Put your energy into reporting

28 Aug 2008Archived News Energetics in the News

Published: WME Magazine by Richard Collins - Jonathan Jutsen, Executive Director; Business Development and Robert Sims, Principal Consultant; Information Data Management, Energetics Pty Ltd talk about Energetics' NGER and EnTERPRIZE.EM services.

 

As the value of energy goes up, so do the reporting requirements. But beware if your energy statistics are stuffed in a dusty shoebox awaiting the auditors, writes Richard Collins.

Imagine a public company doing its annual financial return by scrabbling through the incomings and outgoings at the end of the year and scribbling the numbers into a spreadsheet.

That’s pretty much how energy data has been treated in the past, says veteran energy management consultant Jon Jutsen, who recalls large companies pointing him to the box of invoices gathering dust in the corner come report time. Energy quite simply has not represented a large enough cost centre or come with a compliance requirement.

But that is rapidly changing, not least due to the National Greenhouse and Energy Reporting Act (NGER) that came into force in July as a precursor to the emissions trading scheme expected in 2010.

It begs the question of how to gather the data, which many companies have never had to accurately monitor or interrogate. Jutsen estimates less than 10 per cent of firms are confident they have audit quality data, but says this is set to change in a hurry.

“Reporting to NGER is going to need to be as good as you need for financial reporting and it is going to have to be externally audited because it has potentially real property value,” he says.

The NGER regulations have not set any specific reporting standard or accreditation process beyond saying the information must be 100 per cent accurate, material and complete (with all the energy sources). Get it badly wrong or try to manipulate the result and both the CEO and company can be held liable.

“Two or three years down the track from here you won’t find too many companies that will not have an information management system, either as part of their central corporate reporting system or an independent system that talks to their central system electronically. It is not going to be enough to have a simple spreadsheet,” says Jutsen.

“The complexity of reporting, the audit-ability requirements, the accuracy requirements, the price and cost reduction issues are going to drive companies to make an investment in this area. You are going to see a very dramatic change in this market-place.”

Top billing

As it happens, Energetics has a data management system to fill the gap, one of a number on the market.

EnTERPRIZE.EM is a web-based application that takes customer utility bills, either electronically or through manual input by Energetics staff, and processes it through a series of analyses that vary according to the client. Typically, they include validating energy rates, correct billing – Energetics’ Robert Sims says duplication and incorrect property ownership is “not uncommon” – and year – on-year comparisons of usage and total cost. If a bill fails the variance analysis, it is thrown out for a more thorough check.

It also allows companies to perform a more detailed interrogation of the data, such as trends, cost per unit, benchmarking and conversion to CO2 equivalent emissions.

“The whole idea is to provide the detailed checking to give customers comfort they are paying the correct amount, to leverage off the tools we have to provide the visibility from a reporting point of view and hopefully a cost reduction and energy management point of view, and to leverage off our systems to help negotiate contracts,” said Sims.

A team of 17 energy information specialists manages bills worth about $500 million a year for customers such as the miner Xstrata and food processor Simplot. They work under various levels of engagement, from straight bill processing to active management.

The benefit of a web-based system is the formulae can be updated as the rules and regulations are amended, which is particularly relevant at the moment, considering the speed of change in the reporting requirements. The NGER regulation, for example, was still tweaking the numbers around conversion of different greenhouse gases to the standard CO2e as late as June.

It is also silent on required data management regime, such as the amount of record keeping you need to have and how to estimate missing data. That might not become clearer until October 2009, when the first reports are due and regulators show their teeth.

Sims says that, typically, external audits they are put through by clients include an audit of the data collection system, the processes and people that manage it and a spot check of the results. Whatever the final requirement, you can bet it will be more than a box of bills and a spreadsheet.

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