Who in your org actually owns the electricity bill?

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ceinewydd@reddit

Offices which almost always include lab environments are usually owned by Real Estate & Facilities.

Datacenter leases are more likely to be IT.

Acquiring or renegotiating either contract will be Procurement if you have such a function.

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Really useful breakdown. For orgs that do have a Procurement function, do you think they typically have the energy market expertise in house or do they rely on external advisors to know what a good deal actually looks like?

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ceinewydd@reddit

In a lot of markets you have exactly one choice of supplier and since that’s a defacto monopoly the meter cost is regulated by a utility commission.

In markets where there’s choice it’s normal for Procurement to use consultants or brokers to help evaluate their options, this occurs infrequently because most of these deals are long-term agreements ranging from 36 to 120 months.

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selim_amrouni@reddit (OP)

The 36 to 120 month window is the thing that gets me. Most companies sign and forget for years. Is there anything that actually prompts them to act before renewal, or is it purely calendar driven?

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ceinewydd@reddit

Procurement typically logs contractual renewal dates so as you approach the end of a 36-month or 120-month term you start looking at that six or twelve months in advance?

A lot of the agreements are timed to coincide with other CapEx investment. Very normal to have a datacenter that exists for 15 years, it’s going to get filled up with servers about twice. Datacenter plant investments depreciate over 120-180 months; servers, storage and networking over 72 months.

After 15 years you’re typically at a breakpoint of deciding whether to invest in some likely big ticket upgrades or go lease something else.

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selim_amrouni@reddit (OP)

So the window is really the 6 to 12 months before renewal when Procurement starts looking. Everything outside that window is just paying the bill ? Does anything ever prompt an early renegotiation outside of that cycle?

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ceinewydd@reddit

In many cases the agreements don’t permit negotiation before renewal? You’re signing up for 72 months, or 120 months. It provides certainty to both parties. There’s a TCV (total contract value) and typically a set of explicit things that can change during the term on something like a lease in a datacenter:

Maybe an increase of X% per year in Y part of the deal, for example, you had a fixed price for the space occupied over the entire term, a fixed schedule of any CapEx contributions the lessor requires you to make or ‘tenant improvements’, and the variable rate you pay per MWh can increase by X% per annum with notice X days in advance.
How are things like change in control handled. Potentially a contract breakpoint if the supplier is acquired (bit unusual, does sometimes happen).

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selim_amrouni@reddit (OP)

That escalation clause on the variable rate is interesting. Do buyers typically model what X% per year compounds to over the full term when they sign, or do they mostly just accept it and find out later?

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ceinewydd@reddit

Modeled before signing as a part of TCV.

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sakatan@reddit

The same guys who also pay the water bill, I guess. The fuck do I care.

If higher-ups tell us to save electricity, I'll do my best in my field of responsibility.

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selim_amrouni@reddit (OP)

Makes sense. Does finance ever loop in anyone technical when it comes time to renew the contract or switch suppliers, or is it purely an accounting decision?

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PowerShellGenius@reddit

I have never lived, worked, or heard of an area where 2 or more separate companies run electric lines in parallel and you have a choice. Your supplier is the company that owns the power lines on your street.

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CanadAR15@reddit

There may be numerous retailers selling power on that grid.

I have 17 different retailers I can buy power from, but it’s coming from the same distributor over the same lines.

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selim_amrouni@reddit (OP)

With 17 options, how do you actually know you're getting a good deal? Is there a benchmark or do you just pick the lowest quote?

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gakule@reddit

They all have their rates listed power kWh in my experience. Pick the cheapest one unless you're passionate about using, for instance, solar or nuclear

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selim_amrouni@reddit (OP)

Makes sense as a starting point. Do you ever find the rate structures hard to compare directly, like if one has a fixed rate for 24 months and another has a variable component tied to an index?

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gakule@reddit

Distributors and suppliers are different.

Distributors are what you're talking about - the companies that actually own the infrastructure that goes to the end point, very similar to a "last mile carrier" for your internet for localized distribution.

Suppliers are where your power actually is generated and you'll typically have the ability to select from several different options - at least, that's how it is in Ohio. I know every state isn't the same, Ohio has "only" had this capability in effect since 2001.

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7runx@reddit

He is referring to deregulated energy markets.

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PowerShellGenius@reddit

We're regulated. The power company can't increase rates without permission from the state. But there are not multiple competing retailers selling access to energy from the same physical distributor. I didn't know that was such a popular model some places, good to know.

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CanadAR15@reddit

You’re conflating retailer with distributor in unregulated markets.

Even in unregulated markets it’s uncommon to have two distributors serving a typical residential or commercial. Industrial sites and data centers can differ but generally it’ll be two different feeds from the same grid.

A customer can buy from any number of retailers. The retailer doesn’t deliver the power though.

Suppliers sell to “the grid” (distributors) who sell to retailers.

A customer will buy power from the retailer of their choosing, the distributor will deliver it.

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gakule@reddit

Thanks for the correction, though that doesn't really change the substance of what was stated or the comment chain.

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phoenix823@reddit

Facilities. People absolutely try to optimize it assuming you’ve got a large enough property for it to matter. Think air conditioner settings and shutting off lights.

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selim_amrouni@reddit (OP)

Interesting. So facilities handles the physical side but does anyone look at the actual supply contract? Like whether you're on a fixed rate, variable, whether the utility is the right supplier at all?

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OneSeaworthiness7768@reddit

Have you ever worked a corporate job? Why are you trying to create a service in an area you seemingly don’t know anything about?

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phoenix823@reddit

Sure. I think our power contract is coterm’d with the lease so think a 10 year agreement at least. I wasn’t involved but I know we used commercial real estate consultants to help negotiate it.

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selim_amrouni@reddit (OP)

That makes a lot of sense. Real estate consultants are great at the lease terms but energy contracts are a pretty different beast, especially in deregulated markets where the utility isn't the only option and rate structures vary a lot. Did the contract end up being fixed rate for the full term? Curious if anyone did any analysis on the energy side specifically.

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Ashtoruin@reddit

Finance

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FatBook-Air@reddit

Even that seems odd to me. Every where I have worked, it has been owned by the facilities/maintenance department.

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CanadAR15@reddit

When you’re buying a large enough amount of utilities, it becomes a finance consideration.

Utility costs impact financial outcomes and need to be forecasted, potential hedged, and worked into long term planning.

Finance should be deciding whether it is better to sign more expensive (upfront) fixed cost contracts to avoid risk or instead maybe setting up an internal rate stabilization reserve.

If your electricity costs tend to trend along with natural gas or oil prices, then it’s even more critical for finance to consider as the risk of energy prices hit in multiple areas (heating, power, diesel, gasoline).

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FatBook-Air@reddit

Utility costs impact financial outcomes and need to be forecasted, potential hedged, and worked into long term planning.

Finance should be deciding whether it is better to sign more expensive (upfront) fixed cost contracts to avoid risk or instead maybe setting up an internal rate stabilization reserve.

At a small business, maybe? But unless your CFO also mows the grass after creating financial reports, it just doesn't make sense.

I have never worked a single place that functioned that way. Finance knows nothing about the electricity bill. Finance knows finance. Facilities is the one figuring out how utility bills are structured, what is coming next, and how to hedge against increases. This is why every department (including facilities) is given a budget. Finance makes sure the money comes out of the right GL code but not the wisdom about whether to pull that money from the code.

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CanadAR15@reddit

When your utility and fuel bills are in the millions or tens of millions it becomes a finance problem.

Missing our projection on electrical pricing gave us a $350k favorable impact one year.

When you’re IT for a shop that has a heavy OT demand utility costs get absurd fast.

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FatBook-Air@reddit

When your utility and fuel bills are in the millions or tens of millions it becomes a finance problem.

That's 100% backwards. Once it becomes that big, it cannot be finance's problem. If every large bill was put under finance's purview, the finance department would be 90% of the company.

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CanadAR15@reddit

With finance making the decisions on how to fund/hedge energy (diesel, gas, power) as well as manage all the insurance contracts they were around 14% of the budget.

When it’s an expenditure that is highly variable and more than 5% of the budget, it’s a corporate risk, not a departmental risk.

The flip side is that you need a financial person in facilities who understands reserves, cash flow, and other risks in the global corporate sense to then decide on utility contracts which is untenable.

Finance isn’t looking at the monthly energy invoices, but rather modeling out and risk managing the energy needs and costs at a corporate level. Finance has the modeling expertise and the risk management expertise as well as the whole organizational context.

I.e., Are you hedging diesel this year? If so that may allow more comfort in absorbing electrical price shocks with internal reserves. Are you facing a large potential increase somewhere else that would encourage you to hedge the electrical costs at the provider level?

It’s not too dissimilar from finance or a risk management subgroup taking over insurance decisions. Fleet shouldn’t be deciding whether or not to self-insure vehicles, finance should. Similarly, IT shouldn’t be deciding on whether to buy cyber risk insurance or self-insure. The departments can provide input for finance/risk-management who can then make the analysis on where to pay to reduce risk.

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Ashtoruin@reddit

shrug finance are the people who pay bills so they get all the recurring bills. It's large enough they would have to approve it anyways so why waste my time?

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FatBook-Air@reddit

Most places require every bill be signed off on by someone other than AP, because they usually don't know what they are approving.

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mghnyc@reddit

When you say "most places" what kind of sample size you base this on?

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Ashtoruin@reddit

For something like ordering racks of new servers sure. But it's a bloody electric bill 🤣 and it comes every 4 weeks for roughly the same amount.

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FatBook-Air@reddit

I dunno. Just giving my experience that most AP offices don't want to take ownership of a bill that large.

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tc982@reddit

Depends on who owns the facility that the energy is used for.

I get my monthly invoice from our datacenters and the included usage and the expensive overusage.

I don’t get the electricity bill for the coffee machine and drank dispenser, facility gets the bill for that.

The energy consumption of our fleet is owned by the fleet department as they have to reimburse private charging and check public charging.

If you are a factory, it can be owned by the line manager, as they have a margin to guard. I had a customer that needed to shut down factories due to the previous energy crisis and the fact their budget was shot through and they could not produce any more with a healthy margin.

So - it depends.

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selim_amrouni@reddit (OP)

The factory example is the one that stuck with me. It sounds like energy only becomes someone's real problem when it starts hitting margin directly. Do you think that's the same dynamic at datacenters or is the cost usually just baked into the service pricing and passed through?

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tc982@reddit

Datacenters have the same dynamic, only there you would optimize your load to have more low powered devices.

For example, shutting down failover capacity and adjusting your failover plan to boot them through the OOB management (iLO or idrac)

Setting servers on energy consumption instead of performance and so on.

Usually a factory has less options to optimize as they are purposely build lines with optimisation already in mind.

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selim_amrouni@reddit (OP)

That's a good point on factories being more constrained on the consumption side. Do you think that makes the supply contract more important for them by default? Like if you can't squeeze much more out of the load side, the only lever left is what you're paying per MWh.

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CanadAR15@reddit

It does to a point.

If you’re small enough that you could sign a fixed price contract, then the contract is very important. But if you’re buying enough power you’re forced to go spot pricing in as short as 15 minute windows then the contract terms are less important.

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selim_amrouni@reddit (OP)

That threshold between fixed price and forced spot is really interesting. At what scale does that shift typically happen in your experience? Is it MW of demand, annual spend, or more about the market structure in your state?

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CanadAR15@reddit

All of that will massively change state by state.

Peak demand is what drives the shift where we are. If you’re drawing enough MW you’re paying by the 15 minute interval.

Today’s prices have ranged from $0.00/MWh (for 45 minutes) to $35 with an average of around $11.75. Peak this week hit $300. During summer the peak will get above $750.

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selim_amrouni@reddit (OP)

Shit the range is wild. So the DC basically just prays it locked in a good rate before summer then?

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tc982@reddit

I am not sure what you want me to say here, the contracts are done by procurement and we only manage the contractual baselines.

There is always room for negotiations, you can renew a contract before it end date, make longer commitments and so on.

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selim_amrouni@reddit (OP)

That's a really clear breakdown. Does Procurement typically have energy market expertise in house or do they treat it like any other vendor RFP? Curious if they actually know what a good deal looks like or if they're just running a process.

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CanadAR15@reddit

I had a customer who would run or shutdown their plan in 15 minute intervals based on the electrical spot rate. They did electric arc furnace batch steel making.

Finance absolutely set the guidelines for when things stopped and negotiated the contracts with the providers.

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CanadAR15@reddit

Finance makes the decision then finance manages the contract and service day to day.

Forecasting rates and needs, buying from a purchasing group, and whether or not hedging costs is a valid consideration are all decisions within finances wheel house.

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selim_amrouni@reddit (OP)

Finance actively thinking about hedging costs is pretty rare in my experience. Does your org do that in house or work with an external advisor? And when you mention a purchasing group, is that an internal shared services thing or an external buying consortium?

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CanadAR15@reddit

The rising price of diesel and gas was a $3M hit to our budget one year and lower than expected electrical inflation saved us $350k one budget year. Longer term team members told stories of an eight figure budget hit in the mid 2000s due to energy price escalations. At that scale it’s a big enough impact to have finance oversee it.

It was 50/50 whether it was in house or external depending on previous contracts and volatility in the market. An industry group we were part of had a purchasing pool that also had advisors — some years we went alone as their purchasing agreement was too risk averse and we had enough reserves to handle short term shocks.

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selim_amrouni@reddit (OP)

That eight-figure hit story is the kind of thing that changes a company's culture permanently. Do you think most orgs need to get burned first before they take it seriously, or have you seen companies get ahead of it proactively?

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MonsterTruckCarpool@reddit

Facilities

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rob94708@reddit

This is an AI bot trying to shill a “solution”; look at their post history.

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mickeys_stepdad@reddit

I have never worked for a company where the bill for electricity was owned by the IT department.

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blanczak@reddit

Ha, I have. “If it’s electric related it’s your responsibility”. Yes, I changed lightbulbs too

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mickeys_stepdad@reddit

:/ that’s not IT’s job.

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cli_jockey@reddit

My company made it partly my problem when they installed about 400 PoE powered lights during a remodel.

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blanczak@reddit

I agree! They had me running to Best Buy when the break room refrigerator died and such too. Water heater failed, yup I’d have to find a guy. Such an awful job

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tc982@reddit

Datacenter is owned by IT… ask me how I know 😳

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sambodia85@reddit

I imagine very few companies would run their own dedicated datacenters. Colocation is so cheap for the scale most companies need.

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Linuxmonger@reddit

I currently work for a company that has 5 data centers around the planet. Round numbers, about 40000 physical servers.

Why do you think it would be cheaper to add another layer of management?

Previously, I worked for a company with 300 employees in two offices about 4 hours drive apart, each building was the co-location of the other.

How would it be cheaper to pay for a third location and the staff to maintain that location?

AWS and the like are great for short term testing and cases where you need to scale quickly for transient needs, but they're expensive for well planned, every day use.

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sambodia85@reddit

That would put you in the “very few” companies I was taking about.

For most companies for CAPEX, OPEX and Employees to build, secure and run facilities like this would have the ROI because they simply don’t need 40000 servers.

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realCptFaustas@reddit

Damn, last place I worked that had their own data centers it was on data center maintenance team, sole responsibility to keep those things running.

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FatBook-Air@reddit

I could deal with that, so long as every area is treated the same way.

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tc982@reddit

We have a large datacenter footprint, so only we know that the usage is correct and we spotcheck their consumption figures against ours.

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stilldebugging@reddit

Makes sense, if someone in finance just blindly paid it, they wouldn’t notice if you were being incorrectly charged.

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Fragrant-Hamster-325@reddit

Yeah it’s owned by facilities. Oh but guess who owns facilities?

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FatBook-Air@reddit

Same. I've had 4 IT jobs and a few non-IT jobs, and IT was never even a consideration for doing anything related to the electricity bill (or anything else electrical, for that matter).

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vgullotta@reddit

I think finance pays the bill, but it probably comes out of facilities budget

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BadSausageFactory@reddit

Not a bad question about optimization but I'd really have no idea how to go about it.

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selim_amrouni@reddit (OP)

Curious what stops you from going down that road. Is it not knowing where to start, not knowing if the savings would be worth it, or more that it's just not your job to figure out?

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BadSausageFactory@reddit

mostly the first two and then the toes I'd step on finding out who the third belongs to

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selim_amrouni@reddit (OP)

The toes thing is underrated as a barrier. Most people assume they'd need to convince someone internally before they could even start the conversation. Does facilities or finance ever proactively ask IT about what's driving consumption, or does it always go the other direction?

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ledow@reddit

Facilities, and usually nobody ever bothers to care about the power used.

I've deployed dozens of KW of switches and servers, and the AC needed for them, and nobody ever bats an eyelid or even questions it.

I really DON'T want to start down the nonsense path that would be some penny-pinching boss forcing us to put all the servers in sleep mode overnight and power-savings all day long, and every client on maximum power savings, etc.

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selim_amrouni@reddit (OP)

That tracks. The power bill is kind of invisible to the people actually driving consumption. Curious if that ever creates friction when facilities or finance tries to push back on IT infrastructure decisions.

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ledow@reddit

I've never had anyone even mention it or care, to be honest.

I already have to factor in enough, factoring in every Watt we *might* use is way out of scope for most places.

I worked out that the solar panels that our place installed would barely cover the IT, let alone the 30+ aircon that I watched them put in across the site for other people.

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kirksan@reddit

Facilities owns it, but I usually had facilities report to me. There’s such an overlap between IT and Facilities it makes sense to have them under the same organizational structure.

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FatBook-Air@reddit

How are IT and facilities related in your org? Every where I've worked, they could not be farther apart, other than IT submitting tickets facilities to get network cable run or projectors installed.

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gumbrilla@reddit

Yeah, bugger that. When you realise the health and safety regs, and what their real job is, it's one to run a mile from...

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nyckidryan@reddit

Building automation to start with.

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TinderSubThrowAway@reddit

We are a MFG company with machines that run on a larger service than most people’s homes.

The IT portion of electricity is a rounding error.

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ilikeme1@reddit

I work in broadcast media I.T. Out useage is also a rounding error compared to the transmitter site.

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CanadAR15@reddit

At one of the sites I worked on all of IT might hit 0.001% of the power usage.

I have a friend at a site with 1 rack, 30 workstations, but a total site power usage of 200MW.

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gumbrilla@reddit

Oh, man.. Many years ago my infra director insisted I build out the development environment in a comms room in the office as facilities paid the electric.

This was before cloud was even a term.. We stuffed the place with netapp and Dell pizza boxes, R6xx something iirc. We ran 2000 centos vms off it....

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ilikeme1@reddit

Business office takes care of that. Never heard of I.T. Dealing with it.

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imabev@reddit

In local government: no one. Its a utility bill. They all get rubber stamped.

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Recent_Perspective53@reddit

Why are you even asking this? Like it's cost of business operating expense.

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vexed_squirrel@reddit

It's just a corporate expense for me. The mass specs pull more power than anything I have.

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honnymmijammy-@reddit

Hahahaha died inside

A non critical server had to be moved 4 meters for some renovation.

It turns out that the power was still billed to the previous branch that used to be here.

So now I got to wait until my boss and that branch boss and the previous branch boss hash it out.

That was 16 months ago, and now, I got to the point of having automated mail to all parties involved on the first of each month.

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selim_amrouni@reddit (OP)

16 months and still not resolved, that's impressive. Classic case of nobody actually owning it so everyone owns it => which means nobody does lol

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illicITparameters@reddit

BizOps or FacilityOps depending on the company.

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cryonova@reddit

Facilities for sure

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Zerowig@reddit

How is this relate to Sysadmin or even technical? If I ever worked at place where this fell under either, I’d run away from that org as fast as I can.

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BoltActionRifleman@reddit

Yep, this just screams “we don’t want to have to mess with this anymore, you’re in charge of it now.”

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matt95110@reddit

Facilities has always owned it wherever I have worked.

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BlikkenS@reddit

Not sure, but I believe building management? And yes, we are required by law to implement all energy-saving measures that have a payback of 5 years or less. Furthermore, as a company we try to minimize our ecological footprint so we invested in all LED lighting, high‑efficiency heating systems, insulation upgrades, electrical industrial motor replacements and other improvements that reduce long‑term energy consumption & footprint. Some things that I can think off the top of my head; shutting down workstations at 7pm automatically when not in use, raising our server room temperature to 23 degrees celsius (73f), printers that enter sleep mode etc. Just the simple stuff.

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selim_amrouni@reddit (OP)

That's really thorough on the consumption side. Curious though, does anyone look at the supply contract itself? Like whether you're getting a competitive rate, whether switching suppliers is even on the table, or is that fully outside of what building management or IT would touch?

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BlikkenS@reddit

Well, I can only say that IT is not handling that. And as far as I know we work with 3 years fixed contracts from suppliers for our gas/electricity/water. So pricing will only be reviewed when its time for renewals and I guess that building management or facilities does that. I only get asked to optimize for my department (IT) on the usage side.

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selim_amrouni@reddit (OP)

That's really common. The 3 year renewal window is interesting though, because that's actually when all the leverage is. Most companies just auto-renew or accept whatever the supplier quotes. Do you know if your building management does any shopping around at renewal time or is it mostly just continuity with the same supplier?

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BlikkenS@reddit

Well, I just asked, and apparently we hire an energy consultancy firm to negotiate our contracts for us when it’s time for renewal.

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selim_amrouni@reddit (OP)

That's really useful, thanks for checking. Do you know if the consultancy shops around between suppliers or do they mostly just renegotiate with the incumbent? Curious whether there's a genuine competitive process or mostly continuity.

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jl9816@reddit

We run about 170 000 KW to our site. And IT is 10-20KW of that. So nobady cares.

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hosalabad@reddit

Facilities

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SlateRaven@reddit

I work for a university - utilities are managed by our buildings/grounds people and the funding comes out of the general fund

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waxwayne@reddit

Facilities and by extension real estate.

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Bladerunner243@reddit

Facilities….they manage building infrastructure utilities like water & power. The only building utility that IT might manage is the ISP account.

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JerikkaDawn@reddit

Accounts Payable

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DisastrousAd2335@reddit

Facilities usually in my experience.

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Worried-Bother4205@reddit

Usually facilities owns it, but IT ends up influencing it heavily (servers, infra, cooling, etc.).

Most companies treat it as a fixed cost until it becomes painful — then suddenly everyone cares.

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The_Koplin@reddit

At my office it’s facilities. That said they have missed many opportunities to use waste heat to supplement building heat so we run AC’s in the middle of winter. With that level of indifference I just avoid any conversations about “efficiency” and move on.

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