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Case Studies: Innovative Solutions

Watercare House Case Study: Anchor tenant scores a NABERSNZ excellent rating for energy use

Watercare House Case Study: Anchor tenant scores a NABERSNZ excellent rating for energy use

Pushkar Kulkarni from Total Utilities completed the site review and NABERSNZ Assessment of Watercare House. Here he provides additional commentary to the original published case study, highlighting the specific benefits of a NABERSNZ tenancy rating. "A NABERSNZ tenancy rating is an ideal tool for tenants as it shows them how their day to day operations impact their energy performance. It can also determine how well they manage energy and identify the opportunities that may exist to improve energy performance. In an increasingly competitive market place and businesses look for a point of difference by delivering on their corporate and social responsibility, and think about long term business sustainability, tools like NABERSNZ are a good demonstration of their willingness to "walk the talk". It reflects where they are now with respect to others and what benefits they can get by improving their NABERSNZ rating. I definitely feel that ratings will become increasingly important in New Zealand. Equipment directly impacting the tenancy rating of Watercare are: lighting, computers, and client specific plug load etc. They are limited to what they can do with the lighting connections and zoning due to way in which these were originally designed. This has had an impact on the rating. If a NABERSNZ rating was a factor that developers and contractors were informed of during the design/build stage, then there is good chance that the lighting connections and zoning may have been designed differently. In my opinion the occupancy density, clever use of all areas, and using lighting controls are the main factors that have resulted in a 4-Star NABERSNZ tenancy rating for Watercare. The rating demonstrates it's a very good start and platform for Watercare to understand where they are at compared to the wider market and examine strategies on how they can improve going forward."   Scoring a first-rate NABERSNZ 4-star tenancy rating for energy consumption at its office demonstrates an Auckland company’s commitment to the environment. Auckland water provider Watercare Services Limited is the anchor tenant in an eight-level office block constructed in bustling Newmarket in 2013. 73 Remuera Road is the first Green Star rated commercial property in the district and reflects the growing demand from corporate tenants for green principled, energy smart work spaces. Watercare occupies three of five office floors in the building. Key Facts 4-star ‘excellent’ NABERSNZ tenancy rating Energy use certified as 97.6 kWh/year/m2 NABERSNZ to be used at other sites Further energy upgrades continue Big Numbers 2013 – achieves a 5 Green Star Design rating 2015 – achieves a 5 Green Star Built rating 2016 – achieves a 4 star NABERSNZ tenancy rating Energy use certified as 97.6 kWh/year/m2 Total energy consumption 738,454 kWh/ year Building Profile Location:  73 Remuera Road, Newmarket, Auckland Owner: Viewmount Orchards Limited Anchor Tenant: Watercare Services Limited (approximately 300 employees on site on an ordinary day) Accolades: 5 Green Star Design (Achieved 2013) 5 Green Star Built (Achieved 2015) NZ Property Council Award – Commercial Office Property Best in Category Award 2015 NZ Property Council Award – Green Building Property Merit Award 2015 The Anchor Tenant Watercare is an Auckland Council owned organisation (CCO) providing water and wastewater services to Auckland and its environs. It is committed to the sustainable management of natural resources and energy saving operations. The Auckland Council has two additional NABERSNZ rated premises – the Manukau Civic Building (3 star whole building, 2014) and Orewa Service Centre (3.5 star whole building 2016). watercare.co.nz The Building/Facilities Manager FM Concepts Limited is an Auckland-based commercial property management firm which focuses on medium to large high rise buildings and offers a full range of services including onsite operational management, property consultancy, contract management, health and safety systems and cost management. It has a strong interest in the sustainability of the built environment and energy efficiency. Two commercial buildings in its portfolio are currently undergoing NABERSNZ ratings. fmconcepts.co.nz Key Sustainable Features Located within easy walking distance of train and bus networks - encourages sustainable transport options for occupants High-tech building controls and management system with real time monitoring Energy efficient heating, ventilation and air conditioning system (HVAC). Double glazed façade LED lighting Well-designed waste collection and recycling area End of trip facilities – gym, cycle park and locker facilities This property is a brownfield redevelopment – its construction has improved an existing dilapidated area and makes a positive contribution to a sustainable Auckland. Why NABERSNZ? With water being its core business Watercare has the environment and energy issues at the top of its agenda. While its head office is housed in Green Star rated Watercare House the company’s sustainability manager Roseline Klein says the company wanted to understand its everyday energy performance across the three floors it occupies in the building. It was the missing ingredient. We wanted to know where we were at with our energy performance, how well we were doing and where we could improve. We’d heard about NABERSNZ so we did some research online. It’s a great tool, it provides a benchmark and it drives best practice.” – Watercare Services Limited Sustainability Manager Roseline Klein NABERSNZ in Action Watercare Services Limited sustainability manager Roseline Klein says undertaking a NABERSNZ rating over its 7563 square metres of office space has proved to be “a painless process”. The meterage required for a rating was already in place – 18 meters had been installed in the building during the construction period to aid fine-tuning of systems and utilities. The company took advantage of the free NABERSNZ feasibility assessment which determines a building’s readiness to get started with a rating. “It made a big difference for us and took away the humdrum business of counting 644 computers and documenting the configuration of staff plus it set a timetable, provided a checklist and saved us time,” says Roseline. NABERSNZ assessor Pushkar Kulkarni from Total Utilities says lighting, computers and occupant specific plug load have the biggest impact on a tenancy rating. He says clever configuration of work spaces, occupancy density and sensory lighting controls have resulted in Watercare’s superb 4 star result. The Value of NABERSNZ Watercare says it wants to model water and energy efficiency and its 4-star NABERSNZ tenancy rating shows its credentials. Sustainability manager Roseline Klein says the rating has been “a great experience” and has pushed the company to look hard at its resources and ensure they are better used. “It’s spearheaded change. For example we’re now trying to ensure our procurement process is not always about cost but energy efficiency too. We’ve recently retrofitted our gym with water efficient shower heads which use nine litres per minute compared with 12 – they offer a better shower experience and use less water and energy,” she says. Roseline believes if a NABERSNZ rating was compulsory it would encourage energy awareness and help tackle climate change. “For example Aucklanders are the lowest users of water because it is charged volumetrically so whether you are sustainably-minded or not your invoice reminds you not to waste, to think of water efficiency. A mandatory energy performance rating would have the same effect for landlords and tenants.” In Australia a NABERS rating is compulsory for commercial offices over 1,000 square metres while a range of mandatory energy performance ratings exist in Europe. NABERSNZ assessor Pushkar Kulkarni says as Kiwi businesses increasingly look to deliver on corporate and social responsibility and think about long-term business sustainability a NABERSNZ rating demonstrates a willingness to ‘walk the talk’. “The NABERSNZ tool is set to become increasingly important in New Zealand.” A NABERSNZ rating demonstrates a willingness to ‘walk the talk’ – NABERSNZ Assessor Pushkar Kulkarni

Ongoing Insights with Cloud Analytics: Zespri Case Study

Ongoing Insights with Cloud Analytics: Zespri Case Study

In 2013, Zespri, one of the world’s leading horticultural companies, and the recognised category leader in kiwifruit, was facing many significant challenges. The Psa virus which attacked their main gold kiwifruit crop, had the potential to devastate the company and its grower shareholders. In addition, they were facing significant capital outlays associated with their existing ICT systems and the need to upgrade their computer hardware. Zespri had to ask questions like, "Could the new variety of crop, Sun Gold, be more robust and become another bestseller?", or, "Would our outputs dramatically reduce?" At the same time, Zespri’s Board were concerned about identifying and mitigating the risks of a natural disaster like the tsunami in Japan or the earthquakes in Christchurch. Their data centres were located in Mount Maunganui and backup services in Tauranga. They wanted to understand the impact these types of events could have on their onsite server and storage infrastructure. Measured Baseline Informs Strategy Undertaking the initial analysis of Zespri’s current position, we established a baseline ICT cost. This baseline was used as a benchmark to inform financial decision-making and monitor ongoing expenditure. With assistance from the team at Total Utilities, Zespri evaluated its ICT data centres and infrastructure services and platforms. The objective was to determine whether they could manage the range of potential outcomes that they faced. These systems would have to be flexible enough to adapt to both the best case and the worst-case scenarios. Zespri sought Total Utilities' independent advice to identify and assess out how they could best respond to these risks and opportunities. They ultimately saw the need to inform vital decisions around how they consumed computer services with a scalable and cost-effective model that was aligned with their overall financial and business strategy. Undertaking the initial analysis of Zespri’s current position, we established a baseline ICT cost. This baseline was used as a benchmark to inform financial decision-making and monitor ongoing expenditure. Using this measure, we demonstrated to the CIO and CFO and subsequently their executive and board, significant savings could be made by moving to a monthly subscription model based on public cloud services. In the future increases above the baseline, increased spending in ICT, would be indicative of Zespri’s growth. The baseline is a very useful comparative tool, both for supporting financial decisions and controlling monthly spend. After conducting a thorough analysis of the needs and opportunities available to Zespri, we provided the quantitative data that underpinned the business case presented to their board. Total Utilities subsequently supported Zespri through our independent Request for Proposal process to choose a candidate for the migration to, supply and support of a comprehensive cloud-based infrastructure running over the Microsoft Azure Platform. Moving ICT operations to Microsoft’s Azure cloud computing platform has many advantages including access to data from anywhere and at any time, an IT environment that is quick and easy to replicate as new offices open and new services become available, and it can effectively respond to the increased competitiveness that occurs when other global players enter the market. In addition, moving to Azure mitigated the risk of natural disasters crippling the closely located physical data centres. Ongoing Insights and Cloud Analytics Our commitment to providing Zespri with a dynamic and meaningful experience meant that our relationship continued past the selection phase. With our expertise in financial analytics we continue to provide them with forever evolving insights. Steve Wichman, Zespri’s Procurement and Commercial Manager, outlines how Zespri is moving into an ICT maturity phase. With this the board is always looking for ways to optimise their systems. The regular technical and financial input from Total Utilities is very useful in this regard, Steve describes us as a sounding board and an independent voice. Zespri utilise the Total Utilities cloud management service based on our analytics, reporting capability and the Cloudyn tool. Providing these reports and monthly insights we can help ensure that expenditure is aligned, appropriate, and adaptable to Zespri’s financial strategy. We also help them manage and mitigate the risks associated with an OPEX approach, bill shock, by providing them with real-time alerts of consumption. Steve states that these reports provide insights on how Zespri can best optimise their systems, analyse exceptions, and determine how they can improve their current and future operating state while reducing overall expenditure. Customer-Centric and Flexible Reporting The board is always looking for ways to optimise their systems. The regular technical and financial input from Total Utilities is very useful in this regard. The dynamic nature of our service to Zespri means that, as well as providing clear and understandable reports, our analytics extend to creating what-if scenarios. For example, we can analyse what might happen if Zespri consolidated or expanded some of its ICT services. This approach means we can project future cost savings or increases accurately. Total Utilities insights, financial analysis and recommendations have become more meaningful as more data is gathered and more avenues explored. We can now calculate ICT costs on a “per service” basis. This allows Zespri to identify the true cost of financial, operations, marketing or any other system that requires ICT resources. Our benchmarking and cash projection approach extends to three-yearly reviews of the business case. These reviews are vital to ensure that the case remains relevant to Zespri’s situation and consistent with the parameters set by the board. Regular reviews, along with ongoing monthly, quarterly and annual reporting, are at the heart of Zespri’s ongoing drive to extract the maximum, identified and projected value available from the Microsoft Azure platform of services. Understanding Key Business Drivers to Leverage Competitiveness Other ICT consulting companies might focus on the technology or hardware, we take a financial analytics approach that sees ICT as a consumable and adjustable utility. This means consumption and costs are transparent, flexible and optimised. We believe ICT should be financially appropriate for a company, aligned with their goals, and be able to adapt to real-world factors. We do all this by establishing a baseline of costs, creating a detailed business value analysis in support of a business case and then deliver regular monitoring. This approach informs understanding of the company’s consumption, costs and benefit realisation from their Azure based ICT systems. This is the multi-faceted and valuable service that we continue to provide to Zespri. Finally, would Steve at Zespri recommend us to other companies? A resounding yes. Our strong and dependable relationship, the way we deliver on a job both in quality and in timeliness, and our independent and trusted advice, is hard to find elsewhere.

Achieving Client Success

Emmy Seccombe
Te Uru
Paul Laing
Red Stag Timber
Haydn Randall
St Bede's College
Future Trading Conditions for Energy Market Becoming More Difficult

Until now, articles on the Total Utilities website have always been of direct relevance to the utility markets where we have operated since 1999. In this case, we have included Jonathan Eriksen’s latest quarterly investment commentary below because it puts in wider New Zealand and global context the macroeconomic trading conditions that impact directly and indirectly on the utility providers in New Zealand. I have an economics background and have known Jonathan since I emigrated to New Zealand 25 years ago. He is one of the leading actuaries in the country and his independent investment advice track record is second to none in my opinion. The relevance of this advice to future trading conditions in the local ‘energy’ sector is very clear cut. Global energy market trading conditions are becoming more difficult due to well-publicised political factors including but not limited to the ebbs and flows of the Donald Trump Presidency. The New Zealand dollar exchange is weakening versus the major currencies overseas. We have a small, remote niche economy which has nonetheless been consistently successful over the past 20 years. Focusing on the Liquid Petroleum Gas (LPG) side of ‘energy’, we have an energy source which is non-renewable but which is far ‘cleaner’ than other non-renewables like coal and diesel. Global demand for LPG is growing. There is a great opportunity for LPG to replace coal and diesel locally during the coming 30 year period. However the Government’s recent ill-advised (in my view) prohibition on all new offshore oil and gas exploration will inevitably constrain future local LPG supplies and hence force us to import more. This in turn will increase the proportion of imported LPG (particularly in winter) and hence increase our exposure to LPG price hikes driven by global political and economic forces in general and the Saudi Aramco Index in particular. Investment Returns The NZ Consumer Price Index rose to 1.5% for the one year to 30 June 2018. This was mainly driven by housing, construction, and food price increases. Inflation over the past ten years fell slightly to 1.6% p.a. A number of funds within the Aon Master Trust were added over the quarter, raising FUM by $45 million. Total Master Trust FUM increased by $280 million over the quarter. Funds with a higher proportion of growth style assets (eg shares and property) had the best investment returns for the year to 30 June 2018. The one year weighted average return for all Master Trust Growth funds was 10.6%; Balanced funds 8.1%; and Conservative funds 5.0%. Single Sector Aggressive funds returned 12.0% over the past year on a weighted average basis, while Defensive funds returned 1.8%. Economic Commentary The Trump administration demands to end all imports of Iranian oil have put pressure on prices as some key buyers, namely India, South Korea and Turkey look to source oil from elsewhere. The effects of the restricted supply pool are evident with oil prices still rising. However, it is unlikely that major importers will be able to switch suppliers entirely – at least by the proposed deadline of November. Here in New Zealand, we are seeing our dollar depreciate. International trade uncertainty is one catalyst of this. During times of uncertainty, demand for riskier assets diminishes and the Kiwi dollar is viewed as a relatively ‘risky’ currency compared to many larger economies with more liquidity in their currency market from more transactions. This month, Reserve Bank Governor Adrian Orr released a statement that the OCR would remain unchanged at 1.75%. Also given acceptable inflation and employment levels, we can expect growth-supportive monetary policy for some time. The effects of oil prices, petrol taxes and a weaker currency will flow through to domestic prices. CPI inflation is expected to rise to meet the target midpoint of 2%. However, escalating trade tensions between the US and China are beginning to give investors cause for concern as they could lead to even higher inflation disrupting the global economy. Energy market players are looking at rate hikes by the US Federal Reserve to quell this inflationary pressure. The ripple effect will eventually hit us, resulting in the RBNZ raising the OCR. The expectation of higher short-term interest rates is supported by the US 10-2 yield spread curve which is at its lowest point since the 2008 recession. Bond investors are becoming increasingly more comfortable accepting lower yields for longer-term bonds. Historically, significant troughs in the yield spread have been followed by an economic slowdown. This was the case in both 2001 and 2007 (although it is not always the case). The past does not always offer accurate predictions of the future, but there is some evidence in support of less optimistic economic forecasts going forward. The changes in investor sentiment and outlook over this calendar year are particularly relevant. Last year the world enjoyed synchronised growth, low inflation and stable low interest rates which supported economic expansion. Oil prices below $60 a barrel was considered sustainable and reasonable. This year the price of Brent Crude has reached $75 a barrel, interest rates in the US are projected to continue to rise steadily and inflation is starting to rise. This is worsened by the beginning of trade wars which can only increase consumers costs. They also raise geopolitical tensions and may derail global trade. In this current climate of low interest rates and weaker currency in Australia and New Zealand, overseas buyers have pushed up share prices. Our equity market offers attractive dividend yields at relatively lower price to earnings ratios. In other words, you get more bang for your buck. The inflow of foreign capital will help companies grow while people are buying. Conversely, it would be potentially harmful to equity markets should they sell their positions. However domestic inflows from the SGC (compulsory Super in Australia) and KiwiSaver are also supporting local markets. KiwiSaver Over the past few years funds with a higher proportion of shares and property have seen some stellar returns. This has led to a number of investors who are invested in the more conservatively invested funds to ask: why their returns are so much poorer in comparison; and whether they should switch to a more aggressive style fund to begin reaping these same rewards. Our response is this: hindsight is a wonderful thing! We suggest to investors who have invested more prudently over the past few years to avoid a switch to growth options now. There would be nothing worse than jumping into a fund with a riskier asset allocation profile, after years of investing cautiously, to find that the markets take a dive just as they make the switch. After 30 years of falling interest rates and almost a decade of rising stock markets a correction will certainly happen. The only question is whether it’s this year or next?

IT Security for New Zealand Businesses – The threat within

Data protection is the process of safeguarding important information from corruption, compromise or loss. Many of us will have watched with some concern the ongoing reports of hacking, ransomware (where a hacker locks or encrypts your company data and demands a ransom before releasing it) and data theft by outside agencies. IT Security Threats Pose New Risks for Owners and Directors As owners and Directors of businesses in this country, we cannot ignore the real risks presented to our companies by theft or destruction of company data. Stricter laws governing Director’s responsibility make risk management and mitigation very personal. Henri Elliot, Founder and CEO of Board Dynamics commented to me recently, “It is essential Directors take a strong position on all forms of risk. Risk should be on the Board’s agenda each month and should be appropriately categorised. For example – is a staff member taking a list of clients a company policy issue? An HR issue? An IT security issue? In truth, it is all of the above and Directors need to take a holistic approach.” Security Risks Are Mainly Internal The scary thing when we consider the risks around IT is that it is not the sneaky Russians or the depraved teenage geeks who represent the real threat to most businesses. In fact, it’s often quiet Jane from Finance or good old reliable Mac from Sales who represent the real and present danger. If you think I am being a bit dramatic (and my wife would agree with you) think again. Here are a few things that should give you food for thought. Nearly two-thirds of employees surveyed, who leave an organisation voluntarily or involuntarily, say they take sensitive data with them. That is a real wake-up call when you consider that your staff will almost inevitably have access to sales and customer records, design secrets and new product plans. Nine out of ten Information Technology (IT) staff surveyed indicated that if they lost their jobs whether through redundancy or by firing would take sensitive company data with them. Techies are extra smart, often socially inept and prone to impulsive behaviour when stressed. Just because Jason the geek is a bit dishevelled in the morning doesn’t mean he is not capable of revenge served cold. So how does Jane, Mac or Jason walk out the door with your most valuable secrets? In truth, they probably don’t. Your worst enemy is email. Over a quarter of data, thefts have been as simple as attaching a file to an email and sending it home or to a friend. Next on the IT security threat list for most small to medium businesses is that convenient friend, the USB stick. In many cases, these data downloads start quite innocently with your trusted person downloading files, so they can work from home.  It’s only when they are preparing to leave that the true value of the customer list they downloaded becomes clear. I can dwell on ways you can lose your company data, but in truth, this only serves to make you overly fearful. Instead, let’s look at a couple of the signals that your data may be at risk. Signals Your Data Might Be at Risk  Negative Work Events Laying off or firing staff, whatever the reason should be a signal that your data is at risk. A huge proportion of internal IT security failures come from a desire for revenge. If you are planning to terminate a staff member it is important that you monitor that person’s behaviour. A surge in large data files being downloaded or emails to an unusual address should be a huge red flag. Complacency In many cases, data security failures are just a case of staff members, managers, or owners who just don’t get it. Data is valuable only if you see it that way. The signals of complacency are often clear. You should be troubled by people violating simple IT security policies like keeping passwords protected. It is the company who will pay and the staff who end up with their jobs at risk if you ignore the knowingly irresponsible behaviour. Next month I will run through the key things you can do to reduce the risk of insider security threats without treating your much-loved people as if they are criminals.  

New Branding and New Services

Intelligence without ambition is a bird without wings. Drawing is the honesty of the art. Salvador Dali Today Total Utilities announces its new branding. Over the last 18 years we have worked hard to assist companies in controlling consumption and cost. It's an exciting day for us and we are proud to share this with you. From today you'll see a change in the way we look, including our new ribbon logo. The spherical shape represents the whole as we take a 360 degree approach to understanding our clients and their utility requirements, whether it be Energy, Waste and ICT or Insights, Strategy and Solutions. What doesn't change is our desire to create a sustainable future for New Zealand businesses and how they manage their utilities by continuing to deliver ongoing value for our clients. We continue to work hard to provide new services to assist our clients such as Energy Monitoring and Targeting through wireless non-intrusive energy senors, Cloud Computing Analytics for consumption of computer services and qualitative and quantitative reporting aligned to overall financial strategy. Total Utiltities About Us Presentation We remain committed to delivering a personalised service and assisting our clients navigate a rapidly evolving commercial market place by underpinning strategic thinking. I would like to thank our existing clients for your continued loyalty and confidence in our company. To prospective clients, I hope that you will partner with us to discover real world solutions for sustainable utility consumption and cost optimisation.

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