By Becky Thompson | July 12, 2022
The blog post we did in June set the scene for why the energy market is so crazy. This blog post will dive into what you can do to combat the cost increases as a school business official.
There’s no doubt about it. Annual cost increases of 60-100% are tough to swallow. Especially in an environment where schools are asked to do more with less. But what can you do to combat these higher energy costs? Plenty.
The cheapest kilowatt-hour or therm is the one that you don’t use.
Energy efficiency projects are an easy way for you to reduce the amount of energy you use. These projects represent any replacement or update to your facilities’ equipment that would result in you using less energy (natural gas or electricity).
Illinois is now one of the four best states in the U.S. for distributed generation, primarily due to state and utility rebates for installing solar. Last year’s CEJA law increased the incentives available for solar in Illinois by five times. There is also now a special carve-out in the program for solar energy installed at K-12 education facilities.
Effective Supply Purchasing
It’s time to shake things up and get creative. Dust off your energy contracts and start thinking proactively. Even if your current energy term is not up for another year, it’s more important than ever to review options, get Board buy-in, and have a plan of attack if market volatility starts to work in your favor. Waiting until the end of your energy term to review options can be a recipe for disaster in a bullish market.
Here are some other ideas to consider:
- Increasing competition if you previously had very little (or none)
- Negotiating to remove unfavorable or vague contract language that leaves your District open to risk
- Considering alternative methods for collecting bids, such as reverse auctions
This new market is changing week-to-week, so understanding the right moves to make can change just as quickly. One thing is for sure – what was true for your energy cost planning three years ago is likely no longer true today. You might even find that revisiting some ideas that didn’t make fiscal sense years ago suddenly work with new funding opportunities and quicker paybacks.
Navigating this new market can be tricky, but the above can provide you with a blueprint for starting to take action. Good Luck!