Energy Budget & Accruals
Energy is the number one controllable operating expense for buildings. It is also the most volatile operating expense for buildings. There are countless variables that affect your energy budget; consumption could drop due to efficiency retrofits or lease expirations, supply rates could increase three-fold due to supply contract rate structure and market movement (see Polar Vortex 2014), and delivery rates could increase substantially due to Public Service Commission rate cases. It is not enough to simply take a three year average of rates and consumption and project forward into the future.
EnergyWatch prepares annual utility budgets so you don’t have to. We utilize our expertise of the energy markets, utility tariff, consumption, and real estate to forecast your electric, natural gas, steam, fuel oil, water/sewer, chilled water, and hot water budgets for the future. Our budgeting algorithm accounts for factors such as occupancy, weather, energy conservation measures and capital projects, regulatory changes, and more, to provide data-driven, defensible energy budget for your building(s). We focus on our expertise (energy) so you can focus on your expertise (operations, finance, asset management, etc.).
And with a data-driven, defensible energy budget, EnergyWatch can provide detailed budget variance reports throughout the year. Let us provide the explanation for what’s driving the difference between what was budgeted and what actually happened.
For example, let’s say there’s a usage variance of 300 MLbs and a cost variance of $12,500. If we’re projecting 875 heating degree days (HDD) in January, but there were actually 950 heating degree days, we know the 75 HDD variance drove a steam consumption variance of 300 MLbs, totaling a cost variance of $11,940. The additional $560 variance is due to a difference between the budgeted cost per MLb ($39.80) and the actual cost per MLb ($41.67). Overall, $11,940 is due to a usage variance, while $560 is due to a unit cost variance.
Work with a partner that understands what drives the market and can derive what drives consumption at your facilities.