Tag Archives: multifamily billing

New Construction Utility Expense Management

Getting Your Asset Off to a Good Start from the Ground Up

What if on Day One of the earth moving on your new community you didn’t have to touch the utility aspect of the site?  And, if you wanted to understand what accounts have been created you only need to go to one place to see everything – from what utilities are set up to your current spend? And, what if you could outsource doing everything from powering up the accounts for the trailer right down to installing the last meter needed at the lowest, possible rate available?

Introducing an Energy Manager to the construction team mix in the planning stages will help establish a strong utility expense management structures that carries throughout the life of the investment.

Finding the right person requires a basic understanding of the scope of work and practical benefits. They must have the knowledge to educate you on technology options, as well as the fine details associated with this complex service.

Anyone involved with new construction has experienced the hazards, frustrations, and hair pulling while trying to understand utility bills.

Benefits of Employing an Energy Manager from Day One: 

  • A controlled set up of utility accounts at the right time with the correct, lowest rate available is obviously the best case scenario. Let’s face it, construction companies have the accounts set up at the last minute, rarely worrying about whether the rate is correct. This is a temporary gig for them. You will manage or own the asset long term. An Energy Manager can handle set up based on the construction schedule, on time, at the right rate. No frantic phone calls and unnecessary delays to the project. And, if an issue arises, the Energy Manager sits on the phone with the utility company – not you.
  • The centralization and accessibility of data in an energy management software system is imperative. Imagine no more digging through piles of paper bills trying to find the one number you need. Also, with data being captured correctly and in detail, the ease of accessing it for monthly variance analysis and annual budgets is a breeze. Reports on usage, rates, expenses and exceptions is possible. And, so is making data-driven decisions.
  • Streamlining of A/P processes and the alleviation of work for the accounting and construction, teams, i.e., the rubber stamping of bills versus skilled, audit reviews before payment. For example, the initial paperwork to create accounts, important continuous service agreements and the creation of a standardized process with one point of contact for construction and management can all be handled by an experienced energy manager.

A central point of contact smooths the transition from construction to management with business rules dictating the allocation of bills to be paid based on certificate of occupancy acceptance:

  • Once operational, the Energy Manager continues to add value by eliminating work load for management and expertly handling all your utility needs:
  • Continuous bill auditing using defined metrics. Utility providers never stop making mistakes and rate errors or leaks left unnoticed will cost you big if undetected. Issue resolution on behalf of management is also a critical component. Early detection of problems, such as leaks, and quick resolution are vital to quality utility bill management.
  • Negotiation of procurement contracts is more than just calling brokers and looking for the lowest price. There are dangerous pitfalls of low kWh/high extra fees. A seasoned Energy Manager is crucial to avoiding costly mistakes. Important steps will include reviewing historical usage patterns for your portfolio, aggregating load to gain maximum deal, determining hedging options, scrutinizing hidden fees, finding reputable brokers to contact, manage and negotiate the proposal process, and ultimately present the best options for your consideration. Once a provider is chosen, the Energy Manager maintains and manages the contracts going forward.
  • Failure to connect management and billing. This shouldn’t be a manual process completed on site. Management teams are busy and will miss opportunities to capture all failures to connect problems. An Energy Manager uses a software program designed to capture all failures to connect based on rent roll data versus bill service periods. These would then become exceptions and billed out with an additional penalty fee where allowable by law.
  • If the data is centralized, a budget should be created at an account level based on historical usage patterns, current rate and researched increases triggered to occur in the month forward when actually taking place. Further, anomalies from the previous year, such as leaks, credits or true ups should be scrubbed so the next year’s budget isn’t skewed. This is not the common practice of last year’s expense plus 3-5% increases. It takes a seasoned energy management veteran’s depth of knowledge in utilities to create a realistic budget.

In conclusion, efficient and effective utility bill management is a reality. An Energy Manager will make sure your management associates never open another utility bill envelope.  They will save you time and money and likely make you even more money. Paying a utility bill can cost you upwards of $15 per bill to process. Considering that utilities comprises 16% of your expenses, finding a good energy management program should be a top initiative and not an afterthought.

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Top 10 EASY Ways to Save Energy in Common Areas

Preparing for another winter is not something we want to think about while basking in the last days of summer, but it pays to plan! The Farmer’s Almanac forecast was spot on last winter and it looks like a cold winter is in store for many of us in 2014. Preparing for colder temperatures is essential to avoid budget busting utility bills for your common areas such as hallways, gyms, lobbies and business centers.

  1.  Sealing the building envelope (windows, doors, entrance ways and ceilings) is essential to energy and cost savings. Lack of proper insulation is a significant factor in common area heating and cooling loss. winter-outlookAn easy thing to overlook is proper insulation. This can often be done in-house very inexpensively by rolling out new insulation in ceiling spaces. Proper ceiling insulation can save as much as 20% on your heating and cooling bills.
  2. Maintaining central systems is critical. Because heating and cooling accounts for up to 56% of your building’s energy cost, make sure the HVAC is running at peak form BEFORE winter hits. Even if you need to pay an expert to do a winter checkup, it will be well worth the expense in energy savings and verifying your system can handle the upcoming chill. Tips for HVAC preventative maintenance.
  3. The Environmental Protection Agency (EPA) estimates that windows account for up to 25% of a building’s energy loss. The proper use of awnings, blinds, insulated curtains, UV window tinting in southern exposures with large expanses of glass, as well as the sealing of air gaps can have a significant impact on energy loss through windows. While windows with an Energy Star rating is ideal and can have a huge impact on your bills, it is often cost prohibitive for properties without proper budgeting.
  4. The Energy Information Administration (EPI) estimates that 21% of electric bills are related to lighting. Upgrading lighting to energy efficient bulbs is something to consider before the darker days of winter are here. There are many ways to do this inexpensively without resorting to a “capital improvement” level expense. Tips for maximizing lighting efficiency.
  5. Motion sensors are probably the lowest cost and easiest, instant energy saver in common area spaces. Why leave a light on in the model unit, gym or storage areas if no one is in there? Investing just a few hundred dollars in these devices can give you a rapid return on investment.
  6. Resealing doors with new weather stripping and capping unused power outlets are another way to stop the cold from sneaking in. Another place to address in common areas is any vent that central fans or unused air conditioning vents that meet the exterior of the building. When closing the vent is not enough, install shutter seals on the inside of the vent and make a note to remove them in spring.
  7. Phantom power or vampire load refers to energy used by equipment and appliances that are idle. Large appliances, office equipment rarely used and computers left plugged in overnight can account for as much 10% of your electric use. Conservation-TipSimply unplug rarely used items. You cannot find an easier, cheaper way to save energy!
  8. Replace appliances in common areas and offices that are more than 5 years old with Energy Star rated products. That old refrigerator may still work but it is costing you more in electricity annually than a newer, more efficient model. The same holds true for that gargantuan office copier from the 90’s in your leasing office.
  9. Programmable thermostats are AMAZING! These Wi-Fi thermostats can be easily installed, set up and programmed from anywhere. Program them to turn down the heat or A/C during evening hours. You can save as much as 10% or more in HVAC usage.
  10. Water conservation/leak detection is a commonly overlooked opportunity to save as much as 25% or more in water waste.  For example, after 5 years a toilet that was a 1.6 gallon per flush creeps to a 2+ gallon flush!  Have an experienced technician or plumber recalibrate the flush mechanisms. Also, faulty/cheap toilet flappers degrade quickly and leak over time. Replace them at least annually and use a better grade of product.  Lastly, replace old faucet washers that cause drips and aerators with low flow devices.

By taking time out this fall to do this energy savings work you may have a different conversation with your owners when it’s time to review the financial statement.  Instead of facing the heat of “Why are you over budget in utilities”? You will have the opportunity to explain how you achieved such great savings. And that would be a far cooler conversation by far!