Energy Management Program Development

By William H. Mashburn, P.E., CEM

All the components of a comprehensive energy management program are depicted in Figure 2-1. These components are the organizational structure, a policy, and plans for audits, education, reporting, and strategy. It is hoped that by understanding the fundamentals of managing energy, the energy manager can then adapt a good working energy management program to the existing organizational structure. Each component is discussed in detail below.


The organizational chart for energy management shown in Figure 2-1 is generic. It must be adapted to fit into an existing structure for each organization. For example, the presidential block may be the general manager, and VP blocks may be division managers, but the fundamental principles are the same. The main feature of the chart is the location of the energy manager. This position should be high enough in the organizational structure to have access to key players in management, and to have a knowledge of current events within the company. For example, the timing for presenting energy projects can be critical. Funding availability and other management priorities should be known and understood. The organizational level of the energy manager is also indicative of the support management is willing to give to the position.

2.3.1 Energy Manager

One very important part of an energy management program is to have top management support. More important, however, is the selection of the energy manager, who can, among other things, secure this support. The person selected for this position should be one with a vision of what managing energy can do for the company. Every successful energy management program has had this one thing in common — one person who is a shaker and mover that makes things happen. The energy management program is then built around this person.

There is a great tendency for the energy manager to become an energy engineer and attempt to conduct the whole effort alone. Much has been accomplished in the past with such individuals working alone, but for the long haul, managing the program by involving everyone at the facility is much more productive and permanent. Developing a working organizational structure may be the most important thing an energy manager can do.

The role and qualifications of the energy manager have changed substantially in the past few years, affected by required certification of federal energy managers, deregulation of the electric utility industry (bringing both opportunity and uncertainty), and performance

contracting requiring more business skills than engineering.

In her book titled Performance Contracting: Expanded Horizons, Shirley Hansen gives the following requirements for an energy management:

• Create and maintain an energy management plan

• Establish energy records

• Identify outside assistance

• Assess future energy needs

• Identify financing sources

• Make energy recommendations

• Implement recommendations

• Provide liaison for the energy committee

• Plan communication strategies

• Evaluate program effectiveness

Energy management programs can and have originated within one division of a large corporation. The division, by example and savings, motivates people at corporate level to pick up on the program and make energy management corporate wide. Many energy management programs also originate at corporate level with people who have facilities responsibility and have implemented a good corporate facilities program. They then see the importance and potential of an energy management program and take a leadership role in implementing one. In every case observed by the author, good programs have been instigated by one individual who has recognized the potential, is willing to put forth the effort (in addition to regular duties), will take the risk of pushing new concepts, and is motivated by a seemingly higher calling to save energy.

If initiated at corporate level, there are some advantages and some precautions. Some advantages are:

• More resources are available to implement the energy management program, such as budget, staff, and facilities.

• If top management support is secured at corporate level, getting management support at division level is easier.

• Total personnel expertise throughout the corporation is better known and can be identified and made known to division energy managers.

• Expensive test equipment can be purchased and maintained at corporate level for use by divisions as needed.

• A unified reporting system can be put in place.

• Creative financing may be the most needed and the most important assistance to be provided from corporate level.

• Impacts of energy and environmental legislation can best be determined at corporate level.

• Electrical utility rates and structures, as well as effects of unbundling of electric utilities, can be evaluated at corporate level.

From: Energy Management Handbook, 7th Edition, The Fairmont Press