January - February 2012 Issue IN THIS ISSUE PRSM Magazine Article Reflects on Costly Retail Trend Tampa Electric Urges Retailers to Conserve Energy CFO Perspective on Cost of Doing Nothing
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PRSM Says Trend May Be Costly to Retailers
More Retailers Now Bucking the Trend An article in the November/December 2011 Professional Retail Store Maintenance magazine about the trend by some retailers to cut preventive maintenance (PM) is drawing rave reviews from retailers nationwide who have seen negative consequences because of the cuts. According to the article written by Sam Yates, "Historically, when the economy takes a downward turn, as it dramatically has for the past two years, retailers look for creative ways to improve the bottom line of their overall operations. Often, that may mean renegotiating service contracts with vendors, seeking updated Request for Quotes with a goal of reducing costs by a certain percentage or simply making cuts in vendor services." The article states that, the "cut or reduce maintenance and service" trend is drawing response from throughout the United States from retail service providers who, in many cases, are seeing their clients end up with much larger expenses instead of manageable maintenance costs.
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Tampa Electric Turns to Recommissioning
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Florida Utility Latest to Join Growing National Trend
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Tampa Electric has become one of the latest utility companies in the nation to offer special recommissioning rebates to assist retailers in making their HVAC equipment operate more efficiently and use less energy. Eligible retail and commercial/industrial Tampa Electric Company customers will receive $25 per ton/per HVAC unit rebate for recommissioning their units. According to Tampa Electric, "This program will help existing commercial/industrial customers reduce demand and energy usage. A pre-inspection is required by a licensed participating HVAC contractor." Tampa Electric customers may apply for the HVAC Maintenance program rebate once every six years. All work must be performed by a licensed HVAC contractor and be in accordance with Tampa Electric's program specifications. Only dedicated electric HVAC systems are eligible for the rebate. Find Out More Here
The CFO's Perspective
The Unintended Consequences of Doing Nothing In today's retail environment, justifying investments in physical asset maintenance is often a difficult challenge for any Chief Financial Officer. That justification becomes even more challenging when decisions need to be made whether to keep existing systems, like HVAC, in good working order by investing in preventative maintenance. Or, should the decision be to forgo preventative and regular maintenance as a cost saving measure. Before deciding to abandon preventative maintenance,
especially in a retail environment, serious thought needs to be given to the unintended consequences of eliminating or cutting back maintenance going forward just to save dollars. Is that choice the best decision for the overall company profits in the long term? For most CFO's, preventative maintenance for HVAC systems has been more popular in principle than in practice. One can not argue against the idea of keeping equipment well maintained to extend its expected life and avoid future repair costs. But the economic value of preventative maintenance to the overall facility budget is difficult to determine in some CFO's eyes. Read More from the CFO Here