Volume 15, Issue 82 | September 17, 2018

Why Managing Energy Costs Is a Top Priority for Higher Ed

Universites are meeting business and academic goals with smart energy investments

 

Higher education institutions spend billions on operations and maintenance each year as they work to maintain long-term institutional value through proper maintenance and upkeep. On average, 18% of a campus facility operations budget is spent on energy and the systems that provide comfort for campus living. 

There is competition for capital, such as federal pressure on the availability of financial assistance and the need to attract and retain top student candidates through discounted tuition rates.

Remaining competitive not only means providing comfortable indoor environments, but doing so economically in sustainable fashion, particularly when it comes to energy use. There is a growing interest among leaders, faculty, students and alumni in sustainability and climate change issues, and the heightened focus of investment committees and endowment managers on ESG-related (Environmental, Social and Governance) challenges and priorities.


Best practices for energy management are being utilized by leading institutions across the country. This includes setting energy management and sustainability goals, such as purchasing clean energy from the grid or implementing onsite solar photovoltaic projects. 

Renewable energy and energy efficiency systems, like solar installations and CHP, can now be utilized with little or no upfront capital. A third party invests capital and designs, builds, owns and operates an energy system, while the customer pays for the output (e.g, electricity generated from solar energy or natural gas) for the term of the agreement, typically 20–25 years. This model is called Energy-as-a-Service (EaaS). These deals are normally structured as off-balance sheet agreements to eliminate the need for the institution to take on more debt.

Higher education institutions can realize numerous benefits through this type of energy contract, including lower energy costs, less risk, a more resilient campus and modernized institution infrastructure.

 

For more information, download our white paper, “Turning Higher Education’s Energy Spend into Facility Investments.”


Editor's Note

Prices Up as Storage Deficit Remains

Weekly review for September 8, 2018 September 14, 2018

 

On Thursday, the U.S. Energy Information Administration (EIA) reported that working gas in storage as of Friday, September 7, 2018 was 2,636 BCF. This was an increase of 69 BCF from the previous week and in line with what the market was expecting.

Inventories are still substantially lower than the year-ago levels (by 662 BCF or 20.1%) and the five-year average (by 596 BCF or 18.4%). Production levels have remained very high compared to year-ago levels, but continued strong demand for natural gas has kept storage levels well below normal. 

The PJM West Hub 12-month forward curve rose 1.8% this week, while the NYMEX natural gas 12-month strip was up 0.9%. Stay tuned as we finish up the injection season and head towards the winter heating season. 


This past week's market information is provided as a courtesy to our customers and is not indicative of, nor should be relied upon, as representative of future transactions.


Weather

Local Cooling Degree Days*

 


Cooling Degrees Days* 

 

May - 18

June - 18

July- 18

Aug- 18

Sept - 18

Oct - 18

 Actual

231.5 

336.5 

 484.5

 496.5

 

 

 Normal

115.9

324.0 

 471.6

423.4 

 

 

 Departure from Normal

 99.7%

4% 

           3%

17% 

 

 

 Warmer

 Warmer

Warmer 

 Warmer

 

 

*Cooling degree days are calculated by comparing the day’s average temperature to a 65 degree baseline.  If the day’s average temperature is below 65, there are no cooling degree days that day.  If the average temperature is greater than 65 degrees, then subtract 65 from the average temperature to find the number of cooling degree days.