Plugging into Multifamily - The Official Blog of AUM

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

AUM - Technology Choice Award Winner for 2014

Posted by Alison Hoss on Tue, Sep 30, 2014 @ 01:29 PM

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.”

 

Tags: Energy management, Multifamily, Utilities, Energy Efficiency, performance Dashboards

Turning Multifamily Energy Expense Data Into Actionable Information

Posted by James Kenneally on Tue, Aug 05, 2014 @ 03:15 PM

“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.

Tags: Energy management, Multifamily, Property owners, Energy Efficiency, Data analysis, energy expenses, analytics, Business Intelligence, Big Data, Dashboards, management, Bill Parcells

AUM Energy Market Outlook - April 2013

Posted by Dimitris Kapsis on Fri, Apr 05, 2013 @ 10:46 AM

 

 

Since the AUM March Energy Outlook, the weather over much of the U. S.  has posed challenges for the natural gas market due to colder than expected temperatures and increased demand for heat.  On Thursday, March 28th the Energy Information Administration reported a natural gas withdrawal from natural gas storage of 95 Bcf, well above what analysts expected.  As a result natural gas in storage is currently at 1.781 Tcf, only 61 Bcf above the five-year average figure.  

storage bubble   April

 

Unusually Cold Temperatures Driving Natural Gas Demand

Below-normal temperatures throughout the Northeast and  Midwest over the last 30 days have created above-normal demand for natural gas resources.  Under normal circumstances, we would have entered a storage injection period, but experts expect additional withdrawals near-term. With this withdrawal trend in place, natural gas volume in storage will, for the first time since fall of 2011, cross the five-year average trend as depicted by the blue line below.  Prior predictions of natural gas storage volumes exceeding the five-year average were proven wrong, validating the large influence of weather fluctuations on market pricing.

April Storage

 

Temperature Outlook

After the extended cold spell gripping the heating load regions of the Continental US over several weeks, temperatures are forecasted  to remain fairly cold through the end of this week.  Current heating demand wil place price pressure on the daily cash market and front-month futures contracts.  Weather forecasters are predicting warmer temperatures next week, with the warming trend to continue through April and May.  There is, however,  a disclaimer on these weather forecasts because over the last couple of months expert temperature predictions have left us in the “cold”.

temperatureoutlook april

 

Natural Gas Production and Pricing

Current storage inventory is well below 2TCF and may be below the five- year average by the end of the withdrawal season. Additional withdrawals are expected near-term, delaying the injection season by almost a month.  Additionally, there may be a demand increase due to added natural gas-generated electricity and economic growth.  All these factors are currently working against market pricing.  However, increased shale natural gas production and a possible easing of natural gas usage for electric generation may alleviate updward  price pressure. 

On Tuesday, March 26th the April natural gas contract settled at a price of $3.976 per MMBtu, the highest settle since August of 2011.

Gas Settle   April resized 600

 

Bottom Line   

Natural gas prices have inched upward for five straight weeks.  Last week, the 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) rose by 1.6%, and since the beginning of March, natural gas prices have risen by 11% while peak power prices have risen by 6%. 

Weather is to be blamed for this spike. March 2013 was approximately 25% colder than expected for most areas east of Mississippi.  But, there is hope for recovery. This past week’s price spike was the smallest over the last four weeks, which could mean the rally may be ending with the beginning of spring temperatures.  Even with the unexpected high withdrawal posted last week,  the market dropped substantially last Thursday. 

Natural gas and electric prices are trading higher than a year ago, but they are still very near to the lowest levels of the last ten years.  The spring thaw may be the right time to secure natural gas and electric pricing contracts for the foreseeable future.

Tags: Energy cost, Energy management, Energy consumption, Conservation, Energy budgeting, Energy procurement, Energy rates, Utility rate schedules, Energy Information Administration, Multifamily, Energy market, EnergyBlogs, Risk tolerance

AUM Energy Market Outlook - March 2013

Posted by Dimitris Kapsis on Mon, Mar 04, 2013 @ 11:58 AM

Natural Gas Storage and Usage

Natural Gas Energy OutlookSince our February market outlook, weather over much of the Northeast and Midwest has provided many challenges for the natural gas market due to colder temperatures and the resultant increased demand for heat. On Thursday, Feb. 28 the Energy Information Administration (EIA) reported a natural gas withdrawal from natural gas storage of 171 Bcf, meeting analysts’ expectations. There is currently 2.29Tcf of natural gas in storage which is 308 Bcf above the five year average figure. This current storage volume is still riding the upper range of the five year average trend (the blue line in the graph below). If current weather forecasts hold for the remainder of the winter, we should exit the heating season with natural gas storage volumes exceeding the five year average range.

march Storage Numbers

Temperature Outlook 

Despite the cold temperatures witnessed by most of the country during February, temperature forecasts for March continue to show that most of the country will witness above normal temperatures. The latest forecasts for April by NOAA reflect above-normal temperatures.

 Temperature Outlook

    Courtesy EarthSat

 

Natural Gas Production and Pricing

The latest natural gas production data posted by EIA showed December natural gas production to decrease 1.1% compared to November’s record-high production of at 73.53 Bcf per day (lower-48 revised). Even with the decrease, December’s production is approximately 1% higher than December 2011. Considering record-level production and  storage projected to end the withdrawal season above 2 Tcf, pricing will continue to experience downward pressure.

On Tuesday,February 26, the March 2013 natural gas contract settled at $3.427 per MMBtu.

March Gas Settle 

 

Bottom Line   

Natural gas market pricing will continue to remain under constant pressure as long as the forecasts for near term temperatures remain on the warmer side and storage numbers stay above the five year average line. The highest contract price for this winter season was posted for the December 2012 settle at $3.70 per MMBtu.

With the March 2013 contract already settled, the pricing cycle for 2012-2013 heating season is complete. Traders are now looking for April and beyond, trying to decipher demand notes for the upcoming cooling season. With expected natural gas storage numbers and consistent production, the stage is set for a possible price collapse and an excellent buying opportunity for supply contracts in the beginning of the second quarter.


Tags: Energy management, Energy procurement, Pricing, Energy rates, Utility rate schedules, US Energy Group, Multifamily, Utilities, Heating, Historical utility costs, Energy market

AUM Energy Market Outlook - February, 2013

Posted by Dimitris Kapsis on Mon, Feb 04, 2013 @ 03:52 PM

Natural Gas Storage Capacity

There are several bearish factors working on the energy markets these days.  On Thursday, January 31st, the Energy Information Administration (EIA), in its Weekly Natural Gas Storage Report, noted a smaller than expected withdrawal from natural gas storage, catching many analysts by surprise.  Because of the below normal frigid temperatures recorded the prior week, most analysts were forecasting a larger than average withdrawal of up to 204 Billion Cubic Feet (Bcf).  However, EIA reported a withdrawal of only 194 Bcf.  This report caused a market sell off and a price drop for the prompt months.  The natural gas volume currently in storage is still riding the upper range of the five year average trend as depicted by the blue line below.  If current weather forecasts hold for the remainder of the winter, we should exit the heating season with natural gas storage volumes exceeding the five year average range.

Underground storage

Warmer than Normal Temperatures Expected in Coming Months

Temperatures in the East are warming up to the fifty degree mark while the US National Weather Service is forecasting above normal temperatures for most of the nation for its 6 to 10 day and 8 to 14 day forecasts.  Even though the overall February temperature outlook has turned a little colder nothing extreme is forecasted while the March temperatures outlook still remains with above normal figures for the majority of the heating region.

describe the image

 Source:  EarthSat

Natural Gas Production and Availability Continuing to Cause Downward Price Pressure

The latest natural gas production data posted by EIA showed natural gas production during November to have set another all-time high at 73.88 Bcf per day.  As noted last week (New England Market Alert- January 23, 2012) the number of conventional natural gas rigs has decreased substantially since last year but the number of horizontal rigs in the shale gas fields makes up the difference.  With production at record levels and consumption below average due to warmer weather the natural gas and in turn the electric markets are experiencing a downward price pressure. On Wednesday the February natural gas contract settled at a price of $3.23 per MMBtu.

Gas Settle

 

The Bottom Line

Natural gas market prices will remain under constant pressure as long as the forecasts for near term temperatures remain on the warmer side.  Pricing trend for this winter has already turned downward as seen on the NYMEX graph, the highest contract price this winter was posted for the December settle at $3.70 per MMBtu.  With the February 2013 contract already settled and the traders looking at March and beyond the above normal temperature forecasts will drive prices lower.  As stated earlier natural gas storage numbers are in line to end the winter above 2 Tcf while production has remained fairly constant.  All these factors are setting up a stage for a possible price collapse and an excellent buying opportunity for supply contracts towards the beginning of the second quarter.

Take Advantage of Lower Natural Gas Pricing

AUM Energy Procurement Services evaluates your potential for reducing expense by purchasing natural gas and/or electricity through a deregulated supplier. This is part of AUM’s comprehensive suite of Energy Management Services designed specifically with multifamily in mind. In 2012, AUM was able to save Multifamily customers over $2.5 million in energy costs through its Procurement Services with an increase in portfolio property values of over $35 Million.

Find Out How

Tags: Energy cost, Utility expense Management, Energy management, Energy consumption, Conservation, Energy budgeting, Energy procurement, Market alert, Natural gas, Pricing, Energy rates, Utility rate schedules, US Energy Group, DOE, Energy Information Administration

MARKET ALERT - Low Supply Causing Rise in Energy Prices in Northeast

Posted by James Kenneally on Wed, Jan 23, 2013 @ 01:03 PM

describe the imageThe Energy Information Administration noted on Friday a volatile winter for energy prices in the New England region.

The Report:

From Fox Business News: The Energy Information Administration (EIA), said that since November, average spot-market natural gas prices have been the highest in the US.  Prices have posted premiums of $2 to $3 per million British thermal units (mBtu's) above the national benchmark.

A steady decline in gas supplies and lack of space on pipelines from the west and south, add to challenge in getting supply to the region, the EIA said. Natural Gas supply from Sable, Nova Scotia (a prime supplier to the northeast US natural gas market) is at "a fraction of its levels in previous years." Output was about 30% below the average in the first nine months of 2012, the EIA said.

The start of Encana Corp.'s Deep Panuke offshore natural-gas project, which could have offset some lost Sable supply, has been delayed from early 2013 to possibly midyear, the EIA said. Additionally, stronger demand in Canada also has limited available supply from Sable.

Because of a lack of local storage facilities, high-season demand, and a lack of locally produced gas along with remoteness from the rest of the North American gas-transmission grid, New England has historically relied strongly on Liquid Natural Gas (LNG) imports, including supply from Trinidad and Tobago and Yemen. Since November 2010, 25% of New England's daily gas demand has been met by LNG, and it has spiked to as high as 60% in winter.
The supply snags come as natural gas for power use is rising in New England. The EIA said gas use for power generation in the region was up 3% from a year earlier in the first 10 months of 2012.

Here is the complete Fox Business News Report.

 

Supply strain will be relieved through shale gas production and easing weather conditions. – Dimitris Kapsis, Executive Vice President and Chief Energy Officer, AUM

Natural gas production through conventional vertical rigs has decreased substantially over the last couple of years while production from horizontal rigs (shale gas) has in turn increased substantially.   Overall production of natural gas has decreased approximately 1% year over year while the natural gas storage numbers are still on the high end compared to the five year average.  The recent cold spell that is engulfing the Midwest and eventually the East will exercise some upward price pressure but if NOAA’s forecast for February and March calling for warmer than normal temperatures holds true we will exit the heating season with record high natural gas storage numbers.  The upcoming spring season might experience another buying opportunity for natural gas and electric commodity.
 
New England is a volatile market when it comes to natural gas and electricity because it is the last major market in the supply lines of natural gas originating from Henry Hub in Louisiana.  New England and especially the surrounding areas of Boston do not use diesel fuel for heating as much as their counterparts in NYC and DC so capacity issues in the Boston market especially during peak hours are substantial.  With the lower pricing of natural gas over the last few years and especially 2012 many electric generators have switched to natural gas as their fuel of choice creating additional constraints on the supply grid.  The close proximity of shale gas production in PA and NY provide an opportunity for the New England market for additional sources of natural gas delivery.  
 
Overall natural gas pricing at current low levels is not sustainable for the long term, eventually the laws of supply and demand will kick in and stabilize the market at a level acceptable by both producers and buyers.  What we do not see is pricing reaching the high levels of 2007-2008 where natural gas pricing reached $1.50 per therm.


You can protect yourself from market volatility with AUM Energy Procurement Services

AUM Energy Procurement Services evaluates your potential for reducing expense by purchasing natural gas and/or electricity through a deregulated supplier. This is part of AUM’s comprehensive suite of Energy Management Services designed specifically with multifamily in mind. In 2012, AUM was able to save Multifamily customers over $2.5 million in energy costs through its Procurement Services with an increase in portfolio property values of over $35 Million.

Find Out How


Tags: Energy cost, Utility expense Management, Energy management, Energy procurement, Market alert, Energy rates, Utilities, Energy market, Case study, Electricity, Fossil fuels

Finding $575,000 on Just Three Properties: Why You Need a Multifamily Energy Management Expert

Posted by Michael Miller on Fri, Aug 24, 2012 @ 02:20 PM


Blogpic1 resized 600

I have written numerous times in this blog about the need for focus and knowledge in multifamily utility and energy management. On many occasions, this has centered on the collection and interpretation of data for increasing your Net Operating Income (NOI).

NOI is the residual that is left after you take the operating income (rents, laundry money, fees) and subtract out the operating expenses (taxes, insurance, maintenance, management, etc.).

 

There are only two ways to increase the NOI:

  1. Raise the overall income by raising rents, fees, etc.
  2. Lower expenses


Our clients expect us to lower their energy expenses to increase NOI. We do that through three different disciplines: allocating the proper expense to the residents that are using energy and utilities (AUM Resident Services), accounting and paying that expense appropriately and timely (AUM Invoice Processing Services), and monitoring the rate and usage (AUM Energy Management Services).

Managing multifamily energy and utility expenses is complicated. Each of the 50 states in the US treat multifamily differently, including whether the rates are regulated or deregulated. Tax treatments alone for multifamily are considerably cumbersome.

Can your operations capture the maximum NOI by understanding and applying all of the particular state nuances around energy and utilities?  AUM can, and we have.

AUM was commissioned by one of our clients to conduct analysis on rates and tax treatments for just three of their Texas properties. Multifamily in Texas is considered mixed use, and utilities cannot charge sales tax for residential energy and utility usage (Here is the tax code for your reference). Additionally, rates are deregulated for electricity and natural gas in the state (Here is a complete list of state deregulation for you too).

We conducted a detailed review and analysis of all of the utility accounts for tax exemption eligibility and historical utility costs and consumption. The results of the review on just three properties were unbelievable:

    •  $185,000 in tax refunds/credits
    • $46,000 in future annual tax savings
    • $332,000 in annual commodity savings through more advantageous rates
That's a total overall savings for just three properties of over $575,000!

There are many companies that tout expertise. At AUM, our expertise is in creating increased value for our partners every day. We welcome the opportunity to increase the value of your properties. If you want to learn how, drop me a line, we’d be happy to talk.

Tags: Energy cost, Utility expense Management, Energy management, Energy consumption, Utilities, Utility bills, Case study, Legislation, Data analysis

Fannie Mae begins sending Property Surveys for multifamily energy benchmarking

Posted by Michael Miller on Wed, Jul 25, 2012 @ 02:25 PM

Blogpic2
Chances are, if you work with Fannie Mae (Fannie) on financing for any of your multifamily properties, you have received a Property Survey recently.  Fannie sent out these surveys to 6,500 randomly selected properties in an effort to gather information on behalf of the US Environmental Protection Agency (EPA) for further development of a 1-100 Energy Star benchmark rating.

I have been writing since the inception of this blog  about the importance AND difficulty of developing energy benchmarks for multifamily.  It started with my opinion of President Obama’s Better Buildings Initiative that he proposed in February, 2011 speech at Penn State University (Why President Obama’s Better Buildings Initiative Doesn’t Work For Multifamily). At that time, I noted that multifamily energy benchmarking was difficult due to a number of reasons, most notably:

    • There is not enough information available surrounding the multifamily industry’s energy consumption
    • Facility infrastructure is old and varied.
    • Financial incentives for residents are difficult to establish due to resident/property dynamics.
    • Assessment and benchmarking tools are non-existent in multifamily.

In that same blog, I wrote of what AUM was doing to overcome these obstacles and help multifamily property owners manage their energy expense more efficiently.  Updated from February, 2011, these bullets now show the progress and achievements thus far:

    • Research and development. We developed AUMSCORE energy efficiency benchmarking tool, the only energy efficiency benchmarking tool developed specifically for multifamily.
    • Dialogue, clarification, and education. We continue to work with the EPA and others to deliver a measurement tool that is rooted in multifamily energy factors, not misdirected commercial building factors.  AUM developed the white paper that became the working document for common data taxonomy in multifamily energy benchmarking.  That document was the basis for the Fannie Mae/EPA Property Characteristics Survey that is now being delivered.

Energy efficiency benchmarking makes sense, and cents.  It is the first, crucial step to provide sustainability and operational efficiency that drops right to multifamily’s bottom line.  AUM will continue to be an active participant in any benchmarking and sustainability discussions on Capitol Hill to ensure that these initiatives are thought through and executed correctly.

I will be traveling to Washington, DC in the next few weeks to spend a day on the Hill, visiting with Congressmen and Senators to ensure that multifamily’s interests in energy efficiency and sustainability are heard.  I look forward to providing you an update when I return.

Tags: Energy management, Energy consumption, Conservation, Cost cutting, Energy Efficiency, Legislation, EPA Portfolio Manager, ENERGY STAR, White paper, EPA, MacArthur Foundation, AUMScore, Better Buildings Initiative, President Obama, Regulatory, Data collection, Capitol Hill, Sustainability, Pennsylvania State University

Nomar Garciaparra, Mia Hamm, and Burt Jacobs of Life is Good to Headline Day 2 at NAA

Posted by Dave Carpenter on Fri, Jun 29, 2012 @ 02:44 PM

Blogpic3

Welcome to day two of the National Apartment Association Education Conference and Expo (Twitter:  #NAAEduConf)here in beautiful Bean-town!

Today's conference has a great lineup of speakers!  Nomar Garciaparra, the famed shortstop of the Boston Red Sox, and his wife, USA Women's Soccer trailblazer and the greatest women's soccer player of all time, Mia Hamm, are set to speak at the General Session at 2:30 PM.

In the morning, Life is Good Co-Founder and Chief Executive Optimist Burt Jacobs is speaking on the power of Optimism and where is can take you in life.

The action in Booth 761 for American Utility Management (Twitter: @AUM_Chicago) has been impressive.  If you are at the show, stop by for a Sam Adams Beer and insights on multifamily energy management!

Tags: Utility expense Management, Energy management, Energy consumption, Multifamily, Utilities, Cost cutting, Bill Processing, Resident Billing, Energy services, Sustainability and Benchmarking, Benchmarking, AUMScore, Boston, Business Intelligence, NAA, Press coverage, NAA Education Conference & Exposition