By Anne Cosgrove
Published in the August 2006 issue of Today’s Facility Manager
Trizec Properties, based in Chicago, IL, created its Energy Excellence Program in 2000 to initiate a formal conservation program across its real estate portfolio. Gerard Schumm, who oversees the national program, discusses the strategies the company has implemented and the results it has achieved.
What is your position at Trizec Properties?
I am senior vice president of operations. I have been with the company since November 1997. As part of my responsibilities, I oversee the New York City and Charlotte, NC markets. I also provide assistance in the Washington, DC market.
As chair of Trizec’s energy committee, I have national involvement in the Energy Excellence Program. Mark Macpherson, vice president of technical services, heads energy initiatives for the central region, and Wayne Harner, vice president of engineering, directs the program in the western region.
I am also a member of the company’s national operating board. There are seven of us from around the country who meet periodically to discuss and improve general operations.
Please give a brief description of the facilities involved in this project.
Trizec owns and operates approximately 40 million square feet of commercial office space in 61 buildings across the United States. The buildings range in age from 10 to 50 years.
Why was the decision made to create the Energy Excellence Program?
As a national company, we realized it would be beneficial if we did things consistently across the portfolio that would contribute to the company’s bottom line and performance. Back in the late 1990s and into 2000, we had initiatives in several areas. Energy was one of the focus areas.
Energy is the second largest line item in the operating budget of commercial real estate. We realized that to make sure we were doing things consistently and sharing best practices across the country, we should put into place a comprehensive energy program.
The program was initially headed up by a gentleman in the company’s Calgary office. When he left the company, I inherited his responsibilities on the energy initiative.
What strategy guided the program launch? What practices ensure that you stay on the right track?
We’ve always realized that collecting energy consumption data is important. When we launched the Energy Excellence Program, we set out to establish a database to track the consumption in every property. This database was originally compiled by Friedlich & Associates of Toronto, an independent engineering firm that was helping us with our energy conservation projects. The firm makes sure the calculations we submit are accurate.
That’s where we started—looking at the consumption in every one of the buildings. We then watched the consumption as we implemented certain projects. All the original data consumption came from utility bills.
Now, each month, the information from the bills is entered into a master database. This gives us the ability, at any point in time, to look at the energy consumption in any building in the portfolio.
Friedlich & Associates and the Trizec energy team look at this data monthly. We also work with the chief engineers in the buildings periodically to go over the energy profile and to discuss what’s happening and what we can do. We encourage the engineers to submit projects for possible energy conservation or reduction. The engineers will identify a project and get preliminary pricing and energy savings calculations. They then send the information to the energy team members and Friedlich & Associates to evaluate.
Through the Energy Excellence Program, Trizec has invested approximately $20 million in close to 450 energy efficiency upgrades. What factors have been taken into account when deciding what properties and projects to address?
We first surveyed buildings with Friedlich & Associates, the chief engineer at the building, and a member of the operating personnel. In the New York market, I was the operating personnel member; in the other regions, it was Mark Macpherson and Wayne Harner.
We performed an audit of each property to see how we could save energy. We looked at all the obvious opportunities—low hanging fruit as we called it. We typically sought a two-year simple payback initially, and then we expanded that to a three-year simple payback.
The simpler projects included replacing incandescent lighting in the fire stairs with fluorescent lighting. Many properties were also equipped with incandescent exit signs, and we retrofit them with LED exit signs. We started with those types of projects first, so it could have been anything from a simple lightbulb change to the installation of variable frequency drives on all major air handling equipment.
Further along, we incorporated real time energy monitoring systems to track consumption. These can be programmed to minimize expenses during high cost periods. A recent energy monitoring installation occurred at One New York Plaza. In that building, we are using the services of Power Measurement, a provider of enterprise energy management systems.
Real time monitoring enables us to detect abnormalities in operation. In one building, we were looking at real time graphs on a daily basis. We saw that the building was using a lot of energy on the weekends, almost the same amount as during the week. We were able to discover that the chillers were starting automatically on the weekends.
We can also look at load profiles. In 1411 Broadway [in New York City], for instance, we were using too much electricity after hours. This led us to install a lighting system to shut down all unnecessary lighting after a certain period of time.
We were able to ensure there were no tenants in the space when the lights shut down. And, once the tenants became acclimated to the program, they knew they could call to keep the lights on.
The effect on tenants must be considered. We’ve had to check the leases to see what services we are required to provide.
We use different energy monitoring companies around the country for the simple reason we have not been able to find a national company that can give us what we need. We are looking and have been getting closer.
What economic benefits have you reaped as a result of the program?
Since the program was implemented in 2000, Trizec has achieved $16 million annually in cost avoidance through energy conservation. The reduction in energy consumption for the years 2000 through 2004 indicates a savings of approximately 14% cumulatively.
What environmental benefits have resulted from the program?
In 2000, our annual consumption in BTUs per square foot totaled 80,605. For 2004, that consumption was down to 69,416 BTUs per square foot. It has steadily decreased between 2000 and 2004.
Because we use so many types of fuels across the portfolio, we convert everything to BTUs consumed and then translate that to BTUs per square foot. We do adjust the data for weather by looking at the degree days in each city.
Additionally, based on the cumulative reduction in energy consumption over the base year 2000, the program has reduced greenhouse gas emissions by close to 700,000 tons per year. The reductions break down as follows: carbon dioxide emission reduction of 687,007 tons per year; sulfur dioxide emission reduction of 3,644 per year; and nitrous oxide emission reduction of 1,878 tons per year.
We are proud of this accomplishment, and we continually strive to improve these numbers.
How do you prioritize which projects will be implemented?
It’s whatever makes the most sense. In some cases, maybe there are no capital improvements to be done, but we tweak the operation. We can look at the start up time of equipment in buildings, for instance, that are not open 24 hours a day. Historically, we start up the equipment everyday at 6:00 a.m. and shut it down at 6:00 p.m. But maybe we don’t have to start up at 6:00 a.m. to get desired space temperatures by 8:00 a.m. Maybe we can start up at 6:30 a.m. instead.
There’s no silver bullet. The program requires us to investigate and audit the properties. We also watch energy prices. Two years ago, a project that may not have made financial sense will make sense now because of rising energy costs.
Also, what’s interesting about a company of this size is that it is different in every market. The cost of a capital project or retrofit project does not differ that significantly between the markets, but the cost of energy does. In New York City, energy rates have been up in the range of 20¢ per kilowatt, where in Texas or Charlotte, it has been in the 5¢ to 7¢ ranges. You have to look at each market and determine what the economics are there as they relate to energy costs.
In November 2005, Trizec received the Leader in the Light Gold Award from the National Association of Real Estate Investment Trusts (NAREIT), in collaboration with the U.S. Environmental Protection Agency. What did this award recognize?
Trizec received the top award in the Large Market Cap category—above $1.7 billion. We submitted an application for the award, which requested a great deal of information about our program.
We had to demonstrate what the organizational commitment and approach was, who the senior leadership team was, the objectives and guidelines, and how we monitored and reported the results. We also provided a list of the projects and how we demonstrated innovative thinking in the area of energy conservation. This all had to be backed up with calculations to prove our success.
Going forward, what is planned for the Energy Excellence Program?
The more you do, the more difficult it becomes to find additional things to do. You can only change the lightbulb so many times.
So we’re looking at new technologies. We currently have a pilot program in three of our New York City properties to tweak building operations and reduce consumption. To do this, we are working with a company called WebGen, based in Boston.
The company has a system that monitors and continually fine tunes building operations in very small increments. When I first met with the WebGen people, they said, “We won’t save you a million dollars in a lump sum, but we’ll save you a dollar a million times.” The program involves very minor modifications to operating equipment.
The WebGen system interfaces with our building management system where we have established set points. For instance, if we want to deliver 72°F in a space and the fan is set to deliver that, the system will look at it, and through IUE (Intelligent Use of Energy), the software learns from what it does one day and applies it the following day. It will look at the outside and inside temperatures and know that if we reduced the fan speed for 15 minutes and the temperature came up one half of a degree (which is imperceptible to the tenants), we were able to save “X” amount of energy.
It is difficult to document the savings from the system. We know it works, and we’re trying to establish a definitive method to document the savings. Assuming the pilot works, we would roll it out through the national portfolio, though we have no set date at this point.
We are also letting our tenants know about our efforts. For years, we did things very well internally and didn’t tell anyone. As part of this effort, we launched an Earth Day Post-it® campaign in our properties this past April. We used the Post-it® notes, made of recycled paper, to remind tenants of practical steps they can take toward conserving energy.
What advice would you offer to facility professionals who want to create an energy management program in a portfolio of buildings?
The first thing you have to understand is your market. Second, really understand your buildings. Third, go into it with an open mind. Experiment with new technology. You have to keep looking for every possible opportunity, and pay attention to your operations.
One of the most difficult aspects is to know who is actually paying for these retrofits. You have to know the details of the leases in your buildings. You have to understand how capital costs are recovered—or not recovered. And then you have to be creative, maybe going to your tenants and saying, “If we do this, it’s going to save you money, so we think you need to participate with us in this particular project.” Overall, keep your eyes open and keep investigating.
Questions about this project can be sent to gerard.schumm@trz.com.
