As oil prices shot to record highs this summer, the directors of facility services at several UT System institutions paid more attention to the rising cost of another commodity - natural gas.
UT-Austin saw the cost of natural gas for its campus peak July 9 at nearly $13 per therm. A therm is the energy equivalent of burning 100 cubic feet of natural gas.
The University's Utilities and Energy Management Department produces all of the energy for the campus using natural gas, but UT was insulated from rising costs by a contract that locks in prices, said Juan Ontiveros, director of the department. UT's contract with the Texas General Land Office, which expires at the end of August, had the campus paying $8.27 per therm.
Utilities and Energy Management paid about $40 million for natural gas in the 2007 fiscal year, and Ontiveros projected about the same costs for the current fiscal year.
The department generally tries to consume about 85 to 90 percent of its gas at a fixed price in any given year. Ontiveros said Utilities and Energy Management has locked in the price for about 67 percent of the gas it expects the campus to consume during the 2009 fiscal year. The department will stagger the purchase of the remaining 20 percent in the coming months in case prices continue to drop.
"The major thing is that it's dropped off significantly, and we're optimistic," Ontiveros said. "It's $9 now; what if it drops to $7? It's a guess - that's why we buy a little bit at a time."
Ontiveros said the goal of the department is to pay about $9 per therm for gas in the next fiscal year.
Rene Colunga, project manager for UT-San Antonio Facilities Engineering and Project Management, said the campus buys its electricity exclusively from city-owned CPS Energy. Colunga said the campus pays some of the lowest electrical costs in the state despite the CPS monopoly, because of efforts by the city to branch out into coal and nuclear power.
UT-El Paso buys its electricity from El Paso Electric but, like the Austin campus, negotiates a contract for fixed prices. Juan Guerra, facilities director, said the only price fluctuation the campus experiences comes in the form of surcharges added to its energy bill when the price of natural gas increases for the energy company.
Guerra said these monthly surcharges have been about $20,000 higher than the previous year's, but projected energy costs for 2008 are only $200,000 higher than the $6.4 million UTEP paid in 2007. He said the flat cost increases are due to a determined effort to save energy elsewhere on campus. A new chilling station for cold water uses about half as much energy as the model it replaced, and more efficient lighting systems have been installed across campus.
"We are very aggressively pursuing a lot of energy conservation efforts," Guerra said.
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