Plugged into Energy Use
August 01, 2004
Appeared in Building Operating Management/FacilitiesNet
More than one facility executive has tried to reduce energy costs by shutting off hallway lights, adjusting HVAC setpoints and turning off unused computers and copy machines.
While those tried-and-true methods work, they are only as effective as building occupants’ tolerances for walking in the dark, breaking a sweat in their cubicles and waiting for a computer to reboot.
Reducing energy costs by merely cutting the amount of kilowatts facilities consume is a nice start. But really, it’s that — a start. Making an effective dent in energy costs requires a deeper understanding of energy than just how much electricity facilities use.
Facility executives serious about reducing energy costs — not just energy consumption — should know how their facilities use electricity, what the electricity is used for and how they would get by without it.
“ We know, and have learned the hard way, that it’s not just enough to have enough widgets — energy-efficient windows, lights and other things,” says Evan Mills, a scientist with the U.S. Department of Energy’s Lawrence Berkeley National Laboratory. “You have to make sure they’re applied correctly.”
Knowing which widgets can best be applied to reduce energy expenses starts with knowing how much energy use costs the organization, says Mills. To the surprise of some, that’s usually more than just the product of the number of kilowatt-hours used and the electric rate.
There are a number of charges that electric utilities bill to customers that have little to do with how much electricity is consumed in each billing cycle. Those charges include connection charges, fees based on the time of day that electricity is consumed and the quality of the power measured as it exits the facility. And for those facility executives who lease space, there could be additional charges that the building owner collects based on the presumption that each tenant is responsible for a certain amount of electricity, so-called common charges.
The key to reducing those charges is to understand how they are determined and how they can be controlled.
Organizations pay connection charges, also known as customer charges, for simply having the ability to draw electricity from the utility grid. To a certain extent, the charge is based on the amount of electricity the facility expects to use, not how much it actually uses. The fee is set based upon the facility’s rate class. All commercial buildings of a size and type, for example, would likely pay the same connection charge.
What’s important for facility executives to understand about those charges, says Lindsay Audin, president of the energy consulting firm EnergyWiz, is that connection charges comprise a larger percentage of the electric bill as energy use declines. That means a high connection charge will remain so even if energy usage drops.
An important part in controlling a facility’s energy bill has to do with determining how much electricity is expected to be used monthly. When setting electric service requirements, facility executives undoubtedly want to allow for a facility’s electricity use to grow as the organization expands.
Sometimes, however, that anticipated growth is never realized because the organization changes location rather than expanding within its existing facility. It might also not be realized because the equipment placed in service to accommodate expansion will be more energy efficient than originally thought. Replacement lamps, ballasts, cooling technologies and office equipment will be more efficient than the original equipment.
One of the most important reasons facility executives should get a handle on anticipated electricity load, Audin says, is because of the relationship between kilowatts and back-up power demands. And the more important power is to the organization, the more important it is to figure loads accurately.
A mission-critical facility that uses 4,000 kw, for example, would likely want 7,000 kw of back-up generation available. The extra capacity is necessary in case a generator is offline for maintenance or fails to start when needed.
“ If you’re only using 1,000 kw instead of the 4,000 kw you thought you were going to use, you’ve got a lot invested in equipment that’s not ever going to be used,” Audin says.
Cyrus Izzo, senior vice president of online environments for the Syska Hennessy Group, an engineering firm, suggests facility executives develop a five-year plan to determine how much energy their facilities will need. He cites one firm, a data center based in North Carolina, that looked at how much energy the company used at each of its various facilities located around the country. From there, it used historical data to determine the likelihood of expansion within five years and then determined how large the expansion would be.
What resulted, Izzo says, was a plan that will allow the company to expand with minimal disruption to its business, while in the meantime avoiding unnecessary costs.
“ A company might think it needs 125 watts per square foot,” Izzo says. “That might be true, but it might not need it for another 10 years. To have that capability in place means it’s going to pay for it now even though it doesn’t need it.”
In Light of Deregulation
In addition to deciding how much energy a facility needs to operate, facility executives should give thought to how they plan to meet the energy demand. Deregulation of electric utilities created changes to electricity pricing that influence how facility executives meet peak-load demand.
Jim D’Orazio, director and senior vice president of operations and engineering for Jones Lang LaSalle, says the ability to purchase power in bulk in deregulated markets should prompt review of procedures facility executives have in place to meet peak demands. In regulated environments, it often made financial sense to generate power on site because it was less expensive than purchasing it from the utility during peak times. Depending on the contracted price for electricity, however, it could cost more to operate generators than it does to buy power from the utility.
“ There has to be a review of the practices and procedures that force the generators to start,” D’Orazio says.
The Manhattan Veteran Affairs Medical Center undertook such a review four years ago and has been netting the benefits ever since. The hospital once ran its three diesel-fuel generators only to meet requirements that the hospital ensure the generators work. Those tests, which Manhattan VA conducted from 6 to 6:30 a.m. on the first Friday of every month, have since given way to the medical center’s participation in the New York Independent System Operator’s (ISO) peak-load reduction program.
In partnership with an energy services company, the 1.2 million-square-foot medical complex receives day-ahead signals from the utility indicating a need for power. From there, says James Walsh, Manhattan VA’s chief of engineering services, the hospital prepares to start its generators, shaving as much as 1.5 megawatts of power off its utility power demand.
Manhattan VA is paid not only for its participation in the program, but also based on the amount of power it shaves from its utility demand. Depending on the year and the ISO’s need for power, the hospital can net about $100,000 annually after it pays for the expense of operating its own generators, Walsh says.
In addition, participation in the program has improved the skills of the facility staff to operate the generators, giving the medical center more confidence that systems will operate as expected should power fail, Walsh says. During last year’s power outage, the generators ran for 27 consecutive hours, supplying critical loads with electricity.
“ From an engineering point of view, participation in the program allows us to run the generators,” Walsh says. “It really gives us a good sense of how they are going to run under loads when it’s essential.”
A number of technology options exists to allow facility executives not only to gather energy data, but also to convert it to information on which to take action. While technology options are numerous enough to bog down even the most nimble facility executive, there are a few basics to consider.
The first, says Audin, is an interval meter with the ability to read pulse outputs. Such a meter will allow facility executives to measure how much energy their buildings use within certain time periods. Having that data will then allow energy use to be adjusted — shifted to different times of day, if possible — to take advantage of off-peak energy price periods.
A second important piece of equipment is a power factor meter that measures the quality of the power leaving the facility. Facility executives will know if their buildings are paying power factor charges if they are billed for kilovolt-amps on electric bills. Although the utility calculates the charges, Audin says, having a meter in the facility will verify the charges are correct.
One of the most important pieces of equipment is a submeter that allows facility executives to determine what specific pieces of equipment or processes within a facility are using energy. Knowing that information will enable facility executives to focus energy-reduction efforts in specific areas. In some cases, it also influences what equipment can and can’t be adjusted in an attempt to reduce energy costs.
Organizations with energy-intensive operations and processes, such as data centers and certain manufacturing plants, often look with disdain on attempts to reduce the energy use of critical equipment. Servers in a data center, for example, are typically off limits to energy-reduction efforts because of the impact server failure has on the revenue-producing capability of the business. But that doesn’t mean that energy used by cooling technologies, lights or other systems can’t be touched. To get an accurate read on how much energy use could potentially be eliminated, facility executives should consider submetering systems unrelated to the revenue-producing operation of the business.
Audin remembers working at one printing facility in which he could look at switching or adjusting any system or piece of equipment except for the printing press motors. What he discovered was that warehouse lights where paper was stored were left on even though the only activity in that area was robots carrying paper to the printing presses. The robots didn’t need lights to see. They were guided by laser tracks mounted in the floors and ceilings.
“ If you don’t have people in a space, use that to your advantage,” Audin says.
Izzo, too, recommends submetering. Knowing how much energy certain systems use is an important piece of information, particularly for facility executives whose organizations lease space. Building owners will often charge tenants certain common charges, including those for HVAC cooling expenses.
Izzo says that unless a tenant can demonstrate otherwise, common charges to tenants will be based on the buildings owner’s prior experience with similar types of operations or on the perception of how much energy a tenant’s business requires. Most common, however, is merely to allocate cooling costs depending upon the amount of space a tenant occupies.
That’s not necessarily a fair way to divide energy costs, particularly if a tenant uses most of its power on off-peak times or if it shares the building with energy-intensive organizations. Even shaving some of the expense from common charges — Izzo says he has seen some common charges for HVAC cooling expenses cost several thousand dollars per ton — can make a difference.
“ What’s important to remember is that it doesn’t matter whether it’s $100 a ton or $5,000 a ton, but that everything is negotiable,” Izzo says.
Owners of leased facilities might want to consider submetering as well. D’Orazio of Jones Lang LaSalle says owners might acquire a building without knowing the condition of equipment in the building. Only through submetering can an owner know whether a chiller, for example, is using far more energy than it should.
“ Without submetering, you don’t know where the equipment is operating on its efficiency curve,” he says.
D’Orazio suggests matching submetering data with maintenance records to find out what changes have been made to a system through the years. Sometimes, there have been adjustments to HVAC units that cause them to run inefficiently.
When facility executives inherit equipment, it’s impossible to know what adjustments have been made to it without looking at maintenance and operation logs. Simply by recommissioning the equipment so it’s configured as it was originally intended, D’Orazio says, it’s possible to cut the energy consumed by that equipment by 50 percent.
“ That’s not an unreasonable number,” he says.
One challenge facility executives might face in gathering the information necessary to reduce energy use is getting their organizations to see the value of such efforts. For financial officers at some organizations, energy is an expense that has to be paid, not one that can be controlled. That is, at least, until the relationship is established between energy expenses, business revenues and an organization’s competitive standing.
Mills of Lawrence Berkeley National Laboratory says facility executives should operate in both the economic culture in which financial officers work and the engineering arena in which most facility departments operate. Bridging the two is the challenge for facility executives.
One way to accomplish that, he says, is to gather information that shows energy expense in financial terms. In a restaurant, for example, show the cost of energy to produce one meal. If operating retail stores, report benchmarks showing the average energy expenditures of similar operations, some which would be competitors.
Mills says seeing that a competitor might be spending 2 to 3 three times less on energy can inspire change among top management to get energy costs under control.
“ If those initiatives are owner-driven, they’re usually more effective,” he says.