60 Seconds with Rick Sievertsen, VP of Client Solutions, Advantage IQ
BF: When analyzing a company’s expenditures, in which utility charges can Advantage IQ find the most significant savings opportunities?
RS: Focus on the areas where you have the greatest expense and hence the greatest opportunity for cost savings. If you spend the most on electricity, look closely at your electricity costs and consumption. If you have a high natural gas requirement, you may want to look more closely at your natural gas bills. Your type of business will determine where your greatest energy efficiency opportunities reside. An office building has the greatest opportunities in the areas of lighting and heating, ventilating and air conditioning. A restaurant has greater opportunity in the cooking area. A convenience store should look at the energy consumed by their freezer/refrigeration equipment.
BF: What are common causes for overcharges by utility providers, and how can a company recover overpayments?
RS: Meter malfunctions, being placed on a utility rate that is less than optimal, being billed for service for a facility that was closed or sold or receiving duplicate bills for the same facility or period are common errors found by Advantage IQ for our clients. Recovering utility billing errors requires that you identify the problem quickly and contact the utility provider to identify the problem as soon as possible. Comparing your monthly utility costs and consumption to prior periods is the best way to monitor your bills and identify errors. Identifying the problem prior to payment of the bill improves your chances of paying the correct amount. If you find an error after you have paid the bill, contacting the utility and documenting the error quickly will improve your chance of refund. Many utilities have limits on the amount of time for which a refund can be claimed.
BF: What solutions can a company employ to reduce energy expenditures and become more sustainable?
RS: Communicate with your employees about the impact energy has on the bottom line and enlist their support in cutting energy waste. Turn off lights when conference rooms, offices and restrooms are not in use and turn off office equipment when employees go home for the day. Utilizing building automation systems where available and not over-riding equipment designed to maximize energy efficiency are further ways to save.
U.S. Energy Outlook
In February, the U.S. Energy Information Administration announced some short-term energy outlook projections.
• U.S. real gross domestic product (GDP) is expected to decline by at least 2.7% in 2009, triggering decreases in domestic energy consumption for all major fuels. Economic recovery is projected to begin in 2010, with 2.2 percent year-over-year growth in GDP. Accompanying the projected economic recovery should be a mild rebound in energy consumption for all the major fuels in 2010.
• The U.S. economic downturn also is contributing to a decline in natural gas consumption, particularly in the industrial sector, which has led to lower natural gas prices. The Henry Hub natural gas spot price is projected to decline from an average of $9.13 per thousand cubic feet (Mcf) in 2008 to about $5 per Mcf in 2009, but then increase in 2010 to an average of almost $6 per Mcf.
• The U.S. price for regular gasoline averaged $1.69 per gallon in December 2008, the lowest monthly average since February 2004 and down nearly $2.40 per gallon from the monthly peak seen last July. Gasoline prices have been slowly increasing over the last six weeks as crude oil prices have stabilized and refinery margins have recovered from their recent near-historic lows.