NIU’s energy reduction saves money

by Joe King

Talk in Springfield of a new requirement that could compel state universities to report annually on steps taken to cut utility costs was welcome news at NIU.

After all, who doesn’t like a chance to brag a little?

By using tools such as performance contracts and learning how to purchase gas and electricity in the recently deregulated markets for those commodities, NIU has saved more than $9.3 million over the last two years alone.

“Looking for ways to save money on energy costs is not a new idea for us,” said Robert Albanese, associate vice president for finance and facilities for NIU. “We have been working to trim those costs for years, and we have developed some fairly sophisticated tools to assist us in that process.”

Among the biggest cost-saving tools used are “performance contracts,” which allow the university to pay for energy-saving improvements using the resulting savings.

Currently, the university is realizing a savings of about $2.8 million a year as a result of performance contracts to install more energy efficient lighting in some buildings and to convert other buildings on campus to chilled water cooling (vs. standard air conditioning).

According to a report released this week by the Illinois Department of Commerce and Economic Opportunity, that total makes NIU the leader among state universities, accounting for almost half of the $6.2 million in savings realized from such contracts at all universities across the state.

Northern also has realized significant savings on natural gas and electricity costs in recent years by taking advantage of the recently deregulated markets for those commodities.

In 2002, NIU’s ability to negotiate with electricity vendors allowed the university to save $1,074,000 on electricity, and its natural gas buying strategy netted a savings of $1.2 million vs. what it would have paid had it purchased those commodities at the standard index rates in effect at those times.

In 2003, those cost-cutting measures resulted in savings of $978,000 on electricity and $320,000 on natural gas.

The university also has saved tens of thousands of dollars through its participation in special rider programs with electricity providers, receiving a cash incentive in return for its willingness to make emergency reductions in power usage during times of peak demand on the power grid.

Those cost-cutting efforts were recognized in an evaluation conducted in 2003 by the Illinois Board of Higher Education, which found that NIU had the lowest per-kilowatt electricity costs in the state despite being located in a region that traditionally is saddled with some of the highest electricity costs.

“We are saving a significant amount of money by operating in this fashion,” said Mike Saari, associate director of building maintenance for NIU. “By negotiating our own contracts and remaining flexible, we can take advantage of local rates, local riders and local supply grids which add up to big savings.”

The university has other energy savings projects in the works, most notably the construction of a large chilled water plant, which will allow NIU to cut dramatically the cost of cooling buildings on its east campus. The system, which is awaiting the final release of funds from the state, will replace several energy-wasting air conditioning systems that have outlived their useful life. The process also will eliminate the use of ozone-depleting chemicals.

“As the report from DCEO points out, there are always more things that can be done to save energy,” Albanese said, “and we are always looking for new ways to cut our utility costs.”

4-5-04