What Are Some Best Practices For Optimizing Utility Costs?

Misconceptions about utility usage often stem from a facility manager’s misdirected focus on what usage is being monitored, instead of focusing on how it is being monitored day-to-day.

What is the most common misconception that organizations have about their utility usage? What are some best practices for optimizing utility costs?

Answer by Sal Alhelo, PE, LEED AP

The most common misconception about utility usage is that it is driven by the type of building being managed; and therefore, it is seen as a non-controllable expense. This isn’t the case. The building infrastructure is a major factor which impacts utility consumption, but its cost is also magnified by how the building is operated. Misconceptions about utility usage often stem from a facility manager’s misdirected focus on what usage is being monitored, instead of focusing on how it is being monitored day-to-day.

utility usage
(Credit: Getty Images/Bet_Noire)

A key component of building a solid foundation for efficiently managing utility consumption is the intelligent monitoring and alignment of consumption patterns and schedules with building activities such as customer traffic and taking into consideration points of high operational activity. The goal is to see each building use the right amount of energy at every moment, e.g., allow high consumption when necessary, and take advantage of low activity periods by minimizing consumption.

BOMA, ASHRAE, and other industry research have concluded that the misalignment between consumption and building activities can account for up to or even more than 30 percent of consumption (e.g., energy wastage). These industry leaders confirm that by focusing on a building’s energy efficiency, a company will benefit through dividends that will be paid throughout your business. Building managers can reduce energy bills without sacrificing performance or a quality customer experience. Optimizing energy efficiency also allows for more liquid capital that can be spent on achieving your organization’s goals and mission, while giving businesses the opportunity to demonstrate environmental leadership to the customers and clients they serve. For many businesses, implementing these operational improvements provides a significant saving opportunity and positively impacts their bottom line.

The simplest best practices to implement, and thus begin the optimization process, are those that incorporate utility management into business Standard Operating Procedures (SOP). Examples of such SOP tasks can include turning off lights or adjusting thermostats, etc. before closing the building for the day or when not in immediate use. Utility best practices can also be incorporated into regular housekeeping tasks, kitchen management, and other key areas of operations. This is critical for building managers across vertical industries, from educational and entertainment facilities to hospitals, hotels and more.

Contrary to popular belief, utility and overall energy usage is, in fact, a variable cost of doing business. It varies by external factors such as weather and internal operational factors. Keeping at eye on when those influencing factors present an opportunity to reduce consumption, energy becomes a variable business cost.

Advanced technology platforms can help building and facility managers identify such saving opportunities, related to energy and utilities, by analyzing the influencing factors. Saving measures can be in the form of a modification of how organizations operate the building on a daily basis, or any energy wasting anomalies that could be negatively impacting the bottom line and profitability. This need-to-know, critical information can help all organizations make informed utility management decisions.

utility usageSal Alhelo, PE, LEED AP (BD+C), the founder of EOS Labs, has nearly 15 years of energy management, engineering, construction, and building operations experience. He holds a B.Sc. in mechanical and energy sciences, an MBA with a minor in data analytics, and is a registered Professional Engineer in multiple states. He is an accredited professional in Leadership in Energy and Environmental Design (building, design and construction).

What measures are you taking in your facility to optimize utility costs? Do you think these measures are sufficient, or do you need to do more? Please share your plans and thoughts in the Comments section below.