Energy Audits for Alberta Businesses: What to Expect and When You Need One

Energy is one of the few operating costs a business can often reduce without cutting output. Heating, lighting, cooling, compressed air, and process equipment all draw on it every day. Much of that use is invisible until someone measures it.

An energy audit is that measurement. It shows where your energy goes, where it is wasted, and which improvements will pay back fastest. For a small or mid-sized Alberta business, it is often the most practical first step toward lower costs and lower emissions.

This guide explains the main types of audit and the signs that you need one. It covers how to prepare, what happens on site, what you should receive, and how to act on the results.

What an energy audit is: ASHRAE Level 1 vs Level 2

An energy audit is a structured review of how a building or facility uses energy. In North America, the most common reference is ASHRAE Standard 211. It defines three levels of commercial building energy audit, and each level adds depth, cost, and precision.

Level 1 is a walk-through assessment. The auditor reviews utility bills, interviews staff, and walks the site. The result is a high-level picture of energy use and a list of low-cost and no-cost measures worth considering.

Level 2 is an energy survey and analysis. It breaks energy use down by system, such as lighting, heating, cooling, compressed air, and process equipment. It estimates the savings and costs of each recommended measure, so you can compare options side by side.

Level 3 focuses on detailed analysis of major capital projects. It is used when a business is planning a significant investment and needs high confidence in the numbers. That confidence comes from extended monitoring, detailed modelling, and more engineering time.

Which level fits your business

For most SMEs, a Level 1 audit is a useful screening step. A Level 2 audit is where investment decisions get made. Level 3 is usually reserved for a single large project, once a Level 2 audit has shown it is worth studying.

A small Edmonton warehouse might start with Level 1 to find quick wins in lighting and heating schedules. A food processor planning to replace refrigeration equipment would benefit from Level 2. The deciding question is simple: are you looking for ideas, or choosing between investments?

A Level 1 audit tells you where to look. A Level 2 audit tells you what each fix is worth.

Level 1 and Level 2 side by side

The two levels differ in what they ask of you and what they give back:

• Data needed. Level 1 relies mainly on utility bills and a walk-through. Level 2 adds equipment inventories, operating schedules, and often on-site measurements.
• Time on site. Level 1 is usually a short visit. Level 2 spends longer on each major system and the people who run it.
• Savings estimates. Level 1 gives broad ranges. Level 2 gives estimates for each measure, with costs and payback.
• Best use. Level 1 suits screening and quick wins. Level 2 suits budgeting and incentive applications.

You do not have to commit to every level at once. Many businesses start with Level 1, act on the quick wins, and then commission a Level 2 study of the largest systems.

What triggers the need for an energy audit

There is rarely a bad time for an audit, but some situations make one especially valuable:

• Rising utility bills that you cannot explain through growth or weather.
• Equipment nearing replacement, such as boilers, chillers, compressors, or rooftop units.
• An expansion or renovation, where efficiency is cheaper to build in than to add later.
• Emissions targets or customer questions, since energy use drives most Scope 1 and Scope 2 emissions.
• Incentive programs that require an audit or study before funding approval.
• An energy management system, such as ISO 50001, which starts with understanding current energy use.

Consider a Red Deer manufacturer whose natural gas bills climbed while production stayed flat. An audit traces the increase to a failing steam trap system and poorly scheduled space heating. Both are fixable, and neither required new equipment.

Signs hiding in your utility bills

Your bills often signal a problem before anyone on the floor notices one. Look for gas use that stays high through warm months, or electricity use that barely drops on weekends. Both suggest equipment running when nobody needs it.

Commercial electricity bills in Alberta usually include a demand charge, based on your highest draw in a billing period. A short spike, such as several large motors starting at once, can raise that charge for the whole month. An audit can show whether staggering start-ups would lower it.

How to prepare before the auditor arrives

Preparation is the part of the audit you control most. A business that gathers its data early gets a faster audit, and the auditor spends site time on equipment rather than paperwork.

A typical data request includes:

• At least 12 months of electricity and natural gas bills, ideally 24, for every meter and account.
• An equipment list, with age, size, and fuel type for major items.
• Operating hours for each area, including shifts, weekends, and seasonal changes.
• Floor plans or a simple site sketch showing buildings and major systems.
• Maintenance records for boilers, rooftop units, compressors, and refrigeration.
• Any past audits, engineering studies, or equipment upgrades, with dates.

Name one person to coordinate the audit. That person gathers records, books site access, and knows who runs each system. Operators often know exactly where energy is wasted, so make sure the auditor can speak with them.

What the process involves and how long it takes

A typical audit follows four stages.

1. Data collection. You provide utility bills, equipment lists, operating hours, and floor plans.
2. Site visit. The auditor inspects equipment, controls, and building envelope, and talks with the people who run the facility.
3. Analysis. The auditor builds an energy use breakdown, compares it with expected performance, and models the savings from each measure.
4. Reporting. Findings are presented with recommendations ranked by cost, savings, and payback.

Timing depends on the audit level, the size and complexity of the site, and how quickly data is available. A Level 1 audit of a single building is much faster than a Level 2 audit of a multi-building plant. Having your utility data ready is the single biggest factor you control.

An office building owner who sends two years of bills before the site visit lets the auditor arrive with questions already prepared. That shortens the whole process and sharpens the findings.

What happens on site: the systems an auditor checks

The site visit is where the bills meet the building. The auditor compares what the data suggests with what the equipment is actually doing. Measurements, such as electrical loads, temperatures, or air pressure, may be taken to confirm what the bills suggest.

Heating, ventilation, and air conditioning

In Alberta, space heating is often the largest energy use in a commercial building. The auditor checks boiler and furnace condition, thermostat settings, and how heating and cooling schedules match occupancy. Systems heating and cooling the same space at once are a common finding.

Ventilation matters too. Fans that run at full speed around the clock, or bring in more outdoor air than the space needs, raise heating costs in winter.

Lighting

Lighting is usually the easiest system to assess and upgrade. The auditor notes fixture types, hours of use, and whether controls such as occupancy sensors or timers are in place. Areas lit when nobody is there are a frequent quick win.

Compressed air

Compressed air is one of the most expensive ways to deliver energy in a plant. Leaks, pressure set higher than equipment needs, and compressors running through idle shifts all add cost. Many leaks can be heard during a quiet walk-through, and an ultrasonic detector finds the rest.

Refrigeration, process heat, and steam

Food processors, cold storage operators, and manufacturers often carry large process loads. The auditor looks at refrigeration controls, door seals, and condenser condition. In steam systems, failed steam traps and uninsulated pipes are common sources of wasted gas.

Building envelope and controls

Walls, roofs, windows, and dock doors all affect heating demand. The auditor looks for air leaks, missing insulation, and doors left open in winter. They also review any building automation system, since a control setting changed years ago can quietly undo an efficient design.

What you receive at the end: the deliverable

A good audit report is a decision tool, not a binder for the shelf. You should expect:

• An energy use breakdown by fuel and by major system.
• A baseline that future savings can be measured against.
• A list of recommended measures, each with estimated cost, annual savings, and simple payback.
• Prioritization, separating quick wins from capital projects.
• Emissions impact of each measure, if you are tracking your carbon footprint.
• Next steps, including which measures may qualify for incentives.

A practical example: an audit recommends a lighting retrofit, compressed air leak repairs, and boiler controls. The report ranks the leak repairs first because they cost the least and pay back in months. The lighting retrofit comes second, and the boiler controls wait for the next capital budget.

Reading the recommendations

Simple payback is the cost of a measure divided by its annual savings. It is easy to compare, but it ignores how long equipment lasts. A measure with a longer payback can still be the better investment if the equipment serves for decades.

Look closely at how the auditor treats measures that interact. Upgrading lighting, for example, can slightly increase heating demand, because older fixtures gave off heat. A careful report accounts for these effects rather than adding each saving on its own.

Ask what each estimate assumes. Savings depend on operating hours, energy prices, and weather. A report that states its assumptions lets you test them against what you know about your own operations.

Measuring and verifying the savings

If you plan to claim savings later, ask how they will be verified before work begins. Measurement and Verification (M&V) confirms that savings are real. It matters for incentive claims, financing, and sustainability reporting.

The International Performance Measurement and Verification Protocol (IPMVP) is the most widely used framework. It describes four options, from measuring a single piece of equipment to modelling a whole building. The right option depends on the size of the measure and how much confidence you need.

M&V works best when the baseline is adjusted for things that change, such as weather and production. A colder winter will raise heating use, even after an upgrade. Adjusting for it shows the true effect of the measure.

An audit is a snapshot. Businesses that want lasting savings often follow it with ongoing energy management, such as monthly tracking against the baseline. ISO 50001 provides a framework for that kind of system, built on a cycle of planning, doing, checking, and acting.

How energy savings show up in your emissions

For most Alberta SMEs, energy is the largest source of greenhouse gas emissions. Natural gas burned on site counts as Scope 1. Electricity bought from the grid counts as Scope 2.

That makes an energy audit and a GHG inventory natural partners. The inventory tells you how large each source is. The audit tells you what to do about it and what each measure is worth.

Because Alberta’s grid still relies heavily on natural gas, electricity savings here carry a meaningful emissions benefit. Heating savings reduce Scope 1 emissions directly. Both can be reported against the same baseline your inventory already uses.

A distribution company preparing for customer questionnaires can use both together. The inventory answers what its emissions are. The audit answers the next question customers ask: what are you doing about them?

Alberta incentive programs that may cover part of the cost

Incentives can reduce the cost of both the audit and the upgrades. Programs in Alberta change often, so check current availability before you plan around them.

• Emissions Reduction Alberta (ERA) runs programs funded through the TIER Fund. Past programs, such as Energy Savings for Business, have supported efficiency upgrades for Alberta businesses. Some ERA programs are now fully subscribed, so check what is open.
• The Clean Energy Improvement Program (CEIP) offers financing for energy upgrades through participating municipalities, repaid through property taxes. Availability for commercial properties depends on your municipality.
• Federal programs through Natural Resources Canada and other departments support energy management and efficiency in some sectors.

Some programs require an energy study before they approve funding, so the audit itself can open the door. Ask your auditor to flag which recommendations may qualify. Keep your audit report and invoices, since programs often ask for them with an application.

Putting it together: a worked example

Consider a family-owned bakery in Sherwood Park with one production building and a small delivery fleet. Its owners notice that natural gas costs keep rising, even though output has not changed. A customer has also started asking for emissions figures.

They start with a Level 1 audit. The auditor reviews two years of bills and walks the site during a production shift and after closing. Three findings stand out: ovens preheating hours before the first shift, a compressed air system leaking overnight, and dock doors left open in winter.

None of these needs a capital budget. The bakery adjusts oven start times, repairs the worst leaks, and adds door closers and a simple staff reminder. Each change is logged with its date, so the savings can be tracked against the baseline.

The audit also flags the main oven as nearing the end of its life. The owners commission a Level 2 study of that one system before replacing it. The study compares options, estimates savings, and identifies which choices may qualify for incentives.

A year later, the bakery has lower bills, a documented baseline, and a clear answer for its customer. The audit did not just find savings. It gave the business a plan it could follow and explain.

Common mistakes after the audit

The most common mistake is doing nothing. A report that sits on a shelf costs money and saves none. Assign each recommended measure an owner and a date, even if the date is next year.

Starting with the biggest project. Large capital projects take time to approve and finance. Quick wins, such as schedule changes and leak repairs, can start saving money the following month.

Skipping the baseline. Without a baseline, nobody can show whether savings are real. Keep the audit baseline and track against it monthly.

Losing the settings. Controls changed during an audit can drift back over time. Check schedules and setpoints every season, especially after equipment service or staff changes.

Questions to ask before you hire an auditor

Not every audit delivers the same value. A few questions will tell you a lot about the provider before you sign.

• Which ASHRAE audit level will you deliver, and will the report say so?
• Who will do the site visit, and what qualifications do they hold?
• Will each measure include cost, savings, and payback estimates?
• How will you account for measures that interact with each other?
• Will we receive the calculations, or only a summary report?
• Can you help us verify savings once measures are installed?

Certifications such as Certified Energy Manager (CEM) and Certified Measurement and Verification Professional (CMVP) indicate specific training. A professional engineer may also be needed to sign off on some design work.

Getting started

An energy audit pays for itself when it leads to action. Gather your utility data, choose the right audit level, and insist on a report that ranks measures by payback. You will lower costs and emissions at the same time.

You do not need to fix everything at once. Start with the quick wins, keep the baseline, and plan larger projects as budgets allow.

Terrivis delivers ASHRAE-aligned energy audits and M&V for Alberta businesses, led by a Certified Energy Manager. Learn more about our energy management services.