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Written By: Kathy Kiernan, Senior Vice President of  APPI Energy

Electric bills are complex, especially when a community has multiple accounts and locations.  Here are some considerations to help senior living providers better understand how to manage energy costs.

QUICK TIP: Six Steps to Reduce Energy Costs

  1. Perform a community audit to
    determine ways to increase efficiencies, such as upgrading HVAC units,
    adjusting temperatures, installing occupancy sensors, properly sealing
    doors and windows, and replacing outdated light bulbs with
    light-emitting diodes (LEDs) or compact florescent light bulbs.
  2. Run appliances and equipment when consumer demand on the grid is lowest.
  3. Enroll in a Demand Response program to earn money and offset energy costs.
  4. Ask an independent energy consultant to review your electric bill periodically and verify the accuracy of each line item.
  5. Use a web-based energy data reporting system to measure consumption and identify ways to cut costs.
  6. In states with deregulated electricity markets and/or states with deregulated natural gas markets,
    lock in a competitive supplier contract for a timeframe of six months
    to five years. Consider working with an independent energy consultant to
    obtain pricing on your behalf from many reliable suppliers, and to help
    you choose the supplier that best fits your needs.

Electricity Bill Factors

Square footage. Does your community have one main community, single homes, or a variety of building sizes? Does it contain many street lights, a dining hall, a clubhouse, or an activity center? The size of your senior living community is a major factor affecting your electricity costs.

Times of operation. The cost of electricity fluctuates every minute of every day. During peak demand times (3-6 pm), it costs more for senior living communities to operate laundry facilities, cafeterias, lighting, and medical equipment. Conducting operations in the morning, overnight, and on weekends can reduce energy costs.

Electricity rates. Your local electric utility and your state’s utility regulatory commission determine electricity rates. Most utilities review and adjust their rates on a quarterly basis. The energy market is constantly fluctuating, with prices affected by an array of influencers, including weather, consumer demand, pollution control, and governmental regulations.

Accuracy. When was the last time you reviewed each line item on your electric bill for accuracy? A recent online survey conducted by the Energy Research Council, revealed that 75% of middle-market companies evaluate their energy expenditures and pricing on a regular and frequent basis. Out of the 1,450 middle-market companies that participated in the survey, 31% of smaller companies and 73% of larger companies report billing errors within the last 12 months. 

Make Energy Management a Priority

Procurement. How much is the supply portion of your senior living community’s electric bills? In other words, how much are you paying per kilowatt hour (kWh)? States with deregulated electricity markets provide opportunities for you to lock in a fixed price with a competitive supplier for a timeframe of six months to five years. Locking in an energy supplier contract creates budget certainty and eliminates the risk of your local utility’s fluctuating supply rate. The potential for savings could be thousands of dollars. The Energy Research Council reported that in deregulated states only 15% of middle-sized businesses still acquire their electricity supply form their local utility. Consider working with an independent energy consultant to obtain pricing on your behalf from many reliable, competitive suppliers, and to help you choose the supplier that best fits your needs. If your senior living community is located in a region that is not deregulated, the following sections should be helpful in reducing costs.

Demand Response. An energy consultant can also help you enroll in a Demand Response (DR) program, under which your senior living community can receive financial incentives for agreeing to reduce energy consumption during peak demand times. DR program participants typically reduce consumption by operating onsite generators, adjusting thermostats, and reducing lighting and equipment use when notified. DR events usually occur during afternoon hours in summer months. Payment to you is not based on the number of DR events called, but is determined by the amount of electricity consumption you agree to reduce if an event occurs. For senior living communities, participating in DR programs is a prudent way to earn money and offset energy costs, plus benefit the grid and the environment.

Energy efficiency. Senior living communities are prime candidates for increasing energy efficiencies. From late 2012 until early 2013, 630 senior living communities from 39 states and Washington, DC, competed in the U.S. Environmental Protection Agency’s ENERGY STARBattle of the Buildings.” Using an online benchmarking tool to track monthly energy consumption, 425 communities reduced energy consumption by 3.8 percent, and 50 communities reduced consumption by more than 10 percent.

Reducing energy consumption saves money and improves your community’s environment for residents and employees. In many cases, local utilities and state governments offer tax incentives and cash rebates for completing energy efficiency projects. When was the last time your senior living community upgraded its HVAC units? Do most of its buildings use outdated incandescent light bulbs or more efficient lighting? Who determines the thermostat settings throughout your community? Adjusting the temperate by only a few degrees can have a substantial impact on your electric bills. Additionally, installing occupancy sensors and properly sealing doors and windows can reduce energy costs. Consider undergoing a community audit so an expert can determine ways to increase efficiencies.

Energy data tracking. Senior living communities that operate multiple locations can benefit from using a web-based energy management portal. Access to online reports of energy costs and consumption helps your communities increase efficiencies, reduce consumption, and cut costs. Benchmarking tools provide measurements of efficiency projects and compare multiple locations to each other and to similar facilities in the region. Online energy data tracking tools also can provide full bill auditing, catching any billing errors and facilitating the reimbursement process.



APPI EnergyALFA Endorsement  The Assisted Living Federation of America (ALFA) endorsed APPI Energy as the exclusive firm to provide unbiased and independent energy consulting and procurement services to ALFA members. APPI Energy is helping 2,300 commercial customers across the United States to reduce electricity and natural gas costs. In addition to ALFA, 136 other affinity groups endorse APPI Energy’s member benefit program. Contact 800-520-6685 or to start benefiting from your ALFA member program.


About the Author  Kathy Kiernan is Senior Vice President of APPI Energy and an advisor to the Energy Research Council. She can be reached at 800-520-6685 or


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