In today’s competitive landscape, companies have an increasingly intensive list of demands; often these business issues take precedence over day-to-day operations. In order to better manage daily demands, many companies rely on the expertise of specialized firms for management of resource-intensive aspects of doing business. One such company elected to work with Newmark Grubb Knight Frank (formerly Grubb & Ellis) company for the real estate and facility management of their offices. In 2009 the client -having recognized that energy was a significant expense that needed to be managed carefully and required more attention than they were prepared to provide – launched a corporate procurement initiative to integrate energy management into the real estate management services across the country. Having worked with Newmark Grubb Knight Frank (NGKF) for the past 10 years at a regional level, the client looked to them for a solution capable of integrating these services and extending them across their portfolio. The objectives for this initiative were to drive financial savings, reduce energy consumption and integrate corporate sustainability initiatives into their facility management services. NGKF was capable of aligning their regional portfolio management into a national account platform, but needed a partner to assist with the energy management portion of the initiative. This effort would require a firm capable of capturing and reporting on the nationally distributed facilities.
While NGKF was prepared to implement programs for efficiency, from a facility management perspective they knew the key to success was the ability to measure and communicate the effectiveness of each initiative. Ecova’s energy and data management services would provide the necessary detail to identify such performance. NGKF’ Vice President, National Account Executive, Tara Molnar worked with Ecova to respond and win the business. Together, the three firms united to create a strategic energy plan to execute across the client’s national portfolio of accounts. “As a group we were able to consolidate the various data sets and metrics taken from the individual property perspective and integrate them into a national platform,” explained Tara Molnar. “This data was evaluated from a regional and national perspective for an in-depth analysis of the energy spend, where we were really able to find savings.” Within the first year, the program had provided the critical visibility needed to drive a substantial reduction in energy consumption and costs through operational efficiency initiatives, rate analysis, contract negotiation and retrofit programs.
EXPENSE DATA MANAGEMENT
Ecova worked with NGKF and the client for data collection, organization, validation, auditing and payment. Through these initial first steps, the client realized immediate cost savings and a drastic reduction in wasteful utility spending.
Ecova’s processes made certain that the client was paying for what they used, not what they were charged, as billing discrepancies were being resolved on their behalf. Additional savings were realized, through the elimination of late fees and reduction or elimination of utility deposits. Since awarding the contract in 2009, the client has paid no late charges. The data captured in Ecova’s Expense and Data Management process helped to establish the needed foundation for the client’s overall energy management program.
The expense management process provides access to the energy cost and consumption data, which Ecova captures, tracks and monitors at the site level. The NGKF property management team can access this critical benchmarking data online anytime and use it to build reports and review savings opportunities. This energy data serves as a critical communication tool when discussing the client’s energy portfolio, thus the accuracy of this reporting is essential and has stood up to external yearend environmental reports audits.
STRATEGIC ENERGY PROCUREMENT
Having one central energy database has enabled the development of a strategic energy procurement plan. Using the energy data across all elements of the plan has proven fruitful. In the area of supply, opportunities have been identified and worked through within the regulated and deregulated markets. In the regulated market, rate schedules have been analyzed on an annual basis to ensure sites are on an optimal rate schedule. Through this process, the client has achieved rate tariff changes resulting in immediate cost savings by moving accounts to optimal utility rates. One of the rate changes even led to one utility providing a retroactive refund for a full year. In the deregulated market, the Energy Supply team at Ecova has helped interpret the energy contracts and worked with NGKF to assemble RFP packages and evaluate cost saving opportunities based on the client budget needs. New Energy Supply contracts have been negotiated and implemented and have generated approximately $295,700 in annual cost avoidance for the client.
While the cost savings alone have been outstanding, the client has also reduced energy use. Good corporate citizenship is very important to the client and the greening of sites is a priority. The NGKF facility management team used Ecova’s online reporting tool to review consumption data and benchmark property by property. Within the system, they can view normalized data, evaluate outliers in terms of consumption, and review laggards. Site-by-site energy profiles identified those facilities that were using energy inefficiently. Utilizing this information, NGKF established an energy conservation program for the client. These savings have primarily been a result of no cost and low cost energy initiatives. Poor-performing locations were identified and employee education programs were designed. HVAC systems were adjusted according to operating hours, and occupancy sensors were installed at many of the sites for additional savings. Lighting audits and CFL retrofits have also accounted for savings across the portfolio with a reported $8,000 in annual savings for one site alone. All of these consumption and conservation efforts can be measured and evaluated through year-over-year reporting. As a result, the client has reduced consumption by 2-8 percent across the portfolio of properties.
When the client issued their RFP for a facility management firm capable of managing their energy, they were limited to localized consumption metrics and spend. NGKF has proved they are capable of incorporating energy management into the national facility management and have met the challenge well with results that help the bottom line. Today the client has found their single source for facility and energy management and NGKF has found a firm they can rely on with Ecova.