Mining Utility Data Saves Money and Mother Earth

utility data


Mining data to spotlight cost-saving opportunities is all the rage these days – and for good reason. But when it comes to one of the biggest expenses of all for multifamily properties, utilities, not everyone is exploiting the goldmine of information contained in utility bills and submeter data.

The folks at RealPage Utility Management (formerly Velocity + NWP) will tell you that even modest measures to make use of the utility data flowing to your properties can deliver a big payoff. Yet too many properties still consider utility expenses merely a fact of life rather than something that can be controlled and mitigated.

“Just start with the basics,” says Project Director Kent McDonald. “The first thing you need to do is get the data from utility invoices into a database where it can be analyzed. It’s not doing you any good in a file cabinet or a scanned image.”

Next, he says, break the data into two major components: the rates you’re paying and consumption. Then the insights into possible savings begin.

First, there’s the chance that you’re paying too much for your water, electricity or gas. In many markets, there are various rates for different kinds of businesses. Multifamily properties occupy a murky middle ground between commercial and residential. Some markets have a separate rate category specifically for multifamily.  While your utility company might simply force you into one category or another, there’s often an opportunity to address the issue with a utility and get a better rate.

In deregulated markets, you might get better results by switching providers. And in many markets, various criteria such as low-flow toilets or past and projected usage amounts can be grounds for better rates.

How do you stack up?

Once you’ve got your utility usage data in an analyzable form, you’ll want to compare your usage to that of peer properties. There’s a lot of information already out there. For example, RealPage alone has data on over 7,000 properties, and hopes to amass a database of as many properties as possible across the U.S. “Our intent is to allow property managers to compare apples to apples,” says Vice President Howard Behr.  “An older, less energy efficient garden-style property, for example, would be compared to a very similar building rather than, say, a modern, energy-efficient high-rise.”

Climate is a big factor as well. You won’t benefit by comparing a multifamily property in Tucson with one in Buffalo, considering its long, cold winters, without adjusting for climate. But BI tools (more on these in a minute) let you account for climate differences so the comparison will be valid.

utility data

Making sure residents carry their weight

Smart utility management involves more than eliminating waste and ensuring utility billing is correct and at the lowest possible rate. Also critical is allocating the expense as much as you can directly to the residents who are using the utilities.

Let’s say your data analysis shows that one site is billing 65% of energy costs to residents and a similar one 81%. Many different factors could be at work, and the difference might or might not represent a chance to reduce expenses. How much of the buildings are devoted to common areas? Is there an opportunity for submeters? Or perhaps one property is neglecting to identify residents who have failed to switch utilities into their names, and is footing the bill for days or even weeks of usage.

Then again, maybe you’ll dig up an anomaly that not only explains the difference but can be addressed: for example, you’ve been paying for water from a spigot that’s keeping the community garden next to the property green all summer, or for that home-grown car wash on the back side of the property.  “There are nearly 200 incidents over the past 24 months where we identified usage spikes and helped properties catch these types of situations. We estimate that on average the properties saved over $5,300 per incident,” says McDonald.

Submeters help to both reduce resident usage and identify leaks. “Studies have shown that residents at properties with submeters use on average about 15% less,” says Behr, “and the data available from the submeters allows billing companies to quickly identify and alert properties to potential leaks. By identifying leaks quickly, properties can prevent major water usage spikes while also preventing property damage, including mold.”

When it’s fitting to retrofit

Retrofitting commercial buildings for energy savings alone is a $20 billion business in the U.S., according to the Environmental Defense Fund. The EDF contends it would be a far larger business if property managers knew just how much they were wasting every year.

And that’s where multifamily business intelligence (BI) comes in. Today’s tools are fully capable of weighing climate, occupancy levels and other criteria in determining whether low-energy lighting, submeters, low-flow toilets, modern insulation or other retrofits may be worth exploring. The software can also factor in one-time anomalies such as maintenance issues, so decisions won’t be made on skewed information. Perhaps there was a big leak that went on for two weeks, or the heating and AC were fighting one another 24/7 at a property. These anomalies are logged so that they won’t wrongly influence decisions for capital expenditures. This logging has the side benefit of helping with variance analysis when it comes time to explain budget overruns.

Meeting existing energy standards

The effort to achieve energy savings has spawned an array of programs, government certifications and requirements that set benchmarks for success. Utility management professionals such as those at RealPage are well-versed in these standards so they can help clients striving to achieve one or another, be it LEED®, the HUD/DOE Better Buildings Challenge, ENERGYSTAR®, GRESB or mandatory city or state benchmarks. While some properties are working towards meeting specific standards, others are involved in more freeform efforts to cut costs while achieving greener footprints.

Looking to cut utility costs at your properties while improving your “green” status? Learn more about utility management software solutions available to you.


Author and Contributor

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Based in New Orleans, Guy Lyman is a professional writer with over 25 years’ experience writing about multifamily and commercial real estate. Lyman is a frequent contributor and writer for the Property Management Insider blog.

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