Who Should Read Energy Budgets at Risk (EbaR)?

Energy Budgets at Risk provides background information required to understand the various energy cost, price, efficiency, and related issues that are important in developing a balanced approach to facility energy risk management. Analytical concepts are limited, and sufficient background material is included to explain and illustrate all applications.

This book is designed to serve five separate but related audiences with whom I have interacted over the last 30 years.

The first group is composed of building owners, facility managers, and others on the front line who are responsible for electric, natural gas, and fuel oil budgets in commercial, industrial, government, and institutional buildings and facilities. This audience will learn how to develop, apply and present a comprehensive, consistent financial risk management framework to evaluate energy budget risk, alternative energy-efficiency investments, and, in competitive markets, how to integrate efficiency investment decisions with purchase decisions.

The second audience is composed of CEOs, CFOs, CROs (chief risk officers), administrators, and managers whose organizations have already begun adopting quantitative management approaches in other areas such as Six Sigma quality measurement. For these decision makers, Energy Budgets at Risk provides another tool in the expanding portfolio of management analytics. For organizations just beginning to consider quantitative options for measuring and managing risk, Energy Budgets at Risk provides a perfect starting point. An energy budget and efficiency investment application provides an intuitive introduction to modern risk management concepts and tools, and, additionally provides immediate cash flow benefits.

The third audience, energy service companies (ESCOs), MEPs (mechanical, electrical and plumbing firms), consulting engineers, architects, and other design professionals who provide energy-efficiency services, typically struggles to present efficiency options to their clients. More efficient choices nearly always cost more initially but with proper financing will increase cash flows. However, many owners feel uncomfortable with anything other than the traditional least-cost option. An EBaR analysis intuitively demonstrates that making a trade-off between initial cost and future energy budgets will better meet owner objectives.

The fourth audience is government policy makers and electric utilities program planners. Simply providing consumers with energy-efficiency technology information and encouraging them to use traditional investment evaluations like net present value analysis have relatively little impact on efficiency-investment decisions. Energy Budgets at Risk tackles this problem by providing policy makers and program planners with a new investment analysis tool that can be bundled with energy-efficient technology information to increase the impact of current information programs. Promoting EBaR and other new information initiatives that better fit existing decisionmaking requirements is a promising approach to encourage greater energy efficiency.

The final audience includes advanced undergraduate and graduate university students. Energy Budgets at Risk provides the financial framework to evaluate energy efficiency and green building choices required in architectural design, construction, facilities management, and mechanical engineering disciplines. Also, students in business, finance, and industrial engineering will find Energy Budgets at Risk instructive as an introduction to quantitative risk management applications to evaluate market risks and capital budgeting investment decisions.