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Supply and demand
Monday, February 19, 2007
Charity Times
Undertaking a utilities audit is one way to decrease an organisation's environmental footprint while also realising substantial cost savings. Gary Flood finds out how a bit of leg work can lead to a major financial boost.
At a time of heightened interest in the appropriate use of power - given the increasing concerns over carbon emissions and climate change - it would seem a good time for not-for-profit organisations to review their use of electricity. Is power being wasted, for example, by leaving PCs or lights on all night needlessly, thus adding to the organisation's carbon footprint?
It turns out that it might also be a sensible time to look more closely at power use for bottom line financial, as well as ethical, reasons. Charities may be missing a trick here in not rigorously shopping around for bargains on this front - odd since as householders we may seriously think about switching gas or electricity suppliers on a regular basis. Indeed some estimates claim as many as 80 per cent of organisations of all sorts pay too much for their electricity, gas, water, telecomms and other utilities.
The price of UK gas and electricity has doubled in the past two years (other estimates put the increase at 35 to 60 per cent), so it's no surprise that organisations of all sizes have seen some pretty brisk increases in their bills. Energy prices are now falling again, at least for the moment, so there are better deals to be had.
"Organisations we work with are often genuinely surprised at what can be achieved here," claims Donald Maclean, managing partner at consultancy, Audits Unlimited, that specialises in helping firms cut their utility bills. The company works with a range of charities in Scotland such as the Richmond Fellowship, and overall claims its clients can cut their costs in this area by as much as 10 to 20 per cent annually.
How are such savings achieved? According to Maclean and other experts, it's all down to detail as well as being much more hard-nosed with suppliers than it seems many charities are. "We take an organisation's utility bills, scan them into the computer, and log all the data," he explains. "We then build up an accurate profile of what is being actually used and how much spent. A big part of this is spotting supplier errors. It may sound surprising but we probably find problems with bills on a monthly basis."
Getting such often-unnoticed slips corrected is only part of the deal, though. "A lot of this depends on contract negotiations around changing suppliers," he continues. "It's very important to keep shopping around here and resist being tied in to any supplier for whatever reason." Other techniques include consolidation of suppliers' bills to save on admin and increase visibility of costs. As an example, the company claims that for one client it managed to slash the number of incoming utility bills from 1,200 to 12.
One charity that has taken the company's advice is the MS (Multiple Sclerosis) Society Scotland, which has been working with Audits for over three years to try to identify cost savings in its energy consumption. The good news: it says it has saved 22 per cent in gas and electricity costs and 25 per cent on LPG (liquid petroleum gas) alone in the first year, with savings of over 15 per cent in subsequent years.
A lot of this sort of energy cost saving is plainly down to better management of the relationship between you as a customer and the market. More technologically-oriented solutions are also out there, however. For instance, a company called Qonnectis offers an approach called automated meter reading (AMR) technology.
This lets utilities and their business customers (including NFP organisations) achieve significant cost savings through more efficient operation of their networks, as well as improved energy and water conservation through leakage detection and prevention. In one such example in the public sector the devices helped the Gwent NHS Trust spot a water leak at County Hospital in Griffithstown whose blockage saved over £60,000 on its annual water bill.
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The question is whether you have that time and knowledge to make this sort of decision. If so fine, but if you go to the wider market to get advice be aware that, just as with financial advice, many brokers in the field (apart from specialists like Audits Unlimited) may have preferable arrangements with existing suppliers - so check.
The time does seem ripe to make sure you are getting the very best out of your utility bills ? while it may be too late to make this a New Year resolution, it is still a worthy aim for 2007.
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