Energy data collection maximizes savings for long-term care facilities company
The private equity shareholders of a major North American long term care chain decided to bring in an investment bank to undertake a strategic review of the company’s operations. The choices included an outright sale, and that brought up the question of energy efficiency - given the relatively high prices for electricity and reduced government contribution in several of the jurisdictions.
The long-term care facility company had over 200 locations in 16 states. It found itself under increasingly compressed margins due to competitive pressures. That’s when it suddenly became clear that the company had grown so fast through acquisitions that it had never installed a facility-centric energy data management collection system. This made an energy-efficiency analysis impossible and we were brought in to address this gap.
The first priority for us was to meet with the appropriate company financial department staff members to configure a template and authorization document with which we could approach the multiple utilities to get historic data. Realistically we could only go back one calendar year. Working with the facility staff, we were able to create a template into which the costs could be allocated to each facility. Once we had this completed we were able to do both internal and external benchmarking studies through which were able to develop a go-forward strategy for data collection, create a set of KPIs and, as an aside, identify some billing errors.
The results of our benchmarking and audits, based on actual energy consumption data, were injected as one more feed into a strategic sensitivity analysis. At the same time, the project highlighted some real energy efficiency opportunities that warranted further investigation. The regional managers found the new energy consumption data useful for a number of internal reporting purposes. The company engaged us in an ongoing data management service contract. And the project turned up billing errors of almost 4% of the total annual billings, most of which was recovered from the relevant utilities.