Energy Accounting An Introduction

You must be familiar along with financial accounting. You might perhaps be maintaining your household accounts! Energy accounting is just such as financial accounting, except in which instead of money, we account for energy.

You know that financial accounting has the function of balancing and controlling the flow of money. The practices in the financial accounting enable proper accounting of funds to detect the leakages, misappropriation, fraudulent transactions and etc. and contribute in improving the financial performance of the organization. In the similar way, energy accounting helps in balancing the flow of energy and associated costs, and determining the magnitude of energy losses.

The underlying idea is to treat One Energy Unit (kWh) as a unit of electrical money and develop a system for accounting every unit that is the similar as the procedure followed in financial accounting and auditing.

For example, an energy accounting system at the distribution level should

1.    Account for the energy made available at substation/11kV feeder/Distribution transformer,

2.    Compare it along with the quantum of units consumed by end-users,

3.   Determine the difference among the two that provides the energy losses and check whether these are reasonable and inside permissible limits.

This exercise will help the utility in estimating the revenue realized and the revenue losses. This comparison will enable it to ensure in which all energy is billed and the revenue realized in an effectual manner.