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Understanding your BC Hydro business bill: What you're paying for

Once Marion Machine office manager Alison Silveira noticed power factor surcharges weren't going away, she worked with an electrical contractor to eliminate it.

Power factor surcharge was costing steel fabrication company $200 a month

Okay, be honest. When's the last time you looked — really looked — at your BC Hydro bill?

If you're like a lot of customers, you treat electricity more or less as a fixed cost: the bill comes, you pay it. But there's information on that bill that just might lead to some sweet savings — if you take a close look.

Marion Machine heads off energy waste

Consider the story of Marion Machine, a steel fabrication company in Langford that moved into its own facility in 2000.

"About that time is when the power factor surcharge started to show up on our bills," recalls Alison Silveira, office manager for the company. "At the time, it wasn't a lot of money. We were just really busy setting up in this new shop, and we didn't have time to address it. And then time goes by, and you just keep paying it."

Power factor is a measure of how effectively your equipment converts electric current to useful power output. If your facility has a low power factor (expressed as a percent), it basically draws more current (kW) than it effectively makes use of — a waste of electricity and reduction of what's available to others across the grid.

BC Hydro's Power Factor Surcharge applies when your power factor drops below the desired threshold of 90%. The more your power factor drops, the higher your surcharge. (If your power factor is higher than 90%, you won't see a power factor line item on your bills.)

A 74% surcharge, eliminated

At Marion Machine, the power factor surcharge varied each month, depending on the types of orders they had, and which pieces of equipment were in use.

"It was always just easier to pay it than to do anything about it," says Silveira. "But over the years, it got more expensive."

Once, she says, the company paid a whopping 74% extra on their bill as a result of the power factor surcharge. "And you pay taxes on that, too," notes Silveira.

Planning for monthly expenses was a challenge, as was understanding the input costs of specific jobs.

A member of one of BC Hydro's business advisory councils, Silveira started to pay more attention to energy costs. "You can see that Hydro rates are only ever going to increase. So this was the year to do something about it [power factor surcharge]."

After consulting a knowledgeable electrical contractor, Marion Machine installed a single capacitor for their whole shop.

"We've gone from an efficiency [power factor] for the shop that was usually around 64% up to nearly 100%," says Silveira. "We've wiped out our power factor surcharge; it's totally gone. That's saving us, by the time you include the taxes, nearly $200 a month. So the capacitor has a one-year payback. We're just tickled to death."

Silveira agrees it's easy to not pay attention to your Hydro bill. "A lot of people are kind of just resigned, and the feeling is, 'There's nothing we can do to change it.' But for anybody who has a shop with a lot of equipment, if they have a power-factor surcharge on their bill, I highly encourage them to get a capacitor."

"I guess we just realized we couldn't really afford to be throwing that money away every month," says Silveira. "And the other thing is, you don't want to waste that kind of electricity. I just think that that's so cool, that you can go from being so inefficient to being nearly 100% efficient."

Monitoring your bill: tools and tips

To understand the details of your BC Hydro bill, use the following online tools:

Here are three areas of your electrical costs you can monitor on your bill — and manage for efficiencies:

For additional help understanding your bill and to seek out efficiency opportunities, consult your Key Account Manager, contact us online.