Helping Meet the Needs of Retirement Communities
Brookdale Senior Living operates assisted and independent living centers and retirement communities for middle- and upper-income elderly clients. With more than 650 facilities across 36 states, the organization’s complicated energy spend represented a significant management challenge.
Brookdale Senior Living partnered with Ecova, Inc. to support Brookdale’s energy management team, particularly in helping source its deregulated energy needs. Brookdale also wished to streamline operations by working with a single sourcing vendor able to manage its portfolio. Given its deep understanding of deregulation, Ecova was able to help Brookdale capitalize on savings, balance its risk management efforts and secure its budget.
Prior to Ecova’s support, Brookdale had numerous contracts spread across multiple territories. Many sites were left unmanaged and there was little transparency into the overall portfolio. Brookdale’s team sought to gain a better understanding of the contracts currently in place, as well as the status of contracts currently under negotiation.
HOW ECOVA HELPED
To ensure that the procurement strategy aligned with Brookdale’s risk objectives, Ecova’s senior sourcing advisor worked with Jeff Patton, Vice President of Procurement, the executive team and decision makers to evaluate the risk profile. Ecova leveraged the combination of low risk tolerance and historically low energy prices to develop a hedging strategy. That strategy, together with Ecova’s knowledge of market timing, has allowed Brookdale to enter into multiple fixedprice agreements that have optimized cost, while reducing budget risk.
With a solid procurement strategy in place, Ecova continued to drive savings of the entire portfolio through a comprehensive analysis of the remainder of Brookdale’s energy contracts.
This process enabled Ecova to identify and resolve additional opportunities, including:
- Multiple marketers were managing various contracts, adding unnecessary costs.
- Deregulated states were not fully managed, leaving some sites unable to capitalize on avoiding costs with the local utility.
Because market conditions, Brookdale operational behaviors and Brookdale locations can change at any time, Ecova continues to perform these audits on an ongoing basis in order to ensure active portfolio management.
Additionally, Ecova provides Brookdale with the necessary benchmark reporting to evaluate the performance of their energy procurement program and make adjustments to their strategy as conditions dictate.
The collective efforts allowed Ecova to provide an estimated year-over-year savings of $1,077,760.00 within deregulated territories in the first year alone. Utilizing proprietary analytic and market intelligence tools, Ecova has timed the market well to optimize costs for Brookdale Senior Living.
“We feel confident knowing that Ecova’s team of sourcing experts will bring opportunities to us,” commented Jeff Patton, “and that the recommendations they are making are helping us to reduce costs and minimize risk.”
By 2011, Brookdale had more than 40 energy supply agreements in place and had eliminated an additional $784,924 year-over-year.
WHAT’S NEXT: BUILDING ON SUCCESS
Looking ahead, Ecova will continue to work with Brookdale to strategically align the structure and term of their energy contracts with Brookdale’s overall procurement portfolio strategy. Brookdale’s active role in fulfilling the current strategy has been indispensable to the success of the program—and will continue to be instrumental to ensuring the proper strategic response to market conditions.
Brookdale Senior Living has also had success working with Ecova to improve energy efficiencies across their portfolio. Utilizing a dedicated energy manager, Brookdale has accomplished significant energy reductions based on the data captured by Ecova through energy performance reports and outlier analysis. “We have successfully reduced energy demand by 10 percent over the past two years,” comments Jeff Patton. “Building on these results, we are focused on additional conservation efforts and will use Ecova’s tools and analytics to identify, measure and report on these energy saving opportunities.