OPERATIONAL EXCELLENCE
Reducing Electric and Gas Costs
Without Feeling the Burn By Sara Wildberger
A
t home, the price of electricity feels like a given: You check your bill, you sigh, and you pay. But as
a senior living community or provider, that price can be as negotiable as a professional athlete’s contract—and as complicated to negotiate. Power prices depend on a complex com-
bination of factors in a quickly changing market. The role of the consultant is to help the community determine the best match through analyzing its energy needs, its locations, its resources, and other factors such as risk and requirements. APPI Energy is one of those negotiators
of electric and gas costs and supply, with experience in procuring power under the best terms for health care and senior living clients. In a recent interview, APPI consul- tant Jamie Polend, EMP (a certified energy management professional), addresses several assumptions and myths around power costs. Be agnostic about suppliers. In some ar-
eas of senior living supply, it’s good to build up and stick with a vendor relationship. This isn’t the best play with electric power, Polend says; the relationship with the energy consultant is the one to concentrate on. “We might reach out to 35 suppliers and have them compete for the customer’s business,” he says. Prices change quickly, and the com- petition can work to your advantage. Don’t expect commodity prices to align
with real-life prices. With negative oil prices at times in the past 12 months, some wonder why their heating bills don’t fall accordingly. A commodity price may be low, Polend ex- plains, but the full price of power includes factors such as transmission and capacity, which may rise proportionately as the price of the commodity falls.
Getting “locked in” can be a good thing.
Power contracts are typically set for several years into the future. If you get a favorable price, Polend says, it helps create budget certainty. In fact, one of the value-adds of a good consultant will be to prevent any budget surprises and keep all services run- ning smoothly under changing or renewed contracts. Other costs will likely fluctuate— medication, infrastructure, equipment, and more—but you’ll have one number you can count on for a few years. On the other hand … Energy consultants
with robust data and forecasting analysis capability can get an educated idea of when prices are going to get lower. They can follow the data and recommend going into only a short-term contract under those conditions. Keep your top priority in your sights: Re-
liability. There’s nothing more important, particularly in senior living, than a reliable power source. When there are issues with blackouts or power shortages, a power contract will provide “ancillary services” intended to seamlessly fill in the gap. This power could come from any of several sources; the part that matters is the seam- lessness. “That's the main thing, whether it be a backup source, a solar source, an artificial intelligence battery source, or just straight from the utility,” Polend says.
Don’t overlook what you can control. An
individual community can do a lot to reduce its energy costs and/or reach sustainability goals—a factor that can be an attractive differentiator to prospective residents and families. There are many resources that can help
reach these goals, but one of them should be your power consultant. Look for an energy company that offers this value-add. Vet and vet again. Polend hears of senior
living communities and providers getting multiple pitches from energy consultants. Energy markets have something of a “wild west” reputation. Examine a company’s years in the field, capacity for research and data analysis, access to a range of suppliers, and experience in health care and senior living when making choices. “The data always tell the story,” Polend
says. An energy company should be able to make that story clear to you. Ask for for- ward price trends. Clear data visualizations such as charts should help you follow the story, Polend says. While companies such as APPI track data points into the millions, they should be able to zero in on the points you need to know to make decisions. For more information on terms and rates in your ener-
gy contracts, see APPI’s “Understanding Your Energy Contract” at
appienergy.com/news-and-resources/ news/understanding-your-energy-contract-part-1/.
Q: WHY DID MY RATES SUDDENLY ZOOM UP?
You may have been a victim of “slamming.” This is when someone “obtains your account information and terminates your contract without your consent,” APPI says. You actually get slammed twice—once when you’re charged costly early contract termination fees and again when a promised low rate goes up. To learn more, visit
appienergy.com/customer-service/faq.
32 SENIOR LIVING EXECUTIVE SEPTEMBER/OCTOBER 2020
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60
