Time to Maximize Energy Savings

By Steve Kiesner Director of National Accounts, Edison Electric Institute | May 04, 2010

The U.S. lodging industry spends close to $4 billion on energy every year, according to the U.S. Environmental Protection Agency (EPA). If hotels could improve their energy performance by an average of 30 percent, the hotel industry would see a savings of approximately $365 per available room night per year for every hotel room in the country. The good news is that there are many simple steps your staff can take to use energy more efficiently. And the great news is that electric utilities can help you.

The forecast for natural gas prices

According to the latest estimates from the U.S. Energy Information Administration (http://www.eia.doe.gov/emeu/steo/pub/contents.html), hotels and other commercial customers are expected to have paid a national average of about 10 percent more for natural gas in 2008 than in 2007-$12.48 per thousand cubic feet (mcf) versus $11.31/mcf. A few regions, New England-$15.00/mcf; Mid-Atlantic-$13.85/mcf; South Atlantic-$14.25/mcf; and the East South Central-$13.62/mcf can expect to see prices higher than the national average. Keep in mind that the price for a therm of gas is at an historical high. Today's price is a little more than double the price in the 1990s. Prices in 2009 are expected to be about the same as in 2008.

For electricity, the Energy Information Administration estimates that the nation's commercial sector will see about a six percent increase in prices nationwide. Again, some regions of the country, notably New England, Mid-Atlantic and the Pacific, can expect to see higher prices. All consumers-industrial, commercial and residential-are feeling the effects of the higher-energy prices. High prices for natural gas, electricity, heating oil and transportation fuels are having a ripple effect throughout the economy.

Utilities that use natural gas to generate electricity also are feeling the pinch. Electric utilities do not benefit from higher energy prices, since they are often "caught" between high fuel costs and regulatory limitations on electricity rates. Like consumers, these utilities are seeking to use natural gas as efficiently as possible and are switching to fuels that are more economical whenever it is feasible.

There are no quick and easy answers to our energy policy challenges. Increasing the supply and diversity of our nation's available energy resources involves long-term solutions. Eighty-five percent of the natural gas consumed in the U.S. is produced domestically, and almost all the remainder of our supply is imported from Canada. New North American supplies and infrastructure need to be developed for the future, especially in those areas that are currently restricted or off limits in the Rocky Mountains and the Atlantic and Pacific coastal areas.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.