Budgeting the Commercial HVAC Energy Costs of Extreme Weather

In the Northeast U.S., weather patterns in recent years have been highly unpredictable. Just last year, multiple Nor’easters with uncharacteristic strength plummeted temperatures and caused excessive snowfall, driving up commercial heating costs. The year before that, summer in the Northeast saw fall-like temperatures after an Omega pattern lowered temperatures, creating savings in electric bills but spiking natural gas bills.

Unpredictable, extreme weather conditions make it difficult to accurately quantify, benchmark, and plan energy budgets. Quantifying the impact of extreme weather is the key to more precise budgeting. To aid you in this pursuit, our parent company, ENGIE, has analyzed a sample of their customer base across the Northeast to evaluate and quantify the impacts of extreme weather.

Understanding the Commercial HVAC Costs of Extreme Weather

Extreme weather during the winter is increasing energy costs. In December 2017, companies saw an 18% increase in natural gas spend, followed by another 18.3% increase in January. Overall, the sample sites experienced a $1.7 million increase in spend in January alone. Every state in the Northeast saw at least a 9.4% increase in costs over the previous year.

In the summer, the impact is much different. In August, companies actually saw a 7% decrease in electric spend year over year, saving them nearly $5 million collectively. While electricity costs decreased, natural gas use in June, July, and August increased 14% across all Northeastern states due to the colder summer weather.

Managing the Impacts of Extreme Weather

Unpredictable and extreme weather patterns are having a real impact on the bottom lines of companies in the Northeast. To better prepare budgets for this weather, there are four things you should be doing:

  1. Collect Energy Cost and Consumption Data

The ability to analyze facilities portfolio data gives you insight into consumption, site performance and cost drivers. To achieve this, you’ll need to collect and analyze energy cost and consumption data across your entire portfolio, while also accounting for weather and other key metrics about energy use in your facilities.

  1. Quantify Your Budget

Once you’ve put together the numbers above and understand a basic pattern of changes due to weather, begin quantifying your new budget that includes variations due to extreme weather. Build this into yearly energy spend budgets.

  1. Track Budget Changes

As the year goes on, track changes in this quantified budget. Monitor closely why these changes have occurred and how much variance there is in actual spend vs the planned budget. This will inform future budgeting efforts and offer more insight for more effective planning.

  1. Weatherize Your Facilities

The impact of extreme weather is minimized when facilities are properly weatherized. Repair or replace weather stripping that’s letting conditioned air leak out. Perform regular maintenance on RTUs and air handlers, in addition to replacing filters and fan belts, and clean all cooling coils. Perform preventative maintenance on all heating and cooling equipment to minimize unscheduled downtime and consider modifying thermostat setpoints seasonally.

With proper insight into energy cost and consumption, and the impact that extreme weather has on these costs, energy spend can be more accurately defined and proposed budgets can more closely align with actual spends.

Extreme weather in the Northeast makes it difficult to plan for fluctuating energy costs. The four steps outlined above should serve as a guideline for properly budgeting for whatever Mother Nature throws your way.

To learn more on this subject, read about Donnelly Mechanical’s commercial HVAC services. As NYC’s premier commercial HVAC provider, Donnelly has been helping companies manage extreme weather for over 30 years.

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