Monday, January 3rd 2011

A primer on energy management and utility services

For a blog where the focus is utility management for the American multifamily industry, I think an explanation of energy management and the plans that drive it is in order. The following is a primer on a topic that we’ll talk about extensively in the months to come.

An energy management plan is a program of actions aimed at reducing energy bills and the environmental impacts of a business. They focus on two closely related strategies:

  • Conservation: Avoiding wasteful energy use and energy-related services (if you don’t need it, turn it off). For multifamily, this might mean checking that all vacant properties are not being heated, cooled, or lit unnecessarily.
  • Efficiency: Reducing consumption of energy for current operations (if you need it, use it more efficiently). The first place many will turn is lighting, where owners can replace old bulbs with more energy efficient technologies.

Why manage energy? Because it makes good economic and organizational sense. A well-maintained and well-operated facility will be energy efficient. And managing energy consumption means the business can provide more cost-effective services and minimize the costs passed on to the community. An energy management plan involves four basic steps:

1. Collect and analyze energy use data. Your utility bills contain a lot of data about cost and usage. The key to understanding this data is to measure the effective utility cost and usage and identify trends and variances that you can act upon.

2. Complete an energy audit to determine where, when, and how efficiently energy is used. This involves reviewing on-site utility equipment, such as central systems and property meters; examining lighting throughout the facility; and completing a thorough building envelope inspection. A complete audit will also analyze historical utility costs and consumption, which makes it possible to identify the potential for energy reduction relative to industry averages and similar facilities. The utility cost analysis should include the following:

  • Historical, 12-month utility consumption, demand peaks, and cost data
  • Alternate utility rate schedules that would reduce cost
  • Historical electrical demand peaks
  • Historical water usage

Energy audits conducted by AUM indicate that about 20 percent of energy consumed can be saved by implementing relatively simple measures, which will pay back the investment in less than three years. Management, operating, and maintenance measures, which require little or no capital investment, can achieve a 10 percent savings in energy usage.

3. Implement energy saving measures. There are multiple opportunities across HVAC, lighting, and water usage that multifamily owners can take advantage of for better management of energy services. These measures might be as simple as preventative maintenance, insulation installation, changes to temperature set points, and equipment upgrades. And a simple conservation measure can mean big savings.

There are endless ways to avoid the common practices that suck energy from your building envelope. For example, if water heaters are set just 10 degrees lower, multifamily owners will see a 3 to 5 percent reduction in gas use and cost. And insulating water pipes and water heaters earn an additional 4 to 9 percent savings on gas.

4. Regular reporting and measurement. The only way to truly measure the effectiveness of an energy management plan is over time. If you have a property in a region that sees drastic seasonal change (hello, Chicago!), it might take 12 months to effectively measure a period against the same period from the previous year.

This explanation is just a bird’s-eye view of an incredibly complex topic. I’ll soon delve into the details of how each of these steps is carried out and the many opportunities and benefits for the multifamily industry. So if you’re drowning in energy expenses and need some cost-cutting solutions, stay tuned!

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Posted by Dan Roehl

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