No Quick Fix

By Edward Sullivan, Editor  

Is energy a fixed cost? Ask many CFOs and they’ll answer “yes.” As far as they’re concerned, energy costs are like taxes — something to grumble about but ultimately out of the organization’s control.

That the CFO happens to be wrong about energy costs doesn’t make things much easier for the facility executive. Changing the CFO’s mind will certainly require salesmanship. It may well mean starting with a small, well-chosen project — for example, a building that still has T12 lamps and magnetic ballasts. And rigorous analysis is crucial: If there was ever a time when it was crucial to hit projected savings targets, this is it.

Is there anything worse than a CFO believing energy costs are fixed? Maybe. Some CFOs treat energy as a cost that can be budgeted in the same way that spending on, say, new computers can be planned. When the corporation needs to save money, it’s fair to cut the energy budget along with the budgets for IT purchases, marketing, etc..., and assume that a good manager will make the lower number work.

The trick here is persuading the CFO that energy costs are, in a sense, fixed: They can’t be changed unless something else is changed first. That ultimately leads to a long discussion about all the ways energy costs can be reduced — from making space colder in winter or warmer in summer, to investing in a lighting upgrade or negotiating an interruptible rate for electric power.

Either way, educating the CFO is a long road. Putting off the first step won’t make it any shorter.

Contact FacilitiesNet Editorial Staff »

  posted on 2/1/2006   Article Use Policy

Related Topics: