News about us
As one of the leading utility consultancies in the UK, Business Cost Consultants is regularly quoted in news and trade press. Below you will find recent press coverage on Business Cost Consultants. Please email us if you would like to find out more about the content of these stories or if you would like to discuss how Business Cost Consultants could help your organisation in similar ways.
Dispute with Energy Suppliers on the Rise
Wednesday, July 01, 2009
Scottish Family Business Association
Most organisations, regardless of size or industry sector, will experience at least one dispute with utility suppliers. However, despite the recessionary pressures on businesses, energy companies are increasingly raising historic invoices and demanding payment within a short timescale.
“It is definitely fair to say that the number of disputes between businesses and their energy suppliers has increased in recent times. This could be attributed to suppliers retrospectively examining their accounts from previous years, as they will be under pressure to settle their own debts” says Donnie Maclean of Business Cost Consultants.
“Energy companies must be aware that they hold so much power and can cause businesses to go bust if they demand large payments, which have not been budgeted for. In my opinion, energy companies are not helping businesses” said the Director of the family-owned utility consultancy.
It is unsurprising that such disputes arise given the complexity of bills and the jargon used by suppliers. These disputes can often lead to complex negotiations lasting months or even years. The fact of the matter is; many businesses do not have the time or expertise needed to resolve such disputes.
In the news this week, energy regulator, Ofgem, has urged suppliers to up their game in complaint handling as consumer research found less than one in four customers were satisfied with the way complaints had been dealt with.
As part of their utility management services, Business Cost Consultants have the expertise, knowledge and contacts to tackle these disputes with suppliers on behalf of their clients.
The dispute resolution service from Business Cost Consultants is a rapidly growing part of their business. They work directly with clients as well as with lawyers, accountants and administrators, negotiating with the suppliers for the best result.
This article was featured on the Scottish Family Business Association website.
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Credit scoring drives up firms' energy bills
Monday, June 15, 2009
Thousands of small firms are facing higher energy bills because suppliers are increasingly using credit scores to filter out less profitable business customers and those they perceive as risky.
Experts warn that despite the near halving of wholesale energy prices in the past year, many small business customers are seeing rates rise while others may struggle even to find a supplier prepared to take them on.
Donnie Maclean, of Glasgow based Business Cost Consultants, says suppliers are 'managing risks away' and cherry-picking customers.
"Suppliers have always used credit scoring to assess risk, but the process has become more intense and finding a good energy deal is becoming ever harder for firms in sectors such as retail," he says.
"In some cases suppliers are telling firms they don't want to renew their contract and giving them only three months' notice."
In other cases, suppliers are moving firms on to 'deemed' rates, which is what they charge when businesses are out of their contracts. These can be two to three times higher than contract rates.
"If a business has a weak credit record they may be forced to accept much higher rates, though whether they can afford them is another issue," says Maclean.
According to price comparison service makeitcheaper.com, a third of small businesses are unable to access the most competitive rates for business gas and business electricity because their credit score is considered too poor.
And even those with a good score may be affected as suppliers move away from businesses towards more profitable domestic customers, who pay higher rates.
Jane Stenning, 35, runs family business Hobby Ceramicraft in Hook, Hampshire, with her brother Matthew Sheppard, 33. The firm supplies kilns, glazes, clay and other materials to potteries and runs business workshops.
Keen to keep costs down, Jane contacted their supplier Eon only to be told that they were locked into its high-rate contract. Aware that prices had fallen substantially, Jane tried to negotiate a better deal, but with no luck.
She says: "As a long-standing customer I thought we would be rewarded for our loyalty, but Eon was not interested in helping me."
This article was featured on the Financial Mail's website ThisisMoney.co.uk
Labels: Donnie Maclean
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Energy Watch
Friday, August 01, 2008
Housing Association Building & Maintenance
Donald Maclean offers advice on how housing associations can reduce their costs and cut consumption by monitoring their energy use more closely.
Energy costs have been in the headlines a lot recently. For most housing associations utility costs will feature highly in the concerns of their tenants, as well as their
own operating costs because gas and electricity prices have risen significantly over the last four years. So what can be done to minimise this burden?
In our experience, many organisations do not check their utility bills thoroughly enough, assuming they are accurate if the bill is close to previous invoices. However, we deal with many hundreds of bills each week and our highly trained staff spot errors on around 30% of the bills we check on our clients’ behalf.
Busy housing association officers and managers rarely have time to scrutinise gas and electricity in any great detail. Also very few organisations have the in-house expertise to track energy costs and be in a position to know when is a good time to purchase energy contracts.
A key way for housing associations to save energy is monitoring and targeting. This can be done in-house by installing data loggers on to your utility meters, which will show you exactly how your energy and water is being used in detail. You will then be able to note how your usage successfully drops when energy saving measures are introduced. This can be applied to meters of any size; from domestic up to district heating. It is also possible to submeter areas or floors within large buildings.
If your stock of housing and offices within your association uses a large amount of energy and water, it is prudent to ask an independent utilities consultant to track and manage energy consumption on your behalf. They will be able to work closely with you to identify any consumption anomalies or inefficiencies, which will also help improve your environmental policy. Generally, any fees will be more than covered by the actual savings achieved by reducing the consumption.
A consumption monitoring system, in conjunction with expert analysis, can help housing associations quickly spot problems such as undetected gas or water leaks which if left unchecked can be dangerous and expensive. This alert system will be very useful for the
maintenance team, who will be able to respond to utility issues very quickly.
Efficiency gains
An advantage of the consumption monitoring system, which will appeal to the finance teams within a housing association is that by accurately monitoring the usage through the meters, then passing that data to the supplier, you will not have any estimated bills. The data can be sent to the supplier automatically, which also speeds up the process. The ability to accurately profile usage, will also help you to forecast your future expenditure.
For the management, a wide range of reports can be produced from the system tailored towards the needs of the organisation.
Because the data can be manipulated easily, these reports could be:
- daily, weekly, monthly utility expenditure for each unit or block;
- usage and expenditure for this winter, compared with last winter;
- gas usage compared to the outside temperature.
The reporting options are vast.
Once you have an accurate record of your energy consumption history, you will be in a better position to obtain competitive quotes from utility suppliers. Prior to the New Electricity Trading Arrangements (NETA) and a sufficient capacity of electricity and UK gas reserves, energy prices in the UK were fairly stable. However, from 2004, when the UK became a net importer of gas there have been significant jumps and prices are thought to continue to rise for the foreseeable future.
When putting out tenders for supply contracts it helps to have the details of your electricity profile for at least one year, know how to present the data in order to appeal to suppliers, know which suppliers are likely to be competitive for your type of profile when you choose to go to the energy markets and, most importantly, when is the best time of the year to fix your price. These are complex tasks, which require some expertise. Utility consultants can also advise on cutting energy consumption and reducing carbon emissions. For example, if an organisation spends over £50,000 per annum on its energy, it is entitled to apply for an energy survey, which will be funded by the Carbon Trust. A trained energy conservation specialist will carry out a survey of the organisation’s sites and produce a report detailing measures to cut energy consumption. The consultant’s time is given in proportion to the amount spent on energy. Savings of 10 to 20% as a result of implementing those recommendations are not uncommon.
Simple steps
There are several steps that your organisation could take almost immediately – often at no or low cost – to improve energy efficiency and cut your energy bills. Simply switching off
equipment when you are not using it is one such measure. According to the Carbon Trust an average of £6,000 per year is wasted by organisations through leaving equipment such as computers and lights on over weekends and bank holidays. It is important to make everyone in the organisation aware of the need to conserve energy where possible. By closely checking bills, accurately monitoring consumption, and better managing their energy efficiency, housing associations will not only save money and improve their administration but they will improve their environmental impact by cutting carbon emissions.
Donald Maclean is managing director of Business Cost Consultants.
CASE STUDY: New Gorbals Housing Association
Glasgow-based New Gorbals Housing Association manages 1,150 socially rented units consisting of high rise, maisonettes and new build properties as well as providing factoring services for 1,300 owners.
Business Cost Consultants has been working with the association since 2004 when it initially helped the organisation tender for gas and electricity supplies. As a result of our initial audit, we identified and implemented savings of more than 20% of their total spend on utilities (gas, electric, water and telecommunications). In 2007 savings of £44,504 were identified across all utilities. Those figures do not take into account the considerable savings in staff time provided by the comprehensive management service that includes checking bills, resolving billing errors, monitoring energy consumption and processing and vetting supply contracts.
The implementation of smart data loggers which will help the organisation reduce energy and water consumption even further, and help reduce its carbon footprint, are currently being investigated. Smart data loggers have helped our other clients, such as Rangers and Celtic
Football Clubs.
Mary Reilly, finance manager, New Gorbals Housing Association said: “Business Cost Consultants have provided an invaluable service in not only helping us put out tenders for utility suppliers but also constantly keeping an eye on energy usage and costs, sorting
out any queries with suppliers quickly and efficiently. We rely on their expert knowledge of the utility markets to give us best advice on choice of supplier.”
She added: “We want to get the lowest costs for our tenants and customers and we are obliged to obtain best value for money. Business Cost Consultants has definitely helped us keep costs down. Also as they work on a contingency basis there are no direct costs, they only take a percentage of whatever savings they achieve.”
Labels: consumption reduction, energy efficiency, Energy savings, housing association
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Competition in Scotland Welcomed
Tuesday, March 18, 2008
The introduction of competition in the provision of water and sewerage services can only be good for Scottish businesses, according to Glasgow-based Business Cost Consultants, one of the country's leading independent utility consultancies. However, they do not expect the flood-gates to open when organisations are free to switch suppliers.
Scottish Water has already separated its wholesale and infrastructure side of its business from its retail (customer-facing) side, which is now known as Business Stream. From 1 April this year Scottish businesses of any size or location will be able to buy water services from one of three suppliers: Business Stream; Satec and Aquavitae. Others are sure to follow
"It's exciting that Scotland will be the first country in the world with a water market that is open to competition, following this model. We are hopeful that the free market will drive real value for money for our clients throughout Scotland. However, we do not expect a dramatic change as of 1 April. We expect to "test the water", if you'll forgive the pun, and take our time to evaluate the offerings from all three retailers" said Donnie Maclean, Head of Business Development at Business Cost Consultants.
He added: "For many years businesses have been at the mercy of utility suppliers. From our experience in advising businesses on utilities and managing their accounts on their behalf, we have seen that water bills are frequently inaccurate and the services provided are not up to scratch.
Competition in the marketplace can only be a good thing as the providers are eager to build a good reputation and customers will be able to vote with their feet if they are not getting the service they expect."
"The three companies have set out their stalls and are promising improvements in pricing, service and billing. As we deal with thousands of water bills and help with service issues on our clients behalf each month, we will be very keen to see if these service improvements come to fruition.
We wish good luck to all three companies and welcome more serious entrants to the market.
As with gas, electricity and telecoms, we know that clients will appreciate independent advice when they are choosing their water supplier. Clients are normally seeking best value for money, not simply the cheapest price. We use our expertise to evaluate all the offerings."
Mr Maclean was speaking after a presentation to the Major Energy Users'
Council in Glasgow on 7 February 2008. At the conference he revealed how Business Cost Consultants was helping its clients reduce water consumption, most notably with Celtic and Rangers football clubs who have reduced their water consumption by 40% and 71% respectively. He will be speaking again at Armourer's Hall in London on Wednesday 13th February.
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Bright ideas
Friday, October 26, 2007
Bakery Info Website
Two Scottish bakeries are tackling rising utility bills and their impact on the environment by carefully monitoring their power use.
As costs continue to rise, bakers are increasingly keen to find ways of cutting utilities bills.
Scottish companies Macleans Highland Bakery and Walkers Shortbread are examples of this trend. They have been working with a consultancy firm to see if they could reduce their energy bills and improve their environmental impact.
Reducing utility usage
Forres-based business Macleans has a main bakery and four shops, as well as a wholesale division. "In common with many bakeries, we were keen to reduce our utility usage and make cost savings," says managing director Lewis Maclean. "We were also eager to find ways of reducing our consumption and, consequently, cut our carbon footprint."
With a variety of upward pressures on business costs, Aberlour-based Walkers was also keen to make savings and reduce its carbon emissions from its factories and shops in the north-east of Scotland. "We are very heavy users of utilities in our production processes," says Nicky Walker, general manager of Walkers. "So any savings we can make go straight to the bottom line. We are also keen to reduce our carbon footprint and the consultants have suggested a number of ways in which we can do this."
Data Loggers
For Macleans, the plan is to install data loggers, which allows gas, electricity and water consumption to be remotely monitored. Analysts at Business Cost Consultants will analyse the data and send specialists on-site to identify ways of reducing energy and water consumption.
Business Cost Consultants' managing director Donald Maclean says: "Macleans is quite a large user of electricity, water and gas in its production processes so utilities are quite significant business costs. Overall, we expect to be able to reduce utility costs by between 10% and 20% and we are working with the bakery to make sure resources are being used efficiently and in an environmentally sound manner."
Smart data loggers are also to be installed at Walkers, where the company is facing increasing cost pressures on ingredients, caused by bad weather, dietary changes in Eastern countries and the fact that countries are diverting significant amounts of raw materials towards biofuels.
"We are confident of making substantial savings per annum," says Business Cost's Donald Maclean. "That includes reductions of over 20% on water and telecom costs." The analyst will highlight potential savings for the firm and advise on how utility procurement could be improved.
Remote monitoring
Business Cost Consultants, which previously traded as Audits Unlimited, specialises in the remote monitoring of energy and water consumption and offers an independent utilities advice service.
Based near Glasgow, the company manages several thousand clients' sites, from Inverness in the north to the south of England, Wales and Northern Ireland.
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Celtic and Rangers achieve huge water savings and meet environmental goals
Monday, October 01, 2007
Press Release
Celtic and Rangers Football Clubs' plan to conserve energy and meet their environmental obligations has been greatly advanced with huge reductions in water consumption thanks to the help of Business Cost Consultants, a Glasgow-based utility consultancy.
The clubs are working with Business Cost Consultants to provide a complete utility management service covering electricity, gas, water and telecoms. Being completely independent Business Cost Consultants is able to negotiate the best prices from utility suppliers. By using their expertise and market intelligence, Business Cost Consultants advise the clubs on the best time to purchase energy contracts in very volatile markets. The company constantly monitors the clubs' bills and consumption data to make sure that utilities are being employed in the most efficient way. This involves using sophisticated technology such as data loggers which continuously monitors and tracks gas, electricity and water consumption and flags up exceptions for further investigation.
Over the last 12-18 months, Business Cost Consultants has worked with both Celtic and Rangers football clubs to minimise their water consumption. Reductions of approximately 40% and 60%, respectively, were achieved. The clubs' energy consumption is next on the agenda.
Ross Macaskill, Facilities Manager at Rangers Football Club commented, "By accurately monitoring our usages Business Cost Consultants were able to recommended quantifiable cost savings with respect to all utilities with the largest saving to date centering around our water costs. Due to match day demands we traditionally suffered from water shortages through the course of an event. With the help of Business Cost Consultants this is no longer an issue and perhaps more importantly the ongoing yearly savings associated with these works far outweigh all capital expenditure."
Malcolm Simpson, Head of Facilities at Celtic Football Club said: "Actions speak louder than words and Business Cost Consultants has proven their worth by obtaining best value for our utilities provision as well as assisting the club to reduce our overall energy budget. They are a valued member of our Facilities team."
For further information about Celtic Football Club please visit www.celticfc.net
For further information about Rangers Football Club please visit www.rangers.co.uk
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How to beat rising green taxes and utility bills
Tuesday, September 04, 2007
CIMA Insight - Magazine for Chartered Institute of Management Accountants
Accurate measurement is key to controlling your energy costs. By Donald Maclean, managing director of Audits Unlimited.
Why should accountants in industry be concerned about utility costs and their carbon footprint? First there is the economic argument. Given that most commercial organisations spend between 5% and 10% of their annual budget on utilities, any savings can go straight to the bottom line.
Second, organisations are under increasing pressure on the environmental front. Government targets for reducing global warming are impacting on businesses through such vehicles as the UK's Climate Change Levy (CCL). Also companies themselves are realising that, to be responsible corporate citizens, they need to take environmental issues seriously.
The CCL is a tax that has been applied to the cost of energy consumed by businesses and other organisations since April 2001. Many organisations in ‘industry exemption schemes’ (allowing discounts of up to 80%) found it quite easy to comply with the CCL targets in the first few years. However more demanding targets have now been set and organisations need to scrutinise their energy usage to see how these can be met. Failure to meet targets may mean they lose their industry exemptions. With the current price levels this loss would be much more painful than in 2001 when energy costs were relatively low.
The UK government white paper on its new Emissions Trading Scheme (May 2007) sets clear parameters. Larger organisations consuming more than 6,000 megawatts of energy (or spending more than £500,000 a year on energy) will have to reduce energy consumption or purchase credits. It is likely the scheme will be extended to smaller organisations in due course. Like the CCL, it will be another tax designed to encourage energy efficiency.
Overpayment is common
Few accountants have the time or resources to analyse every utility bill in detail. Yet as many as 80% of UK businesses could be paying too much for their electricity, gas, water, liquid petroleum gas (LPG) and telecoms. Since wholesale electricity and gas prices doubled in 2005, energy prices have become a prime focus for businesses and other organisations.
One way for businesses to save energy is monitoring and targeting. This can be done by keeping track of all bills, taking regular meter readings and noting how they change when energy-saving measures are introduced. It is necessary to measure existing energy costs accurately every day for two or three months so that you can identify your energy profile. Once you have established that baseline, you can analyse the data to identify inefficiencies and set targets for lower energy consumption.
Two other main factors affect what you pay. You should know which suppliers are most keen to supply your particular energy profile and how to present your energy data to potential suppliers.
Monitoring consumption
Having accurate data is vital. New devices have come on to the market called smart data loggers. These are sensors that can provide real-time data on your electricity, water, gas and LPG consumption. This data is transmitted to a central computer for analysis. This can flag up any anomalies in consumption and highlight areas where savings can be made. Reports produced by the system will make it easy to see if equipment is being left on overnight or if thermostat settings are wrong. Also gas and water leaks can often go undetected for long periods resulting in large bills at the end of a quarter. Smart data devices can automatically spot such anomalies and immediately alert the user by SMS or email.
If you have an accurate record of your energy consumption history, you will find it easier to obtain competitive quotes from gas and electricity suppliers. This is particularly true of non half-hourly electricity and gas supplies where detailed and accurate data is usually not available. It is different for half-hourly electricity supplies. These usually have current transformer meters that record consumption every half hour then transmit the data daily to a website via a modem.
Non half-hourly sites usually consume less electricity and their meters are not usually connected by modem to the supplier. Hence the meter has to be read manually. Since the meters are at best read once a month by the user and the dials can be hard to read, mistakes can be made. Suppliers will read the non half-hourly meters about once a year. Therefore organisations with this type of meter often find themselves relying on inaccurate data and estimated bills.
By reducing your overall consumption of energy and water, you can help reduce your carbon footprint. The primary carbon footprint of a business is measured as the amount of energy and water it, and its employees, consume during a year. This is then converted into tonnes of CO2 emissions. It will take into account gas, water and electricity consumption as well as transport costs.
Simple steps can help
Most organisations are entitled to free energy surveys which are carried out through the Carbon Trust. Such surveys can identify possible savings and recommend ways in which they can be achieved. There are also soft loans, enhanced capital allowances and grants available which could help you with purchasing approved energy saving equipment.
There are several steps that your business could take almost immediately – often at no or little cost – to improve energy efficiency and reduce bills. These include establishing an energy management team and simply switching off equipment when you’re not using it. According to the Carbon Trust, offices waste £6,000 on average each year by leaving equipment such as computers and lights on over weekends and bank holidays.
A first step could be to review your supplier. Many claim to provide ‘greener’ electricity. You could also install an on-site source of renewable energy such as wind turbines, heat pumps, solar panels, or biomass boilers. If your company uses a lot of water it is worth considering a rainwater harvesting system. This collects rainwater in large tanks which is then filtered and can be used for flushing toilets, washing hands or in production processes. There are many smaller energy conservation measures such as boiler controls, draught-proofing, insulation, variable speed drives, voltage optimisation and energy efficient lighting. You can also offset your carbon through measures such as planting trees.
Whatever you choose to do, the key word is measurement. If you can keep an accurate eye on consumption, you stand a good chance of being able to cut your bills. And that’s something we can all be pleased about.
Click here for a link to this story on the CIMA Insight website
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How can small firms reduce their carbon footprint?
Tuesday, July 10, 2007
Expert Panel on Newbusiness.co.uk website
We asked Donald Maclean from Audits Unlimited, Dale Vince from Ecotricity and EBICo's Phil Levermore how small firms can reduce their carbon footprint.
Donald Maclean, managing director, Audits Unlimited
The carbon footprint of an organisation is the amount of energy it and its employees consume during a year. This is then converted into tones of CO2 emissions taking into account gas, electricity, water, LPG and transport consumption.
Reducing your carbon footprint makes not only environmental sense but economic sense as well. Everyone is all too aware of the massive rises in the costs of utilities in recent years. Any savings which can be achieved will directly affect the bottom line. This can be quite significant given that utilities, on average, account for between 5% and 10% of most company’s annual budgets.
However, before you can start saving the environment and money you need to have an accurate picture of your consumption. You may think that your bills are fairly accurate, but from our research we estimate that some 80% of businesses in the UK are paying too much for their utilities. However, many organisations find they do not have the time or skills in-house to keep track of utility bills and monitor the energy markets for the best times to purchase contracts.
Businesses are increasingly turning to independent utility consultants for advice on how to measure and monitor consumption of electricity, water, gas and telecoms. Also new devices called smart data loggers have been introduced to the market which organisations can use to measure consumption in real-time. These non-invasive sensors continuously collect data on usage and this is then sent to a central computer for collation and analysis. When analysed by utility experts, this data can identify any anomalies and highlight areas where savings can be achieved. For example, water and gas leaks frequently go undetected for some time, resulting in a large bill at the end of the quarter. Smart data loggers can send an SMS or an email as soon as a leak occurs. Analysis of the data can also flag up instances of lights being left on overnight, wrong thermostat settings and office or factory equipment using too much energy.
Once an accurate picture of consumption has been established, there are a number of ways in which your carbon footprint can be minimised. It is worth taking advantage of the free energy and water conservation surveys offered through organisations such as the Carbon Trust. There are even soft loans, enhanced capital allowances and grants available for purchasing energy-saving equipment.
It is also worth considering buying 'green energy' instead of 'brown energy' through suppliers or installing an on-site source of renewable energy such as wind, solar, heat pumps or biomass boilers. If your company uses a lot of water it is worthwhile considering a rainwater-harvesting system which collects rainwater in large tanks which is then filtered and can be used for flushing toilets, washing hands or in production processes (e.g. cooling machinery). There are also a host of energy-conservation measures which can be implemented such as boiler controls, draught-proofing, insulation, variable speed drives, voltage optimisation, power factor correction, energy efficient lighting and lighting controls.
In addition, it is possible to offset your carbon through buying trees and investing in renewables. It is worthwhile drawing up an energy policy for your company. This can recommend actions on such things as recycling and how employees travel (car sharing and company cycle schemes, for example).
There are many steps businesses of any size can take to reduce their carbon footprint and their utility bills. Much of this advice is freely available and in the case of independent utility consultants in most cases there is no net cost as fees are taken from the savings achieved.
For more information visit www.auditsunlimited.co.uk
Dale Vince, chief executive and founder, Ecotricity
It's not always easy for small businesses to imagine that they have an impact on climate change. But everything adds up: electricity, heating, cooling, machinery, office equipment, transportation, packaging, waste disposal, water use and so on. Regardless of the size of your operation, by using and wasting less you can save money and reduce your impact on climate change.
However, since burning of fossil fuels to make electricity is the UK's biggest single source of CO2, the biggest single step a business can take is to switch to a green electricity supplier. But it's not easy to choose the best one; the one with the biggest impact. Green tariffs are available from almost all suppliers in the UK – they offer a percentage of green content – typically from 100% to 10%.
However, most of these green tariffs are supplying 'old green energy' from sources built up to 50 years ago. Buying this green energy is said to reduce your carbon emissions but it only does this at the expense of the person who used to buy it before you did: net UK emissions of CO2 stay the same, yours go down, someone else’s go up. It's a con at the heart of many green tariffs. The UK currently only has 5% green energy available, which is nowhere near enough. The only way to fight climate change and to really reduce emissions is to build new sources of green energy, every year. That's what we do. We call it 'new green energy'.
The best way to judge how much each company is doing to build new green energy sources, and therefore how green their offering to you really is, is to look at how much they spend each year doing that. We collate and publish this information each year for all UK electricity suppliers. It's expressed as '£ per customer spent each year on building new green energy sources' and you can find it on the web at www.whichgreen.co.uk. The results are startling: half the big six don't spend anything at all and only one independent company has ever spent anything.
The data shows that we spend more each year per customer than all other suppliers in the UK put together, and then some. We're working with all sorts of companies, large and small, from Sainsbury's and Ford to local shops and farms. Over 1,000 SMEs have already joined us.
Phil Levermore, managing director, EBICo
Publication of the recent energy white paper underlined the government's commitment to CO2 reduction, proposing a domestic carbon reduction commitment (CRC) to be applied to larger (6,000 MWh per annum) domestic companies and organisations. However, setting and achieving climate change targets can be a 'win-win' opportunity for most organisations, even for those without a statutory carbon reduction target. The environment gains from the company's CO2 reduction but, with an appropriate approach, the company can win from reduced energy costs and enhanced public/customer image.
As with any capital project, the success of a carbon reduction programme (CRP) will depend, crucially, on the quality of the evaluation and planning that goes into its development, its alignment with the overall business plan and the financial discipline applied to the programme's implementation. EBICo Limited recommends the following stepwise approach in developing and implementing a CRP.
Step 1 in a CRP is to identify a project sponsor, leader and core team. The CRP team should agree, with the company senior management team, the programme aims and approach along with milestones, deliverables and timescales
Step 2 establishes the business case for the CRP. This will involve an assessment of the business drivers along with a baseline assessment of the company's current CO2 emissions and forecasts of business-as-usual emissions levels. Given this, an assessment of the potential for company value enhancement can be made at this stage and a business case assembled for the CRP
Step 3 involves the identification, assessment and appraisal of risks and opportunities to the CRP and the use of standard financial appraisal procedures to formulate specific cost-benefit analyses
Step 4 sees the development of the carbon reduction implementation plan (CRIP), which will involve consultation with the key stakeholders identified in Step 1 and presentation to, and sign-off from, the senior management team.
Step 5 launches the CRIP and involves the detailed management of the implementation plan, the updating of the emissions inventory, the monitoring and reporting of progress and the purchasing of any CO2 offsets that have been identified as necessary in the CRP
Click here for a link to this story online at newbusiness.co.uk
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Utility Costs: How Schools Can Make Savings
Thursday, May 31, 2007
Funding for Independent Schools Magazine
Electricity and gas prices have risen by over 100 per cent in recent years, so it is crucial that headteachers and bursars investigate methods of minimising the impact of utility costs on their budgets.
Ways to beat the price rises
People assume that utility bills are more or less accurate, but this is not necessarily so. From our experience, we estimate that more than 50 per cent of business utility bills may be inaccurate or contain errors. The majority of schools have small electricity supplies (under 100kW maximum demand), gas supplies and water meters. This means that, although they receive monthly bills, they are likely to be based on estimated readings. Once every 12 months or so, a meter reading is taken by the supplier and there is a reconciliation. Often this can produce a nasty surprise.
To negate this, you should take monthly meter readings (on the same day each month) and submit these to the utility supplier. Most suppliers are happy to accept your own meter readings. Hence, your estimated bills will be based on reasonably accurate monthly figures.
Taking out the guesswork
An alternative is to use a smart meter or smart data logger which, combined with sophisticated software, can provide precise readings on a daily basis. Armed with this data, bursars and school financial managers are in a better position to budget and negotiate better deals with suppliers. Analysis of the data can also reveal opportunities to minimise consumption and cut bills.
Schools are increasingly turning to independent utility consultants to advise on how to manage resources more effectively. For example, a consultant can advise on the little-publicised charity discounts available for schools that have charitable status. They can also give guidance on the timing of purchasing energy contracts. They receive daily intelligence on energy prices and can save considerable amounts by knowing when to purchase contracts, as well knowing which suppliers will be keen to supply your particular energy profile.
The key benefits of using a consultant are that you do not have to spend time researching the market to find the best deal and also they can deal with queries on bills which can save you considerable administrative time. Many utility consultants work on a contingency basis so that you only pay a percentage of any savings made. Therefore, if no savings can be achieved, there is no charge to the client.
The High School of Glasgow has saved tens of thousands of pounds on their utility bills by using a consultant. In addition, working with the consultant, the bursar, Gerry Simonis, has procured new telephone systems for both the junior and senior schools, negotiated energy contracts, acquired leading edge internet connections, dealt with dozens of supplier disputes, identified water leaks, recovered thousands of pounds in overcharges and helped provide accrual figures when utility bills were estimated and budget figures requested.
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Trigon Snacks slashes utility costs
Tuesday, March 27, 2007
Snacks Magazine
UK-based Trigon Snacks has slashed its utility bills following advice from Audits Unlimited, a firm of independent utility consultants.
Trigon Snacks is a UK producer of snack products, and owner of the nut brands Planters and Big D. Following a change of management team in 2002, the company invited Audits Unlimited to carry out a review of electricity, gas, water and telecoms expenditure. This highlighted potential savings of more than 30% across all utility expenditure, including a 35% saving on telecoms and 30% on electricity.
Audits Unlimited helped Trigon Snacks renegotiate its electricity contract, saving the company over £25,000 in the first year, and highlighted electricity billing errors which resulted in a refund of £5,500.
John Pendleton, finance director with Trigon Snacks, said: "Over the years, had it not been for Audits Unlimited's consultancy, we could have spent an average of between 10% and 20% extra per annum on utility contracts."
Trigon Snacks is also keen to reduce energy and water consumption and carbon emissions and will soon be installing smart data loggers to help it to achieve this.
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New Gorbals Housing Association make savings on utilities
Wednesday, February 21, 2007
Scottish Housing News
Glasgow-based New Gorbals Housing Association has cut its costs by working with a leading utility management consultancy Audits Unlimited for the past two years.
Audits Unlimited was originally engaged when the association took over management of housing stock from Scottish Homes. New Gorbals owns 1,150 socially rented units that consist of high rise, maisonettes and new build properties and further manages the factoring service for 1300 owners. The consultancy helped the organisation prepare a tender for gas and electricity supplies.
Since then, Audits has been retained to monitor the association?s utility usage and bills. They also manage the telecoms and water costs for NGHA. Over the period of the last two years, Audits has identified savings of over £50,000 for gas, electricity and telecoms costs.
Using a consultancy has also saved considerable administration time and reduced administration costs. Over 800 bills a year were processed by the association for gas and electricity supplies. Audits Unlimited have now consolidated this into a single bill per month which is much easier to manage and frees up the time of the association?s staff.
Audits unlimited plan to start soon on a new project to help NGHA to reduce their energy consumption and their carbon emissions. That will further reduce their energy costs and help the environment.
Mary Reilly, Finance Manager, New Gorbals, said: "Audits Unlimited has provided an invaluable service in not only helping us put out tenders for utility supplies but also constantly keeping an eye on energy usage and costs, sorting out any queries with suppliers quickly and efficiently."
Link to this article on the Scottish Housing News website
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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.
Link to this article on The Charity Times website
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Cutting and controlling utility costs in schools
Friday, February 16, 2007
School Financial Management
Donald Maclean outlines some of the latest techniques and new technologies being introduced to help school finance staff keep utility costs under control.
Schools face a never-ending battle to keep costs under control. In recent years one of the areas of greatest concern to schools has been the dramatic rise in utility costs, with electricity and gas prices alone having risen by over 100% in a few years. It is, therefore, crucial for schools to find ways of minimising the impact on their budgets. So what practical steps can schools take in this vital area?
School finance staff are busy people and by definition don't always have time to scrutinise bills thoroughly. People often assume that utility bills are more or less accurate but experience says otherwise. It has been estimated that over 50% of school utility bills may be inaccurate or contain errors. Although you receive monthly electricity, gas and water bills many of them are likely to be based on estimated readings. A recent survey by the Energy Services and Technology Association showed that about 82% of non-domestic gas bills and 67% of electricity bills are based on estimated readings. Every year or so an actual meter reading is taken by the supplier and there is a reconciliation. This can spring a nasty surprise if your supplier has underestimated consumption. To avoid this you should take meter readings once a month (on the same day each month). Most suppliers will accept your own meter readings and hence your bills will be more accurate.
Smart meters and smart data loggers
An alternative is to use a smart meter or smart data logger which (together with sophisticated software) can provide precise readings on a daily basis to give you and your suppliers very accurate consumption and cost data. Armed with this information you are in a better position to budget and negotiate better deals with suppliers. Reports produced by the system will also make it easy to see if boilers or electrical equipment have been left on overnight, or if thermostat settings are wrong. The net result is that you can identify opportunities to minimise consumption and cut your bills. If you cannot measure your consumption accurately you cannot control it accurately.
Crucially, using such devices consumption of water, gas, electricity and LPG can be monitored in real time. The data gathered is sent to a central server for detailed analysis. Reports produced by the system can highlight any anomalies, such as excessive consumption. That can lead to significant reductions in consumption, costs and carbon emissions. For example, unusually high water usage could indicate the presence of an undetected leak. The smart data loggers are non-invasive so do not interfere with the normal functioning of the supply and the equipment can monitor
usage in different zones of a building, even where the supply is coming from a single source. From a school's point of view having this detailed analysis can be invaluable when budgeting. Historical trends can be used to set more accurate budgets and highlight variances, compared to previous years.
Contracts
Are you confident you have negotiated the best contracts with your utility companies? For example, those schools which have charity status can take advantage of special discount schemes which are only available to charities. Utility and telecom companies do not widely advertise this fact and rely on schools finding out for themselves.
The timing of purchasing energy contracts is also crucial, otherwise you may find yourself paying too much for utilities. Knowing when to purchase your energy is the most important factor influencing what you pay for your energy.
Analysis of past years' energy prices shows that there are key times during the year when energy contracts should be negotiated and making a decision to choose these key moments can save you money. The other two main factors affecting the price you pay are knowing which of the suppliers are likely to be keen to supply your particular
energy profile and knowing how to present your energy data to potential suppliers. Many schools are taking advantage of the services of utilities consultants who can provide expert advice in these areas that can save them thousands of pounds.
Telecommunications
Another area where savings can be made is telecoms, both fixed and mobile. With
the plethora of tariffs and special offers available it can be a minefield for the unwary to analyse telecom costs. There are over 250 authorised telecom service providers in the UK. It can be useful to have an audit carried out of all telecom expenditure. This audit can highlight such issues as expensive or inappropriate tariffs, redundant lines for which line rental is still being paid and misuse of mobile phones. Again this is an area where it is difficult for schools to find out if bills are accurate or whether the right tariffs are being applied, but it is vital to ensure the school is getting the best deal possible.
Conclusion
There are many steps you can take yourself to reduce consumption and energy costs and many sources of valuable advice (such as the Carbon Trust, see www.carbontrust.co.uk). However, the key message is that unless you can accurately measure your consumption, it will be impossible to control your costs. This should be the starting point for any work to control and reduce your utility costs.
Link to a PDF of this article in School Financial Management
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Telephone Bill Headache For Local Government Could Be Cured By Independent Audit
Tuesday, January 23, 2007
UK Local Authorities could be saving millions of pounds if they restructured their telecoms infrastructure according to Audits Unlimited, a leading independent utility consultant.
These comments follow the publication of a pilot study by the London Regional Centre of Excellence(*) which looked at the feasibility of carrying out an independent audit of telephony services. The pilot, carried out in collaboration with the Office of Government Commerce (OGC) and the London Boroughs of Hammersmith & Fulham and Barking & Dagenham, concluded that telephony audits can make significant savings (averaging 20%) on current telephony costs. Furthermore, the report recommends that all London Boroughs give consideration to using a specialist audit company to carry out a telephony audit.
Amongst the recommended suppliers of such services cited in the report Audits Unlimited is the only truly independent consultancy.
"A detailed analysis of existing fixed and mobile phone bills can reveal huge potential cost savings," said Donald Maclean, Managing Partner of Audits Unlimited. "The cost of redundant lines, costly equipment rental, inappropriate tariffs and event using the wrong directory enquiries number can all mount up not to mention straightforward telephone misuse."
He added, "The study revealed that introducing a personal call management service whereby staff could pay for personal calls made on work mobiles could make huge savings for local government. One London Borough has already made direct savings of over £215,000 per annum by implementing such a service."
Maclean concluded: "By conducting a completely independent audit of telephony services local government will be able to identify savings and demonstrate best value procurement to the taxpayer."
(*) "Delivering savings through telephony audits" London Regional Centre of Excellence: Outcomes from London pilot ? 16 June 2006.
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Targeting Climate Change
Monday, October 16, 2006
With CCL targets becoming more challenging, Donald Maclean discusses how organisations can ensure they meet their environmental obligations.
The Climate Change Levy (CCL) tax, introduced in April 2001, was intended to play a major role in helping the UK to meet its targets for reducing greenhouse gas emissions. It was hoped that, by adding about 10% on to energy bills for all non-domestic users, large energy users would reduce their consumption and hence their carbon emissions.
Two aspects of the CCL scheme have worked well. Many heavy energy users have been able to join industry association schemes, for example The Food & Drinks Federation scheme covers most food producers. If an organisation is a member of the Federation and agrees to reduce its energy consumption over a 5 year period, it is granted an exemption of up to 80% in the CCL. Over the years the industry association schemes have helped businesses reduce their energy consumption significantly. This has saved millions of tons of carbon and other greenhouse gas emissions.
The second part of the scheme is the free Action Energy Surveys. These have worked equally well. They are paid for by the Carbon Trust, which is given substantial amounts of money by the government through the CCL. If an organisation spends over £50,000 per annum on its energy, it is entitled to apply for a free Action Energy Survey. This means that a trained energy conservation consultant carries out a survey of the organisation's site or sites. The more the company spends on energy, the more of the consultant's time it is allocated. His report prioritises the actions which will enable the company to reduce its energy consumption. Those measures which require the least cost and produce the biggest reductions are listed first. Those which require a high investment and have a long payback period come at the bottom of the list. Energy savings of 10% to 20% are not unusual.
Many organisations in industry exemption schemes found it quite easy to comply with the CCL targets in the first few years, because the targets and benchmarks were not too challenging. However in recent times, more challenging targets have been set. These new, more demanding targets, together with the large rises in energy costs, have created a growing need for close monitoring and reduction of energy consumption, and it is now more crucial than ever to explore every avenue where savings could be made.
A key way for businesses to save energy is monitoring and targeting. This can be done in-house by keeping track of all energy bills, taking regular meter readings and noting how they change when energy-saving measures are introduced. It is necessary to accurately measure existing energy costs (to benchmark) before you can move on to identify inefficiencies and target lower energy consumption.
If your organisation lacks the time, the technology, or the resources to accurately measure its energy usage, it is possible to commission an independent utilities consultant to track and manage energy consumption on your behalf. Some are willing to take up the challenge and be paid on a contingency basis. These consultants have recently seen a sharp increase in demand for their services, and senior personnel, such as managing directors and finance directors, are increasingly seeking their help.
New technology systems are also emerging which offer "smart metering" or "smart data loggers", which collect metering data very accurately and very frequently. This allows consultants to accurately monitor electricity, gas and water consumption and use their expertise to analyse the data. The main objective is to search for inefficiencies in the use of energy and water. Reducing the wasted energy and water can lead to dramatic savings in energy and water costs and carbon emissions.
The use of these devices, coupled with expert analysis, can help organisations quickly spot problems such as undetected gas or water leaks which if left unchecked can be hugely expensive. Such systems can also measure consumption in different areas of a building even where the utility supply is coming from a single source. A multitude of reports can be produced from these systems tailored towards the needs of the organisation so that areas of inefficiency can be identified quickly and rectified. In addition, the software is now so sophisticated that emails or text messages can be sent out by the system if energy or water consumption exceeds or falls below set figures.
There are several steps that your business could take almost immediately - often at no or low-cost - to improve energy efficiency and reduce your energy bills. These include simply switching off equipment when you're not using it. According to the Carbon Trust, offices waste £6,000 on average each year by leaving equipment such as computers and lights on over weekends and bank holidays. Simply distributing a memo reminding employees to turn their monitors or lights off before they leave can make a difference to your organisation's energy costs. However, smart data loggers will provide you with the proof that equipment has been left on.
By applying these energy management measures, you will ensure that your business meets its own targets, or those set for them under the CCL exemption schemes, and will prevent your firm from falling behind on its commitments to save energy. To do so could result in ejection from industry schemes and the loss of its 80% exemptions. With the current high energy price levels, this loss would be much more painful than in 2001, when energy prices were relatively low.
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