Ogden district energy manager warns of higher utility costs, cites $500,000 January 2023 gas spike

Logan Murphy, the district construction and energy manager and certified energy manager, told the Ogden City School District board at its March work session that rising electricity and natural-gas prices and new utility demand charges are driving large, immediate costs and require both short- and long-term operational changes.

Murphy said the district experienced a sudden market spike in January 2023 that produced a roughly $500,000 increase in its natural‑gas bill for facilities that bought gas on the open market through a transportation service. “In January 2023, we spent our entire budget for the year for all of that gas,” Murphy said, describing the month when market prices briefly skyrocketed.

Why it matters: Murphy said energy is a material district expense. For calendar year 2024, he said nearly $1.7 million (about 50% of the district’s utility costs) went to electricity and just over $1 million (about 31%) to natural gas. Those two categories, he said, make up the largest portion of the district’s utility spending.

Murphy traced the January 2023 hit to how the district procured gas. Several district facilities, including larger high‑use sites such as high schools, junior highs and pools, bought natural gas on the open market through a vendor, Summit Energy, rather than under a fixed utility pass‑through. The vendor’s costs surged for a short period, and the district absorbed the full immediate charge. Murphy said the district later negotiated a block‑purchase approach with Summit to spread risk: “Since then, we’ve gone to a negotiated rate…we bought set blocks of gas per month for those facilities,” he said, describing a shift that smooths monthly volatility but can cost more in summer months while saving in winters.

Murphy contrasted the district’s experience with the utility model: he said utilities such as Dominion (now Enbridge) also saw the market spike but are able to spread recovery of those costs over 24 months rather than billing customers all at once. That, Murphy said, explains part of the larger statewide increases Utah customers saw in 2023 and 2024.

On electricity, Murphy noted Rocky Mountain Power had requested a sizeable rate increase — he cited a company filing seeking about a 30% increase over two years — and said that request, if approved in full, could materially change the district’s electricity expense profile.

Offsetting measures and where the district stands now

Murphy said the district has mitigated some exposure by installing solar and by investing in energy‑efficient new construction. He listed Eastridge, Polk, Liberty, the Ben Lomond Athletic Center and a small array at the Mount Fort Innovation Center as sites with solar and said newer schools (Liberty, Polk, Eastridge and the Ben Lomond athletic facility) are among the lowest cost per square foot to operate. He said Hillcrest was built “solar‑ready” but full solar at Hillcrest was deferred because bids came back far higher than prior projects: “the numbers for solar at Hillcrest came in astronomically higher…almost double in cost for the same size solar system,” Murphy said.

Murphy also described several operational levers the district is working on:

- Temperature set‑point management and holiday setbacks: he said tighter adherence to district temperature standards and implementing setbacks during extended closures save meaningful sums. He cited the district winter setback policy of 58 degrees as consistent with industry guidance and said he would review whether deeper setbacks might inadvertently cost more depending on system efficiency and duration of shutdowns.

- Preventive maintenance: Murphy emphasized that well‑maintained boilers, chillers, filters and pumps can improve efficiency and reduce energy use more than small behavioral measures alone.

- Controls and staggered start strategies to reduce demand charges: Murphy explained a growing utility practice that levies demand charges based on peak kilowatt usage in any 15‑minute interval. “They charge you a demand. It’s the highest demand you had in any given 15 minutes for the month,” he said, and gave an example: outdoor athletic field lighting currently avoids demand charges under its rate plan, but if that plan changes a typical peak could push the district’s bill for those fields from roughly $300–$500 a month to about $1,500–$2,000 because of demand fees. To limit demand charges, he said the district is exploring staggered equipment starts and working with controls contractors to prevent multiple large pieces of equipment from starting simultaneously.

- Targeted investments: Murphy advocated continuing to prioritize energy‑efficient equipment and new construction where code and design produce long‑term operating savings. He noted recent installs of “IDEC cooling” (a modern evaporative cooling approach) on several new schools as an example that trades minor summertime comfort variance for large operating savings.

Operational details and smaller savings

Murphy also addressed smaller, often discussed items. He said classroom mini‑fridges and lights cost only a few dollars per month — roughly $2 a month for a mini fridge, $6 for a newer full‑size fridge and about $5 a month for classroom lighting — while a single degree difference in a building’s heating set point can cost $200–$500 a month at a typical facility. He cautioned that space heaters are particularly costly and can interfere with building controls.

Discussion and next steps

Board members asked about measurement on the district campus and differences across newer and older facilities; Murphy said the district campus is complex to analyze (multiple meters and mixed uses) and agreed to provide a more detailed campus breakdown. He also said he will continue work on preventative maintenance schedules, BMS (building management system) programming to enable staggered equipment starts, and tracking opportunities for future solar installations if market prices and incentives align.

Murphy closed by inviting further questions from board members and staff.

Provenance: opening and close of Murphy’s presentation are recorded in the meeting transcript.