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“Typically in the past, it was two to three months prior to your contract ending (for renewal) but now with the market being so volatile, it’s something you need to be paying attention to all the time,” Chung said during RealPage’s year-end energy outlook webcast.
Chung joined RealPage Vice
President of Energy Management
Dimitris Kapsis in December
to discuss how to develop a
holistic buying strategy based on
understanding current energy rates
and identifying best-fit suppliers
for markets and rental properties.
Kapsis, a long-time veteran of the
energy sector, shared about how to execute new contracts, including renewable energy options, and manage contract renewals to better reduce risk.
IDENTIFYING THE BEST ENERGY SUPPLIER FIT
Chung says pursuing an energy contract at least six months in advance of renewal or start date will help buffer properties from volatile price hikes. Early in the pandemic, RealPage Utility Management helped clients take advantage of historically low market rates by locking as much as 12-13 months before contract expiration.
The strategy paid off as rates surged.
“You definitely want to work with a broker because you want that expertise and that ear to the market, knowing what’s going on, knowing when the best time to execute is, as well as being able to negotiate contract terms with strong supplier relationships,” Chung says.
Part of what an energy broker does is analyze current contracts and work with utilities to get the program that best fits the property or portfolio.
“You want to identify the best fit suppliers (because) not every supplier is created equally,” says Chung. “Some are stronger in some markets, while others in other markets. But there are also contract terms that you want to think about. And that’s again something that your broker will be very familiar with because they work with a large pool of suppliers.”
RENEWABLES HELP REDUCE MULTIFAMILY UTILITY MANAGEMENT COSTS
Kapsis says property owners and operators are wise to look into a rapidly growing renewables market to
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lower energy costs while building a reputation as a sustainable multifamily operation. Today’s apartment residents desire sustainability and green living, which means it makes sense for operators to pursue renewables such as community solar.
Through today’s community solar programs, operators and residents can take advantage of reduced rates without significant upfront capital. Electricity is drawn from solar farms nearby and priced on multiyear contracts at lower rates than conventional utility power.
Property management operators can claim usage as part of sustainability reporting toward earning green certifications that appeal to apartment residents who want to live in eco-friendly communities.
“Community solar, which is not a new concept, is a very viable option for a lot of our clients for their common area house accounts and also for allowing residents to take advantage of renewable energy,” says Kapsis.
For more on the 2022 energy market outlook, please watch the video. RealPage Utility Management helps operators take control of energy conservation and billing.
ABOUT TIM BLACKWELL
Tim Blackwell is a long-time publishing and printing executive in the Dallas/Fort Worth area who writes about the multifamily housing and transportation industries. He has contributed numerous articles to Property Management Insider, and worked as a newspaper reporter in the D/FW area. Blackwell is president of Ballpark Impressions, and publishes the Cowcatcher Magazine. He is a member of the Fort Worth Chapter/ Society of Professional Journalists.