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.

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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.