Plugging into Multifamily - The Official Blog of AUM

Energy Outlook - April 2015

Posted by Alison Hoss on Mon, Apr 13, 2015 @ 02:51 PM


Natural Gas Storage




The Building of Storage Inventories is off to a Strong Start

According to EIA’s recent Storage Report, there was an injection of 15 Bcf into storage inventories last week.  This injection was higher than predicted and much better than last year’s 8 Bcf withdrawal.  After the news of the storage injection, May 2015 NYMEX contracts dropped $0.07/MMBTU to $2.47/MMBTU and the 12-month strip contract traded at $2.84. 

Regionally, the East Region’s storage level experienced an 18 Bcf withdrawal, which was offset by injections in the Producing and West Regions of 26 and 7 Bcf respectively.



Weather Forecast: Look for Warmer Than Expected Temperatures Through June

Temperature Outlook

For the remainder of the 2nd quarter, temperatures are predicted to be warmer than average.  Only Central and Southern Texas is predicted to see higher than normal temps.  Warmer temperatures and positive storage injections should result in stable or lower natural gas pricing.


Energy Prices

Natural Gas

Natural Gas prices continue to drop as a result of mild temperatures, reduced demand and positive storage injections.  Natural gas consumption fell 4.3% across all sectors this week, led by residential and commercial usage falling by 8% each.  Currently, May settlement contracts are trading down around at $2.50/MMBTU. 

The current 12-month strip price is down from last month’s price of $3/MMBTU to $2.84/MMBTU.

NYMEX monthly settlement price for April ($2.59/MMBTU) was 43% below April 2014.


Electricity Outlook for the Summer Looks Positive

Electricity markets continue to look favorable heading into the summer season.  Low natural gas prices combined with increased switching to natural gas generation continue to keep electricity prices stable heading into the summer.  In 2014, natural gas fueled generation accounted for 27.4% of all U.S. generation.  Natural gas’ share of generation is predicted to grow to 30.4% in 2015.

Natural gas generation growth, along with strong natural gas storage levels, should keep electricity prices stable throughout the summer.  One concern comes from California.  As a result of the severe drought conditions and reduced snowpack, expect lower hydropower output, thus further reducing electric supply in California and possibly driving prices upward.

Bottom Line

We are in a Great Position for Stable Pricing this Summer 

Natural gas storage is above last year. Lower priced natural gas generation is up over last year, and near-term temperatures are predicted to be at or above normal through June.  Everything appears to be aligning for a good summer for energy supply and pricing.



Energy Outlook - March 2015

Posted by Alison Hoss on Mon, Apr 13, 2015 @ 02:47 PM


Natural Gas Storage


Solid Storage Levels Continue to Drive Prices Down

EIA’s latest Storage Report showed that stocks were 489 BCF higher than the same period last year; representing a 47% improvement.  While storage levels dipped below the 5-year average by 13% (225 BCF), working gas is still within the 5-year historic range.  As a result of today’s EIS report, April NYMEX natural gas contracts traded at $2.86/MMBTU; a 4¢ dip in prices as a result of the news.

The East and Producing regions have storage levels 21% and 19%, respectively, below the 5-year average, while the West region enjoys a surplus of 24% above the 5-year average.  With milder weather predicted throughout March, continued strong storage reports are expected. As the withdrawal season ends in the next few weeks, we enter the injection season in a much stronger position than last year.  In 2014, we entered the injection season at a low point of 822 Bcf and played catch-up all summer long.




Weather Forecast: Winter's Worst is Behind Us


Temperature Outlook

Both the 30-day and 90-day outlooks show normal or above normal temperatures for almost the entire US. The West is predicted to see above normal temperatures. With mild temperatures ahead and solid gas in storage, we should expect to see energy prices remain low and stable.



Energy Prices

Natural Gas

Natural Gas prices continue to outperform the last two years.  The NYMEX March settlement price of $2.894 was 40% below the March 2014 settlement price of $4.855/MMBTU.  Currently, April settlement contracts are trading even lower at $2.80/MMBTU.  The drop in natural gas prices is occurring as crude oil is slightly up.  Overall, U.S. demand for natural gas is 74.3 Bcf/day; up by 3.2 Bcf/day.  The increase in demand is attributed to the cold weather in the Northeast.  Natural gas supply remains steady at 72.1 Bcf/day.

The current 12-month strip price is at $3/MMBTU.  That’s a great marker for everyone to evaluate their current contract prices.


Electricity Outlook for the Summer Looks Positive

Electricity markets look favorable heading into the summer air conditioning season.  On average, U.S. generation will grow 1.3% in 2015.  U.S. electricity consumption is predicted to grow at a similar rate of 1.37% in 2015; residential (0.7%), commercial (1.6%) and industrial (1.9%).

Generation growth, coupled with strong natural gas storage levels, positions us to withstand any weather challenges this summer.  Our primary concerns are the upcoming hurricane season and any long-term generation outages.


Regulatory Opportunities: CA Deregulation Legislation

In February, California Senator Bob Hertzberg introduced a bill (SB 286) that would allow all business customers to partake in electric choice.  The bill would require the PUC to eliminate the existing caps on non-residential direct access load over a phase-in period not to exceed three years, with all business customers able to participate in electric choice at the end of the period. The phase-in period shall commence by July 1, 2016.  The bill has the backing of many companies and suppliers who have written to support the legislation. 

This bill is a significant regulatory change and will have a positive impact on all business customers currently not permitted to receive low-cost electricity in California. The bill is progressing through the process and has been referred to the Senate Energy, Utilities and Communications Committee for review.  AUM will keep everyone updated as this bill progresses.



Bottom Line


We Survived Another Winter

While many in the Northeast are still shoveling snow, overall we have made it through another winter and are in a strong position going into summer.  Natural gas storage levels are nearly 50% higher going into summer than last year and pricing continues to remain low.  Currently, power generation looks to remain on pace to match usage growth.  Overall, the energy markets look stable and low prices should continue.



Energy Outlook - February 2015

Posted by Alison Hoss on Thu, Feb 12, 2015 @ 10:30 AM



Back to Normal Levels - Within 1% of 5-Year Average

EIA’s latest Storage Report measured storage levels at 2,428 BCF, a whopping 468 BCF above the same period in 2014.  Remarkably, this is climbing to within 1% of the 5-year average level of 2,457 BCF and 24% above last years’ levels.  Despite the severe snow storms the Midwest and Northeast experienced, moderate temperatures dampened gas withdrawals from working supply. Storage levels in all three regions (East, West and Producing regions) were above their year-ago levels by 254 BCF, 66 BCF, and 148 BCF, respectively.


Weather Forecast: Mild Temperatures for the Remainder of Winter

Temperature Outlook

The past few weeks brought record snowfall in the Northeast and Midwest and prices continued to fall. February looks to bring below average temperatures to the middle of the country and above average temps west of the Rockies.  The 3-month forecast continues to show above average temps west of the Rockies with the regions seeing below average temps shrinking to parts of Texas, Oklahoma, and the Central Plains.  The East Coast forecast looks to see normal temperatures throughout the remainder of winter.


Energy Prices 

Natural Gas

This week Natural Gas prices fell to a new 32-month low, settling at $2.584/MMBtu.  With predictions of lower than expected gas withdrawals, natural gas prices continue to drop.  Storage levels have not experienced large withdrawals and edge closer to matching the 5-year average.  The temperature outlook for the remainder of winter looks to be at or above normal temps (except for Texas and the Central Plains).  All indicators point to prices staying low. 

Today’s early prices for March 2015 continued trading at the $2.59 level, while March Crude Oil is up at $52.23/barrel and heating oil is up 2.24% to $1.809/gallon.  The gas strip prices for 2016 through 2021 all closed at all-time lows yesterday.  Gas supply helped to drive prices down.  While domestic production remained relatively flat, imports from Canada were up 2.9% last week with increased imports to the Northeast and Midwest.




The U.S average retail price of electricity came in at 10.35 ¢/kWH in January down from the prior month of 10.80 ¢/kWH. As natural gas prices go, so goes electricity prices.  The largest change in electric rates came from significant hikes in utility default service rates; especially in the Northeast and Midwest.

Bottom Line

Winter is at the Half-Way Point and We're Way Ahead of Last Year

Continued mild temperatures (not snowfall) and increased working gas in storage drove natural gas prices down to 32-month historic lows. Average to above average temperatures predicted for most of the country for the remainder of winter bodes well for continued stable and low natural gas prices.  Similar to gas, electric prices have shown a drop in prices.




Founded in 1994,  AUM provides the most complete utility management solution to multifamily. For a no-obligation NOI Analysis and Program Plan that demonstrates what AUM can do to help your bottom line, click the button here.

  No-Obligation NOI Analysis



Tags: Energy cost, Energy consumption, Energy Commodity Purchasing, Energy services, Energy Efficiency

January Energy Outlook

Posted by Alison Hoss on Tue, Jan 13, 2015 @ 04:23 PM


Natural Gas Storage

Mild December Weather Curbs Withdrawals -  Storage Levels Finally within 5-Year Average Range 

As of EIA’s December 26th Storage Report, storage levels were at 3,220 BCF; 232 BCF above the same period in 2013, yet still below the 5-Year average by 3%.  The current 3,220 BCF storage level marks the first time since November, 2013 in which total working gas is within the 5-year historic range (the gray band shown on the chart below). We started this withdrawal season at a 10% deficit below historic 5-year averages.  Due to our mild December, withdrawals have been small and have not bled reserves like last December and January.


Working Gas in Underground Storage Compared with the 5-Year Maximum and Minimum - Billion Cubic Feet



Weather Forecast: Colder Temperatures for the South 

January has started out with frigid cold, but is expected to end mild throughout most of the US.  Only Texas and the Central States are predicted to experience below-normal temperatures.

The long-range forecast show below-normal temperatures for Texas through Virginia.  The West Coast will experience above normal temperatures.



Energy Prices

Natural Gas

December was a great month for energy prices. Warm temperatures dampened the heating demand for natural gas and record high gas production applied downward pressure to energy prices; causing natural gas prices to drop 6% and electricity prices dropped 1%. The last two weeks of December were significant with the NYMEX average 12-month price for natural gas closing down 12% and the PJM 12-month average price for peak power dropping 7%.

February natural gas contracts continued to fall to $2.882/MMBtu, despite the cold spell in early January reaching across most of the country.  This week’s cold temps are expected to end and a return to above-normal temperatures is expected.  Short-Term cold spells should be expected, but unlike last winter, they are not expected to last for extended periods.




As natural gas prices go, so follows electricity prices.  Most all electric markets have seen a corresponding dip in prices; however not as noteworthy.  Our biggest concern today on the electric front comes from significant increases on the utility standard/default service rates.  Large increases have been enacted in the Northeast and Midwest.

Bottom Line

Mild December Weather Offsets Low Storage Levels

This Holiday Season brought us three gifts: mild December temperatures, limited storage withdrawals, and record gas production levels throughout  the injection season. The combination of these events has offset lower-than-normal storage levels. As a result, natural gas prices fell to the lowest levels in 2 years, down 35% since November.  At a time when prices usually escalate ahead of the peak season for heating demand, the warmer-than-normal December and record production has limited storage withdrawals.


Tags: Energy cost, Energy procurement, Multifamily, Energy market, EnergyBlogs, energy benchmarking

December Energy Outlook

Posted by Alison Hoss on Mon, Dec 15, 2014 @ 02:32 PM




Injection Season is Over – Stockpiles Higher than Expected

As of today’s storage report, storage levels are at 3,359 Bcf, which is shows a withdrawal of 212 Bcf since our November Energy Outlook.  Withdrawal season has begun.  At current levels, we go into this winter 351 Bcf under the 5-year average.  Being 10% below historic levels places the market at risk if near term cold temperatures strip away the smaller storage stockpiles. Currently, December temperatures are predicted to be mild and small withdrawals may not stress storage levels or have a large impact on price. 


Weather Forecast

Near Term Mild Temps - 2015 Brings Colder Temps to the South

Temperature Outlook

December tmperatures have been mild, bringing much rain to both coasts.  The first quarter of 2015 looks to deliver above average temperatures in the West and in far Northeast.  Below average temperatures are predicted for most of the South and Southeast; ranging from New Mexico to Virginia.  The Midwest, Central Plains, Ohio Valley and Mid-Atlantic are predicted to have normal winter temperatures. 

Near-term temperatures will be critical to energy prices going into 2015.  Any cold snap may result in earlier and stronger natural gas withdrawals than expected; causing prices to increase.



Energy Prices

Natural Gas

The January 2015 gas contracts gained this week, settling at $3.652/MMBtu.  Traders took advantage of oversold conditions, which resulted in Monday’s drop under $3.60/MMBtu, to cover short positions in anticipation of a colder January.  Much of the bounce back up is attributed to technical support at the $3.60 level.  Congrats to everyone who was positioned and ready to capitalize on Monday’s price dip.

So far, December has been much warmer than originally expected.  Normal to above-normal temperatures are expected to continue until at least Christmas, which is nothing like the below-normal temperatures originally forecast for December.  January and February are still forecast to be below-normal, yet not quite as cold as last winter.  The big question is … “when the cold eventually materializes, will prices rally due to increased demand for natural gas or will storage be enough to stabilize prices?”


Remember Natural Gas Spot Prices from Last Year (Henry Hub)?



The latest energy challenge has occurred on the electric side.  Most Northeast states will see huge increases in default electric rates.  Some have already gone into place and most will start on January 1st.  Below is a table of the Northeast states and their approved default service rate increase.  If you are on default service your price will go up.  Give AUM a call to help you avoid these price jumps.  You can easily avoid these price increases through our energy procurement services.



Bottom Line

Mild December Weather has Offset Low Storage Levels

The mild December weather has dampened the typical seasonal price jump.  We have experienced periods of price dips, enabling prepared buyers to take advantage.  Some concern exists with storage levels 10% below the 5-year historic average.

Time is running out to lock in fixed natural gas prices for this winter.  Waiting until after Christmas will force you to be exposed to market prices in January and possibly February; the most volatile gas price months.  Take Action NOW, or roll the dice on winter gas prices.

Default Electric prices will be going up significantly in the Northeast.  Almost all NE states have approved rate increases in place or set to become effective on January 1st.  Start locking in your energy now to avoid those ugly default rates.

Tags: Energy procurement, Energy market, Energy Efficiency

Resident Utility Bills to Increase January 1 - ComEd Rates Increase 11%

Posted by Alison Hoss on Mon, Dec 15, 2014 @ 11:14 AM

Chicago Market Alert:

ComEd Delivery Rates to Rise by 11%


From the Chicago Tribune, December 10, 2014

Commonwealth Edison (ComEd) was given the go-ahead Wednesday to raise electricity distribution rates by 11 percent to help pay for a $2.6 billion grid modernization effort.

The change in electric delivery costs will be reflected in Januaryutility bills, totaling nearly a $245 million increase. This year ComEd already increased the average customer bill by $5.50 to assist in grid modernization efforts. This latest 11% increase will add $2 to $3 on top of the previous rate hike.  All Clients with ComEd properties should account for these increases in 2015 budgets.  

Here is a link to the article:

Illinois Multifamily Property Owners have Options to Keep Rates in Check

In Illinois, electricity is a de-regulated energy commodity, meaning you have options when selecting a utility supplier.  While ComEd may be the commodity delivery distribution company, there are many electricity commodity suppliers.

Multi-Housing News - Making Your Mark

Posted by Alison Hoss on Thu, Nov 13, 2014 @ 03:47 PM

Multi-Housing News (MHN) recently reached out to AUM's Dimitri Kapsis for insight regarding benchmarking in our industry. 

Below you will find the article where Kaspis speaks on behalf of AUM and sheds a light onto AUM's experience with benchmarking in multifamily.


Making Your Mark

By Joshua Ayers, Senior Editor - Published November, 10 2014

Most operational tasks at multifamily communities strive to maximize efficiency in order to increase the bottom line. The web-based revolution in the past 10 to 15 years has helped these businesses to streamline their operations and as that technology evolves, companies are taking a closer look at, and improving, the ways they are spending money on property utilities through benchmarking.

So what is benchmarking? Putting it simply, benchmarking is the process of taking an entity’s specific set of metrics and measuring or comparing those metrics to the metrics of another entity or the average of metrics of other similar entities. In multifamily—and commercial and industrial buildings as well—an example would be taking the total use of electricity at one building and comparing that usage against other similar buildings, or the average usage of multiple buildings that are similar in stature.

While this might sound relatively simple, there are several factors that make utility benchmarking at multifamily communities and buildings more difficult than their commercial and industrial counterparts, including sub-metering, resident privacy and the willingness of utility companies to cooperate with requests for accurate data. Having the right tools, finding the right benchmarking vendor and being aware of local, state and federal benchmarking efforts can all help companies to build a benchmarking strategy that will help reduce utility costs and increase NOI.

A few vendors and tools

In order to effectively benchmark utilities, a company needs nothing more than a method of collecting, analyzing and storing the data, as well as a way to determine how other similar multifamily properties are consuming in order to track results. An initial gut response might include opening up Microsoft Excel or signing into Google Drive, but, unfortunately, the labor costs for tedious manual data entry for benchmarking would likely outweigh any savings that could be had, and there would be no guarantee that the data could be appropriately analyzed.

“This can be done in spreadsheets, but it is time consuming and tedious, and the analysis required to do it accurately is not as simple as adding up utility bills,” says benchmarking guru Jonathan Braman, vice president of the New York-based benchmarking company BrightPower. “For example, in climates with a lot of heating or cooling needs, building energy consumption varies a lot based on how hot the summer [is] or cold the winter is. If I installed a new efficient boiler before last winter’s polar vortex, I still probably used more gas than the previous winter. I may have used less than I would have with the boiler—but utility bills alone won’t show that.”

BrightPower is just one of many benchmarking companies that have emerged in the multifamily industry. One tool that the company offers its clients is its EnergyScoreCards platform, which automatically fetches data from most large utilities, and then “provides weather-normalized benchmarks at the building, property and portfolio levels,” he notes.

Braman says that the use of EnergyScoreCards has helped long-term clients decrease utility spending since they started using the project, but he also notes that the benchmarking alone isn’t necessarily a cause for energy saving.

That combined with working with BrightPower analysts can help companies sort through the data. If consumption problems are evident, BrightPower engineers and procurement experts help clients work through the problem.

“Benchmarking only helps owners make better decisions and take action to save energy,” he says. “We think of benchmarking as a critical component of energy management, but it must be combined with smart operations and maintenance, behavioral changes, and in some cases, capital improvements, to save energy.”

Another major player in the benchmarking industry is American Utility Management (AUM) Inc., which has been providing energy management solutions to the multifamily industry since 1994.

AUM Chief Energy Officer Dimitris Kapsis says that the most important tool for benchmarking is good data.

“The most essential tools for benchmarking is the availability of the actual comparative data, its integrity and overall size of the comparative group,” he says.

AUM’s primary benchmarking tool, SCORE, utilizes data captured from a state-of-the-art data capture process that checks the data’s integrity, and then provides benchmarking that takes into account geographic region, property type and other property characteristics and their overall utility usage to rate a property’s energy efficiency again similar peer groups.

Kapsis stresses the importance of the data integrity checks, since manual data entry can be flawed, as can data that comes directly from the utility companies.

“It could be a situation where we have some data entry issues such as fat fingering, or we even have data issues coming from the utility, because unlike the popular consensus, utilities make mistakes and sometimes [they] make big mistakes,” he says.

Once the data is validated and entered into the system, AUM’s system monitors the data for anything that is out of trend, including utility usage.”

“It’s pretty straight forward. We put some variances in place up or down, and if they break through those barriers that we manually set into the system then the system notifies us,” he says. “We look into it as to if it’s a legit variance. If it is, we let it go through the system and the client receives a notification. From there, either themselves or with our help, we can work on fixing the issue.”

Kapsis referenced an AUM Energy Management client with a portfolio of more than 100 properties that was able to identify conservation opportunities through benchmarking efforts that led to $400,000 in annual savings with a ROI in just 13 months.

NWP, which offers benchmarking through its analytics portfolio, offers a product called ScoreCard, which allows clients to rank a property within a portfolio to see how it is doing against its peers.

ScoreCard also takes into account factors such as weather normalization, and benchmarks several utilities both individually and combined.

“You can look at gas, electric and then a combined gas and electric,” says Chris Dorando, product manager for NWP’s Utility Smart product line. “So for instance, if you’re a property that has electric heating and you want to know how that property is performing against other properties in the area that have gas heating, we normalize that so that you can actually make a comparison.”

NWP also works with clients that use the EPA Energy Star Portfolio Manager, which anonymously tracks whole-building energy and water consumption data that can be used for benchmarking.

All three energy management and consulting companies, BrightPower, AUM and NWP, are service and product provider (SSP) partners through the Energy Star Portfolio Manager program. According to Energy Star, SSP partners “have demonstrated their expertise and achievements by meeting strict Energy Star program requirements for benchmarking customer buildings using Portfolio Manager and gaining Energy Star certification for buildings.”

Challenges and the future

Utility benchmarking has been around since the 1990s, but was primarily restricted to more commercial buildings, where whole-building consumption data is easier to acquire and track.

Even though an assortment of industry suppliers have assisted EPA in creating and improving the Portfolio Manager, whole-building data remains one of the biggest challenges for multifamily due to property complexity and the various types of metering structures set up at those properties.

“The main difference between the rest of the industry and multifamily, especially when we’re talking about commercial or retail, is that each individual unit-—an individual unit could be a retail shop or an entire office building—tends to have central metering for electric, gas and water. So, when we capture the data, we know what the entire unit is using on a per-month, quarterly and annual basis.”

This type of cumulative data makes a platform like Portfolio Manager easy to use and compare to other similar properties by type and region.

With multifamily, however, properties can range from garden-style, to high-rise buildings and beyond, with each of those different types of buildings. Utilities across the spectrum can be measured across the entire property, such as water, which tends to be measured by whole-building, combined with utilities such as gas and electric, that are measured in either entire building or individual apartments or somewhere in between.

“To be able to compare apples to apples for a particular property, it’s not just location and type of property, it’s also what type of metering they have in place. And, not just for one type of utility, it could have a diversity of metering types depending on what utility you’re looking at … that was the difficulty that the EPA had up until recently and they still do.”

Currently, whole building data can only be acquired from utilities that have willingly agreed to provide the information in good faith or that have been mandated by
cities to provide the information, with the first option being subject to a variety of
data discrepancies.

“Benchmarking laws in several cities have also helped owners and vendors to improve the process and greatly expand the number of properties benchmarking,” BrightPower’s Braman says.

Kapsis, who notes that owners are gravitating toward individual metering for gas and electric as residents demand more control over factors like individual unit climate settings and knowing their own utility usage, is in agreement that the availability of whole-building data will help with benchmarking.

“As a result of those mandates, we will be able to capture whole-building data,” he says.

Dorando believes that the mandate trend is not going to fade away anytime soon.

“As those urban areas like Seattle and New York and Washington D.C. [and] Chicago start to roll out, I think you’ll start to see a lot more of that happen across the country,” he says. “Other communities will start to follow that. It’s something that’s going to be happening, and it’s something that we help our clients with. It’s pretty cutting edge at this time. I think it’s going to be a valuable tool for the property owners because they’ll be able to really improve their properties.”

As this whole-building data becomes more accessible to vendors and their clients, more research and evidence on the effectiveness of benchmarking will become available to owners and operators.

“People used to say, rightly at the time, that there were no good databases of multifamily energy and water use data, so no one knew what was good or bad,” Braman says. “Now we know.”

Tags: Energy management, Multifamily, Utilities, Submetering, ENERGY STAR, Benchmarking, Data analysis, Data capture

Energy Commodity Purchasing Outlook - November, 2014

Posted by Alison Hoss on Fri, Nov 07, 2014 @ 03:11 PM





Injection Season is Over – Stockpiles Higher than Expected

The traditional Injection Season has ended and gas storage levels saw a healthy jump in October, up 583 BCF.  Some experts still expect a couple more weeks of storage injections through the middle of November. This past April, storage levels were 55% below the five-year average and no one expected injection levels to get  anywhere close to those historic levels.  But strong injections through the summer lifted stockpiles to within 6% of the five-year level.  The robust injection season has alleviated some of the supply concerns going into this winter season. 

A word of caution, colder temperatures are predicted for the first half of November, which could result in gas constraints or possible withdrawals in November.


Weather Forecast

Near Term Unseasonably Cold Temps – Overall, Not a Rosy Picture

Northeast & Mid-Atlantic: Repeat of Last Year?

Forecasts indicate similar cold and snow to last winter.  Expect cold surges in November, with Polar Vortex temperatures hitting in January and February.  Higher than normal snowfalls are predicted west of the I-95 corridor.


Southeast, Gulf States & Tennessee Valley: Concerns over Rain & Ice.

Expect extreme ice events from Texas to eastern Kentucky in January through early February. A very wet winter is predicted with possible risk of flooding from large storm systems. The current weather pattern sets up Florida for significant and severe weather potential in mid- to late winter.  Tornadoes will be possible from mid-January to February.

Midwest, Ohio Valley, Northern & Central Plains: Dry & Less Harsh.

Expect several cold months for the Midwest, although not as extreme as last winter.  Below-normal snow fall totals are predicted.  The Northern and Central Plains are expected to see temperatures on a roller-coaster; up and down all winter; lessening risk of high total snowfalls.

Northwest & Northern California: Some Precipitation, but Not Enough to End the Drought

California has seen its fourth year of drought and is in dire need of precipitation.  In California, the Northern Sierra and Sierra Nevada, rainfall is predicted to be below normal.  December will bring some rain to northern California, but eases off in the following months, making the region drier than normal by February.  After a season of intense wildfires, the precipitation that reaches the Northwest will not be enough to prevent problems next year.  Southern California looks to see slightly above-normal precipitation this season, especially in areas farther from the coast.

Southwest & Southern Plains: West & Rainy; Possible High Snowfalls

A weak El Nino may bring high rains to the Southwest.  The Four-Corner region, as well as Northwest Texas, Oklahoma and Kansas, may get above-normal snowfall totals.

 OVERALL: Weather is NOT expected to be friendly to energy prices this winter.


What is the Polar Vortex?11-7-2014_11-49-45_AM

A polar vortex is a persistent, large-scale cyclone located near either of earth’s geographical poles.  The polar vortices are located in the middle and upper troposphere and the stratosphere. On occasion, the cyclone slip down away from the North Pole and brings with it frigid temperatures and “Polar” conditions.

Energy Prices

Prices Climb for 7th Day in a Row

For the 7th day in a row, natural gas spot prices for December have risen; as high as $4.315 per MMBTU. NYMEX Futures prices traded as high as $4.325 per MMBTU.  October trading began at $4.003/MMBTU. Despite positive storage reports, the forecast of cold weather have driven prices up.  Bullish speculators are betting on the cold winter weather to increase early-winter demand for heating fuel.  Analysts are concerned if we get a repeat of last winter, storage supplies will dry-up quickly. In addition, the pipeline bottlenecks from last year have not been corrected, resulting in constraints on gas deliveries and price spikes if storage levels drop significantly.


Bottom Line

Predictions of Another Harsh Winter Have Driven prices Up.

Even when we get good news from a solid natural gas injection season, prices still climb.  Mother Nature has spoken again and her threat of bad weather has started November off with a significant price spike of over 30¢ per MMBTU in the last 30 days.

Congrats to those who locked in prices in October!  The early November cold spell has driven prices up.  We suggest you quickly lock-in prices before temperature  forecasts get worse. By the way, we have seen predictions of gas storage WITHDRAWALS in November. It’s way too early to start removing significant gas from storage.

A quick note for our New England Clients; electric default pricing for the upcoming winter months is topping $0.20 per kWh in many jurisdictions, forecasts of 20-30% year over year increases in electric costs have flooded the market.  There is still time to lock in lower rates for a December contract start but the window is getting smaller.


Tags: Energy cost, Utility expense Management, Energy consumption, Energy budgeting, Utility rate schedules, Multifamily, Energy Commodity Purchasing, Cost cutting

November Elections Are Almost Here - Be Informed

Posted by Michael Miller on Wed, Oct 29, 2014 @ 09:10 AM


Educate yourself on multifamily issues that can be affected by your vote.

Usually at this time of year, companies are pushing for a strong EOY finish and setting budgets for next year. On these even years, it is hard to avoid the constant barrage of election campaign messages.

Representatives will be elected who will make decisions that significantly impact our industry.  Although how we participate in the election process is a personal decision, our challenge, as an industry, is to filter out the political noise and learn about the real issues we will face, and who may best represent us and our views.

Today's goal is not to guide you in a political direction, but to provide you with resources in order to educate yourself and your teams regarding the upcoming elections.

Our trade associations, the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC), have combined resources to produce “Issue Fact Sheets” on major legislative and regulatory topics affecting the multifamily industry.  The NAA/NMHC Joint Legislative Program Fact Sheets outline various federal and national issues we face and include their viewpoint on these issue.  Issues range from Building Codes and Tax Reform to Energy Policy and Bed Bugs.

On a local level, NAA also publishes State and Local Fact Sheets, containing background information and regulatory outlooks from the coming year. (Note: Access to the NAA local Facts Sheets may require membership.)

The November elections can impact our industry for many years to come, and with an educated viewpoint on the candidates and issues, we as industry leaders, can help our multifamily industry prosper through our actions on November 4th.  If you have any additional resources to share, please send a note and AUM will share it.

Email Us Here!

Tags: Utility expense Management, Multifamily, Legal and Regulatory, Property owners, Legislation, NAA, National Apartment Association, NMHC

California Market Alert: Assembly Bill 2451 Regarding Submetering is Now Law

Posted by Alison Hoss on Tue, Oct 07, 2014 @ 02:20 PM


CA Market Alert: CA Bill 2451 Is Now Law

New law streamlines approval of submeters for use in the state.


After numerous attempts over the last year to modify submetering rules in the state of California, AUM, along with many industry players and the office of Assembly Member Tom Daly of the CA 69th District, have successfully drafted California Assembly Bill 2451.  The bill was approved by Governor Brown, Chaptered by Secretary of State Debra Bowen, and is now law.  We are very excited about this successful effort in streamlining the approval process for water submeters as well as lowering the existing liability placed on those that supply, install and use submeters. The chaptered bill:

  • Allows submeters to be tested in one county and used in another
  • Allows approved submeters to be reserved for a period of time
  • Assures testing fees are paid to the county where tested
  • Clarifies that submeters are “placed in service” when they are installed
  • Determines the proper disposal and use of submeters that fail county testing

We are very excited with the cooperrative work between all parties, including the Division of Measurement Standards, and look forward to future positive legislative efforts.


Tags: Utility expense Management, Multifamily, Submetering, California, Water