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How To Tackle High Energy Costs With energy prices at near-historic levels, hospitality companies are faced with spiraling costs and future price instability. Because utilities comprise 12 to 20 percent of a hotel's budget, it is the right time to get an energy containment strategy that covers both the supply and demand sides of the energy cost-center equation. Click here for the full article in PDF format.
New England Hotel Magazine Anyone who owns, manages, or even eats at a restaurant doesn't need an energy consultant to tell them that prices for gas, oil, and electricity are at all-time highs with little relief in sight. Since October 2004, the market price of natural gass has increased by 105% and electricity costs have increased by 85%. Click here for the full article in JPG format.
New England Hotel Magazine Whatever energy commodity is purchased, the first critical step is to get the absolute best price. Gary K. Markowitz, president of Kilojolts Consulting Group in Lexington, Mass., suggests going through an independent broker. He strongly recommends paying a fee for their service. “If you’re quoted a service for free, you better flee,” warns Markowitz.” While substantial chains should be putting bids out, other properties should use an independent broker rather than one supplier. For example, if your property consumes five million kilowatt hours, a broker might charge $.001 per kilowatt hour, equaling $5,000. A broker’s flat fee would only be between $2,500 or $3,500 for the same amount or even greater amounts of usage. Energy savings are not only about one-time buying decisions. It is also about shifting employee behavior. “Create an army of energy monitors,” advises Markowitz. Individual decision-making, from closing doors to turning off computers will have an impact on energy savings. The objective is to create a common concern among the entire hotel staff. It could be achieved through an education program focusing on the environmental consequences, or a financial reward program, but the staff needs to be working toward that goal. Markowitz recommends a comprehensive approach, including posters, stickers, teaching guide, etc. He also suggests the creation and placement of a logo and a memorable phrase to instantly trigger the employees’ association with energy savings.
Conservation and culture shifts are keys to restaurant energy cost containment Energy costs rank among the top five expenditures in a restaurant’s budget. But each month most managers just scan the bills, shake their heads and write off the expense as an unavoidable cost of doing business. However, the recent energy crisis in California, which is threatening to make its way across the country this summer, is prompting restaurant managers to take another look at their energy budgets and scour the marketplace for new ways to hold down energy costs. One of the most efficient ways to tackle soaring energy costs is through conservation. Although often perceived—incorrectly—as an only moderately successful activity, changing human behavior to eliminate waste has an almost immediate and far-reaching effect on energy costs. Click here for the full article in PDF format.
Papa Gino's Reduces Energy Costs
Greater Boston Consumers may face power rate hikes
Eye-Candy: Lighting Can Even Help Stores Sell Candy Gary Markowitz wants lighting to create eye-candy for retail store customers-but at a fair energy-consumption-to-price balance. "Lighting is for people," says Markowitz of Kilojolts Consulting Group, an energy management and lighting design consulting firm in Lexington, MA. "Lighting also drives sales. People shop and buy with their eyes. In a supermarket, they typically decide if they'll make a purchase in the produce or meat departments within the first 15 seconds or less," he explains. "It's the job of the lighting package to grab the shopper's attention and let them see the product in the best possible light. It's unnecessary to wash the entire store with a high quantity of light," he advises. "Rather, it's the quality of the light on the product that is important, not the light on the ceiling and the floors." Markowitz offers these tenets of effective, cost-efficient retail lighting:
Maximizing Energy Deregulation One of the first things Kilojolts did was undertake a full assessment of Ro-Jack's energy usage. It included an energy-billing profile analysis (going back 24 months) and the identification of all energy-saving opportunities. "Deregulation is not about getting discounts," says Gary Markowitz, president of Kilojolts. "The key to a successfully implemented strategy for energy deregulation is to focus on the goal of reducing operational costs. And that's only made possible by establishing a full understanding of how the customer uses energy."
Designing for Deregulation On Distributed Generation On Calculating Payback On Deregulation
Local deregulation consultant Gary Markowitz, president of Lexington-based Kilojolts Consulting Group, said the ruling indicates the DTE is trying to create the type of robust competition that deregulation was supposed to bring about with the higher pricing for power generation. "It will indeed create that marketplace," Markowitz said. "There's always the caveat that customers should be aware of the economic conditions of the energy market prior to making a decision on which option to choose, variable fixed." Markowitz said there are a lot of barriers to small businesses trying to wend their way through the system. He said there needs to be a more concerted effort to educate small-business customers, possibly through organizations like chambers of commerce or Rotary Clubs. In contrast, Markowitz works with a lot of larger companies that are savvy about the ins and outs of deregulation. An example might be a corporation with multiple locations throughout the state. "They might take advantage of [fixed pricing]," Markowitz said. "They might say we know what's going to happen, and sign up for a set price for a six-month period."
Deregulation taking hold in Bay State
What can you get?
Whether or not you make your [deregulated] utility provider unravel, Markowitz say in order to get the most out of your [contract] negotiations, you'll need to bring more to the table than a sincere desire for a discount. In most states, generation is only 45 percent of the total bill. So a five-percent discount isn't much of a savings. But five percent off everything is pretty good... If you don't' ask for it, you won't get it." However, he adds, "If the customer won't intertwine service and commodity, they'll be disappointed and won't see the [entire potential for] savings."
Energizing Savings, Nov. 22, 1999 "The formula for finding ways to save [energy dollars] is initially getting a base of information and setting up benchmarks. We set up annual efficiency indexes to better understand the true condition of each store. "The retailer created a new database that included information on past bills, energy consumption, square footage sales and weather to understand outside influences on costs."
Without a Safety Net, Interruptible Rates Are a Big Gamble EUN: Should end-users consider interruptible rates and, if so, under what circumstances? Markowitz : Interruptible rates can offer economic benefits to end-users, but this economical mode of operation doesn't come without a cost. The term "interruptible rates" is unsettling to end-users because it means you have to give up something and that may be the power needed to run a part of your business. It can also mean that energy management will no longer be transparent to your employees or, worse, your customers, which can be an inconvenience for them. EUN: In what ways? Markowitz: A noticeable change in temperature, the shunting or dimming of lights, or the rescheduling of energy-intensive processes may negatively affect the productivity and profitability of your business. I've used lighting system-dimming technologies as a load-shedding tool within production and research areas at an electronics research and development facility company here in Massachusetts. Although it was difficult to measure, many section managers reported they felt an adverse effect on productivity. In the case of a supermarket, interrupting power might lead to a temperature rise within refrigerated cases or elevated humidity levels. These variations can potentially harm product or shorten its shelf life. If the interruption in power affects the general illumination systems and lighting levels are too, low the presentation of product suffers. |
Markowitz says another option is to mix services and commodity. Offer a three year deal that includes an [investment grade] energy audit and find out what the [Supplier's partner] ESCO will do for you after the audit. "The [deregulated] utility must guarantee a savings if you do what's recommended in the audit..."
