Area Energy Managers Striving to Rise to the Challenge:
Rising Energy Costs Make a Tough Job Even Tougher

By Tim Oliver, Project Manager, AOBA Natural Gas Energy Efficiency Project

As we all know, energy prices have risen sharply over the last several years and unfortunately, the upward trend is expected to continue. Since energy costs are now the largest variable expense for many buildings, managing energy budgets has become a critical role for most AOBA-member energy managers. Those responsible for the energy portions of their organization’s budgets, however, face a Herculean task. Continual improvements in energy efficiency are necessary just to keep overall energy cost increases manageable. Even substantial changes in facilities and building operations are often insufficient to yield net decreases in energy costs. And reducing consumption to combat rising energy prices can be a complicated undertaking. Often, it seems as if all the forces of nature are working against today’s energy manager.

So how can we help our facilities’ energy manager succeed? Clearly, knowledge and communication are key. Successful management of energy use and budgets involves numerous considerations, including: energy efficiency improvements, operational improvements, strategic procurement of energy supplies, tenant comfort, and marketing. Regular, open communication between the energy manager and a diverse array of professionals (inside and outside of the organization) is essential. Unfortunately, many professionals who need to be sensitive to energy management goals and objectives are not fully versed in the complex details involved. This creates a communication challenge for many energy managers that can be time-consuming to overcome, yet problematic if overlooked. In addition, communications challenges are often magnified by energy accounting challenges, with numerous individuals in one company now striving to contribute to the “greening” of their buildings -- making accountability for achieved savings difficult. Recognition of these communications and energy accounting challenges by management -- from property managers and owners to leasing agents -- can go along way towards addressing them.

As one way to help area energy managers address this wide array of concerns, AOBA has created a new Energy Managers Roundtable. This professional, peer group forum is providing connections between these hard-working professionals. Now it’s up to the rest of us to lend our energy managers a hand (or a steady shoulder) to help them succeed in today’s tough market environment!

Note: Tim Oliver may be reached at timoliver@revilohilll.com.

Questions or comments?
E-mail us at aobanews@aoba-metro.org or call 202-296-3390.

In This Issue:

Area Energy Managers Striving to Rise to the Challenge Rising Energy Costs Make a Tough Job Even Tougher

Growth in Use of Natural Gas for Electric Generation More than Offsets Conservation in Other Sectors

Maryland Legislative Summary

Maryland Strategic Energy Investment Fund Allocations

DC Taxicab Update

Growth in Use of Natural Gas for Electric Generation
More than Offsets Conservation in Other Sectors

Over the last several years, Commercial, Residential and Industrial use of natural gas has declined. Growth in the use of natural gas to generate electricity, however, has surged, causing overall U.S. natural gas consumption to continue to rise despite conservation efforts. The rise in natural gas use in electric generation is the primary driver of natural gas price increases. Electric requirements for natural gas will continue to be one of the key determinants of natural gas prices through at least the middle of the next decade, unless vastly increased amounts of renewable generation can be constructed and placed into operation.

Increasing concerns regarding the environmental impacts of continued reliance on coal-fired generation, coupled with long lead times for siting and constructing new nuclear plants, make renewable generation essentially our only alternative to increased use of natural gas to generate electricity. Yet renewables, at this point, only account for less than 5 % of total kWh’s generated on an annual basis in the U.S.

Given the manner in which electricity is priced, as well as further increases in natural gas demand and prices, electricity prices are expected to increase substantially. Even in a weak economy, growth in electricity demand for natural gas can be expected to keep natural gas and electric prices on the rise.

Figure 1

Maryland Legislative Summary

Major Pieces of Energy Legislation from 2008 Maryland General Assembly

Constellation Settlement Legislation

• Provides rate relief to BGE Residential Customers
  
• Removes barriers to Constellation’s investment in a potential third nuclear reactor Calvert Cliffs.

EmPOWER Maryland Energy Efficiency Act of 2008

• Requires electric companies to provide customers with energy conservation and energy efficiency programs targeted to achieve a 15% reduction in electricity demand by 2015.

Regional Greenhouse Gas Initiative

• Creates “Maryland Strategic Energy Investment Fund” from proceeds derived from auctioning carbon dioxide emissions allowances
  
• 40% of funds dedicated to provide rate relief to Maryland Residential Customers rather than investment in efforts to limit Greenhouse Gases

Renewable Portfolio Standard Percentage Requirements

• Accelerates implementation of renewable generation requirements
  
• Penalties for not meeting specified renewable portfolio standards will rise to as much as 4.0 cents per kWh by 2011

Maryland Strategic Energy Investment Fund Allocations

• Low-income assistance through EUSP and related programs 17.0%:
  
• Residential rate relief 23.0%;
  
• Energy efficiency, conservation, and demand response at least 46.0%;
  
• Renewable and clean energy, climate change, and energy-related public education and outreach up to 10.5%;
  
• MEA administration up 3.5%, but not more than $4.0 million

DC Taxicab Update

Members may want to be aware of these significant developments, and you may wish to share them with your tenants:

The District will uphold the May 1 deadline that requires all taxicabs to switch from the current zoned system to time and distance meters.

The announcement follows the city’s victory in DC superior court ruling over a dispute filed by a group of cab drivers who opposed the switch.

The rates for time and distance meters include a $3.00 flag drop rate and a 25 cents for every one-sixth of a mile after the first sixth of a mile traveled.

For every minute stopped in traffic or traveled under ten miles per hour, there will be a charge of 25 cents per minute.

All other rates and surcharges, such as those for additional passengers and rush hour, will still apply.

The maximum fare for all trips within the District is $19.00

Drivers who do not meet the terms of the new regulations between May 1 and May 31 will receive a WARNING ticket displaying a $1,000.00 fine every time they are caught picking up riders without meters.

Beginning June 1st, taxicab drivers will no longer receive WARNINGS and will be expected to PAY the FINE in FULL.

Taxi inspectors will spot-check both meters in cabs as well as the technicians that install the meters.

The Metropolitan Police Department will also be assisting taxi inspectors in ticketing.

Passengers who wish to file a complaint against an unmetered cab should obtain the taxicab driver’s name, company and license number and report it to the DC taxicab Commission at 202/645-6018 or dctc@dc.gov.