Delivering Value: FirstService Residential Energy Aggregation Purchasing Program
As part of our commitment to deliver value to our clients, FirstService Residential has helped our boards and building owners save millions of dollars in energy costs over the last decade, in part, through our Energy Aggregation Purchasing Program. Administered by our affiliate FirstService Energy, the program leverages the collective consumption of our management portfolio to secure competitive rates for natural gas and electricity. Today, the program ranks among one of the country’s largest gas and electric aggregation purchasing programs for multifamily residential buildings.
What is energy aggregation and how can the program lower our building’s energy costs?Energy aggregation is similar to bulk-buying at Costco or BJ’s Wholesale Club. At these retailers, items are sold in large bundles which drives down the price per pound of food compared to your local supermarket. In this same respect, the FirstService Energy Aggregation Purchasing Program leverages the combined energy utilization of hundreds of properties managed by FirstService Residential. Given the size of this composite group, our procurement specialists are able to negotiate below-market rates for natural gas and electricity. This enables our boards and buildings to pay considerably lower energy fees compared to those charged by local utilities.
In the last three years, buildings that participated in the program have saved over $9 million in electricity and $5.5 million in natural gas costs. This equates to an average of a 13% reduction in energy rates compared to fees charged by Con Edison and National Grid. In addition to a reduction in sales tax, participating buildings also no longer pay a Merchant Function Charge – an administrative expense charged by the utility for using their services.
This energy aggregation process is made possible by the government’s deregulation of electric and natural gas energy resources. Deregulation gives consumers the opportunity to purchase electricity and natural gas from competing suppliers outside of local utilities like Con Edison and National Grid, which no longer have a monopoly over a geographic territory. Multi-family properties in New York City will still pay a monthly tariff to the local utility for the delivery and servicing of the wires.
Despite these changes, the process is seamless and participants will not notice any changes in service when the new supplier begins. Participants will not need any new equipment, meters, or account numbers. The only difference is that you will pay the new supplier for energy consumed rather than the local utility.
In the event of an outage, ConEdison or National Grid will be dispatched to service the power lines and turn your power back on under the same protocols that have existed for years. These local utilities are still responsible for all aspects of delivering and servicing the energy lines and are indifferent to what supplier a customer uses. In fact, the utilities do not know which of its delivery customers rely on competitive suppliers.
What is the cost to participate in the Energy Aggregation program?The outbreak of COVID-19 has triggered a sudden and unprecedented slump in already low energy prices, with prices sinking to new lows. In part, this is due to the oversupply of natural gas and high gas storage levels. These factors will continue to apply downward pressure on energy prices, which can significantly affect your property’s energy bill.
To consistently secure the best-possible energy rates, FirstService Energy constantly monitors the market to identify strategic procurement opportunities, energy sources and partnerships, which in turn, ensure year-over-year longevity. Just last year, the surplussed market gave our clients the opportunity to renegotiate their contracts and lock-in lower rates which would not be attainable without a dedicated and proactive team or procurement specialists.
While there is no cost for your building to participate, FirstService Energy does receive compensation from energy suppliers for running the program. An administrative fee of $.002/kwh for electric and $.02/therm for gas is paid to FirstService Energy directly by the suppliers.
Who will deliver my electricity or gas if I choose a new supplier?Each Energy Service Company (ESCO) requires that your building enter into a contract agreement for the purchase of electricity and/or natural gas. Though pricing is based on all buildings in the group, your building will have its own contract that reflects pricing, terms and conditions. Contracts are negotiated and signed on behalf of each building by FirstService Residential. All contracts are for a 12-month term beginning either June 1 or October 1.
Clients are enrolled for a period of one year for electricity and/or natural gas and have the opportunity to re-enroll in the program each year. Properties that are part of an aggregated group remain customers of their natural gas or electric utility company.
FirstService Residential & FirstService Energy: Working in Tandem for Boards and OwnersFirstService Residential and FirstService Energy are here to help boards and building owners make the best possible investments in clean energy and sustainable resources. To clearly illustrate a property’s current energy performance and actionable improvements, our energy efficiency experts also perform a detailed benchmark analysis. The results are presented in a customized Energy Report Card which includes an annual potential savings model, energy usage and cost benchmarking, weather normalized energy consumption, historical energy consumption by commodity and a carbon emissions impact study. The goal is to arm clients with measured data and practical recommendations to help boards and owners make informed decisions when considering efficiency strategies.
To help our clients understand their obligations under New York City’s Climate Mobilization Act (CMA), our in-house experts have participated in webinars, live Q&A sessions and symposiums offering pathways to navigate the new legislation, avoid costly fines and penalties related to carbon emissions, improve overall energy efficiency and compliance with new local laws.
With the right plan and the right partners, buildings can turn this obligation into an opportunity to save money, reduce emissions and improve quality of life for residents.
Contact FirstService Energy today for more information on how our energy experts can help your property achieve its efficiency goals.