GIANT EAGLE EXPECTS SAVINGS BY OUTSOURCING UTILITY AUDITING

LINDA PURPURA

PITTSBURGH -- By outsourcing its utility bill processing and auditing to a third party, Giant Eagle here expects to save more than 1% in utility costs.

Giant Eagle, which was developing a database of utility histories for its 70 stores and warehouses, has transferred its data to the third-party company. The new database should be complete by Oct. 1.

While Giant Eagle was in the process of transferring its database file to the third party, the retailer discovered it had paid a duplicate bill for one store's utility charges. Giant Eagle was actually owed a credit of $25,000 to $30,000, which demonstrates the potential savings possible from more careful auditing.

Utility bill auditing and processing "takes a fair amount of resources, both in time and money, and experience," said Jim Lampl, director of the resource conservation department for Giant Eagle. The retailer began outsourcing its utility billing operations last month.

The third-party company, Illinova Energy Partners, Oak Brook, Ill., "is totally focused on the utility auditing process," he added. "We felt they could do it as well or better than we could, without our investment in resources."

Illinova will also identify opportunities for energy efficiency in areas such as equipment and operations for the retailer.

However, "It's not completely a hands-free arrangement," he added. "We are going to be intensively working with them to manage the process. We feel confident that the savings will more than justify this investment."

Illinova will not only be looking for duplicate bills, but for inaccurate meter readings; faulty equipment; different rate structures; and incorrect classifications.

"Previously, we were just handling this on our own, and we weren't looking and comparing invoices as diligently as we thought we should," Lampl said.

"Supermarkets have significant utility costs," Lampl said. "When you consider the slim profit margins of the supermarket industry, conservation and auditing are very effective ways of putting profit dollars on the bottom line without having to sell more groceries."