University officials are now negotiating heating-oil prices for next year, and the likelihood of paying more than usual may cut into the budget for some facilities maintenance projects next year
With the end of winter, thoughts about the high cost of heating oil may have shifted to the back burner for most homeowners, but not for Brown.
University officials are now negotiating heating-oil prices for next year, and the likelihood of paying more than usual may cut into the budget for some facilities maintenance projects next year, said James Coen, director of maintenance and service operations.
Coen monitored the rising cost of heating oil this winter as inventories of crude oil hit a 30-year low in January.
Despite the decision by OPEC in late March to increase oil production in an effort to alleviate that shortage, "it worries me still," said Coen. "I know I'll be paying more for my fuels next year than this, so certain improvements will have to wait."
Until about a month ago, the University did not see any effect of the rising fuel prices because it had locked in the oil prices the year before. However, as the oil prices rose, so did natural gas prices, which have had a "minor" effect on the budget, Coen said.
Unlike homeowners, however, Brown has the flexibility to switch back and forth between the use of oil and natural gas to heat most of its space.
All of the largest buildings - totaling 4 million of Brown's 5.5 million square feet of space - are heated through the central heating plant at 135 Lloyd Ave. There, three boilers can switch from one fuel to the other within a half hour, or two can even burn alternate fuels at the same time.
The dual fuel setup is necessary because Brown could not be heated solely by natural gas. On the coldest days of winter, the University cannot use the gas because the supply is limited by its delivery system. When boilers ignite as frequently as they do on those days, there is too much demand for the delivery system to accommodate.
The alternative also ensures that the University has leeway to save money by burning the cheaper fuel. "That way we're not as susceptible to highway robbery," said John Noonan, director of facilities management.
Smaller buildings that are not connected to the central heating plant have their own boilers, for which oil is purchased by the gallon.
The Purchasing Department starts looking at fuel costs at the end of January for the next season in order to lock in a low price; prices are usually lowest in the spring. Planning is a financial necessity because Brown purchases some 40,000 barrels of heating oil a year, most of it No. 6, and the rest No. 2.
Soon the subject of heat will even disappear from the minds of those who regulate it here. The heat is scheduled to be shut off for the season the day after Commencement and not be turned on again until Sept. 15.