5 Ways to Reduce Utility Costs at Church Blog Feature
Joe LaPaglia

By: Joe LaPaglia on November 17, 2016

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5 Ways to Reduce Utility Costs at Church

Multisite | Managing Facilities

Russ Williams, facility manager at the Barrington campus of The Orchard, a growing multisite church in Chicago’s suburbs, was concerned about the high cost of utilities. Electric bills, in particular, were draining the church of dollars that could have been better spent on ministries.

To uncover the hidden costs of utilities and potential opportunities for savings, Russ sought the help of Laura and Tom Sherman of Sustainable Energy Services (SES).

As an energy broker and energy efficiency consultant respectively, Laura helped simplify the complex aspects of evaluating and procuring cost-efficient electricity and natural gas at The Orchard, and Tom helped audit the church’s energy usage and evaluate ways to reduce usage.

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“Every building has a meter,” says Tom Sherman. “In the energy space, organizations tend only to focus on one side of the meter. We focus on both sides of the meter—gaining usage efficiencies and cost efficiencies. Every time you save a dollar, money is added to your church’s offering basket.”

The Shermans shared their insights at a gathering of facility managers in the Chicago area. Here are some key takeaways from Laura’s talk:

5 Key Areas to Manage Energy Costs

According to Laura Sherman, there are at least five key ways for churches to manage energy costs:

1. Shop for energy when markets are favorable.

Go to multiple suppliers, run competitive bids.

2. Manage demand.

There are two components to an energy bill—demand (i.e. kilowatts), and usage (i.e. kilowatt hours). For the last two years, ComEd customers in Chicago and BG&E customers in Maryland are paying the highest capacity costs in the PJM system, our region’s grid operator. If you can manage demand, you can help manage costs.

3. Sign up for Demand Response.

Demand Response is a program that helps curtail summer usage in highest season. If you can curtail usage, you can earn money back.

4. Lock-in at favorable market opportunities, not on a calendar basis.

Natural gas is hitting historically low prices. In March 2016, it hit a 16-year record low. Multiple factors affect gas prices. A glut of natural gas is keeping prices down, and production is up. Now is the time to shop for rates for energy contracts expiring in the near future and beyond.

5. Purchase energy with a group.

Group purchasing can reduce prices overall. If a group of local churches wanted to make a group purchase, they could each buy a short-term contract to true up the group, and once everyone’s on the same timeline, they can sign up as separate churches with separate contracts as long as each entity in the group starts supply in the same month. This can be a powerful way to save money.

What Is Demand Response?

Demand Response (DR) is an emergency curtailment program run by PJM—which stands for Pennsylvania, Jersey, Maryland. PJM is our region’s power grid operator responsible for keeping power on for 61 million people, including customers in the Chicago, Illinois, area, as well as in 12 other states.

In order to ensure the stability of the power grid during peak periods due to high usage, such as summer A/C load or power generators going off-line, organizations can enroll to voluntarily curtail electricity during an emergency event. In return, participants in DR recoup money for agreeing to dial down their usage so that there’s enough for everyone on the grid. PJM is the administrator of this program, and they make payments to those organizations that volunteer to participate.

When you sign up to be part of DR, you assess where you can cut back usage and how many kilowatts you can drop. Curtailment Service Providers who are part of this DR process will contact users when an emergency event is activated by PJM. If no emergency event is called, you simply have to participate and curtail electricity for one hour at the levels you agreed to, and then you get paid for the whole season. Essentially, DR allows you to get paid for agreeing to be on standby for an emergency energy event.

“This is perfect for churches,” says Russ Williams from Orchard. “They only require you to curtail during the week, which is when many churches can naturally pare back on energy usage.”

Williams says Orchard recoups about one month of free power per year by being part of the DR program.

If you can’t volunteer to meet criteria, you can opt out for a season. This is a no-cost, no-risk program, according to Laura Sherman. ComEd, the most common provider of energy to the Chicago area, has had no emergency events, so a church’s chances of being called on to curtail their energy usage is slim.

Buying Energy in a Nutshell

Laura reiterated that gas and electric markets are favorable. Churches should consider getting price offers for future contracts since markets are at historic lows. Now is a historically low time to buy energy. Now is the time to buy.

For more information from Laura about how to make smart energy buys, contact her at: laura@sustainable-energy-services.com.

If you’d like to learn more about how to gain cost savings and efficiencies at your church, or to be alerted about future facility manager learning events, contact us here.



About Joe LaPaglia

Joe LaPaglia serves as Director of Cost Modeling and Strategic Partnerships at Aspen Group. He has more than 45 years of experience in the construction management field.