Pick the low hanging fruit? How about the watermelons lying on the floor? — Partnering with Utilities to Reduce Energy Costs

July 28, 2011

When companies develop a sustainability strategy to reduce operating expenses, among the first areas they address is the “low hanging fruit” of energy efficiency as it represents one of the largest cost buckets behind rent or debt service.

However, many or most organizations may not think about “picking up the watermelons lying on the floor” by partnering with their utility company to create an energy plan. Because power providers are incented by federal regulators they are required to extend rebates and provide cost saving programs as part of their service to rate payers.

In a Member-Only meeting of the Sustainability Roundtable, Inc., New England-based National Grid was featured to share some information about programs they offer to their customers and make recommendations that all organizations make take advantage of. They cite that partnering with a utility provider to develop a long-term strategic energy plan includes:

  • New initiative to meet aggressive energy saving goals
  • Targets top quartile customers
  • Sets long-term and high energy saving goals (road-map) for customers rather than ‘short-term’ ad-hoc upgrades
  • Create (or modify) an organizational shift to how energy efficiency decisions are made within a large organization
  • A financial model that enables a re-investment based cash flow positive structure for energy efficiency upgrades

Their presentation highlighted that, in addition to ‘triple bottom line’ energy planning, there are several other key areas they recommend organizations to address:

Financial – incentives, on-bill financing, investment criteria

Technical – benchmarking, energy use data, coordination with LEED standards

Operational – staff training, building certification, O&M guidelines

Other “green” measures – indoor air quality, day lighting, water savings, GHG tracking, productivity studies

The presenter during the program was National Grid’s Michael McAteer who said, “a significant opportunity exists for customers to maximize the technical expertise and achievable energy savings potential in their business environments by partnering with their utility. Adopting a comprehensive data driven approach to reduce operating costs with support from utilities is a smart move and provides valuable dividends to customers.”

He suggested a process that you and your utility company could take might include:

  • Establish contact with top management of large customers and the utility company
  • Identify energy goals, financial criteria, and sign memo of understanding
  • Identify/prioritize projects
  • Benchmark existing use
  • Implement measures and incentive payments
  • Evaluate progress
  • Develop long-term road map for the entire portfolio through “collaborative effort”
  • Train operations staff, create case studies, and assist other studies (water savings, productivity, LEED etc.)

The key takeaways the SR Inc. program highlighted were:

  • Leading companies that develop and implement portfolio-wide sustainability strategies prioritize scalable best practices in energy efficiency and energy cost reduction, and seek to maximize innovative financing, including utility benefits.
  • Utilities are responding to market demand for a portfolio approach by looking beyond buildings, building systems, and technologies for opportunities to assist customers to reduce demand and consumption.
  • The portfolio-wide approach enables customers and utilities to partner at a strategic level, and achieve greater reduction and savings a lower cost and in less time than a fragmented ‘Energy Conservation Measure’ or technology rebate approach.

As you embark on the green to gold treasure hunt or search for the proverbial ‘low hanging fruit’, be sure to reach out to your energy provider who is ready to help and can play an important role to address energy cost, save money and pick up some ‘watermelons.’

If you would like to receive a copy of National Grid’s presentation or to learn more about how you might forge a strategic partnership with your utility company, please contact me at larrysimpson@sustainround.com.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc.  who can be reached at larrysimpson@sustainround.com. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/forum/ )

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What do home offices, airport terminals, cafes, and office touchdown areas all have in common? — they are all important spaces in today’s alternative workplace solutions.

July 14, 2011

As part of an overall sustainability strategy, leading companies are innovating beyond traditional workspace practices and are evaluating shifts in the location of work, hours of work and schedule of work hours.

At a recent Client-Only meeting of the Sustainability Roundtable, Inc. (SR Inc.), new research on “Integrated Alternative Workplace Strategies” (AWS) was presented that found:

  • Changing demographics, advances in technology, new business needs (24/7 service), globalization trends, and environmental considerations influence the move to greater mobility and accelerate the adoption of AWS.
  • Leading companies implement AWS to reduce real estate operating costs and carbon footprint; retain and recruit top talent; increase human capital outcomes; enhance real estate and operational agility; and enhance their brand.
  • Executives follow an iterative process to plan, implement, and evaluate AWS to maximize benefits.
  • Executives deploy AWS on company-wide level after making a compelling business case, aligned with business goals, ensure departmental integration (RE, HR, IT, EH&S), conduct initial assessment, and test pilots.
  • Executives integrate AWS into their company’s sustainability strategy; adopt options customized to meet their business goals and organizational culture to enhance sustainable value creation across the enterprise.

The organizational readiness of companies to adopt AWS differs and this impacts the level of employee mobility they are ready to embrace. SR Inc. classifies AWS into four types of solutions based on the level and mode of mobility:

Internal Mobility – working and moving within a dedicated office, group workstations, open office, and hoteling

External Mobility – working across multiple offices of the same company or home-based work, remote/satellite offices, and telework centers.

Virtual Office – full mobility and third places of cafes, libraries, airports, and client sites.

Fourth Generation Office – fully furnished flexible offices worldwide with outsourcing office and equipment provision to 3rd parties. I.e. Regus, Metro Office, Workspace Group

SR Inc.’s research included case studies from American Express, AT&T, Cisco, GSA, Nortel and Oracle that highlighted lessons learned of:

  • AWS aligns workplace and technology with the way employees already conduct work.
  • Proactive stakeholder engagement is critical. This includes a cross‐functional team with start-to-finish support from RE, HR, IT and the C-suite and engaging employees.
  • Building a legitimate business case, includes RE, HR, IT, and EH&S perspective as well as a real employee value proposition.
  • Technology is available, mature, and effective. It is expected to advance significantly in the next several years, and therefore, companies can design for maximum IT flexibility
  • Formal, comprehensive assessments of the program helps determine what works within the unique company’s context in order to make appropriate adjustments and maximize benefits.

As much as organizations are looking to AWS for the inherent benefits it is important to anticipate the needs to facilitate face-to-face interaction that can stimulate team building and knowledge exchange.

SR Inc.’s Senior Sustainability Analyst, Irina Mladenova, says, “companies across industry sectors find it necessary to revisit their workplace strategies to accommodate evolving working needs. Those who are unwilling will find it challenging to retain top talent, improve collaboration and innovativeness, and ensure low costs. One issue executives still struggle with is capturing space utilization accurately and attributing real estate and GHG footprint optimization or reduction specifically attributed to AWS. Another issue that companies still need to address more directly is how to adapt standard AWS practices company-wide level to local culture and practices.”

If you would like to learn more about how AWS could become part of your company’s sustainability strategy, feel free to download the Executive Summary of the “Integrated Alternative Workplace Strategies” at http://sustainround.com/research/AWS.php.

(The author is Larry Simpson, Executive Vice President, Sustainability Roundtable, Inc.  who can be reached at larrysimpson@sustainround.com. Additional posts can be found in SR Inc.’s Forum found at http://www.sustainround.com/forum/ )