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Tutorial Do You Think You're Out Of Money? Think Again Six Steps To Reducing Your Maintenance And Operations Budget by Grant Van Hemert L et's look back to the "good old days" when the ARRA pumped four years' worth of funding into a single calendar year. Some municipalities got long sought after projects funded, but the good times have ended, and many municipalities have a list of projects with no means to fund them. To make matters tougher, reduced tax revenues are forcing some municipalities to cut back on operations expenses. The good news is that many municipalities have the funds, but don't realize it. Many times, these funds exist in the maintenance and operating budgets. It just takes a little creative thinking to utilize 1,000 kWh of business to a power utility, however if the municipality uses an EPC, then the EPC may represent 350,000 kWh of business. If you were the power utility, who would you listen to for rate negotiating? Many options exist to improve facilities without relying on the traditional method of creating a project and securing a loan. the money. Here are six suggestions for how utilities can achieve their goals by managing their maintenance and operations budget. ENERGY PROCUREMENT In the cyber world, social networking is all the rage. Many websites such as MySpace, Facebook, and LinkedIn are vehicles that enable this type of networking. Companies pay attention to the power of these social networks and adapt accordingly. So we must ask: can networking save money on a municipality's energy bill? In a nutshell, this is how energy procurement works. By itself, a municipality may not have the tools, expertise, or usage clout to negotiate for a better rate from the power utilities, this is especially true of small utilities, however a municipality can hire an energy procurement company (EPC). An EPC, will combine your energy usage into a network with other users. This large network of users can then be used to negotiate lower rates for everyone. For instance, a municipality alone may represent a 32 Water Online The Magazine, Cleanwater Edition ■ wateronline.com EPCs can do more than just negotiate rates, they also look at the terms of the energy contracts, market dynamics, and contract terms. Furthermore, quality EPCs will look at errors in your bills, demand response, and other opportunities to identify wasted energy, and or wasted billing. So how does an EPC work? Simple, the EPC reviews your past energy invoices to identify current energy purchasing options and issues a request for proposal (RFP) to the municipality to purchase energy. After the municipality indicates a willingness to participate in an RFP, the EPC sends the energy load to the supplier community. Once the responses are obtained from all sources of energy, an EPC energy consulting expert review all responses and recommend the best option for your company based on key factors such as pricing, contract terms, product structures, and credit conditions. Finally, once a municipality selects a source of energy, a high-quality EPC will handle the transactional process and complete all relevant legal documentation — achieving savings with little involvement from the municipality. PERFORMANCE CONTRACTING Performance contracting is an alternate method of financing projects, using anticipated savings to finance a project. Here is how it works. An energy services company (ESCO) does an analysis to identify and quantify potential savings. The savings can come from energy, chemical, or