ESG: A Sustainable Trend - Updates from ULI Research

MACH attended the ULI conference in Washington D.C. in September. ULI is a thought leading organization with many lessons to impart, particularly from the annual ULI Emerging Trends report. The work is based on surveys of CRE (commercial real estate) professionals and research from ULI, PWC and others. A few interesting sustainability / efficiency data points from the report:

• * - ESG (Environmental, Social and Governance) awareness is particularly high among Millennials.  ESG work and performance is factored into investment decisions for 55% of Millennials and 25% of Gen X investors.

• * - Other major investment issues for private equity investment decisions include energy efficiency (75% of respondents), sustainability governance (71%) and emissions / air quality (71%) (Source: PwC PE Responsible Investment Survey, 2019)

• * - Data and Diligence : two survey respondents, a consultant to institutional asset managers and their client, stated they believe ESG monitoring as a part of the acquisition due diligence process can be associated with improved risk-adjusted returns.

• * - Data and Due Diligence II : At MACH, we have heard from customers interested in leveraging our energy management software, energy reporting, budgeting and other functionality to help better diligence acquisitions. The visibility helps them move from guess-timates based on utility or tenant billing to more accurate forecasts, better post-purchase capital project outcomes and more insight into building operations or healthy buildings. More on better capital project outcomes here.

• Check out the ULI press release here for more on the Emerging Trends report!

California Tariff Changes - Good news, bad news!

As many know, the California utilities are in the process of changing their summer tariff time-of-use (TOU) schedules because the high volume of solar installations in California have shifted utility supply requirements to the later afternoon, as solar generation is winding down. 

In areas served by Southern California Edison, this shift is now part of the rate schedule. Summer, beginning June 1, peak demand periods moved generally from Noon-6PM to 4PM-9PM.  SDG&E implemented a similar schedule previously with PG&E likely to follow suit.

At MACH, our energy management software has always included a utility-grade tariff engine, so we thought it would be valuable to look at the potential impact so that enterprise and facility energy managers can include the utility TOU shift in their thinking.  

Good news – strong savings impact for typical office buildings - we estimate ~5-7% on average.  The typical office is winding down in the afternoon so visibility into usage and proactive energy management software should help reduce costs.    Demand will also likely have a significant drop during the Summer months.

Bad news –  on the other hand, based on what we see as a typical solar load profile below, it appears that the changes may result in lower solar payments.  

We have presented these estimates assuming there are no changes to your building operations.

But there may be opportunities to further reduce on-peak demand by increasing the building cooling before 4PM and ‘coasting’ a bit. There are typically significant savings available by changing your building’s operating schedule, though understanding your (changing) tariff is required!  

And of course tenant comfort / engagement is always an important consideration (see our previous tenant billing software blogs). 

If you have questions or want to talk energy savings, please reach out at contact@machenergy.com!

The Facility Management Talent Shortage: The Industry Responds

Our recent white paper focused on facility management staffing and the potential shortage in talent. It’s a hot topic within the industry. While the number of available positions in the industry is growing, and appears it will grow in the future, there is increased concern about attracting new staff to address employer demand and replace retiring workers.  

As quick background, labor statistics indicate that while employment in the broader economy has grown about 0.6 percent a year since 2000, a number of key roles within facility management are growing faster. The Bureau of Labor Statistics also predicts 10 percent growth in real estate and property managers through 2026, which outpaces the broader economy.

The average age in facility management is 51 years, with industry associations citing a “critical shortfall” in talent.

There are a number of industry responses to this issue including enhanced training and modernizing the workplace with technology.  Our white paper highlighted one talent development program supported by the Building Owners and Managers Association (BOMA) and BOMA Chair Brian Cappelli, called Careers Building Communities, which seeks to connect job seekers with positions in their communities.

In addition, we’ve  learned about a few other great programs:

• * - San Bernardino County and Chaffey College Program:  Working with IFMA, Chaffee / SBC developed a program to train facility managers, driven in large part by the nearby talent shortage a (one article cited 3,200 facility management job openings in the area, with only 30 qualified applicants).

• * - Stacks and Joules: Specifically, this program provides training on building automation systems (BAS) and controls engineering. As we discussed in a previous MACH blog comparing them to energy management software, BAS are products that control complex systems like heating, ventilation, air conditioning (HVAC), lighting etc.

• * - Johnson Controls (JCI): JCI is teaming up with a nationwide specialized training provider to open 10 sites within existing Lincoln Tech locations that are focused on HVAC and electrical training.  While the initiative is focused on helping JCI recruit and train staff, it also will improve the overall number of people entering this industry.

• * - Universities and Colleges: We note in the white paper that some universities are adding facility management courses to supplement more general engineering programs.

In addition to training programs, modern, often mobile operating technology in buildings may also play a role in reducing the impact of this shortage of facility management talent. The white paper highlighted a few key conclusions:

• * - Adopting technology can act as a “force multiplier” that helps staff get more done. For example, some help desks for tenants and occupants are no longer physical locations, but remote and virtual. This reduces the overall staffing needs while providing the same level of service

• * - Sustainability - for many potential employees, employers demonstrating a desire to build operate sustainably can be appealing. Energy Star for buildings in particular is well known and free. Energy Star for Tenants will be another option as it is rolled out.

• * - As buildings become more technology-enabled, and more focused on delivering a productive and differentiated environment, the increased deployment of modern technology will have cascading effects. Using tools like enterprise energy management software and tenant billing software combined with data driven operations in the building, firms and staffs will realize significant efficiencies.

• This will likely change the typical roles of facility managers and drive more prospective employees to consider the field. This was confirmed by Able Engineering’s head of recruiting, “We have some clients with very high tech buildings and the younger engineering talent, in particular, wants to go

  there.”

Tenant Billing Software - BMS vs. EMS

Hi, John Hobson here, new MACH Customer Operations Manager, based on the East Coast.  As many of my previous projects have involved tenant billing through a BMS, and as MACH authored a BMS vs. EMS blog previously, the team suggested I write a “new eyes” update based on my experience.

BMS Tenant Billing Thoughts:  

Most of the major Smart Building vendors such as Siemens, Johnson Controls, Trane, Schneider and Honeywell offer solutions which can integrate into a BMS.  

However, as a PE and CEM, I often found the perceived benefit of a complex Tenant Billing system integrated with a BMS to capture the costs of thermostat and schedules changes was often NOT worth the cost and headache associated with the project.  

Some of the issues that we saw in our projects included:

• High Upfront Costs - by definition a BMS upgrade can run in the tens of thousands

• Customer “Locked In” - In my experience, tenant billing systems through the BMS typically require meters to be a specific manufacture or that some additional hardware (“gateway device”) be installed so the BMS will communicate to the submeters without issue.  These systems require additional costs in order for the vendor or controls contractor to configure the system and routinely provide software/firmware updates throughout the year.  This has the effect of locking in the building to a specific vendor for any future changes.

• Not User Friendly - a BMS is designed with the building engineer in mind, and not the management and accounting teams that typically use the Tenant Billing application.  I heard many complaints from customers that the Tenant Billing application through the BMS felt overly complicated and unintuitive.  

• Dollar Shortcuts - I also heard customer complaints that the BMS did not accurately reflect their bills because it relied on a simple dollar per kWh conversion to calculate all utility costs.

• Expensive and Unwieldy Upgrades -  On one project, the project required additional points requiring me to upgrade my license, and required frequent software updates.  The vendor did not communicate the release of their software updates, so my customer had to tell me they were having problems with their BMS before we knew to update the software.  Updates required a site visit from the vendor which could take weeks, though some were more responsive than others.

EMS Tenant Billing Software Thoughts -

As I have gotten up to speed on MACH’s tenant billing software, I can see the advantages they and other EMS vendors have in building a modern platform outside of a BMS environment.  A few thoughts: 

• Flexible and Cost-effective - MACH Energy’s Tenant Billing Software supports both manual meter reading and communicating meters.  As a result, you can choose to upgrade to communicating meters as your budget allows, and still have a portion of your meters read manually.  

• Modern, user-based design - MACH’s cloud-based platform and customized dashboards can assist all users: engineers, facility and property management and accounting.  The software supports accurate meter reading, calculating blended rates, creating tenant bills, sending data to accounting, and maintaining billing history.   

• Mobile app - a “must have” today

• Easy upgrades - unlike required site visits, modern software is cloud-based and software upgrades typically happen automatically

• Tariff engine - key to accurately calculating actual utility costs and definitely not what I saw with the big vendors.  With a provider like MACH with a built-in tariff engine, a user can bill their tenants at any time of the month with confidence that their billing will accurately match their total utility and supply bills.

All in all, it was interesting to see and understand the differences an enterprise Energy Management Software (EMS) provides for tenant billing software. 

A more detailed discussion of MACH Energy’s Tenant Billing can be found here.

I look forward to meeting more MACH customers!

John Hobson

Tenant billing in action...video!

With demographic changes and recruiting challenges leading to leaner teams, many CRE owners, property managers, engineers etc. are looking to modernize an often antiquated tenant billing process.

Increasingly they are looking at energy management software and tenant billing software to streamline this process and increase cash flow.  In response, MACH hosted a tenant billing software webinar in December. 

The call was led by MACH veteran Cliff McAuliffe and special guest Joe Sesto of CBRE / Able.  The call was well attended, with 50-60% of attendees stating they have 15 or more meters to report on each month – a daunting task!

A big highlight was a Cliff and Joe production, a short, authentic video of the mobile app...look out Hollywood!

Thanksgiving for Energy Star

As we discussed in our Energy Star white paper a year ago, many industry participants believed the Energy Star program was at risk, though now it seems to be going stronger than ever.  It is great to see the industry collaborate to show the program’s value…what a difference a year makes!

We wanted to share a few Energy Star-related market updates:

• CBECS scores changes - As pictured below, due to the many efficiency advances since the last 2003 CBECS survey, scores on average went down in some cases more than 12 points, which was expected.  

  Interestingly, when we ran the numbers, the typical MACH building saw a smaller decrease of ~4-5 points, which may imply users that are investing in energy management software are better prepared than the average building.

• New York buildings – at various New York events, there were many conversations being had about the larger than expected Energy Star decreases experienced in buildings using steam, some more than 20 points.  One way to combat this is operating changes. A data point: MACH energy analytics identified on average operating improvements that could yield 5-6 points in score improvements.  Stay tuned.

• Energy Star and Tenant Billing Software –  we have seen continued interest in modernizing the submetering process with a large number of participants in our latest webinar.  And more than 60% said they had dozens of submeters!  Many of these loads are monitoring data center spaces, which can make Energy Star reporting challenging – which a modern tenant billing solutions that integrates with Energy Star can help automate to improve accuracy and timeliness.

• Finally, the Energy Star program is still taking comments on the CBECS change – to leave feedback, please visit www.energystar.gov/scoreupdates. 

Happy Thanksgiving from the MACH team!

Another Satisfied Customer: Lessons from Net Promoter Score

At MACH Energy, our goal has always been to provide our customers with a modern, intuitive energy management software in order to help commercial building management save time and money…and generally to make their job easier!

We often hear positive market feedback but quantifying and summarizing this data can be challenging.   It also can be difficult to see the full picture, as people may be reluctant to disclose frustrations in person or on the phone.  In an effort to better understand our customers’ satisfaction with our energy monitoring system, we initiated our first Net Promoter Score (NPS) survey.

The NPS system is a customer service and satisfaction metric that allows companies to see what their customers think about their user experience. The program enables software and other companies to monitor customer satisfaction, respond to feedback, and improve the product or user experience.  

Survey says…

Happily, we found the scores mirrored anecdotal evidence with the MACH Energy NPS score consistently 60+.  Over 50 is considered excellent and over 60 rivals Apple.

But what kind of feedback do we get? What are examples of satisfied customers?

1. Savings – “MACH’s energy analytics helped us save over $50,000 a year in power costs.” 

2. Make Your Job Easier – “The mobile app is so easy to use. Tenant meter billing used to take hours and now takes 40 minutes. No more Excel input!"

3.  Focus on making customers happy - "Great product with awesome support"

Lessons

1. We needed to communicate better about some features, like real-time data, which came up and has been available for more than a decade!  

2. Some responses showed users grappling with their sustainability or ESG mandates (which we described in our last blog here.).  Another good reminder that energy analytics need to be intuitive and easy to use! 

3. NPS is simply one metric – a good score, or a bad score, isn’t make or break 

We’ll continue to improve how we help you save money and time and make your job easier!

Please let us know how we are doing - if you have comments or questions about our modern energy management software, please connect at contact@machenergy.com.