Become More Energy-Savvy to Save Money

Special to the Philanthropy Journal

By Meg Lusardi

For any organization, energy costs can be a large part of the annual operating budget. For nonprofits those energy expenses can diminish the funds an organization has available to pursue its mission. Not every organization will have a dedicated energy manager, but with the help of experts from your local utility and consortiums like PowerOptions, there are a few simple ways that any organization can reduce its overall energy costs.  

1. Shop for a Supplier

In 17 states and the District of Columbia, electricity markets have been deregulated, meaning that retail companies can sell electricity directly to consumers. In these competitive markets, shopping for electricity is like shopping for cable or telephone service – you can choose the provider with the lowest cost and greatest number of benefits.

Shopping for electricity often involves working with an energy-buying consortium or a broker, who will help you navigate the complexities of energy-buying. When working with a consortium or a broker, there are a few things to keep an eye out for:

  • Pass-through costs: Many standard supplier contracts include situations where certain costs can be passed through to the customer. Make sure you know what all of these costs are upfront, and work to negotiate the best deal on these, as well as your rate per kilowatt hour (kWh).
  • Fees: Many brokers are paid through a fee added onto the customer’s price. They are paid for the entire duration of the supply contract, so their incentive is to lock a customer into very long-term arrangements, even if it’s not in the best interest for the customer. Consortiums often provide value over brokers’ fees, but it’s important to understand how the consortium is being compensated. In either case, know what you’re paying and make sure you’re getting value for that investment.
  • Experience: In some states, becoming an energy broker may require little more than an approved application by a governing body. Look for an expert who has real energy experience and ideally someone who participates in industry forums where rules and policies that impact the market are determined. You want someone who will go to bat for you, not just on your contract, but on the policies that affect your contract.

2. Explore Your Utility’s Energy Efficiency Programs

Many utilities have energy efficiency teams that may provide low- to no-cost energy assessments, rebates or incentives for equipment and project costs. These programs often include incentives for upgrading to more efficient ENERGYSTAR heating and cooling systems, or upgrades on lighting systems that will help you achieve significant savings on your electric bill. Some states also offer demand response programs where you can earn incentives for reducing electricity usage at critical times of peak demand, such as hot summer days.

3. Consider On-site Solar Generation

While the installation of on-site solar generation can require a significant up-front cost investment, the long-term payback is ongoing energy savings, as well as reductions in carbon emissions and environmental benefits. There are various financing options available for solar systems, and nonprofits particularly benefit by working with a developer through a Power Purchase Agreement (PPA), since nonprofits cannot take advantage of tax incentives available through state and local governments. The PPA structure provides nonprofits the value of those incentives through a lower price for their solar power. Some customers utilize other forms of on-site generation or have advanced demand management systems to allow them to effectively control power usage.

4. Change Behavior to Save Energy

If you live in a state where electricity markets haven’t been deregulated or you aren’t ready to make the investment in energy-saving equipment or on-site generation, there are still plenty of ways to reduce your energy use simply by having your team change their behavior. For example:

  • Turning off lights in unused spaces;
  • Raising the thermostat by a couple of degrees, or cycling the compressors and just leaving the fan on;
  • Shutting off computers and other office equipment that is not currently in use; and
  • Closing the blinds and any exterior or interior doors that would affect the loss of cooling.

Maximizing your energy savings can take time, however, the changes you make today can benefit your bottom line for years to come.

Meg Lusardi is the Executive Vice President of PowerOptions, an energy-buying consortium based in Boston, Massachusetts. The organization was founded in 1998 to help nonprofits consolidate their energy-buying influence. Prior to joining PowerOptions, Meg worked for the Massachusetts Department of Energy Resources, the US Nuclear Regulatory Commission, and was the Chief Operating Officer of the nonprofit Project Hope.

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