The University is trying to take advantage of the uncertain economy to lower its energy costs. Facilities Management signed an agreement Wednesday with World Energy Solutions, a move that allows the University to lock in energy commodity prices as far as two years in advance, said Chris Powell, director of sustainable energy and environmental initiatives.
Until now, the University has bought oil and gas up to a year in advance of when they would be needed, hoping to lock in prices while they were low. The new agreement, which Powell said is a "very significant" change for the University, allows it to expand that strategy, letting it invest in energy for as far ahead as 2010 using today's prices. Powell said he expects prices will increase with time.
World Energy operates a market for energy buyers and suppliers. It will work as a middleman between Brown and oil and gas suppliers, allowing a greater number of suppliers to bid as part of a reverse auction.
Yet like any investment, this one is not without risks. Energy prices for this year were locked in June, mainly in response to fears that a continued upward trend in prices would force an expansion in the Facilities budget, Powell said. But when the economy and consumer demand turned south in recent weeks, energy prices started to fall below the cost the University bought energy at months ago.
Although oil and gas prices have decreased significantly since June, the University will continue to pay at elevated rates until next year, Powell said.
"Sometimes you win, sometimes you lose," he said. "We don't have a crystal ball."
He added that the University saw the opposite effect last year, saving money by locking in very low prices before costs surged. On balance, Powell said locking in future prices saves the University money.
Finding new ways to keep energy costs under control has been a priority for several years. The University's heating costs are up 25 percent this fiscal year, with the total energy budget now reaching $23 million.
The University saved about $600,000 by switching most of its heating operations last year from oil to natural gas, The Herald reported in February. Unlike the heating oil the University once used, natural gas is listed on the New York Mercantile Exchange, a large commodities market that Powell said gives Brown access to many more suppliers, helping lower costs.
Facilities Management also spent $800,000 to replace 1,400 steam traps on campus in the past year, a project that is expected to save the University $300,000 annually, and reduce carbon emissions by 2,000 metric tons. Steam traps prevent steam from escaping a radiator, allowing condensate to be reused and improving overall system efficiency, according to a Facilities Management fall newsletter.
Efforts to keep heating and energy costs low are closely tied with efforts to reduce carbon emissions at Brown, according to Michael Glassman '09, a leader of the student group emPOWER. EmPOWER worked with Facilities Management to set University-wide emissions goals last year, aiming to reduce greenhouse gas emissions to 42 percent below 2007 levels by 2020.
Powell said Brown produced 73,000 metric tons of carbon dioxide equivalent in the 2007 fiscal year, which ended June 30, 2008. Following the switch from oil to predominantly natural gas heat in 2007, that figure fell seven percent, to 67,890 metric tons.
As part of the joint initiative to improve both financial efficiency and environmental sustainability, Facilities Management recently replaced the heating system in Minden Hall, installing thermostats and control valves to each room. Previously, only one thermostat controlled heating for the entire building, and heating was inefficient and imbalanced, said Kurt Teichert, environmental stewardship initiatives manager.
EmPOWER has also been working with Powell on a project to increase public awareness of energy use at the University.
Glassman said the project has two goals: the creation of a Web site that would allow students and staff to monitor energy use in different buildings, and a large public display, such as a television screen in Faunce House, that would show the same information.
