Ten Mistakes to Avoid When Purchasing Energy Cost-Conscious Advice for Boards and Managers

Legal issues, maintenance challenges and the ever-present Fire Department of New York (FDNY) and Department of Buildings (DOB) compliance requirements are just the tip of the iceberg when it comes to the obstacles condo and co-op boards, along with their owners and building managers, struggle to navigate. With challenges constantly mounting, it’s easy to understand how energy management can fall to the bottom of the proverbial “I’ll get to it later” pile. Unfortunately, this lack of focus can often cost boards thousands of dollars.

The biggest mistake boards and managers make is not having a simple energy management plan. From the most close-knit four unit co-ops up to the largest high-rises, a simple plan that includes benchmarking usage, reducing consumption, budgeting cost and community engagement will yield noticeable results.

The sustainability of our planet depends on the combined efforts of owners and managers to reduce consumption. We all benefit by collectively reducing the amount of energy and water used through reduced cost and the improved sustainability of our environment. Ensure your strategy doesn’t revolve around simply taking bids once a year for procurement contracts, but rather focus on the long-term benefits of a constantly-evolving strategy. Below are ten suggestions to consider when creating an energy management plan:

1. Price Isn’t the Most Important Factor

The price you pay, which is definitely an important factor in a complete energy management plan, shouldn’t be the most important part. Boards often make the mistake of thinking the lowest price today will be the lowest long-term price. In truth, a low price often carries high risk for the end user. Today’s “low rate” might wind up costing you more in the long run. The fine print in some contracts allows some energy supply companies to bypass costs such as line loss or balancing charges. Be sure you have your attorney review contract language carefully and work directly with a company that allows flexibility based on your board’s needs. While no one can predict the future with absolute certainty, you can be sure that seasonality has a substantial effect on the ever-changing energy markets. Be sure your procurement strategy avoids locking in fixed prices during the hottest and coldest times of year.

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