 m2 = 1.17 GJ/m2/yr.

How to Read Your Energy Bill

Some retailers never see an energy bill. Instead, you may pay fixed or variable energy costs to your landlord as part of your lease. If you do receive a bill, the following explanations may help.

Energy consumption charges reflect the amount of energy you consume. This is usually charged in dollars per kilowatt hour (kWh) for electricity or dollars per cubic metre (m3) for natural gas. Propane and fuel oil are usually sold on a per-litre basis. These calculations differ across the country and could also be influenced by other factors – such as time of year, size of facility, amount of consumption and customer discounts – depending on the policies and rate structures of your local utilities.

Demand charges reflect the rate at which energy is used. This is often listed in the electricity bills of large energy users as a cost per kilowatt (kW) or kilovolt ampere (kV·A). Utilities must be able to supply customers at all times, based on peak use. A 20-minute spike in your electricity consumption could result in a correspondingly high charge for the entire month. This demonstrates the need to reduce energy in your peak times during the day and assign energy-intensive activities to the middle of the night when possible.

Another major consideration is power factor (pf), which measures how effectively your equipment converts electricity to useful power. Power factor is expressed as a percentage or decimal (90 percent or 0.9, for example), which equals real power (the amount you use in kW) divided by the total power supplied to you (in kV·A). Ideally, your pf should be as close to 1.0 as possible since some utilities charge penalties when users fail to maintain power factors of 0.9 or greater. These lower percentages are sometimes referred to as poor or low power factors. The key to avoiding penalty charges is to control reactive power, which is the difference between the power supplied to you and the power you use, measured in kilovar hours (kVarh). Reactive power performs no useful work, but must be supplied to your facility to generate magnetic fields used in motors, transformers and lighting ballasts. One way to correct pf is to install pf correction capacitors, described in the “Motors and Drivessection.

Other bill items can include transportation or supply charges (usually the cost of producing energy or bringing a fuel like natural gas to your province or territory), distribution or delivery charges (usually the cost of bringing this source of energy to your facility) and basic monthly or service charges. It is your company's money, so ask your utility or check its Web site if you are not sure about all the items on your bill.

Talk to a business representative from your utility to see if you qualify for any discounts.

To simplify calculations in this guide, energy rates are averaged at the following:

  • $0.07 per kWh or $20 per GJ for electricity (including demand and other charges); and
  • $0.26 per m3 or $7 per GJ for natural gas (including all charges).

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