Rising fuel prices to affect Univ. spending
Due to recent surges in gasoline and natural fuel prices nationwide, energy expenditures for the Homewood campus in fiscal year 2006 may see increases of over $2 million from last year's costs, according to figures released by administrators in the Office of Facilities Management.
This fiscal year, Homewood campus will pay an estimated $7.5 million for electricity and $4 million for natural gas, up approximately 21 percent from last year's expenditures of $6.5 million in electricity and $3 million in natural gas.
The hike in fuel costs has been attributed to the damages wrought by Hurricanes Katrina and Rita, which severely debilitated oil infrastructures in the Gulf Coast and sent gas prices soaring.
"This is the highest increase we've seen in quite a while," said David Ashwood, director of Homewood plant operations. "Normal yearly increases are driven by a lot of factors, but due to the hurricanes this year, those things are unpredictable."
According to the U.S. Energy Information Administration, natural gas prices across the country are expected to rise 48 percent this winter, after the Gulf Coast hurricanes devastated 60 percent of the region's oil refining resources and 40 percent of its natural gas production.
The high price of gasoline -- which, according to the Energy Information Administration's latest figures, now stands at an average of $2.96 per gallon on the East Coast -- have also become a source of worry for facilities administrators.
The University currently uses approximately 100,000 gallons of gasoline a year to run its trucks, shuttles and security vehicles, 60,000 gallons of which is used on the Homewood campus, said Director of Facilities Management Larry Kilduff.
The recent increase in prices could double the cost of gasoline, adding an extra $150,000 to gasoline expenditures.
However, Kilduff said, this increase "pales in comparison to worries about electricity and heating."
All buildings on campus are heated via steam, which can be generated through the use of both electricity and natural gas. Because of the University's dual fuel capacity, facilities administrators can choose which fuel will be most cost-effective.
Hopkins has purchased contracts for natural gas, electricity and gasoline supplies that will last through next summer and part of fiscal year 2007.
While the University's two-year natural gas contract with Colonial Gas holds at a fixed rate, the cost of electricity -- which Hopkins purchases from Baltimore Gas and Electricity -- has from risen 6.5 cents per kilowatt to 8 cents per kilowatt in the last two to three months, according to Kilduff.
Administrators stressed that the constantly fluctuating markets of fuel and gasoline have remained largely unpredictable.
"We're finding it real hard to find out what impact the markets will have on our utilities," said Kilduff. "Even the best market experts can't predict it."
According to Ashwood, money will be budgeted to cover the increased energy costs during the quarterly budget process.
"We're not robbing other resources to pay for [extra energy expenses] -- it's up to the school to decide how they want to fund it," Ashwood said. "The school is well aware of these rising costs."
Whether higher energy costs will affect the prices students pay for campus housing has yet to be determined, but such considerations will play a role in the process of determining next year's housing budget, said Carol Mohr, senior director of housing and dining.
"We work hard to minimize the impact on our students in terms of housing costs, but it's really much too early to give any sense of cost increase," Mohr said.
"At this point, we're not anticipating an unusual increase. We generally cover our expenses from revenues pulled in from student housing and dining services."
The rising costs will, however, affect juniors and seniors living in off-campus housing, who will pay significantly higher utility fees this winter.
BGE spokesperson Linda Foy said that over the last year's winter period, from Nov. 1 to March 31, the average residential consumer paid approximately $646 to his or her their home. This winter, the number is expected to climb to anywhere between $860 and $940, marking a 45 percent increase in price. Before Hurricanes Katrina and Rita, the estimated increase had been 20 to 30 percent, according to a Sept. 19 press release by BGE.
"We have to focus on energy consumption factors now," Foy said.
She suggested that residents make efforts to save on energy by sealing cracks in heating ducts, lowering their thermostat to 68 or below and regularly changing filters on forced air systems.
On campus, administrators are also focusing on energy conservation efforts. The University has spent a year and a half implementing a $4.7 million energy conservation project on Homewood campus, with measures that included installing high-efficiency motors, retrofitting lights and using energy-recovery heat wheels in buildings.
"All of those measures would've saved $1 million a year," said Kilduff. "Probably, if you look at today's prices, those savings will come out to another half million."
The conservation project has already brought some success. According to Kilduff, a project converting the heaters in Wyman Park Building to high-efficiency gas boilers to circulate hot water will save the University up to $300,000 a year.
However, facilities management administrators remain doubtful about the feasibility of introducing alternative sources of energy to the University.
"We have reviewed using wind energy for electricity," said Ashwood. "That typically is not cheaper, but you do that for environmental interests."
He added that for the production of steam, cheaper alternatives to fuel oil and natural gas have yet to be found.
"A big part of it is what you're able to exhaust," Ashwood said. "There are a lot of fuels you could use if you could dump wastes."