Lander Medlin is APPA's executive vice president. She can be reached at lander@appa.org. Donald T. Little contributed many valuable suggestions to this column.

The impact of deregulation on today's utility market is dramatic, yet the present changes may represent only the tip of the iceberg. Changes are occurring in every segment of the utilities industry including electricity, natural gas, and telecommunications. As a result, utilities are rapidly restructuring to adapt to the emerging competitive environment. State by state the regulatory and market outcomes are unfolding.

Now is the time for educational institutions to undertake a utilities strategic assessment, to evaluate the opportunities and the barriers and embark on a strategic plan of action. Changes in the utilities market are creating unprecedented opportunities for educational institutions to address four costly and critical facilities issues:

1. Reduction of the deferred maintenance backlog;
2. Upgrading and replacement of the utilities infrastructure;
3. Promotion of sound plant economics and stewardship; and
4. Protection of the environment.

As I develop these themes, you might consider for a moment this context:

• Higher education and facilities impact the daily lives of 17 million students, faculty, and staff;
• Higher education boasts a $500 billion plant asset portfolio consisting of more than 280,000 buildings with 4 billion square feet of floor space—the single largest dollar investment of most institutions, by far;
• Higher education spends over $18 billion per year on facilities operations, maintenance, and construction;
• Higher education facilities' energy and purchased utilities budgets exceed $7 billion, which comprises 25 to 40 percent of its annual facilities operating budget;
• A survey of colleges and universities revealed in excess of $26 billion in deferred maintenance needs. Resource reinvestment is urgently needed for proper functioning and presentation; and
• If K-12 elementary and secondary school facilities are included in these figures, the totals jump to an annual expenditure for energy and purchased utilities of $18 billion, and a deferred maintenance and capital renewal need of over $100 billion.

Consider for a moment the irony that our institutions' capital campaign seldom includes funds for roof replacement, a new chiller, a boiler upgrade, or a major repair of your steam tunnel! Moreover, you will find few if any commemorative plaques or signs naming these kinds of major repairs, replacements, or upgrades after a prestigious donor or retired president or trustee—a missed opportunity, really!

Let's face it. These aspects of our business are not glamorous, yet they need to be strategically planned for and annually funded if we are to ensure the quality facilities that support the delivery of a first-rate educational experience for the students and uphold the total mission of the institution.

It seems to me that we could use a "utility strategic assessment" approach to the dynamic changes taking place in the utilities industry. We should direct our attention to the high utility budgets of $18 billion in higher education and K-12 schools and examine the opportunities for resource reallocation imbedded in these budgets. For those who do their homework (including metering, monitoring, and verification of load), energy savings are possible within the context of each state's rules and regulations. It is important to start now to identify possible savings and to set priorities for using those savings. How would you like to:

1. Reduce your deferred maintenance backlog;
2. Replace and upgrade your utilities infrastructure;
3. Promote sound plant economics and stewardship; and
4. Protect the environment...all with "found" dollar resources?

Perhaps you can. APPA, with cooperation and support from both the United States Department of Energy's Rebuild America (DOE/RBA) program and the Electric Power Research Institute (EPRI), is expanding its educational program offerings, information, and publications to prepare facilities professionals to move dynamically, and as champions, into this emerging deregulated utilities marketplace.

How is APPA positioning itself to encourage your proactivity? First and foremost, APPA has established a formal strategic alliance partnership with the DOE/RBA program to provide educational opportunities and utilities case studies for dissemination and use both nationally and on an individual state-by-state basis. Rebuild America is a voluntary program that helps form institutional partnerships that then make improvements in their existing buildings using energy-efficient technologies.

The RBA programmatic approach lets you choose the best ways to save money by cutting the costs of energy supply as well as the overall consumption in your facility. RBA will support you with a network of technical and business experts, resource materials, and access to innovative solutions and proven technologies. For further details on this alliance, please visit our website, www.appa.org, as well as DOE's website, www.eren.doe.gov.

APPA and RBA are now developing a new series of state-based executive briefings called Resource Reallocation - Utilities Strategic Assessment (RR-USA) to help educational institutions understand, assess, establish, and implement a plan of action to address the critical facilities needs outlined above through resource reinvestment. The RR-USA executive briefings will be delivered at the state level and will consist of components that are designed to:

• Review the stewardship context for what we do;
• Understand the macro case for institutional (utility) resource reinvestment;
• Take advantage of deregulation to determine new utility rates with their corresponding risk;
• Identify opportunities for reduced consumption through energy retrofits and upgrades;
• Understand why accurate measuring, monitoring, and verification is critical to your success;
• Show institutions how to turn utility budget cost avoidance into resources to fund deferred maintenance and utility infrastructure renewal;
• Create an effective utility strategic assessment that can lead to a utility strategic plan that is integrated with the facilities master plan; and
• Adopt a comprehensive program of utility and plant renewal through annual reinvestment in the plant asset portfolio potentially with utility dollars or other funds.

These executive briefings are designed specifically for the chief business officer and the chief facilities officer. They, of necessity, hit the key topics and move to possible actionable suggestions during the course of each full-day, state-based briefing. APPA is working collaboratively with the National Association of College and University Business Officers (NACUBO) in the delivery of these state executive briefings. Speakers for each of the state briefings will be drawn from APPA and NACUBO's membership and their business partners.

In addition, APPA has established a progressive working relationship with the Electric Power Research Institute to further augment the formulation and delivery of these important briefings. The prime partnership with RBA continues to be fundamental to our success in assisting you in this core competency area of energy and utilities.

EPRI is one of America's oldest and largest research consortia with over 700 member electric power utilities. Their mission is to deliver science and technology to make the generation, delivery, and use of electricity affordable, efficient, and environmentally sound. The advent of utility industry restructuring has caused many utilities to focus increased attention on their most important outcomes. Colleges and universities are usually considered a vital part of their customer base. To find new ways of assessing customer needs and to exchange information in constructive ways, EPRI and over 60 member utilities have formed the Education/ Government Initiative to work with APPA and others on programs of mutual interest and benefit.

EPRI is also assisting APPA in the development and delivery of a second educational offering, a utilities deregulation seminar. We are planning delivery of this seminar for July or August. We are partnering with NACUBO and the International Facility Management Association (IFMA) to collectively cosponsor this seminar on a regional basis. More details will be available via brochure, fax, and on APPANet when available. Furthermore, APPA, IFMA, RBA, and EPRI will develop and publish a series of monographs. The series will consist of:

1. A metering handbook for managers, authored by Mo Qayoumi of the University of Missouri/Rolla, which is already significantly underway;
2. A case studies and applications book; and
3. A set of generic technical specifications for use in preparing bids, RFPs, and other contractual procurement agreements or documents.

All in all, a great number of educational and informational products and services will be forthcoming from APPA and its strategic alliances and business partnerships. These products and services are, we trust, timely and extremely important for APPA members as we wrestle with both the opportunities and barriers posed by utility deregulation.

What's at stake? Millions of dollars that can potentially be "saved" (if not avoided) and reinvested from utilities budgets. This cost avoidance can then be leveraged and reinvested in the plant asset portfolio to address the critical facilities needs of reducing your deferred maintenance backlog, replacing and upgrading your utilities infrastructure, promoting sound plant economics and stewardship, and protecting our environment. You can do this by upgrading and renewing your utility infrastructure with more efficient and less environmentally impacting equipment and practices.

Do you have a utilities strategic assessment underway? Are you ready to adopt a utilities strategic plan of action? Can you take advantage of the opportunities posed by deregulation? If not, we would like to offer our assistance; if so, we would like to share your story with your colleagues. Either way, please contact us. We would appreciate the opportunity to work with you in your stewardship of your energy and utilities resources.