Step 1: Define the Value Proposition
Data-driven energy management reduces wasted energy and increases the efficiency of operations, saving your organization money, time, and resources. Define the value proposition for your energy data management program by outlining and quantifying the following benefits to your organization:
- Energy and cost savings
- Enhanced goal setting
- Improved control of energy budgets.
Tailor your communication of these benefits to the specific audience you are engaging. Additionally, consider highlighting how data-driven energy management promotes a culture of accountability and high performance and demonstrates leadership that can result in positive recognition for your organization. Including these benefits can enhance the value proposition for your energy data management program.
Energy and Cost Savings
Growing evidence shows that tracking and managing energy use in buildings is associated with sustained energy savings. Given that the average building wastes 30% of the energy it consumes,[1] there is a significant opportunity for your organization to reap energy and cost savings by taking a data-driven approach to energy management.
An analysis conducted by the U.S. Environmental Protection Agency (EPA) of 35,000 buildings shows organizations that benchmark their buildings consistently in ENERGY STAR® Portfolio Manager have achieved an average increase in their ENERGY STAR score of 2 points per year and average annual energy savings of 2.4%.[2]
Resources: Realizing Energy and Cost Savings in Public Buildings
Public-sector organizations that have voluntarily joined the U.S. Department of Energy (DOE) Better Buildings® Challenge have on average reduced their portfolio-wide energy use intensity by 2% annually.[3] At an individual facility-level, public-sector facilities have achieved average energy savings of 30% annually through investments in multiple energy conversation measures.[4]
Check out Challenge partners' portfolio-wide energy savings and showcase projects to learn more.
Resulting cost savings can provide significant benefits to financially constrained organizations. For example, school districts have benefited by reducing energy costs and using the funds to retain teachers.[5] Local governments have benefited by using the cost savings to retain or hire new staff and maintain or enhance vital city services, such as public safety and fire protection.
Example: Energy Data Analysis Results in Significant Cost Savings
After examining energy use data to identify cost saving options, Davenport Community School District in Iowa carried out projects that reduced energy costs by $1.2 million cumulatively from 2003 to 2008, which were then used to fund 20 teacher positions.[6]
When you reinvest a portion of the savings in a dedicated, internal energy fund for financing efficiency projects, you can have funding available for additional projects. In turn, these energy efficiency projects can generate additional energy and cost savings down the road.
Resources: Revolving Loan Funds
You can find resources on revolving loan funds on the DOE State and Local Solution Center and in the Green Revolving Funds Toolkit on the Better Buildings Solution Center.
Identify Opportunities and Increase Operational Efficiency
A robust and well-structured energy data management program can serve multiple departments within your organization and increase the efficiency of your operations by identifying opportunities to:
- Reduce redundancy
- Optimize staff time, resources, and equipment
- Execute energy and cost savings strategies.
For example, by collecting and tracking equipment performance data you can more accurately predict when systems and equipment are likely to need replacement. Based on that information, you can reduce redundant procurement actions and streamline the equipment replacement process by scheduling bulk procurement and replacement, which optimizes finance and facility staff time.
Local Government Spotlight:
Gillette, Wyoming
Establishing an HVAC Inventory and Tracking Process
Gillette, Wyoming, created a geographic information system (GIS)-based inventory and depreciation schedule for HVAC and related equipment in City Hall that improved the city's fiscal management by allowing it to anticipate funding needs and plan appropriately. Additionally, the inventory process drove improved internal communication and teamwork among the participating divisions and enhanced the Sustainability Division's role in procurement decision-making. Due to the limited access to funding, staff members in Gillette often found themselves managing large volumes of deferred maintenance, lobbying for replacement budgets, and making equipment purchase decisions with less than optimal data. Developing an inventory depreciation schedule ensured efficient management of the HVAC systems and related equipment and guaranteed proper maintenance and replacement as needed.
Learn MoreIn addition, by benchmarking the energy performance of your facilities over time and against similar facilities, utilizing tools such as the EPA's ENERGY STAR Portfolio Manager and DOE's Building Performance Database, you can identify low-performing facilities to target for energy and operational improvements. Research shows that a typical office building can cut energy use by up to 25% by implementing no- and low-cost measures and over 45% by pursuing deeper retrofit measures.[7]
Providing timely data and information to your building owners and facility managers can allow them to make informed decisions about building system and equipment optimization; identify and recommend energy efficiency investment opportunities; and more quickly identify and respond to issues such as usage anomalies, thereby avoiding costs related to energy waste.
Example: Leveraging Utility Billing Data Reduces Water Costs
San Bernardino, California, leveraged utility billing data to determine that a pump system for a public lake was malfunctioning. San Bernardino's billing oversight process flagged a monthly bill for $15,000 that was normally around $500. The pump system repairs cost about $50,000—approximately the amount the city would have poured into water payments every 3 months had the pump system not been repaired.[8]
Another opportunity to increase operational efficiency is by optimizing your utility billing process. For example, billing errors and late fees can add unnecessary, avoidable costs and processing time. The energy management service provider ENGIE Impact (formerly Ecova) reports that over 9% of utility accounts have missing or late invoices, and up to 6% of client invoices are reissued by utilities.[9] By streamlining your bill review and payment process, you can avoid these errors and fees and reduce finance and accounting staff time and resources spent on processing utility bills.
Example: Electronic Bill Processing Decreases Staff Time and Costs
When Virginia Beach, Virginia, transitioned to electronic bill processing, it eliminated approximately 12,000 paper invoices annually, and, as a result, staff time required to track and pay bills was reduced from 160 hours per month to an average of 20 hours per month, equivalent to more than an 85% decrease. Invoice processing time was also significantly reduced.
Local Government Spotlight:
Boston, Massachusetts
Energy Data Optimization Saves Boston $1.2 million
Boston, Massachusetts, implemented a programmatic overhaul of how energy data was collected, analyzed, and reported. In order to improve the city's energy management process, Boston incorporated a blend of in-house and outsourced strategies to optimize resources and staff availability. The program results are immensely successful thus far, recovering over $1.2 million in identified utility billing errors in the first year of the outsourced bill verification contract, a 400% return on investment in these services in just the first of a 3-year contract.
Learn More K-12 School Spotlight:
Portland Public Schools, Oregon
Making the Business Case for Investing in a Utility Data Management Solution
The Energy Specialist at Portland Public Schools determined that implementing a third-party utility data management solution could reduce the staff time dedicated to utility bill management by 46 hours per month and save the school district approximately $3,000 per year. By quantifying the costs and benefits of the utility data management service, the Energy Specialist successfully made the case for the school district to invest in the third-party solution.
Learn MoreDesign and Verify Energy Efficiency Projects
Easily accessible data allows your organization to leverage tools like DOE's Building Energy Asset Score and Building Performance Database that can recommend energy efficiency upgrades to improve the energy efficiency of your buildings and help forecast the performance of planned energy efficiency projects. Regardless of project structure, energy data can help verify that you are achieving savings during the performance period of energy efficiency upgrades.[10] For example, the ability to quantify savings associated with energy conservation measures can complement the measurement and verification of energy consumption and savings obtained through energy savings performance contracts (ESPC) with energy service companies (ESCOs).
ESPC is a budget-neutral approach to make building improvements that reduce energy and water use and increase operational efficiency. By partnering with an ESCO, you can use an ESPC to pay for today's facility upgrades with tomorrow's energy savings—without tapping into capital budgets. The measurement and verification (M&V) process documents the impacts of projects implemented through ESPCs.
Resources: Energy Savings Performance Contracting
You can find ESPC resources, including resources to support measurement and verification of ESPC projects, on the DOE State and Local Solution Center and in the ESPC toolkit on the Better Buildings Solution Center.
Example: Maryland's M&V Practices Save $900,000
As a result of required ongoing M&V, Maryland had documentation that enabled it to hold the ESCO accountable for a $900,000 annual shortfall as part of its ESPC.[11].
Also, an established energy data management program can allow your organization to more easily pull together the requisite energy data to apply for energy efficiency rebates and grants.
Enhanced Energy Goal Setting
Setting a specific energy savings goal is a proven strategy for improving performance. When developing the value proposition for your energy data management program, consider including the benefits of enhanced goal setting, which includes establishing realistic and attainable goals built on current and past performance data. Setting realistic and attainable goals can significantly increase your organization's chances of success. Once you have established these goals, tracking progress toward these goals is critical for determining whether adjustments need to be made to your organizational strategy. Achieving a goal can provide your organization with a tangible result that can be used to garner public recognition and help build a culture of continuous improvement and accountability.
Set Achievable Goals and Track Progress
You can use past performance trends as useful benchmarks for setting concrete and achievable goals. Tracking performance data provides visibility into the actual energy and cost savings achieved through projects and initiatives. This allows your organization to make more accurate estimates of future savings.
By tracking monthly energy consumption against benchmarks, you can evaluate your progress toward your goals and the effectiveness of energy efficiency projects and programs, enabling a quicker response to issues. This feedback can allow you to adjust strategies if energy savings are less than you expected.
State Spotlight: New York
Using Data Management to Track Progress and Evaluate Program Results
New York established BuildSmart NY, a state-led initiative to drive energy efficiency action and achieve New York's goal to improve the energy performance of state-owned buildings by 20% by 2020. As of the 2015 reporting period, New York recorded a 4.3% cumulative reduction in energy use intensity across state buildings from a 2011 baseline year. This reduction represents a cumulative avoided cost of $20 million. As part of the BuildSmart NY program, the state created a state-specific data management platform to track the progress of BuildSmart NY's various milestones and evaluate the program's results.
Learn MoreReceive Recognition for High Performance and Leadership
Setting and achieving a measurable goal provides your organization with tangible results you can use to communicate energy and cost savings publicly and receive recognition for leadership and responsible stewardship of taxpayer dollars. Your organization can also receive recognition by participating in regional and national initiatives that recognize government leadership and innovation.
If one or more of your buildings qualify for ENERGY STAR certification, you can use the certification to increase the visibility of your energy efficiency efforts. By benchmarking buildings and obtaining a score, you can strategically prioritize projects that can increase your scores and then post those scores publicly to demonstrate leadership in your community. In addition, there are green building rating and certification systems (e.g., Building Research Establishment Environmental Assessment Method (BREEAM), Leadership in Energy and Environmental Design (LEED), Green Globes, Living Building Challenge, Zero Energy Certification, Passive House Institute US, SITES, WELL Building Standard) offered by nongovernmental organizations that recognize leadership in designing, building, and operating high-performance buildings.[12]
Finally, you may want to consider participating in regional or national programs, such as DOE's Better Buildings Challenge, which provides national recognition to organizations for setting and achieving energy goals and applying and sharing innovative energy solutions. Recognition can help reinforce the value of data-driven energy management in your organization.
DOE News Release: DOE Announces $11 Billion in Energy Cost Savings from Better Buildings Initiative Partners
June 9, 2020
The 2020 Better Buildings Progress Report, released at the Better Buildings, Better Plants Virtual Leadership Symposium, details partners' progress in advancing energy productivity and highlights the 20 organizations that achieved their energy efficiency goals in the past year. DOE also recognized partners that met previous challenge goals and have set new goals to achieve even greater energy efficiency.
Learn MoreDevelop a Culture of Accountability and High Performance
Tracking your organization's energy performance increases accountability and incentivizes continuous improvement. It allows your organization to:
- Report on progress
- Build on past successes
- Set more ambitious goals
- Adopt innovative strategies to achieve deeper energy and cost savings.
An increasing number of public-sector organizations are expanding their energy data management programs to include a larger proportion of their buildings and facilities and a wider set of commodities and services such as:
- Water
- Fuel
- Solid waste management.
You can even apply the principles and best practices learned from data-driven energy management to help improve and create accountability in other parts of your organization.
Improved Control and Transparency of Energy Budgets
A comprehensive and robust energy data management program can help to drive awareness and engagement on energy across your organization by providing greater transparency and oversight on energy budgets and expenditures. By taking a holistic approach to managing your energy budget—not just your energy consumption—you are likely to identify additional cost-saving opportunities that can be reinvested in additional energy efficiency projects or staff. In doing so, you can have greater control over your energy budget that can facilitate more accurate and effective energy planning and purchasing.
Reduce Peak Energy Demand
Your energy budget is influenced by more than just your total energy consumption. It is also impacted by the rate of your energy consumption or energy demand. Oftentimes, you may be charged a fee associated with your building's peak energy demand during the month. By leveraging energy consumption and operating schedule data, you may able to reduce your peak energy demand and thus reduce your energy bill. In many cases, the peak demand charge can be the largest cost on a utility bill, so reducing your energy demand can have a significant impact on your energy budget and free up capital for investment in additional energy efficiency projects or energy management staff.
You can also consider participating in load shifting or demand response programs that may be offered by your local utility. These programs allow you to generate cost savings from shifting your energy use to off-peak hours or reduce energy use when called on by your local utility.
Recover Costs From Billing Errors and Tariff Adjustments
An established energy data management program facilitates periodic utility account audits, which can recover erroneous utility payments. You can avoid billing errors—such as overcharges, double billing, and billing on closed accounts—through consistent tracking and monitoring of utility billing data.
In addition, careful oversight of utility bills can reduce recurring monthly charges and late fees that, over time, can contribute to significant, unnecessary costs.
Examples: Utility Bill Analysis Recovers Costs From Billing Errors
Maryland conducted a detailed utility billing analysis that revealed a $91,000 electronic billing error. [13].
During a comprehensive rate appropriateness review, North Carolina examined all of its meters, which led to discovering bills they received and paid for serviced buildings the state no longer owned or occupied. As a result, the state recovered more than $500,000 in erroneous charges from the new tenants.
Virginia Beach identified numerous accounts where it paid a monthly charge, but there was no power usage. Closing these accounts avoided the city future costs.
A periodic review of utility bills and contracts can also lead to savings from utility tariff adjustments. A tariff is a pricing schedule or rate plan that utilities offer to their customers. Along with the pricing schedule, there may be certain rules for each tariff, such as the times or seasons when prices will vary, eligibility for a tariff, when or how you can join or leave the tariff, and what type of meter must be installed.[14] Data collected as part of your energy data management program can help you identify if specific buildings or assets are placed in the correct tariff. For example, a review of your building's characteristics and energy use may reveal that it is in the incorrect tariff or that there is an opportunity to switch to a different tariff offered by your utility, such as a time-of-use tariff, that can result in cost savings for your organization.
Examples: Utility Bill Reviews Result in Savings From Tariff Adjustments
Houston, Texas, worked with a consultant to audit historical consumption information and recovered $215,000 due to inaccurate utility tariff rates.
The Poudre School District in Fort Collins, Colorado, achieved $50,000 in annual savings by adjusting rate schedules, which was possible because the energy manager had access to accurate historical consumption information.
Columbus, Ohio, optimized natural gas rates in its large buildings, which resulted in enough savings to pay the yearly salary of its Energy Manager.[15]
Facilitate Energy Budgeting and Purchasing
A comprehensive energy data management program can also support more effective energy budgeting and energy purchasing decisions, which is a critical component of smooth operations and effective energy management. By bringing together energy, operational, and asset data, you can more effectively forecast future energy budgets based on historical performance and planned facility and equipment upgrades. Additionally, you can utilize historical performance data to help predict future energy needs and purchase energy at current rates hedging against energy price fluctuations, particularly in deregulated markets.
Example: Using State Energy Database Enables Block and Index Purchasing Strategy
Maryland uses the State Energy Database to enable its "block and index" purchasing strategy that saved the state $5.65 million in fiscal year 2019.[16].