AUM white paper helps multifamily property owners benchmark energy usage
March 6, 2012 - Multifamily energy services company American Utility Management (AUM) has released a white paper, explaining how multifamily property owners can reduce energy use and cut operating costs by benchmarking utility usage against a qualified pool of comparable properties.
Multifamily Energy Benchmarking for Reduced Energy Expense, now available for download, shares the results of a benchmarking statistical study conceived by AUM and conducted in collaboration with the Georgia Institute of Technology (Georgia Tech) in Atlanta, Ga.
Using AUM’s data, Georgia Tech developed a mathematical algorithm which compares and contrasts multifamily properties, ultimately allowing owners to identify cost savings. The algorithm takes into account a wide range of variables unique to this property class, including nuances such as common space, size of swimming pools and other high-intensity energy amenities, geography, climate, and even a property’s orientation to direct sunlight.
“Until now, comparing multifamily properties in order to establish benchmarks and identify best practices to reduce energy use was impossible because of the complexity and differences between properties,” said Michael Miller, president and CEO of AUM. “Using AUM property information and actual utility data, the researchers at Georgia Tech helped us to create a way for owners to draw peer-to-peer comparisons between properties, which give them deep insight into how they are operating against standard.”
The study used Data Envelopment Analysis (DEA) methodology to develop the benchmarking model. Properties in the population are relatively ranked and each property receives a relative efficiency score, with the most energy-efficient receiving 100% as its relative efficiency score. The scores of remaining properties are specified in direct comparison with respective peer properties with scores of 100% to determine sustainability. Using the AUMScore, property owners would then be able to compare their properties’ energy usage across their own portfolios and the multifamily industry.
According to Miller, benchmarking is a vital first step in reducing energy and utility costs.
“We conducted this study to prove that there is an effective way to create benchmarks that can be used to better manage properties, reduce operating costs, enhance asset value, and increase ROI, while reducing utility consumption and maintaining a greener property,” he said.
AUM noted the multifamily industry spends over $53.5 billion a year on energy; additionally, the U.S. EPA (Environmental Protection Agency) reported that utility costs represent the single largest controllable cost in an apartment community—typically accounting for 25-35%.
“The joint study validates the AUM model for energy benchmarking,” said Baabak Ashuri, PhD, director of the Economics of the Sustainable Built Environment Lab in Georgia Tech’s School of Building Construction. “We view it as a valid new voice that will have positive reverberations throughout the multifamily sector, helping asset owners, managers, and investors see stronger returns while increasing sustainability.”
For a copy of the white paper, contact Leigh Sperun at email@example.com or (610) 228-2108.