Philadelphia’s Director of Sustainability, Mark Alan Hughes, answers our readers
Q: When I saw you speak at Johnny Brenda’s a few months ago, you mentioned an idea to make Philadelphia government offices more energy-conscious by tracking their usage, setting goals and rewarding conservation efforts. Since that time, Mayor Nutter has announced massive cutbacks and I couldn’t help but wonder if your plan to curb the energy use by government offices has been put into effect.
—Elizabeth Reed, Northern Liberties
A: Thanks, Elizabeth. That’s a great question and it couldn’t be more timely. As Philadelphians face an unprecedented economic crisis, the sustainability agenda is more important than ever. That’s because sustainability is fundamentally about ending present waste and avoiding future costs. Both things are part of the solution to a budget crisis like the one facing Philadelphia and governments across the country.
Let’s recap that crisis: As with all cities, we must have a balanced budget. But in addition, Philadelphia is required to also have a balanced five-year budget, and each of those five years must be balanced. After closing a gap of about one billion dollars in the five-year plan just a few months ago, we now need to close another billion-dollar gap that has opened as the economy continues to worsen.
These gaps open up for two main reasons. First, our tax revenues are falling as people earn less, buy less and businesses sell less. Second, as the investments we use to pay our pension obligations decline in value, the shortfall needed to pay our retirees must be made up with money from tax revenues. Decreased money coming in and increased money going out creates a gap.
The Target Energy Budgets we discussed at Johnny Brenda’s are one way of working to close that gap. City departments (e.g. Recreation, Police or Public Health) don’t pay their electric or gas bill. Heck, they never even see the bill. They’re all paid centrally. That means no one has an incentive to change their behavior. Turning off the lights doesn’t save them any money and propping open the door when the a/c is on doesn’t cost them any money.
In a few months, all that will change. Every department will receive a Target Energy Budget for each of their facilities (firehouses, rec centers, libraries, health centers, etc.). These Targets will be 10 percent lower than this year’s spending. (It’s more complicated than that, but that’s the basic idea.)
If a department doesn’t meet its Target, the difference will be subtracted from the program budget the following year. If they exceed the
target, then the department gets a bonus equal to the difference in their next program budget. Every expert will tell you that 10 percent savings are easy to find in a building where electricity and gas are treated as if they are free.
This is basically a shared savings plan in which the general budget gets the first 10 percent saved and the department gets all the savings after that. The plan should save over $3 million in next year’s budget and every year after.
It’s a great example of how the smart environmental option is often a smart economic option, too. And we’re implementing it earlier than we might have because of, not in spite of, the bad economy. ■+