October 2014
Condo fees are not increasing at the same rate as utility costs. While an increase of 2% per year may appear reasonable, based on the Consumer Price Index (CPI), this is nowhere near enough to pay for recent and anticipated increases in the cost of utilities. This means that many condo corporations have spent and will continue to spend more for utilities and less for everything else. Yet this may not be sufficient to keep future condo fee increases at current levels.
Condo corporations have no control over the cost of utilities. They can reduce costs by reducing usage.
The Problem
Water rates have increased 9% per year on average for the past ten years which is a doubling in cost since 2004.
Near term annual increases in the range of 8% are predicted.
Electricity rates have increased about 10% per year for the past five years; a combined increase of 50%. In addition, clean energy rebates have been scaled back and will end in 2015. Cost increases are the result of investments in the refurbishment of nuclear reactors, new infrastructure, Toronto’s distribution system revitalization program and clean energy projects.
Natural Gas rates are anticipated to increase by 40%. Over the past two years natural gas prices have gone from 25 year lows to 5 year highs. This has not been due to a shortage of natural gas. It is the result of several factors that include the coldest winter in 20 years, a 20% increase in gas usage this past winter, storage levels for gas at 10 year lows and insufficient storage facilities to accommodate increased demand.
There are ways to lower utility costs by eliminating waste and using less.
Water Utilization Tips
Annual water costs can range from $400 to $1,400 per suite per year. Occupancy, type and quantity of water-utilizing fixtures, and common area requirements such as cooling towers and swimming pool all impact on usage. Of these only fixtures is controllable.
Most faucets include aerators which tend to be removed over time. Faucets without aerators can use up to 80% more water.
Low flow shower heads can reduce their water usage by 50% or more.
Toilets typically represent about 25% of a condo unit’s total water usage. Installing low flow toilets can reduce their water requirements by up to 40%.
Monitoring water consumption, on an hourly basis, is an important component of managing this utility. Measurement technologies can help to identify leakage and other wasteful water usage.
Buildings that effectively implement water control and measurement technologies such as those mentioned here can recover their costs in as little as one year.
Electricity Utilization Tips
In suite electricity usage can account for 60% to 80% of total building electricity consumption.
Energy efficient lighting in the form of LED lighting can result in an up to 75% savings; up to 92% when combined with sensors. Sensors will automatically turn lights on and off when an area is in use. Annual maintenance costs can drop by up to 70%. The payback on energy efficient lighting projects is usually under four years.
Submetering is a system used in multi-unit properties, such as condominiums, where utility usage is measured in each suite and that usage is paid for by the tenant or owner of the suite. When submetering is in use, total building consumption of electricity can drop by 30% to 40%.
Springfest 2014 was a one-day event for building owners, property managers, facility managers, and others responsible for building maintenance and facility operations. Yonge-Sheppard Condominium News attended the Springfest presentation on managing utility costs and based this article on that presentation.
