Ohio State University focusing on cost management practices

COLUMBUS -- The Ohio State University Office of Physical Facilities is continuing to deploy energy cost management practices to keep the escalating demands for energy consuming services in check.

Associate Vice President for Physical Facilities James Stevens told the university Board of Trustees Friday (7/11) that energy rates are being contained by wholesale purchasing of electricity, locking in gas prices before price surges and burning low cost Ohio coal as much as possible, resulting in more than $2.5 million in avoided fuel costs in fiscal year 2003.

Utility bills for the university are averaging from $24-$28 million a year, Stevens said. Energy costs continue to rise due to increased computer use; more intensive building use with expectations of 24-hour air conditioning; security concerns requiring more exterior lighting; and energy demands of new laboratory space that requires high rates of outside air ventilation.

Stevens outlined additional cost management steps — with expected savings — to be implemented in the immediate future:

• Replacement of the oldest four of the six McCracken Power Plant boilers because of age, condition and environmental issues, will result in annual fuel savings of between $300,000 to $500,000.

• The addition of more chillers and buildings served, and a proposed chilled water plant on College Road could result in savings of $21 million in net capital and operating expenses over the next 26 years.

• A project to replace an old, less reliable electrical distribution system — already funded and currently under design — will increase distribution capacity.

• A rebuilt coal burner that will assure consistent operation could result in $1 million to $2 million per year in avoided gas costs per year, depending on natural gas prices.
Stevens also is counting on the OSU community to buy into an energy conservation campaign previously launched by Physical Facilities to encourage campus energy users to turn off lights, computers and other equipment when not needed. Academic and support units are billed on square footage, not actual usage, though self-supporting units like the hospitals and residence halls are usage billed.

“The problem is that individual staff, student or faculty members may not see any direct feedback from the billing to provide them with incentive to control costs,” Stevens said.
Other initiatives have included the forming of an energy management committee, and training of architects and engineers in the Leadership Energy Environmental Design program — a national program for promoting and rating energy efficient and environmentally friendly buildings.

Trustees also heard an update from Larry Lewellen, associate vice president for human resources, on cost and quality management for faculty and staff health plans. The university has taken several cost containment steps in provider contracting, improved plan administration and benefit plan design that will result in significant annual cost savings.