Small business operators must start planning and implementing sustainable energy strategies to protect the environment - and their profits, says the president of a leading natural gas provider to smaller firms.
"(Small-business operators) should attack energy like they would attack their own business," said Bob Huggard, president of Canadian operations for Direct Energy Marketing Ltd., after speaking at a recent Vancouver Board of Trade luncheon.
Small business owners must focus on a "whole value chain," which involves buying, converting, using and disposing of energy, he said.
Direct Energy, a subsidiary of U.K.-based Centrica PLC (formerly British Gas), operates under the brand Direct Energy Business Services in B.C. and acts as a natural gas retailer for small commercial customers. The firm also supplies heating, ventilation and air-conditioning (HVAC) systems.
Customers include federal and municipal governments as well as several sectors ranging from manufacturing and farming to education. Energy consumption accounts for approximately five per cent of small companies' cost of goods, said Huggard.
With gas prices at record levels, operators are starting to realize they should pay more attention to reducing emissions and ultimately improve their bottom line.
In his speech at the Four Seasons Hotel, he contended failure to find cleaner ways of using energy could lead to demand destruction as high fuel costs force companies out of business.
Many people do not realize that unsustainable strategies and deferred or inadequate HVAC maintenance are costing them hundreds of thousands of dollars per year while unnecessary greenhouse-gas emissions are hurting the environment.
"My message is: No longer can we just focus on price when it comes to energy," said Huggard.
Instead of just dismissing green energy as too expensive, users must monitor their consumption and emissions with devices such as smart meters and web-based portals - and then choose energy sources accordingly.
As well, the Ontario government announced last week it wants to install so-called smart meters in 800,000 homes by 2007.
Direct Energy uses smart meters, which are produced by various manufacturers, to monitor customers' consumption and "show them where their gaps are" so they can improve energy efficiency.
Huggard called on companies of all sizes to start measuring their energy consumption.
Small businesses that only have one location should conduct an energy "audit" and "approach it like you were going to go to an energy banker."
Companies can change the way they use energy through the automation of lighting, heating and cooling systems, the replacement or retrofitting of inefficient equipment, and the redesign of existing building interiors to maximize natural light.
Instead of concentrating on megawatts (the units of power output), he said, Canadians should focus on "nega-watts" - reductions in consumption and emissions.
The B.C. government, said Huggard, has already begun to take "a hard look" at energy consumption by introducing a plan to increase efficiencies by 36 per cent in new homes and 43 per in new multi-unit buildings by 2010. Premier Gordon Campbell's government will also target reductions in existing homes and facilities.
Direct Energy is developing emission-reduction programs with such large organizations as the University of Calgary - which aims to save $30 million and reduce carbon dioxide emissions by 14,500 tonnes over seven years - Sears Canada and Fairmont Hotels. Huggard predicted a Canadian emission-credits exchange, similar to a stock market, will begin operations within two years. Companies will buy and sell credits like shares as they try to comply with Canada's international emission-reduction obligations. (There are several emission-credit exchanges in Europe, but Canada does not yet have one.)
Under the Kyoto Protocol, Canada must reduce emissions to six per cent less than 1990 levels by 2012.
Aldyen Donnelly, president of the Vancouver-based Greenhouse Emissions Management Consortium (GEMCo) of energy companies, which trades credits on behalf of large emitters, and several other experts say they doubt Canada will reach its Kyoto targets in time. They have predicted Ottawa will be forced to walk away from the deal - or face heavy fines for failure to comply.
(Monte Stewart can be reached at monte@businessedge.ca)
