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Cliff Hockley, CPM
President, Bluestone & Hockley Real Estate Services
High cost of Clean Water Act results in increased water and sewer costs to meet EPA standards
Natural gas shortage (caused by increase use in Midwest and East Coast) results in increased natural gas prices
Shortage of oil results in increased prices for oil and gasoline
Dam piercing to protect wildlife results in shortage of electricity and increased costs
Every utility provider – water, sewer, rubbish, oil, natural gas, and electricity – is feeling the dual pinch of increased legislation and demand. Utility providers are faced with not only with more consumers, but also federal and state regulations that are making a more environmentally conscious society and their added restrictions. These laws, focused on wildlife preservation, nuclear restrictions, and emission controls as well as demands to pierce the dams, add significant costs to operations.
The question is what can you do about it? Not very much since there is a limited supply of oil and natural gas available. You need to consider conservation and direct bill backs to your tenants as the main strategies to saving money at your properties. Consider some of the following ideas.
Electricity
- Shop for and use longer life bulbs that use fewer watts.
- Use fluorescent light bulbs.
- Ask PGE or PP&L to come to your building for an inspection.
- Review the most electrically efficient lights to use.
Water and sewer and storm sewer
- Install low flow shower heads at all condo and apartment properties. If tenants take them off replace them on every tenant turn.
- Replace spray heads in dishwashers to reduce flow.
- Install separate meters or sub meters.
- Review your water and sewer expenses and bill back increases to the tenants (this can be done by a utility bill back company, also called the RUBS program).
- Encourage tenants to wash with full loads.
- Reduce water levels to minimize required water per load.
- Cover pools to keep water from evaporating.
- Repair any water leaks at pools. Turn off pumps at night. Use timers.
- Install low flow aerators for faucets.
- Install low flow toilets.
- Install the Aquasaver in your toilets to use less water.
- Conserve water use for landscaping.
- Make sure every month that there are no broken sprinkler heads.
- Monitor the soil moisture to keep from over watering.
- Install plants that do not need much water.
- Ask your landscapers to make property recommendations, and pay them a reward if they can save you water or sewer expenses.
- Replace sprinkler heads with newer models that are more efficient in their use of water.
- Have a competition with the tenants to see who can come up with the best ideas.
- Don’t allow car washing on site, or set up a car washing station where you charge for the water.
Natural Gas
Natural gas is used heat pools, commercial spaces, and hot water heaters. Most houses use gas in the furnaces to heat.
- Make sure you are servicing both the furnaces and the hot water heaters on an annual basis.
- Make sure all pools heaters work properly and have no leaks.
- Service all heaters on a regular basis.
- Encourage the tenants to conserve.
- Retrofitting to other fuel uses does not make sense at this time.
- Shut down pools promptly in the fall and make sure only a limited amount of heat is being used.
- Make sure that furnace filters are changed on a quarterly basis. Plugged filters use more energy.
We are just facing the tip of the iceberg in his issue. As our population grows to a 100% increase in the next century the demand for energy and water will continue to be a challenge investors are going to face. Start now with recovering your costs, otherwise your real estate investments will not make cash flow sense.
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