If you are interested, or know someone who may be interested in improving Net Operating Income (NOI) and reducing Operating Expenses (OPEX) in existing commercial buildings this article can help lower 2017 utility cost by 3 – 5% without additional capital investment.
What’s needed? Have an effective Utility Cost Reduction Plan in place for each property. Better yet, if you have the time, you can put this plan together in-house. Below I will share with you the six components of an effective Utility Cost Reduction Plan.
Why is this important? First, it will assist with establishing and tracking meaningful utility cost reduction/control goals which will give you a better sense of control over your electrical, natural gas, water, and/or waste disposal costs this year. Second, It will help guide decision-making on discretionary capital investments (i.e. lighting upgrades) so those don’t occur as one-off or haphazard projects devoid of any bigger picture game plan.
The six components of an effective Utility Cost Reduction Plan include:
1) Benchmark & Establish an Annual Utility Cost Baseline
2) Identify an internal Utility Cost Control Champion
3) Formalize members of your “Waste Less” team
4) Establish/Clarify a Utility Cost Management Policy for each building
5) Obtain consensus for 6 month, 1 year, and 3 year reduction goals
6) Ongoing quarterly reporting compared to goals
Although many of the steps above appear self-explanatory there are often mitigating factors and other considerations that can impact the success of such an endeavor. For example, item #6 “Ongoing quarterly reporting compared to goals” is an example of something that is easier said than done. It’s so important that all stakeholders who are either directly or indirectly impacted by utility expenses are clear on how you are going to determine and ensure ongoing success of this effort. What are you going to do if/when one of the ongoing reports indicate that you are no longer on track to achieve your stated utility cost savings goal? Are you going to factor in weather normalization when applicable?
If you are interested in getting more information on how to put together a DYI Utility Cost Reduction Plan just email a request to stephen@theEnergyGuy.com.