The quickest utility budget is one line: last year’s total, plus a percentage. It takes 10 minutes, and it hides every site that moved.
A site-by-site budget takes longer the first year and less time every year after. It also gives finance a reason for every variance, instead of a shrug in month seven.
Start from a clean base
The budget is only as good as the history under it. Before forecasting anything, pull 24 months of bills for every meter, each one mapped to its site.
Then check that history for errors. A wrong multiplier or a duplicate charge that repeated all year is now in the base, and a budget built on it carries the error into next year. The bill audit checklist covers the checks a team can run in about an hour per bill.
A base that has been mapped, checked and weather-normalized is what we call the peg: the fixed mark every month is measured against. Everything below is built on it.
Four questions for every site
For each site, the budget answers four questions:
- How much will it use? A weather-normal year, not last year’s weather.
- What will it pay per unit? The current rate schedule, plus any change already filed.
- What will demand cost? A separate line, for sites that pay demand charges.
- What will change? Openings, closings, hours, equipment and tenants.
Answer those four for 40 sites and you have a budget with 40 sets of reasons in it. Add them up and you have the total finance asked for, with the reasons still attached.
Usage: a normal year
Last year’s usage includes last year’s weather. If last winter was mild, a budget built on it runs short when an ordinary winter arrives.
Use a weather-normal year instead: each site’s baseload, plus the weather load for average degree days at the nearest weather station. Our note on weather-normalizing energy use shows the method on one page.
Price: one utility at a time
A single escalator across every utility hides more than it shows. Each utility, and each commodity, moves on its own schedule.
For each account, record:
- the current rate schedule, from the current tariff book
- any rate case or rider change filed but not yet decided
- for gas, how supply costs pass through, and how much they moved over the last two winters
- for water and sewer, any rate change the provider has adopted or proposed
Do not invent a number for a pending rate case. Budget current rates as the base case and the requested change as the high case. Our note on what a utility rate case means for budgets explains where those requests come from and how long they take.
Demand gets its own line
For sites on demand rates, demand is a separate cost with its own driver. A 2017 National Renewable Energy Laboratory analysis of more than 10,000 utility tariffs found that demand charges “can account for anywhere from 30% to 70% of a customer’s electricity bill” (NREL, via ScienceDaily).
Budget demand by month from the last 24 months of peaks, not as a share of energy. A site that set its peak on a July afternoon will likely set a similar one next July, unless something changed. The demand charge calculator shows what each 10 kW of peak costs on a given rate.
Water, sewer and the small bills
Water, sewer and stormwater bills are small one at a time and not small across 40 sites. They also change on their own schedules, set by each city or district.
Give each its own line per site. Sewer charges are often tied to water use, so a leak shows up twice. Stormwater fees, where a site pays them, often depend on the property rather than on use, which makes them easy to forecast and easy to forget.
Known changes, in writing
Budget misses often come from changes someone knew about and nobody wrote down. List each one by site, with a date and an owner:
| Change | Budget effect | When to book it |
|---|---|---|
| New site opens | Add a full set of bills, prorated | From the expected opening month |
| Site closes | Remove bills; keep final bills and deposits | Through the final read |
| Longer hours | Raise baseload, and possibly demand | From the change date |
| Heat pump installed | Less gas, more winter electric and demand | From the first heating month |
| EV chargers added | More kWh, and possibly a new peak | From commissioning |
| Solar installed | Fewer kWh bought; demand may not fall | From interconnection |
Each line needs an owner who confirms the date. A store opening that slips three months becomes a forecast error only if nobody updates the budget.
Ranges, not single numbers
A site-level budget should carry three numbers: low, base and high. The spread shows where the risk sits.
A worked example, with illustrative numbers. Three sites from a 40-site portfolio:
| Site | Low | Base | High |
|---|---|---|---|
| Store 12, owned, gas heat | $38,000 | $41,000 | $45,000 |
| Store 27, opening in May | $18,000 | $24,000 | $27,000 |
| Warehouse 3, demand rate | $96,000 | $104,000 | $121,000 |
The warehouse’s high case is wide because one 15-minute peak sets its demand charge each month. The new store’s range is wide because its opening date might move. Store 12 is narrow and boring, which is what you want from most of a portfolio.
Phase it by month and cycle
An annual number is not enough for the monthly close. Utility costs are seasonal, and bills arrive on billing cycles, not calendar months.
Spread each site’s budget by its own monthly pattern from the base years, and note which bills land in which accounting month. That makes accruals cleaner and variance explanations shorter. Our page for finance and accounting teams covers accruals and cost allocation across many sites.
Mind the budget calendar
For calendar-year companies, budget work lands in the fall, right beside the state benchmarking date. The Colorado Energy Office says Building Performance Colorado benchmarking reports and fees are due November 1 each year (Colorado Energy Office, Building Performance Colorado), and the same meter data feeds both jobs.
Our compliance calendar puts rate reviews, benchmarking and budget work in sequence across the year. Only the November 1 state date is fixed there; the rest is recommended practice.
A one-page budget memo
Finance does not need every site’s workbook. It needs one page that says what the number is and what could move it.
That page carries five things:
- the portfolio total, as a base case with a low and a high
- the five sites with the widest ranges, and why each is wide
- the rate assumptions by utility, including any pending case
- the known changes booked, each with its date and owner
- what would make you revise the forecast mid-year
Write the assumptions in plain words. “Base case uses current Xcel Energy schedules; high case adds the requested increase from the pending case” is a sentence anyone can check next spring.
Holding the budget during the year
A budget built site by site can be tracked site by site. Each month, compare actual cost and usage with the base case for each site, and explain any gap above a set threshold in one line.
That is the monthly work of Bill Desk: every bill read against the tariff and the baseline, with each variance explained in plain words. By month seven, the question is not why the total moved, but which three sites moved it and why.
Where to start
A Portfolio Energy Plan takes the same site-by-site view out five years, for up to 40 sites, with rate changes and planned projects in the numbers. To see what your bills say before planning anything, send three for a free Three-Bill Read.
