How Much Will It Cost to Heat Your Building This Winter?

Fuel costs, like the weather, can be difficult to predict. New York Cooperatives and Condominiums generally utilize 2/3rds of their budgeted fuel funds during the first half of the year. Colder than expected weather, like we saw last winter, often results in operating deficits later on.

The best way to deal with the unexpected is to monitor consumption closely, but it gets tricky as temperatures drop and usage increases. Fuel companies don’t always push for prompt payment from customers in good standing. Even buildings that fall behind often still get deliveries due to the importance of the relationship.

Don’t be fooled. Ask for a consumption report from the fuel company. Every building should be evaluating consumption versus budgeted amounts. While no one can accurately predict the weather, smart building managers can react to it.

Usage reports show how much fuel was used last month. A way to anticipate fuel costs for the current month is to monitor Heating Degree Days (HDDs). HHDs provide a measure of the demand for fuel. It can be calculated by averaging the high and low outside temperature for a given day. If the number is above 65º, there are no HDDs. If it is below 65º, then subtract the average from 65º and the result is the number of HDDs. Watch how many HDDs there are this year versus last.

If you are running a surplus, you are in good shape. But beware of falling behind. If fuel prices are rising and/or usage is increasing, your budget can get out of control fast. It pays to stay out in front of these costs and address potential solutions immediately. And whatever the weather, be aware of its impact on your budget.

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New york, NY
Englewood Cliffs, NJ