Creating an Energy Team…and enhancing your building’s asset value
By Matthew Holden
6 min read
Developing, owning and managing commercial real estate is a complicated, labor-intensive and expert-driven endeavor, and it is unreasonable to think that one individual can “play all positions.” Just as the owner of a pro football team needs an entire roster of on- and off-the-field talent to make his enterprise successful, owners and developers of affordable housing need a variety of teams to acquire, develop and maintain properties. These days, one of the most critical teams in maximizing efficiency and profit is an energy team. And what separates out the high-performing energy/maintenance teams is their ability to maintain results for the 15-plus years of the building’s compliance life.
Who are the members of an optimum energy team, and what are their talents?
Competitive pressures in asset management and market pressure, such as state Qualified Allocation Plans, bring urgency to addressing energy use and forming a team to deal with it. But how, and with what team?
Let’s return to the sports analogy to illustrate how diverse talents contribute to success: A winning football team starts with an owner invested in the team’s performance, not only for sake of a winning season – a lower operational cost – but also for the associated benefits of branding, advertising and the overall value of the franchise. Who else plays on this team? The quarterback would be the energy manager, seeing the opportunities on the field and guiding the football (time, energy and resources) in the direction of the greatest opportunity to score.
Other team members include the offensive linemen of property operations that get the job done every day by ensuring that systems run properly. The blocking halfback is the regional manager, plugging holes. The tight end is seen in the rise of the “super technician” who gets the dump pass when the quarterback is rushed. This super technician receives the call before taking on the expense of an outside contractor and supports properties by thoroughly understanding the programming of all the high-tech controls and systems.
Special teams are the energy auditors and PNA firms that help get the ball and try to put it through the uprights or punted to the opponent’s five-yard line, depending on the situation. The team’s statistician – measurement and verification of energy savings – helps ensure month-by-month that the energy and water consumption remains on track. The team scout – the utility procurement broker – looks for the best way to fill the pipeline with the lowest cost for natural gas and electricity.
Of course, we shouldn’t overlook the team’s fans in this analogy. The fans are the utility programs incentivizing owners, as well as all of today’s advocates for an energy-efficient built environment.
Finally, the coach is the commissioning agent, preferably from the firm that completes the energy audits and analysis on the new construction project or acquisition/ rehabilitation. A good coach-commissioning/energy auditor is a third-party that focuses on the goals of the owner, ensuring that the design and construction teams deliver what the owner wants and helping with the transition to successful operation.
A good commissioning/energy auditor draws upon a wealth of design, construction and operation experience to ensure the success of the project, reducing or eliminating “fumbles” between acquisition, development and management. Done properly, commissioning documents the intent and designed systems, details the testing protocols to accept the installed systems and helps management staff with the transition—fulfilling the discipline of a game plan and practice.
Without practice and successful execution, even the best game plan won’t get the ball into the end zone. The rise of the commissioning agent’s importance is a direct reflection of the complexity of building systems, pressure on construction schedules and costs, and the quality of the trades. Fully utilizing the commissioning agent is the coach for peak performance of buildings.
So, how do you start an energy team?
The HUD Better Buildings program and increased management fees can be a place to start in funding the position of quarterback/energy manager. Up to $5,000 per property per year is available, and that can add up to a new position to help reach the goal of 20 percent energy savings over a 10-year effort. It is sort of like the new stadium being paid for by the franchise city. The next place to look is paying attention to utility consumption in addition to utility cost. Getting actionable data on consumption of utilities is absolutely the best practice to find the winners and losers.
Decisions by the energy manager quickly evolve into a matrix decision – not unlike what a quarterback faces on each play. Which properties have reserves, utility incentives, property retention in the portfolio and opportunities that warrant the play? Do I hand off into a formidable defensive line of low-utility cost or throw deep to score because there is a great incentive program to help with a complete HVAC retrofit, or the sure bet end run of water conservation?
The energy auditor and PNA specialty teams can really help achieve the best field position. Good firms provide sound specialty advice on a whole-building approach. Communicate with these specialty teams to get the results you want (the onside kick-off for buildings with short hold times or deep penetration for properties you plan to retain). A common error is not communicating the owner’s project requirements.
As a result, the energy audit with 15-year payback projects just sits on the bench – or shelf.
Just as in a football game, there are timeouts, quarterly breaks and a halftime to regroup and reevaluate strategy. The energy efficiency field is continually evolving with changes in commodity prices. Natural gas costs are going down except in the Northeast, and water and sewer costs are universally rising. Further, QAPs and utility incentives inform decisions regarding project scope for new construction or acquisition/rehabilitation.
Finally, it is practice, practice, practice that leads to great execution. In our case, the execution is the installation of conservation measures. Some of these are passive, like attic insulation, and some are active, like boiler controls. Some are hyperactive, such as ensuring tenants keep windows closed and don’t heat their units with the oven.
But regardless of the details, the everyday persistence of savings over the compliance period is the way we insure that the score will be in our favor at the end of the game.
