Taking an Integrated Approach to Utilities Cost Management and Facilities Modernization
Building managers constantly struggle with the age-old conundrum of controlling rising energy costs with limited capital funding and shrinking maintenance budgets and resources, while corporate level mandates to reduce facility energy intensity adds to the challenge. And for the conscientious facilities manager that has already taken actions over the years to actively reduce their utilities spend, what now to do?
Is your current utility procurement strategy being reviewed on at least a quarterly basis, measured against goals or some established benchmark? Does the current approach align with your facility’s current purpose or operating tendencies or might it impede with planned project initiatives such as solar power or cogeneration? If not, reassess your approach, establish new goals and re-procure if necessary. Utilities procurement is one of the most effective return on investment strategies, if done prudently.
Are you considering free capital, such as utility incentives, demand reduction revenue, or government grant monies to help you address your deferred maintenance backlog? Those programs, offered in just about every state to some degree, but are especially robust in the Northeast, can help offset a large portion of capital costs for needed upgrades to energy infrastructure. A project budget request presented with a significant capital cost offset, energy savings, and a favorable simple payback or return on investment makes a more compelling case for approval.
How do “green” programs fit into your overall plan for meeting your energy reduction and sustainability goals? Well-crafted, sustainable energy projects have been proven to save money while providing favorable public relations value. It all matters, of course, on your operating profile and where you’re physically situated as it relates to incentives and tax breaks.
Alternative project structures are also available in many instances, including power purchase agreements or PPAs, which are commonplace for solar photovoltaic installations, and energy services agreements or ESAs that are often utilized for third-party owned cogeneration installations—either is usually implemented with little or no capital outlay by the facility owner. Each project or initiative must be measured on its own merits—both technically and programmatically. The financial upside of sustainability projects, if developed and implemented effectively, can be more than a simple “feel-good” story.
In the final analysis, all facility energy and capital planning decisions and actions will interact and impact your overall bottom line—hopefully for the better. The key is to take a judicious, integrated approach to managing your energy costs concurrent with infrastructure upgrades that not only generates a positive cash flow but provides lasting and meaningful improvements.
Fitzemeyer & Tocci has Energy & Infrastructure experts on staff ready to assist with any questions regarding sustainable energy and infrastructure-enhancement programs. Please feel free to reach out to Fitzemeyer & Tocci’s Energy & Infrastructure Market Leader, Tom Tsaros, PE by email or phone (781) 285-2305.