Report: Energy Use Down, Costs Increasing

Led by a dramatic increase in utility costs, the overall cost of running a facility is 10 percent higher than it was just four years ago, according to results from a recent International Facility Management Association research report.

The study, Benchmarks V: Annual Facility Costs, shows that utility costs — which include electricity, gasoline, fuel oil, steam water, and sewage — have jumped 19 percent compared to similar data from 2006.

While the increase in utility costs may come as no surprise; it is happening when energy consumption is down. When compared to the association's 2006 benchmarking figures, average electricity consumption — measured in kBTUs per square foot — has dropped from 93 to 81, while gas consumption has remained constant at 35 kBTUs per square foot. This decrease in energy usage could be attributed to companies implementing energy conservation practices, lighting improvements, and equipment upgrades at their facilities.

"In recent years, many organizations have invested in their electrical and mechanical systems to make them more energy efficient," said Shari Epstein, associate director of research. "Performing simple measures such as installing occupancy sensors, adjusting heating and air conditioning controls, and performing preventive maintenance checks to keep equipment running efficiently can make a measurable impact in reducing energy consumption."

Based on a survey of 1,032 facility professionals across North America, the new report covers various costs, including lease, maintenance, housekeeping, security, environmental, recycling, waste disposal, and space planning. The costs are on an annual basis and are displayed as dollars per square foot. Many of the costs are further broken down by industry, facility type, and geographic region.

This year's report reveals that expenses associated with environmental initiatives are starting to increase. For example, the cost of recycling has doubled in the past four years. While facility managers today are spending an average of 4 cents per square foot on recycling, they were spending 2 cents per square foot in 2004, according to a previous benchmarking study.

"In years past, organizations could generate a little income from recycling paper, cans, and cardboard materials," Epstein said. "With the current emphasis on sustainability, more organizations are stepping up their recycling efforts even though it comes at an increased operational cost."

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