Miami University aggressively seeks ways to reduce utility costs by focusing on commodity costs and consumption. In fact, this focus is included in one of the recommendations in Miami's recently announced Strategic Priorities for Growth and Success.
“One of the most significant costs to operate our facilities is utilities,” Cody Powell said. “This fiscal year, we expect to spend about $24 million on utilities, either through commodity purchase, utility plant operations, or infrastructure improvement needs.”
Because two of Miami’s largest commodity purchases are in electricity and natural gas, the university restructured its business practices to greatly reduce these costs in April 2010. By becoming what is known as a retail customer in electricity, Miami has been able to restructure contracts that amount to a cost avoidance of about $1.5 million in the first six months, Powell explained.
Another benefit to the new retail customer status is that the university can sell back electricity based on an energy market system in which electricity is bought and sold based on real-time market price. In one of the most dramatic successes, the university gained about $11,000 during an eight-hour period this summer.
To help with consumption reduction, the university produces steam for building heat, utility use and day-to-day hot water needs. The university recovers condensate (hot water) from steam that can be reused, which reduces operating costs and fueling needs. Miami is not unique in this, but unusual in that we return between 90 to 95 percent of the water.
Physical facilities also updated computer programming to turn off HVAC equipment when buildings are not in use, similar to a home’s programmable thermostat. Electric consumption was down 15 percent and steam consumption down 13 percent during the first quarter of FY11 – equating to about $300,000 for the 3-month period.
“Our success in commodity cost reduction is notable, but the best long-term success in managing operating costs is by developing a culture of consumption reduction,” he said.