Utility Budgets: Creating Budgets
Aquicore can automatically calculate utility budgets for your fiscal year based on:
Your utility bill charges, and
Historical and projected occupancy data.
You may see two kinds of budgets within your Budget menu (under Utility Budget Module):
“Generated” budgets, can be automatically calculated during the Onboarding process for all available utilities for the current and next fiscal year.
Individually calculated budgets are generated by clicking “Create.” During this process, you can only select one fiscal year, and one utility.
Aquicore can create budgets based on even just one month’s worth of utility bill data. Naturally, the more data you provide the platform, the more robust and accurate our budget recommendations will be (see Confidence Rating below).
For a step-by-step guide on how to create a budget, please refer to this article.
Locking Your Budget
After your budget has been entered, it is important to ensure the “Locked” toggle is on and you have removed the word 'Generated' from the title.
Budget Packet
Before you continue reading, we recommend you download the Budget Packet associated with your generated budget.
The Budget Packet includes all the data that goes into generating a recommended budget. We encourage you to reference the budget packet while reading the rest of the technical guide so that you can better contextualize the calculations.
How are Recommended Budgets calculated?
Once utility bills are uploaded, budgets are calculated in the following way:
Bills are calendarized;
For each month, Aquicore normalizes the total utility spend based on available historical bills;
In the event no utility bill data is available for a month, Aquicore will interpolate spend based on similar seasonal spend;
If occupancy is set, Aquicore will adjust recommended budgets accordingly. Occupancy is treated as a weighted input and will increase budget projections by no more than 20% of your baseline.
Aquicore also provides a Confidence Rating for its recommended budgets based on the available data. Continue reading for more information.
Calendarizing Bills
Aquicore first calendarizes all available utility bill data in order to align with your fiscal year. For example, in order to calculate spend for April…
Assume your utility bill is based on the 15-15 of each month. In this case, your April bill is based on March 15 - April 14, and your May bill is based on April 15 - May 15.
Aquicore creates an average daily spend based on the available days reflected in the bill. Following the above, your April bill was $15,000 and included 31 days while your May bill was $16,000 and included 30 days.
Your calendarized April utility spend would be: ((15,000/31)*14) + ((16,000/30)*16) = $15,307.53
This process is done for each month based on the available bill data.
Normalizing Utility Spend
Aquicore normalizes all available utility bills so that calculated budgets reflect average weather patterns, tenant usage, and rate changes for a given month.
If more than 1 year of utility bill data is available, Aquicore normalizes total utility spend for each month. For example…
April 2016, April 2017, and April 2018 utility bills are uploaded into Aquicore. The calendarized spend for each month is $29,500; $30,152; and $30,516, respectively.
May 2016 and May 2017 utility bills are uploaded, but May 2018 is not available.
Aquicore normalizes utility spend for each month based on the available bills. In this case, 3 utility bills are averaged for April, while 2 are averaged for May.
Aquicore will normalize April utility spend as: (29,500 + 30,152 + 30,516)/3 = $30,056. This number will be used in your recommended April 2019 budget.
This process is done for every month, assuming more than 1 bill exists for that month.
Interpolating Spend (i.e. accounting for gaps)
Aquicore’s budget recommendation calculations also account for gaps in available data. This only occurs in the event no data is present for a given month.
For example, you are only uploading 2018 utility bills. Summer 2018 months are captured but data is missing for your winter 2018 months. Aquicore will assess equivalent seasons to fill in these missing months.
The data available for the summer months will be analyzed and used as a substitute for the winter months, as we expect similar consumption habits -- and associated spend -- during these extreme seasons. This process is also applied to the fall or spring months.
More specifically:
Assume utility bill data is uploaded for 2018. November 2018 data is the only month in which data is missing; all other months are present.
Aquicore will identify and use the most comparable dataset to interpolate for November 2018; in this example let’s say March 2018 data is used.
Aquicore will not arbitrarily use March 2018 data to inform November 2018. Instead, it will holistically look at the surrounding months to calculate a reliable interpolation. Following the above…
After the previous steps in the process are completed, Aquicore has captured October and December 2018 utility spend data ($35,000 and $42,000, respectively). March 2018 spend, which will be used to inform November, spend is $33,000.
Aquicore will adjust its calculations accordingly to produce an interpolation that fits within expected trends. In this case, we expect November spend to be similar to or greater than October. Thus, Aquicore fills in missing November 2018 spend as $36,250.
Accounting for Occupancy
Aquicore will calculate a more robust, recommended budget if Occupancy data is available.
Note: Occupancy must be set before recommended budgets are calculated if you want occupancy to be reflected in your budget.
Occupancy is factored into budgets in the following way:
Recommended Budget + [(Recommended Budget * Occupancy %) * 0.2]
A 20% cap is applied when factoring in occupancy. In other words, occupancy rates will only increase the calculated baseline budget by no more than 20%, in accordance with Department of Energy guidelines[1].
Furthermore, occupancy is applied one month at a time when calculating recommended budgets. For example…
Occupancy is set at 75% at January 2018, and is changed to 85% in October 2018.
The 75% occupancy rate will thus impact January through September 2018 months, while 85% occupancy rate will impact October through December 2018.
Confidence Ratings
A Confidence Rating, indicated by a star, will appear next to your calculated budget and is determined by the number of utility bills that were used to calculate your recommended budget.
Confidence Ratings are specifically based on the number of months Aquicore has bill data for from the calendarization process, after the normalization process. The calculation is as follows:
(# of months with bill data / 12) * 100 = % Confidence
For example, three years of utility bills are uploaded into Aquicore but for each year November data is missing. The Confidence Rating would be:
(11/12)*100 = 91.6%
There are three levels of confidence:
High (green star): 90%+
Medium (yellow star): 50%-89%
Low (red star): <50%
Hovering over the star within Aquicore will reveal a legend indicating the above confidence ratings.