Multi-Housing News Taps American Utility Management as Technology Choice Award Winner for 2014
National multifamily publication award chosen by over 25,000 industry executives representing over 5,000 organizations.
Lombard, IL –(September 28, 2014) – Multi-Housing News (MHN), an industry-leading national publication for Multifamily, has awarded American Utility Management, Inc. (AUM) a 2014 MHN Technology Award for utility management. The MHN Technology Awards, voted on by industry users, recognizes companies who provide flexible customization, competitive pricing, and the most innovative solutions, all backed by superior customer support.
“AUM is honored to receive this award from Multi-Housing News,” says Joe Stackhouse, AUM President and Chief Operating Officer. “Since 1994, our sole focus has been to help Multifamily property owners maximize NOI through expert energy and utility management. For them, transforming energy expense data into actionable information is the difference between profit and loss. Our Performance Dashboards and Ad Hoc Reporting Tools on the AUM Advanced Analytics platform reduce millions of data points into simple visuals, allowing our clients to make critical decisions quickly for competitive advantage. We affect properties’ NOI every day in a very real way.”
Over the past few months, we’ve all been inundated with reports on the new Apple iPhone 6 release and all of the new features it has to offer. It got me to think about all the data that travels through the air, across phone lines and over the internet; and about all the new devices that are being used to gather and send all the data. The Internet of Everything (IoE) phenomenon, which is the next big wave of how people and things connect to the internet, is growing exponentially. IoE applications (often Machine-2-Machine applications) include: smart meters, video surveillance, smart cars, package tracking chips, chipped pets and livestock, and digital health monitors. Today, there are over 2.9 Billion M2M connections and they are projected to grow to 7.3B by 2018.
But what about the business aspect of all these new devices and resulting data:
1) Who Owns the Data?
2) Who has Rights to transform the data into valued information?
In the utility world, these are hot topics. Recently in Chicago, ComEd installed 425,000 smart meters as part of its $2.6B grid-modernization project; that number of smart meters is planned to grow to over 4 million meters. The list of companies wanting access to the data is almost as long as the number of meters themselves, but no data is flowing. No one is able to see the benefits of energy efficiency as a result of the new energy information gathered via the smart meters. Why? Because regulators are still determining who owns the data (the utility or the customer) and how data is to be released in order to comply with privacy laws.
The US Department of Energy (DOE) has established the “Green Button” as the standard for smart meter data access by customers. Green Button is a good start. However, the local utility is the only one who presents the energy data to the customer and only in the format or manner that the utility chooses. In order to enable the markets to develop products and services around smart meter data, rules must be established to enable easier access to the data for enterprising business as well as property managers like you.
At AUM, we are fortunate to gather all of the utility data from your invoices as a part of our invoice processing service. On the AUM Advanced Analytics Platform, clients get instant access to their information via a myriad of on-line reports, a first-glance Performance Dashboard with data drill-down capabilities, and other self-serve Ad Hoc Reporting Tools.
But the next generation of data coming from smart meters has yet to be made easily available to customers and energy solution providers. AUM’s question to you is: How should AUM advocate on your behalf to ensure the data is most accessible to you? What is the best solution to gather your residents’ utility data? Do you want to access your residents’ usage data in order to help them become more efficient (and enable your properties to become more energy efficient)?
Multifamily Market Alert
EPA Announces 1-100 ENERGY STAR Score for Multifamily
Today, the Environmental Protection Agency (EPA) announced the availability of its 1-100 ENERGY STAR score for Multifamily. For two years, EPA has been analyzing energy data received from the Fannie Mae Multifamily Survey and Data Taxonomy Project. Available through ENERGY STAR Portfolio Manager®, the score enables owners and managers to compare energy performance of their properties against similar properties nationwide. It provides valuable information to help prioritize energy efficiency efforts and track improvements.
AUM Chief Energy Officer Dimitris Kapsis was actively involved in the development of the benchmarks, and the score is an important development in the future of Multifamily energy management.
As an ENERGY STAR Partner, AUM works on your behalf to ensure that both property characteristics data and energy usage data needed to deliver a score are correctly input into Portfolio Manager. We will continue collaborating with EPA to make sure the new tool is an effective measure of your energy usage.
Founded in 1994, AUM is celebrating its 20th anniversary of increasing Multifamily property NOI & RE value through use of its integrated Resident Billing & Energy/Utility Management tools.
For a no-obligation NOI Analysis & Program Plan that demonstrates what AUM can do to help your bottom line, click below.
To learn more about our services click below
Natural Gas Storage
Storage Injections Grow, but Miss Market Expectations
US Natural Gas Storage levels continued to grow, but the markets expected more and as a result, natural gas prices bumped up a few cents per Bcf on the NYMEX. The East and West natural gas regions both saw storage builds larger than their 5-year average (12 BCF and 6 BCF above 5-year average, respectively), while the Production Region experienced a 2 BCF drop below in storage injections.
While storage levels are increasing, the average unit cost of the gas in storage is $4.38.MMBtu, 15% higher than this period last year. Reasons for concern: only 9 weeks left in the injection season, lower than expected gas storage levels, the effects of recent warm weather, and higher priced cost of stored gas; these factors do not bode well for the price of this winter’s gas coming out of storage.
Weather Forecast : Temperatures Less of a Factor
As the summer comes to an end, weather is becoming less of a price factor over the shoulder months of October and November. The end-of-August hot spell did have some impact on storage injections, however traders do not expect near-term warm temperatures to sway prices.
The temperature outlook for September through November indicates above-normal temperatures in the West and almost the entire Eastern coastline. Below average temperatures may be felt in the central area of the Great Plains.
Near term weather concerns are trending towards possible tropical storms and hurricanes, which could disrupt oil and gas rigs and production in the Gulf of Mexico.
EC-Equal Chance for A.N.B. A- Above N- Normal B - Below
Natural Gas Prices Continued to Move Up as August Ends
The warmer temperatures during the end of August and an underwhelming gas storage report caused natural gas prices to move up at most market locations. NYMEX 12-month prices increased 1.7%, closing the month at 40.35¢/therm. Likewise, the 12-month PJM electricity prices rose 1.3%. Henry Hub gas prices rose 14¢/MMBtu in the last week of August. September futures contracts rose from $3.823/MMBtu to $3.957/MMBtu, before the contract expired. The October prompt month started trading up at $4.003/MMBtu.
Regional Pricing of Note: Northeast Prices Show Wide Fluctuations
The major Northeast market areas saw prices trade with strong discounts to the Henry Hub since the spring. At Transcontinental Pipeline's Zone 6 (serving New York), prices began the last week of August at $2.37/MMBtu, fell to $1.86/MMBtu (the lowest level since December 1998), and ended the week up at $2.79/MMBtu. At the Algonquin Citygate (serving Boston), prices rose from $2.46/MMBtu to $4.23/MMBtu, and then fell to $2.92.
The Midwest and West saw prices increase. Chicago, rose 8¢ to $4.01/MMBtu, and Northern California prices increased to $4.56/MMBtu.
Also hampering gas prices is the low number of active rigs (330), down 57 units from last year. The chart below indicates gas spot price increases the last few years as the rig counts decline. Fortunately, fracturing and horizontal drilling have provided significant volumes of gas to offset the lower rig counts.
Bottom Line: Get Ready for Winter Pricing
Labor Day has passed, summer is over and the end of gas injections season is nearing. The good news is that gas production is up; thanks to fracturing and horizontal drilling. But with less than two months of gas injections left, it will be difficult to get back to our 5-year average storage levels. Prices will be challenged if another cold winter hits us. Low storage levels, higher priced gas in storage and no increase in available pipeline capacity could result in the perfect storm for this winter’s prices. This Fall’s pricing will be mainly driven by near-term weather forecasts (primarily tropical storms) and storage reports.
Now is a good time to start locking in your winter gas; at least a portion of it to mitigate potential winter price risk.
About The Author
Dimitris Kapsis joined AUM in 2008, and is responsible for the creation and management of the Energy Solutions group. His leadership had allowed AUM to expand its offerings and become a leading national energy management services provider for the Multifamily industry. These Energy Management solutions are inclusive of energy management planning, facility utility auditing, energy commodity procurement, utility variance analysis, rate & tariff analysis, budgeting and benchmarking in addition to AUM’s traditional Invoice Processing, Resident Services, and Utility Submetering services.
In addition to his responsibilities at AUM, Dimitris is active in the Association of Energy Engineers (AEE) and the American Society of Heating, Refrigerating and Air-Conditioning (ASHRAE). He also holds several professional certifications, including Certified Energy Manager (CEM®) and Certified Energy Procurement Professional (CEP®). He is a frequent speaker on Energy Management in Multifamily including:
• Guest Lecturer at Georgia Tech’s School of Building Construction
• National Apartment Association
• NMHC Leadership Conference
• EPA Panel Speaker on Energy Star
Dimitris is an advisor to the EPA’s development of a Multifamily benchmarking standards, and a member of the Data Taxonomy Think Group lead by Fannie Mae, the EPA and funded by the MacArthur Foundation. He received his B.S., Urban Systems Engineering in 1993, and his M.S., Facilities Management in 1997 from George Mason University.
Founded in 1994, AUM is celebrating its 20th anniversary of increasing Multifamily property NOI and RE value through use of its integrated Resident Billing and Energy/Utility Management tools. For a no-obligation NOI Analysis and Program Plan that demonstrates what AUM can do to help your bottom line, click the button here.
To learn more about our services simply click on this button.
Market Alert Update: Current CA Legislative Session Comes to Close with No Vote on SB411
We alerted you last week of CA SB411, the water conservation bill introduced by Senator Lois Wolk of the 3rd District. AUM, along with other Multifamily industry advocates, worked with Senator Wolk to ensure that Multifamily property owner interests were protected as they related to billing residents for water.
SB411 was passed late in the legislative session and was not read in the Rules Committee, so the bill will not be voted on this year. Any future bill must be reintroduced and go through the entire legislative process. AUM will remain diligent in protecting Multifamily owners’ rights as they relate to resident utility billing.
Texas PUC Takes Over From TCEQ
As you may be aware, presently the Texas Commission on Environmental Quality (TCEQ) has jurisdiction over water/sewer utility billing at multifamily communities. On September 1st, that jurisdiction will be transitioned to the Public Utility Commission of Texas (PUC). While this may appear to be a drastic shift, it is in fact not.
The PUC has adopted all the same rules and regulations of the TCEQ with one exception. In the past, lease documents must include either the entire set of rules, or a summary of the rules. PUC has eliminated the ability to provide a summary, therefore the entire rule section must be included. The Texas Apartment Association (TAA) has updated their leasing program to include these rules. They also have provided a 4 page print of the rules for those that do not have access to their program which can be found here:
Future registrations for billing water & sewer should be directed to the PUC and not TCEQ. If you have already submitted forms, the TCEQ will finish the process or pass the application to the appropriate contact at PUC.
Further information may be found at the TCEQ website:
As the PUC takes over the process of regulating water and sewer much like they currently do for electric, we anticipate minor modifications in the program and will keep you informed of these changes.
California Market Alert: SB 411 Amendments Pass Assembly Floor – On to Committee.
Key amendments protect Multifamily property owners' ability to bill for utilities.
As you may recall, last fall Senate Bill 750 failed to pass out of Assembly Committee. At that time, AUM was spearheading efforts to protect California Multifamily property owner interests as they related to the Bill. SB750 was to require all structures (with a few exceptions) built after January 1st, 2014 to be individually metered by the water providers, or have submeters installed to measure water use. Under SB750, any charges to residents for water would be determined by the use of a submeter or included in their rent, and any Ratio Utility Billing System (RUBS) would be prohibited.
Since then, AUM, along with several other industry players, has been working on a modification to the bill’s language and formulating its incorporation into a new bill. This new bill, SB411, was successfully amended on Friday Aug. 22nd to include the agreed upon submetering provisions similar to SB750, and is now going to committee. Working with great cooperation with Senator Wolk’s office as well as many other interested parties, the latest version of the bill will satisfy the wants and needs of California.
With similar language from last year’s SB750, the submetering portion of the bill will establish rules surrounding the use and installation of submeters. The rules established include but are not limited to the following:
Nothing will impact existing billing using allocation programs (RUBS)
Submeters (or direct metering by the utility provider) will be required for new construction after Jan. 1, 2017
Admin/Billing fee up to $4.75 or 25% of the utility charge with future CPI increases
Addition that nothing prohibits any other lawfully allowed charges to be on a utility bill
Late fees of $7.00 if not paid within 25 days, increased to $10 if not paid by the next billing cycle
Failure to pay balance shall be a curable material breach of the lease allowing termination of the lease following existing tenant landlord laws
Unpaid amounts may be deducted from security deposit at end of tenancy
Written lease must include disclosure of charges & billing methods as well as upon request submeter information such as location and testing registration
Estimated submeter reads (if unavailable) shall be 75% of prior average
Excluded from these rules are Low-Income housing, student dormitories, long-term health care, and time-share properties. Further exemptions may be allowed by the Department of Housing and Community Development in anticipation of infeasibility in high-rise structures.
The utility provider cannot charge additional “connection” charges for submeters.
All billing providers will need to update their billing practices, as well as landlords and their lease documents. As such, the rules will not become operative until Jan. 1, 2017 to allow adequate time for compliance.
This has been a long road, and we feel confident that this bill will be embraced by everyone now that the details are open for public comment. We look forward to its speedy approval and signature into law by Governor Brown in the coming weeks. The amended bill, SB 411 can be found here:
Natural Gas Storage and Usage
Storage Levels Continue to Grow, but Not as Strong as Expected
Storage injections continue to replenish supplies depleted over our last winter; surpassing historic average injection rates for the 16th consecutive week. However, last week’s injection of 82 billion cubic feet fell short of expectations. US natural gas storage totaled 2.389 trillion cubic feet, further reducing the deficit from the 5-year average to 20% from 21.7% and down from a record deficit of 54.7% at the end of March.
Weather Forecast : Transition to El Nino Conditions; Above Average Temperatures
The weather agencies are all predicting a transition to El Niño conditions is underway. During El Niño conditions, the northern tier of the lower 48 states exhibits above normal temperatures during the fall and winter, while the Gulf coast experiences below normal temperatures during the winter season
The temperature outlook for August-October indicates above-normal temperatures in the West, Southern Texas, Southeast and parts of the Mid-Atlantic States. Below average temperatures may be felt in the Northern Rockies and Midwest.
Above average temperatures may lead to higher electricity consumption, resulting in higher prices. Also, higher temps may increase natural gas consumption at electric generation stations, thus causing reduced storage injections of natural gas. If the predicted above average temperatures occur, natural gas prices
EC-Equal Chance for A.N.B. A- Above N- Normal B - Below
Natural Gas Prices Move Up Each of the Last Three Weeks
Natural gas prices generally increase across most markets in August. NYMEX natural gas deliveries for September continue to rise since Mid-July; peaking over the $4.00/MMBTU level.
In August, Henry Hub prices started at $3.75/MMBTU and have steadily risen to market influencers like mild weather, increasing storage injections and a decrease in energy consumption typically cause prices to soften.
Energy Price Sensitivity in the Northeast
The Northeast natural gas prices have proven to be more sensitive to temperature than other regional markets. A few points about the Northeast energy and its correlation to temperature:
During summer months, the largest increase in natural gas consumption comes from the electric power generation sector, due to the increased need for cooling in homes.
As temperatures approached 90 degrees in New York and New England during July and August last year, natural gas spot prices surpassed $5 /MMBtu at hubs serving those areas. However, prices remained below $5/MMBtu at the national benchmark Henry Hub in Erath, Louisiana, and at the Tetco-M3 Mid-Atlantic hub near Philadelphia.
The northeastern United States is increasingly reliant on natural gas for power generation. In 2013, natural gas-fired power provided 44% of net electric power sector generation in the New England U.S. Census Division, versus a 26% naturally.
Note: Lines represent best-fit second-order polynomial equations based on a scatter plot of temperatures observed at major airports in each city, and prices at nearby market hubs. Best-fit lines do not extend to cover the entire range of all temperature and price observations. Spot prices are by delivery date.
Bottom Line: Natural Gas Prices Have Started to Move Upward
Are you Prepared?
Congratulations to all of you who secured long-term energy prices these past few weeks.
We have seen prices begin to move upward; when many market indicators would have normally driven it downward. Mild weather, low energy consumption and increased gas storage injections typically hold prices steady, if not cause them to drop. Now is the time to look at securing longer term natural gas and electric contracts of 24 to 36 months. Look to lock in winter gas now, before the El Niño and the real summer returns or a significant event happens.
As a caution to our clients during energy supply contract negotiations, please make sure transmission, capacity and ancillary charges are included in the price offerings and they are not just listed as a pass-through charge. We have seen several suppliers try to make their prices appear lower by not including these components in prices; just to give the appearance of lower prices. Don’t be fooled; let AUM help.
“You lose with potential. You win with PERFORMANCE.”
- - - Bill Parcels, Hall of Fame Football Coach
Yes, it’s almost football season, but this truism applies not only to sports, but also to business. Our season is every day of the year. We all strive for peak performance; yet without a great way to measure our progress, our efforts are meaningless. The all-telling statistic that measures success in business is the income statement, and the difference between wins and losses is Net Operating Income, or NOI.
In Multifamily, a key component of improving NOI for property owners is the ability to manage energy expense and usage. The ability to transform energy expense data into information means the difference between profit and loss.
AUM Performance Dashboards reduce millions of data points into simple, visual information that allows Multifamily property owners to make critical energy expense decisions quickly. The Dashboards enable owners to view their performance at a single glance for their entire portfolio or an individual property. With just one click on a performance gauge, owners see actionable opportunities for improved performance.
Some key features of this new tool:
Critical Key Performance Indicators (KPI) on a single screen.
Easy to read gauges for quick visual analysis
Interactive gauges for simple drill down to more detail in chart or table format.
Each new view opens in a separate tab for fast & easy switches, comparisons, analyses, & root causes.
Ability to be used anywhere you have an internet connection – including your mobile devices.
So, whether you’re managing energy usage, utility expenses, vacant cost recovery, resident billing, invoicing or late fees, AUM’s Performance Dashboards on our Advanced Analytics platform provides all the energy and utility knowledge you need to support your decisions and help you maximize your NOI, and be a winner. . .even by Bill Parcell’s standards.
Now is the time to start securing longer term natural gas contracts of 24- to 36- months. Time is running short to lock in low summer energy prices for both natural gas and electricity. Any worries about low storage levels going into this winter are waning with recent high injection reports. Look to lock in winter gas now, before the real summer returns or a significant event happens.
Since our June report, natural gas storage levels received an injection boost of 430 BCF. While storage levels are still lower than in years past, natural gas storage has reached 80% mark of the 5-year storage levels. Good to see a strong recovery from this winter’s polar vortex.
Weather Agencies are predicting below average temperatures for the next 6-10 days for the middle US with above-normal heat for the West and Southeast. We are about half-way through summer and most regions have not experienced hotter than normal temperatures, as NOAA predicted. The longer we go without prolonged high temperatures; the larger our natural gas supplies will be for next winter. Also, our first hurricane, Arthur, had little impact on energy prices.
In June, NYMEX natural gas prices set a new high 52-week high of $4.87. The first week in July has seen prices drop to $4.19 / MMBTU; a 14% price drop.
Daily electric prices have seen the normal bump-up that summer brings. However, in all deregulated markets, except the Northeast, future prices increase each calendar year of 2015, through 2018. In the NY & PJM West, the future market prices see 2015 high and decline or are flat through 2018.
Bottom Line: Take Advantage of Soft Market
Now is the time to start securing longer term natural gas contracts of 24- to 36-months. Time is running short to lock in low summer energy prices for both natural gas and electricity. Any worries about low storage levels going into this winter are waning with recent high injection reports. Look to lock in winter gas now, before the real summer returns or a significant event happens. Additionally, electricity pricing has stabilized further into the future; look to longer term contracts (24- to 36-months).
A caution to our clients during energy supply contract negotiations: make sure transmission, capacity and ancillary charges are included in the price offerings, not just listed as pass-through charges, causing prices to appear lower. Don’t be fooled; let AUM help.