Risk issues for School Boards and Universities

As a public serving entity, school boards face strong public scrutiny over annual budgets. With fluctuating energy prices and the impact of weather on energy consumption, active management of a building's energy supply is needed to avoid large budget variances. The chart below demonstrates the seasonal fluctuation in energy costs versus an annual budgeted amount.

The annual budget planning process for natural gas often begins with a forecast for next year's consumption based on lasts year's data. However, changes in weather can have a substantial impact on consumption. The result can be excess gas sold, additional gas purchased and budget variances.

This issue is compounded by fluctuations in natural gas prices. Hedging the natural gas price will provide some protection from fluctuating prices, but only for the budgeted volume of gas. Excess gas may be sold and additional gas may be purchased, at a price different from that budgeted.  In a budget costrained environment, this is rarely a welcome surprise.

Aegent Energy Advisors uses probabilistic analysis to help school boards ensure that they will conclude the year at or, under, budget with a specific degree of certainty. For example, we can help a school board set their budget and be 90% certain of meeting, or performing better than, the targeted cost.

Aegent also works closely with school boards to leverage group purchasing strength while still providing a depth of reporting that allos for effective cost allocation.

To learn more about how Aegent can help, call us at (416) 622-9449.