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The Critical Importance of Public Housing Energy Management in Pennsylvania |
- Is your budget shrinking?
- Are your energy costs rising?
- Do you track your energy bills with a spreadsheet?
Rising energy cost and budget cuts have motivated both policy makers and management to identify energy efficiency and conservation as a critical component of reducing operating costs in public housing. Historically overlooked has been the concept that energy is the single largest manageable operating expense in the public housing sector. In a recent research survey conducted by Envinity, public and private housing managers were interviewed to determine where real opportunity lies in public housing energy management. The overwhelming response was that many organizations do not understand if they are spending too much on energy or if they have significant opportunities to reduce this manageable expense. This paper intends to educate and inform facility managers of public and private housing on the potential to reduce energy costs.
Energy management is a component of operations that many public and private organizations are struggling to understand and incorporate. Buildings consume over 40% of the energy we use in the US. According to HUD, the US Government spends over $5 billion on utilities for public housing. Utility costs are quickly rising and have increased by over 30% since 2000.
According to HUD, the average annualized public housing utility voucher allowance in 2007 was $1,467. Because the low-income housing industry uses a variety of tactics to subsidize utility costs it is difficult to determine what program your tenants are included in, and how much energy they should be using.
If your tenants do not receive an electric bill, there is no way to show people how much energy they are using. This was the case in many elderly and assisted living facilities that have one single electric meter. Research also identified that elderly housing was more likely to be master metered than other types of public housing.
Envinity has been assisting public housing managers to address energy efficiency through ASHRAE Level 2 investment grade energy audits, benchmarking, procurement strategies, and education for the past five years. Through our work, we have collected valuable data that shows how energy management can lead to lower energy use and costs.
Survey research was conducted through 28 phone interviews, where housing authorities, public property management companies, and program administrators facilitating multi-family public housing in Pennsylvania were contacted. Through this effort, four action items were identified that when followed, will lower your energy expenditures by 15%- 30%. These items are:
- Benchmark all your buildings;
- Perform ASHRAE Level 2 energy audit on buildings that are consuming more energy than the national average;
- Create an energy management plan for the organization that includes implementation of energy conservation measures at all facilities, equipment and energy procurement standards, and contractor qualifications;
- Implement a tenant based energy education program.
Lowering your organization’s energy cost by 15-30% through an energy management program and investment grade audits is a realistic goal and one which has been achieved by clients who have worked with Envinity. Opportunities for energy savings through comprehensive energy management are real and substantial. Identifying savings, creating a plan, making changes, and realizing savings can be done in-house by hiring a staff energy manager or contracting with an energy management company.
The results of the research survey showed that views on energy management varied widely, often changing with the size of the organization and its ability to balance energy costs in aging facilities with limited resources. Tactics for energy management often involved budget analysis through a spreadsheet, while higher functioning organizations implemented benchmarking, procurement, and dedicated staff to manage energy.
Benchmarking | Benchmarking is now a cost competitive and effective way to determine how one facility compares to its peers across the county. Benchmarking isn’t used effectively by public housing entities partly because of the challenges associated with managing sub-metered facilities. There are currently a variety of web based tools available to track and compare a facility’s energy consumption to the national average of like facilities. One example of a no cost benchmarking tool is ENERGY STAR Portfolio Manager.
Benchmarking is a critical step in determining if a building should be examined further for energy related performance improvements. A building’s utility structure is often complicated. No two buildings are ever the same: we found that about 25% of public housing has a master meter, while the rest sub-meter. This is why it is important to gauge a building’s performance against other buildings to determine if it is performing properly. New York City recently adopted a policy where all buildings over 50,000 sq ft were required to be benchmarked by May 1st, 2011.
As an organization that receives federal money, benchmarking your buildings in the future may be a required part of doing business. As such, starting to benchmark your facilities now is highly recommended. Commercial benchmarking software often doubles as energy analysis software and energy management software. Benchmarking can be easy and inexpensive. It is an important step in getting a grip on energy management.
Our research survey results indicated that most public housing providers base their utility budget on a previous year’s energy consumption and cost. We found that less than 10% of housing authorities were using energy tracking software to benchmark their buildings. One organization, Action Housing in Pittsburgh, PA, collaborated with Energy Score Cards to create a web-based energy benchmarking tool specific to multi-family public housing.
To show how benchmarking can lead to insight, Envinity has compiled several buildings we have audited into the chart below (blue dot), and then compared them to the national average (red line). Smaller buildings had more variability in energy density, with larger buildings skating the line of average.
Figure 1 | Envinity took seven of the buildings we have benchmarked and calculated their energy use density. Data Sources: Envinity Inc and the Energy Information Agency (eia.gov)
Energy Auditing | Energy auditing is often viewed as something “we have to do,” as a result of a five year mandatory energy audit for HUD properties. It is also difficult to understand the different levels of energy audits and what you will get out of an energy audit after it has been completed.
HUD requires that you perform a Level 1 energy audit every five years. Level 1 audits are considered walkthrough audits: they are conducted quickly without any in depth analysis. Level 1 audits are great for identifying the obvious, but they lack the diagnostic and engineering analysis that determines the feasibility of a project. Level 2 investment grade energy audits incorporate energy modeling software, in-depth analysis, and building science to discover more complex building issues that a walk through audit would miss.
Envinity has conducted over 50 Level 2 investment grade audits in the multi-family housing sector and routinely discovers energy saving potentials that pay off in under 5 years while reducing energy costs by 30%.
The research survey revealed that all housing authorities were aware of the potential energy savings flagged during mandatory HUD Level 1 audits. 95% of respondents were not aware of what a Level 1 audit entailed, or that they could take advantage of a Level 2 investment grade audit that provides more definition than a Level 1 walk-through audit. Disappointingly, only 15% of those interviewed for this research used a Level 2 audit internally to gauge the performance of their buildings or identify areas of possible savings without the aid of external funding.
Energy Management | All of those interviewed as part of this survey thought energy management was important, but many did not have a clear definition of what energy management is. Those questioned during this survey defined energy management in several different ways: energy purchasing, architectural improvements, mechanical improvements, education, and interdepartmental collaboration. Many of those surveyed were proud of the efficiency projects they have completed, but many also were not aware that energy was their single largest manageable operating expense. The primary focus on energy management was on physical improvements and tangible changes versus a softer habits based approach.
Research found that there were less than ten energy managers examining energy use as a core component of their job in Pennsylvania in the public housing business. This includes both private and public entities. In housing authorities with less than 10 staff members, who have a limited human resource budget, Executive Directors became the energy managers. In medium sized authorities, controllers or accountants become the person responsible for monitoring energy use. And, in some of the largest housing authorities and property management companies (3,000 units +), energy efficiency gains pay for a management position.
Survey results indicate that 85% of property managers use a simple spreadsheet to monitor energy use and cost. Spreadsheet programs are widely accessible, easy to use and familiar to people who are paying bills. A spreadsheet is limited in capability, however. It cannot perform analysis, red flag abnormalities, or detect billing errors, and certainly does not benchmark your building against others you do not own. Additionally, accountants signing checks often do not have the training to know if a building is using too much energy.
Energy tracking software can benchmark, analyze (and even pay) bills, and help you set energy use goals that will provide a roadmap for guiding capital budget planning. Although the best utility management software packages require a monthly fee, many are free.
Portfolio Manager, which is available at no charge through the ENERGY STAR web site, is an example of a comprehensive, free energy management tool. During this research, less than 10% of the organizations interviewed used energy tracking software. However, several indicated they were in a shared savings agreement contract that requires energy tracking as a component of the contract. The one organization using energy tracking found the process so valuable that they collaborated with Energy Score Card to create a web based energy benchmarking tool. This tool focuses on multi-family housing and uses building type, size, and weather data to measure and weigh a building’s performance against the national average. It also lets you measure changes in your building and track their effect on your bottom line.
Education | Education is often overlooked as a tool for reducing energy costs because management feels “that those who don’t pay, don’t care.” This simply is not true.
One manager commented, “when we do [energy] education programs, I can see a drop in utility bills the very next month.” Educational programs surrounding energy use could be seen as less vital to tenants than other social programs when examining quality of life issues. This is understandable, but does not mean education should be taken off the table as a way to lower energy costs. Additionally, just because people are elderly or low income does not mean they will not be receptive to changing their habits. In some cases they will be more receptive to change if it is explained.
Smaller housing authorities should team up to provide energy oriented education seminars to tenants and staff . All housing authorities can encourage staff to attain certifications like those offered by Association of Energy Engineers, LEED, and Building Performance Institute (BPI). Proactive energy management will create a climate for employees and tenants to feel comfortable and excited about energy efficiency and the changes necessary to attain energy management goals.
If you lack the resources to pull together an educational program, you can contract with an energy service provider like Envinity to deliver a program that engages your tenants and raises energy awareness. Creating a climate of collaboration and buy-in is an often overlooked—but critical—component of a successful energy management plan.
Conclusion | Energy will either be a thorn in your side, or an area where you can achieve success and become an industry leader. You need to take time to find out if your buildings are using too much energy. Envinity found that by adopting an aggressive energy management strategy in conjunction with a Level 2 energy audit, you can reduce your energy use and costs by 10-30%. If you choose to do nothing, or let others reap the rewards of improved energy efficiency, you run the risk of having to decrease services. This could potentially mean laying off employees or reducing the number of people you are able to serve.
References & Additional Information
- Energy Efficiency in Affordable Housing, A guide to developing greenhouse gas reduction programs. US EPA. 2011 www.eia.gov
- Implementing HUD’s Energy Strategy. US Department of Housing and Urban Development Office of Policy Development Research. Pg, 10. December, 2008. www.huduser.org
- This is where you’ll find Portfolio Manager and a lot of information on energy efficiency www.energystar.gov
- Energy Scorecard is a web based benchmarking software provider www.energyscorecards.com
- PA Association of Housing & Redevelopment Authorities www.pahra.com
- PA Housing Finance Agency | www.phfa.com
- US Green Building Council, and Leadership in Energy Efficient Design (LEED) | www.usgbc.org
