Utility cost management covers a wide spectrum of functions, including better energy management and conservation, water conservation, invoice analysis for overcharges, cost reduction through negotiation with suppliers and monitoring changing as well as new legislation in the broader utility sector.

"Knowledge of supplier bylaws and charging structures and why utilities are priced the way they are needs to be combined with engineering knowledge and energy consumption management to reduce costs over the long term," says Hayley Elwen, head of strategic development for Venn Diagnostics.

"Reductions in cost per unit are often typically low-cost measures and can finance more expensive technical solutions."

Among other factors, it is important to take into account 265 sets of municipal bylaws that fall in line with national legislation, and the multiple charging structures that are in place for different types of consumers, when implementing utility cost management programmes, Elwen says.

She says statistics arising from her company's analysis of sites nationally during 2003 highlight overcharges from various utility suppliers and savings on utility costs like electricity and fixed-line telecommunications.

Among these, the study showed that 29% of food and beverage manufacturers were overcharged, with average savings of R215 169 a year. About 71% of shopping centres analysed were overcharged on at least one of their utilities, with average annual savings of R85 000 realised.

In addition, 31% of hotels were overcharged by an average of R37 431 a year, while 30% of general manufacturing sites were overcharged by an average of R135 372 a year.

Tammy Perrie, MD of Venn Diagnostics, says facilities management companies and property owners need to scrutinise their utility costs.

Organisations need to ensure that holistic utility cost management systems are implemented to effect the lowest utility charges possible, she says.

Old Mutual Properties has developed an internet-enabled utilities management system that allows property and facilities managers to track energy and water usage in buildings and to manage municipal utility accounts effectively.

Richard Murphy, who heads the facilities management division of Old Mutual Properties, says the internally designed system Utilman can also be used as a forecast and budgeting tool to project energy and water usage based on historical data and user control values.

He says the company has negotiated a standard format of data exchange with its meter- reading service providers to ensure accurate loading of monthly tenant meter-reading data received from service providers.

The tool is integrated with Old Mutual Properties' financial system to ensure accuracy of data migration to the financial system.

Business Day