Controlling Utility Costs in Your Industrial Facility
May 28th, 2021
Once upon a time when industrial facilities were abundant, land was plentiful, labour was available, and both energy and commodities were cheap… one did not have to measure every line item perfectly or forecast needs years out in order to make decisions with confidence and move the business forward.
However, times have changed.
The business landscape is more competitive than ever. Globalization has opened up markets. Technology has lowered barriers to entry. And cheap financing has bought time for startups to grow, consumers to buy, and companies to scale.
These forces were then exacerbated by the pandemic and its effects on e-commerce to the point where real estate, land, energy, and raw material prices have gone through the roof. This means that, today, one must accept the new reality of uncertainty and expensive decisions that come with no guarantees.
That being said, when operating a business, one must control whatever is possible to provide a baseline of certainty. For example, a manufacturer or distributer can maximize throughput, optimize their labour, and minimize energy expenditures in order to give themselves the best possible chance at success.
However, how does one do this?
Well, the first step in optimizing or maximizing anything is to measure it.
So with that said, this week, we sat down with Utility Metering expert Alberto Quiroz of Intellimeter to provide us with a bit of insight into… and what YOU need to know when looking to measure and control costs in your commercial property…
Here is what Alberto had to say…
What Is Sub-metering?
The rising costs of energy are impacting businesses across the globe. Companies worldwide are facing an uphill battle with these rising prices, in some cases being hit with hikes of up to 120%, as opposed to 20% increases faced by regular households. Trends show that these figures will continue to grow.
Sub-metering allows landlords, homeowners associations, multi-headquartered companies, property managers and any other type of multi-tenant property owners or associations to monitor their utilities. It also offers the ability to organize and bill the utility usage. It is especially useful when it comes to dividing electrical, gas, or water bills for several buildings, apartments, offices, or even individual tenants. Sub-metering is mostly used for electricity meters, gas meters and water meters, Which are utilities found on any type of building.
Why Should I Opt for Sub-Metering?
First thing’s first! If you want to have the most efficient energy consumption, be it electrical, gas, or water; sub-metering is without a doubt the easiest and most cost-effective method to reduce expense and to correctly track monthly utilities.
“I recommend that master-metered residential buildings currently [in Con Edison’s service territory] be required to submeter each dwelling unit within four years…” • NY Dept. of Public Service Staff testimony in Con Edison rate case September 2008
When it comes to larger spaces or entire condominium associations, sub-metering proves itself to be even more efficient, cutting costs even more. It is since the more apartments, offices, or buildings are metered together; the more significant the chances are that consumption losses will not be tracked down. It means that losses will be harder to track and analyze. Without the possibility of tracking down the source of energy losses, solving the problem becomes exponentially more difficult and costlier.
You can monitor the total electric, gas or water consumption for the entire building and also track the individual components of that consumption, with the added flexibility of being as detailed or granular as a single appliance, like HVAC, refrigerators, TV sets or any load whether indoor or outdoors.
Installing a sub-meter will let you understand and monitor consumption patterns for any specific buildings or equipment.
What Are The Most Important Benefits Of Sub-Metering?
From a business perspective, the benefits of sub-metering include:
- Separates energy use in facilities that receive funds from different sources, e.g., state-supported vs. auxiliary, instruction vs. research, academic vs. hospital
- Facilitates charge-backs to departments or other campus units as a way to encourage energy efficiency measures.
From an engineering perspective, the benefits of sub-metering include:
- Identifies performance improvements and guides preventive maintenance: trends in the monthly and annual use of each form of energy help to identify the benefits received from system upgrades and also the energy systems (e.g., boilers or chillers) that may need attention if they show unexpected increases in use.
- Enables quick response to failures of system components, assuming the meters are linked to an energy management system (EMS).
From a management perspective, the benefits of sub-metering include:
- Assists in making decisions about energy upgrades in buildings by comparing energy use in similar facilities.
- Focuses accountability for building operations on the facilities department, encouraging building managers to control energy consumption. Facilities department staff review metered data, know which buildings consume a disproportionate amount, and can be held accountable. The data facilitates the dialog and collaboration between the energy manager and the building users (or tenants) in finding ways to reduce consumption, leading to increase efficiency in operations.
Sub-metering is cost-efficient and eco-friendly because it helps in lowering energy consumption and unwanted costs. The lower the energy loss, the bigger the profits and the greener the environment. If that’s not a good enough reason to install a sub-meter, then maybe the reasons listed below will convince you that sub-metering is a must for any building or building complex.
- A precise and accurate overview of your energy consumption in real-time
- A very detailed review of energy data regarding any monitored facility
- Access to historical records needed when failures appear or to schedule preventive maintenance
- The ability to record your entire real energy usage
- A more efficient decision-making process when optimizing energy consumption per unit/apartment/equipment/building/complex.
- An overview in real-time along with the historical of the consumption of the monitored area
- Ability to identify and fix the sources of energy loss.
It is clear that Sub-metering offers accountability for utilities usage and provides tools that lead to reduced consumption. Take the first step towards managing your energy costs. Re-examine your current setup and make improvements.
I hope this has been an informative introduction into the concept and process of sub-metering, as well as some of its benefits. In our next issue, we will look at the system components, as well as some of the direct costs and outcomes involved.
Overall, if you are an Investor, Landlord, Owner-Occupier, or Developer of commercial property in the GTA, then you must consult with a utility metering professional to measure and control your utility costs, including water, gas, electric, and thermal.
***Disclaimer: The information provided in this newsletter is for educational purposes only. Alberto is an expert, however, to receive the appropriate guidance for your unique situation, please consult the proper authorities before taking action. We are not liable for any damages – perceived or otherwise – as a result of your own personal decisions.***
On that note…
For further information on the subject of Commercial, Residential, and Industrial Metering in the GTA please contact:
Intellimeter offers a comprehensive line of sub-metering systems to provide detailed real-time information on Electricity, Water, Gas, and Thermal Energy consumption. Their i-meter-Energy Analysis cloud-based software is the gateway to intelligent information for their clients. Their greatest value is providing customers with energy information that strengthens conservation, accountability and helps to promote lean property management.
To read the original article on Intellimeter’s blog, go here.
Utility metering is probably a topic that most of us either take for granted or forget to think about when thinking about our properties. However, as they say, the quickest way to get someone’s attention is to hit them in their pocketbook.
Energy costs have been rising as of late – and – with many regions and nations pursuing long-term energy goals, it isn’t a stretch to think that we may be facing additional disincentives or taxes which may push prices up further in the not-too-distant future.
Further, Users occupying multi-tenant facilities may want to pay their exact ‘fair share’ of utility costs, as opposed to a proportionate amount based on the square footage they occupy. With the growing popularity of robotics, racking, and other material handling or manufacturing machinery… the energy consumption within industrial facilities can be significant… so why pay for your neighbours excessive use?
Finally, businesses in general are looking for ways to control costs and push down their bottom lines. What better way to do so than to first accurately measure all of your outgoing expenses? Here is one line item that has traditionally been taken ‘as is’ without question… well here is a solution that is simple to outsource and implement.
Alberto was kind enough to reach out and provide us with great, actionable content to share with you, our readers. So if you are looking for more detail on this or anything else related to utility metering, then please connect with Alberto directly (his contact info is above).
Until next week…
Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 25 years.
Goran Brelih is a Senior Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 27 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.
Goran is currently serving as Immediate Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter.
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
Cushman & Wakefield is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries.
In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, advisory, and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at email@example.com, or visit www.goranbrelih.com.
Goran Brelih, SIOR
Senior Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
Immediate Past President, SIOR – Central Canada Chapter