Put the Chill on Energy Bills This Winter
By Steve Kiesner Director of National Accounts, Edison Electric Institute | October 28, 2008
Even if your company has locked in lower prices through long-term fuel contracts, you still should be making sure you are doing everything you can to get the most value from your energy dollar. The lodging industry spends over $5.5 billion per year on energy. That is a lot room for potential savings. And greater profitability.
The EIA says that its energy price estimates are somewhat sensitive to how fast the oil and natural gas infrastructure in the Gulf of Mexico recovers from the recent hurricanes. As of October 31, a little more than half of the daily natural gas production in the Gulf remained offline. By the end of the year, EIA estimates that about 20 percent of natural gas production in the Gulf will still be offline. Production should return to pre-hurricane levels by March 2006.
It is important to note that the hurricanes did not cause the higher prices. They did, however, aggravate an already tight supply and demand situation. The wholesale price for natural gas is now trading at around $13 per thousand cubic feet ($1.30/therm). Last year, the price was around $6.
The answers to our nation's energy challenges are neither quick nor easy. Increasing the supply and diversity of our available energy resources is vital, but this involves long-term solutions. Key among them is that Congress should work with the Administration and the states to increase access to oil and natural gas supplies from our country's vast onshore and offshore resources.
In the short term, greater energy efficiency is essential. As you may know, your electric utility is a good source for information and assistance to help you get started. Your account representative will likely have historical data about your energy use. The local electric can also help you with answers about electric utility incentive programs, discount electricity rates, energy-efficient equipment, or any other energy-related question.
The nation's comprehensive new energy law, the Energy Policy Act of 2005, can help you as well. The legislation includes a range of measures to improve energy efficiency, including a tax deduction of $1.80 per square foot for new commercial buildings that meet a 50 percent energy reduction standard.