Step 6. Optimize the Organizational Structure

To effectively integrate data-driven energy management into your organizational structure, consider centralizing your energy data management program. This centralized integration can enable the seamless sharing of information, reduce redundancy, improve resource efficiency, and create synergies across departmental units. You can still delegate the responsibilities to track, monitor, and act on the data to energy data champions in various branches, departments, or workgroups within the organization, but a centralized energy data management program can enable a coordinated approach to managing energy use that can yield a net positive result for the organization as a whole.

To optimize your organizational structure for data-driven energy management:

Evaluate your existing organizational structure and operations, including how your utility bills are paid and how your energy budget is allocated, as well as the staffing resources available to support energy data management
Consider common organizational structures for data-driven energy management
Centralize energy data management and bill payment
Enact policies that help institutionalize energy data management
Review federal programs that support energy data management.

Evaluate Existing Organizational Structure and Operations

As you plan to integrate energy data management, evaluate a few important structural and operational aspects of your organization. Three critical aspectsto be aware of are how energy bills are utilized within your organization, how energy costs and savings are allocated across departments, and necessary staff resources to support your energy data management program.

Utility Bill Payment

Typically, an accountant in the accounts payable department(s) pays your organization's monthly utility bills. If your organization does not have established energy data management practices, accounts payable personnel may consider if a utility bill looks anomalous based on the historical bill payments; however, they may not have the knowledge to evaluate whether the bill is anomalous based on the energy management practices being implemented elsewhere in your organization.

As you work to hardwire energy data management in your organization, close the knowledge gap between energy use and energy costs by actively managing utility billing against expected outcomes from energy efficiency programs or projects.

Energy Budget Allocation

Integrating energy data management into your organization also requires understanding how energy costs and savings are allocated across departments. In many public-sector organizations, the budget for energy costs is allocated based on need, and a reduction in need results in an equal reduction in budget allocation.

Charts comparing departmental utility budget allocations over two years.

Figure 6-1. Departmental utility budget allocation

This arrangement short circuits the incentive to expend even a small amount of departmental or staff resources on saving energy when it is not part of the department's core responsibilities. Within such an organizational structure, unlocking the energy savings opportunities can take many forms, but, ideally, an organization can review its budget rules and create a budget mechanism that rewards departments for saving energy.

Local Government Spotlight: Philadelphia, Pennsylvania

Creating Incentives for City Departments to Save Energy

Philadelphia, Pennsylvania, created the Energy Efficiency Incentive Program (EEIP) pilot to create incentives for city departments to save energy. In the first year of the pilot program, city departments collectively saved more than $115,000 and 985,000 kWh. The EEIP pilot is an interdepartmental savings incentive program to share energy use and costs with individual city departments, and reward their energy saving efforts by allowing departments to keep a portion of their energy cost savings rather than returning all of the cost savings to the city's general fund.

Learn More

A formal budget process that recognizes and rewards a department's energy-saving efforts aligns departmental incentives with the organization's energy data management priorities. Critically, it enables all departments to participate in the success so that one department's energy savings does not preclude another department from saving an equal amount of energy.

In addition to a formal budget mechanism, or if creation of a budget mechanism is not organizationally feasible, you can employ other strategies to support energy data management in your organization. For example, consider launching an energy challenge to engage departments in a friendly competition to see which one can save the most energy over a defined time period and raise awareness about everyday actions that contribute to energy costs and savings. You can also leverage EPA's no-cost guides and templates to help plan every step of your competition, including determining the framework, collecting and managing the data, and celebrating successes and sharing best practices.

You can utilize recognition and awards programs for energy savings independently or together with energy challenges to provide incentives to your departments or personnel.

To align incentives at the staff level, you can also consider including energy savings as a component of personnel performance plans.

Energy Data Champions

Evaluate your staffing resources to support energy data management. It is critical to have dedicated staff (e.g., an energy data champion(s)) responsible for leading your energy data management program. This person or group of people must have sufficient time and resources to implement, maintain, and manage the energy data management program. This includes activities such as:

Monitoring data
Investigating anomalies
Converting data to usable information that can advance the organization's goals.

Your energy data champion(s) should be comfortable with the following tasks:

Advocating for the benefits of a robust and comprehensive data management program
Gathering and providing the data necessary for evidence-based decision-making
Disseminating and communicating the energy data reports to relevant stakeholders.

Hiring an Energy Data Program Manager in Maryland

The Maryland Office of Energy Performance and Conservation hired an Energy Data Program Manager to provide oversight of the state's energy consumption and reduction efforts, including managing the state's energy data management service provider. In that role, the Energy Data Program Manager developed a comprehensive data communications strategy, a more efficient water data collection process, and an improved energy data management tool training program.[1]

When your staff resources are limited or if you are a smaller organization, consider identifying a person to serve as your energy data champion on a part-time basis. You can also consider joining with another similar organization to hire a person that can serve in this role in both of your organizations. For example, in 2013, Arlington, Massachusetts, and Bedford, Massachusetts, partnered to hire a regional energy manager to serve both towns. In 2015, Arlington, Massachusetts, expanded the position to a full-time position.[2]

If your specific department lacks sufficient staff resources to support energy data management, consider coordinating with staff from other departments to assist. Cleveland, Ohio, collaborated with the city's municipal utility and leveraged its staff to assist with data entry (see "Local Government Spotlight: Cleveland, Ohio" to learn more). Similarly, the energy manager of Hennepin County, Minnesota, also leveraged staff from other departments to assist with data entry.

Consider Common Organizational Structures

Common organizational structures for energy data management include:

Decentralized
Parallel/hybrid
Centralized.

Each organizational structure has a different way that information flows between the energy manager and/or energy management office, accounts payable, and implementing departments.

Your organization's size and existing structure often influences which departments are designated for energy data management. That structure also impacts whether energy data management is conducted independently, synergistically, or is integrated with accounts payable or finance departments.

The main factors that play into an organization's approach to energy data management include:

Which departments have access to utility data
Where those departments are positioned within the organizational structure
The degree to which energy management is integrated with the bill payment and validation process.

Table 6-1 below compares how the three factors outlined above—data access, location within the organization, and level of integration—are typically performed under the three most common energy data management structures in the public sector.

Table 6-1. Comparison of Energy Data Management in Three Common Organizational Structures
	Decentralized	Parallel/Hybrid	Centralized
1. DATA ACCESS: departments with access to utility data	Bills are delivered to individual accounts payable (AP) offices	Bills are delivered to individual AP offices; bill copies are also sent to a central sustainability or energy office	Majority of bills are delivered directly to central sustainability or energy office
2. LOCATION WITHIN THE ORGANIZATION: departments responsible for tracking energy	Distributed across departments and their staff; sustainability or energy office performs periodic data "roll up"	Distributed across departments and partly performed by the central sustainability or energy office	Central (executive level) energy or sustainability office
3. LEVEL OF INTEGRATION: bill validation and payment process	Bills are validated and paid by one or more AP office with no input from sustainability or energy office	Bills are validated and paid by one or more AP office with limited input from central sustainability or energy office	Bills are audited by central sustainability or energy office prior to payment; bills are paid by one central AP office

Decentralized Organizational Structure

In a decentralized organizational structure, utility bills are delivered to one or more departments or agency-level accounts payable offices. Under this structure, energy data collection and tracking are distributed across departments and may be performed by a variety of department staff, including accountants or operations staff, while bill validation and payment are handled independently from energy management.

Because utility invoicing is often independent of energy tracking, accounts payable may not be responsible for oversight of energy use. In this scenario, energy cost and consumption data could be recorded separately from invoicing and in separate databases. The energy data are then reported (typically annually) to an executive-level energy office with data from each department "rolled up" to represent the energy cost and consumption of the whole organization. See Figure 6-2 below.

Flow chart of how utility bill data processes into departments and accounts payable then the energy or sustainability office.

Figure 6-2. Data flow and processing in a decentralized organizational structure

Hybrid or Parallel Organizational Structure

In a parallel or hybrid organizational structure, utility bills are delivered to departments responsible for payment and copies of the bills are sent to an executive-level energy or sustainability office. Through this approach, the person and/or office responsible for energy management has faster access to billing data (as soon as it is available from the utility), which allows for earlier detection of usage anomalies. With this organizational structure, energy data tracking is distributed across departments and performed by the central energy or sustainability office, while bill validation and payment are handled by an accounts payable office that often operates independently from the energy or sustainability office.

The executive-level energy office and individual departments may track data in parallel, potentially resulting in data entry redundancy and data entered into separate databases. With this structure, because accounts payable typically operates independently of the energy or sustainability office, the office responsible for energy management does not have direct oversight over invoice payments. As a result, invoice payments may get made without prior review of energy consumption anomalies or trends. See Figure 6-3 below.

Flow chart showing how invoice payments flow thought a hybrid or parallel process into accounts payable and energy/sustainability office.

Figure 6-3. Data flow and processing in a hybrid or parallel organizational structure

Centralized Organizational Structure

A centralized organizational structure integrates energy management with bill validation and payment. In this arrangement, the energy or sustainability office and accounts payable department share the same set of utility billing data, delivered either electronically by the utility vendor or facilitated by a third-party service provider.

Utility data are entered into a central energy database once, and the data set is shared among departments that use the data. This eliminates redundant data entry because the data set is compatible with the data management tools utilized by various departments.

Just like in the hybrid or parallel structure, energy management does not need to rely on accounts payable for delivery of utility billing data, improving the speed of analysis. In some centralized structures the energy or sustainability staff are fully integrated with the accounts payable staff in one office. While in other instances, the energy or sustainability and accounts payable offices operate independently from one another. In those instances, the energy or sustainability office reviews and approves the bills for payment prior to processing by the accounts payable office. See Figures 6-4 and 6-5 below.

Flow chart showing how invoice payments flow in a centralized or fully integrated process in accounts payable and energy/sustainability office.

Figure 6-4. Data flow and processing in a centralized organizational structure with a fully integrated accounts payable and energy office

Flow chart showing how invoice payments flow in a centralized, but not fully integrated process in accounts payable and energy/sustainability office.

Figure 6-5. Data flow and processing in a centralized organizational structure without a fully integrated accounts payable and energy office

Centralize Energy Data Management and Bill Payment

The optimal organizational structure centralizes the oversight of energy data management and coordinates it with the accounts payable office. This centralized integration can enable seamless sharing of information, reduce redundancy, improve resource efficiency, and create synergies across departmental units. When integrated across the appropriate departments, the monitoring of energy costs and consumption benefits multiple business units across an organization.

Integrate Energy Data Management With Accounts Payable

Integrating energy data management with accounts payable closes the information gap between energy usage and energy costs. It ensures that energy-usage trends are monitored before the energy bills are paid. This reorganization can include changes such as:

Creating a hardwired connection between an energy or sustainability office and an accounts payable office by using energy management software that provides functionalities useful to both departments
Establishing protocols for utility billing audits and validation by an energy or sustainability office prior to bill payment
Shifting the responsibility for data collection and tracking from individual departments to a central unit at a higher level within the organization
Consolidating multiple accounts payable departments into a single unit and integrating energy tracking and oversight with utility bill validation, reconciliation, and processing.

Table 6-2. Key Responsibilities of Energy and Accounts Payable Staff in a Fully Integrated, Centralized Organizational Structure
Energy/Sustainability Staff	Accounts Payable Staff
Review and prevalidate invoices prior to payment	Improve energy purchasing through improved knowledge of energy consumption and demand
Enter energy use and cost data into central energy database and leverage data management tool	Pay bills including addressing billing errors, errors in rate schedules, and late payments
Liaise with other departments on improving operations, project implementation, and maintenance	Liaise with utility providers on billing-related issues
Communicate usage anomalies to appropriate staff
Create reports and communicate results with stakeholders

For a detailed list of internal stakeholders and example energy data management activities, review the information in the section titled "Staff Resources and Capabilities" of Step 5.

Benefits of Centralized Energy Data Management and Bill Payment

With appropriate staff available, centralization offers numerous benefits to an organization and its energy management program.

Utilizing Bill Data More Comprehensively

A centralized structure for energy data management facilitates oversight of utility bills by staff who are accountable for the energy performance of your organization's energy-using assets. These staff are typically trained in energy management practices and responsible for reviewing the usage and cost components of utility bills to identify usage anomalies and/or billing issues.

Capturing Billing Errors Before Payment

When energy or sustainability staff audit and prevalidate bills prior to payment, fewer errors carry over into the bill payment process. This results in fewer accounts that have missing, late, or reissued bills. It can also save your organization time that would otherwise be needed to reconcile billing errors and recover costs.

Increasing Speed of Data Analysis and Anomaly Identification

Because energy or sustainability staff are the first to review utility bill data, they can capture and reconcile billing errors and usage anomalies earlier. This can reduce your organization's energy and financial losses associated with prolonged inefficiency in asset operations.

Reducing Redundancy of Utility Bill Data Entry

In a centralized organizational structure, accounts payable and energy management staff share utility bill data sets and data management tools, which minimizes redundancies in data entry leading to increased operational efficiency, saving staff time in addition to saving energy.

Improving Communication of Portfolio Changes

When various departments across your organization share a common central energy database, changes to the asset portfolio and/or database are more transparent. For example, when a lease is terminated and a building vacated, accounts payable is instantly notified and can cancel utility service to that property.

Challenges of Centralized Energy Data Management and Bill Payment

For smaller organizations and/or organizations with a single accounts payable department, full integration of energy management with bill payment may be a feasible option; however, in an organization with many accounts payable departments, integration of energy management may prove more challenging due to the sheer number of personnel and disparate business structures, processes, and systems that may be involved. In this case, it may not be possible to integrate every branch or agency under a centralized structure. But a subset of departments may still be integrated, yielding the benefits of a partially centralized structure.

Another challenge with a centralized structure is that individual departments are no longer responsible for data collection and bill processing and could become disengaged from the energy management program. One way to address this challenge is by establishing energy data champions in various branches, departments, and/or workgroups within your organization. Once established, give your energy data champions the responsibility of tracking, monitoring, and acting on the data managed by your organization's central energy or sustainability office.

You can also align incentives across departments by establishing a budget mechanism to capture and retain energy cost savings at the departmental level. The ability of departments to directly reap the rewards of their actions can go a long way toward incentivizing the additional time required to implement new policies, procedures, and/or undertake new efforts to save energy.

In addition, it is vital to consistently communicate cost and consumption details to individual departments and reinforce the value of the centralized energy management approach to the entire organization. To learn more, see Step 7 Drive Engagement and Communicate Results.

Integrating Energy Management in a Small Organization

For institutionalizing energy data management practices in smaller organizations, consider assigning the responsibility of bill review and validation to an energy manager or appropriately trained staff. These staff can review energy consumption, track expenditures, and audit for billing errors to identify erroneous charges and recover costs for the organization.

K-12 School Spotlight: Poudre School District in Fort Collins, Colorado

Bundling Energy Management With Bill Processing and Payment

Poudre School District (PSD) integrated energy data management into the organizational structure by establishing the Energy Conservation Program and hiring an energy manager that implemented utility data management, utility bill oversight, and energy efficiency projects. Since the program was established in 1993, PSD has saved more than $615,000 per year with cumulative savings of over $2 million through 2012.

Learn More

Transitioning From a Decentralized to a Centralized Structure

To enhance oversight of energy use and costs, some public-sector organizations have transitioned from a decentralized to a centralized energy data management structure. Centralization involves an energy manager or energy data specialist (or team or office in the case of larger organizations) reviewing and auditing incoming utility bills in addition to other energy management tasks. The energy manager also analyzes energy consumption and related issues as well as rate schedules and billing issues.

Local Government Spotlight: Denver, Colorado

Centralizing Energy Data Management Over Time

Denver, Colorado, demonstrates that transitioning from a decentralized to a centralized energy data management structure is possible even in large cities with several dozen departments. Denver worked within their existing organizational structure to centralize energy management, instituted an electronic central energy database, and expanded the role of the Utilities Division to include energy management assistance for most city agencies. As a result, in 2018 Denver achieved a cumulative energy reduction of 11%, relative to its 2011 baseline year.

Learn More

Centralizing Energy Data Tracking Across a Large Organization

When energy bill payment is distributed across several agencies or departments but a large reorganization is not feasible, you can implement a hybrid or parallel structure. In the hybrid or parallel structure, the central energy office has direct access to utility data for tracking, while accounts payable maintains responsibility for bill payment. To simplify bill access and processing for all departments, create a central data management system. This can provide a shared resource that reduces redundancy in operations.

State Spotlight: Maryland

A Comprehensive and Centralized State Energy Database Helps Maryland Reach Its Energy Efficiency and Conservation Goals

Maryland centralized energy data tracking and contracted with a third party to create the State Energy Database with a dedicated energy data program manager position to oversee the contract and manage data tracking and analysis. As a result, Maryland achieved a cumulative energy reduction of 25% from 2008 to 2019 and leveraged the State Energy Database to establish block and index pricing contracts that resulted in $5.65 million in savings for the state in Fiscal Year 2019.

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Enact Policies That Institutionalize Energy Data Management

To help generate buy-in from internal stakeholders and enhance energy data management across your organization, your state or local government can enact policies that provide authority to a designated office or agency to collect and report monthly building-level energy data. More than 30 public-sector organizations have enacted policies for benchmarking of publicly owned buildings and other energy and water-using infrastructure.[3] In some cases, these policies also create additional resources and training to help establish an energy data management program.

Examples: Leading-by-Example Benchmarking Policies

Learn about some state and local governments who are leading by example, enacting policies that require benchmarking of publicly owned buildings and other energy- and water-using infrastructure.

Learn More

To increase data availability and broaden the energy savings impact of energy data management in their communities, approximately 30 state and local governments across the country have passed commercial building benchmarking ordinances, which require both public and private buildings in their jurisdictions to report building-level energy consumption annually.[4]

Examples: Commercial Building Benchmarking Policies

Learn about some state and local governments who are enacting benchmarking policies that require both public and private buildings in their jurisdictions to report building-level energy consumption data annually.

Learn More

Commercial building benchmarking policies not only drive energy data tracking in public and private buildings, but they can transform the market by engaging utilities to work with public- and private-building owners to improve access to utility data and provide greater visibility of energy use to the general public.[5] In addition, benchmarking policies aim to make energy use data a topic of conversation among building owners and operators which can lead to new energy management policies and procedures.

Similarly, auditing ordinances, which have been passed in more than 10 jurisdictions across the country, take the next step of identifying where energy improvements can be made within a building and the costs and benefits of those identified upgrades.[6]

Resource: Benchmarking and Transparency: Resources for State and Local Leaders

DOE's Benchmarking and Transparency: Resources for State and Local Leaders provides state and local leaders with streamlined access to key existing resources for developing and implementing high-impact building energy benchmarking and transparency programs in their jurisdictions.

Learn More

Review Federal Programs that Support Energy Data Management

There are a few federal initiatives that help raise awareness about the benefits of tracking energy consumption and costs. They also provide valuable resources for institutionalizing energy data management practices.

Better Buildings Challenge

DOE's Better Buildings Challenge^®, an initiative challenging CEOs, university presidents, state and local government leaders, manufacturers, multifamily housing and building owners to commit their organizations to 20% energy savings in 10 years and to lead the market by sharing their solutions and results.

50001 Ready Program

DOE's 50001 Ready Program recognizes facilities and organizations that have implemented an ISO 50001-based energy management system. The program does not require any third-party audits or certifications. It is a self-paced, no-cost way for organizations to build a culture of structured, continual-improvement-based energy management that leads to deeper and more sustained cost savings.

ENERGY STAR Program for Commercial Buildings and Industrial Plants

EPA's ENERGY STAR is a voluntary program that delivers environmental benefits and financial value through superior energy efficiency. Through ENERGY STAR, EPA partners with businesses and public-sector organizations to transform the way that commercial buildings and industrial plants use energy. Over more than 20 years, the ENERGY STAR Program for Commercial Buildings and Industrial Plants has helped these organizations save more than $192 billion in energy costs.[7] By partnering with EPA through the ENERGY STAR program your building or organization can receive national recognition for environmental leadership.