ACHRNEWS

Operating Costs Are up, Energy Use Is Down

June 9, 2008

HOUSTON - If it feels like you are taking more proactive energy cost reduction steps, but seeing little return on your efforts, take heart. You also might not be seeing increases as high as you would have if you had not taken those steps.

According to results from a recent research report from the International Facility Management Association (IFMA), the overall cost of running a facility is 10 percent higher than it was four years ago. This increase has been led by a dramatic increase in utility costs, the association said. The study (Benchmarks V: Annual Facility Costs) shows that utility costs - including electricity, gasoline, fuel oil, steam, water, and sewage - have jumped 19 percent compared to similar data from 2006.

The increase in utility costs probably is no surprise, but it’s interesting that it’s happening at a time when energy consumption is down. Average electricity consumption (measured in kBtu per square foot) has dropped from 93 to 81, while gas consumption remained constant at 35 kBtu per square foot, according to IFMA in a comparison with its 2006 benchmarking figures. This decrease in energy usage could be attributed to companies implementing energy conservation practices, lighting improvements, and equipment upgrades at their facilities, the association said.



MECHANICAL INVESTMENTS

“In recent years, many organizations have invested in their electrical and mechanical systems to make them more energy efficient,” said IFMA Associate Director of Research Shari Epstein.

“Performing simple measures such as installing occupancy sensors, adjusting heating and air conditioning controls, and performing preventive maintenance checks to keep equipment running efficiently, can make a measurable impact in reducing energy consumption.”

The new report, based on a survey of 1,032 facility professionals from across North America, covers a variety of costs, including lease, maintenance, housekeeping, security, environmental, recycling, waste disposal, and space planning. The costs are measured on an annual basis and displayed as dollars per square foot. Many of the costs are further broken down by industry, facility type, and geographic region.

The report reveals that expenses associated with environmental initiatives are also starting to increase. For example, the cost of recycling has doubled in the past four years. While facility managers today are spending an average of 4 cents per square foot on recycling, they were spending 2 cents per square foot in 2004, according to a previous IFMA benchmarking study. IFMA conducts annual benchmarking surveys of its members in an effort to collect data that allows for comparisons of built-in environment costs and practices. These reports allow facility professionals to gauge their performance against similar facilities - whether in the same industry or a different one. This year’s report is the association’s largest benchmarking study to date.

To learn more about the survey, or to order a copy of the report, visit www.ifma.org.

Publication Date: 06/09/2008