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Energy Management: A Charged Debate
Heady debates on energy issues are abound in the corporate boardrooms and corridors of Congress.

By John Parkinson and Matt Stansberry

Starting with the California energy crisis a few years ago, and felt most recently with the massive blackout in the Northeast, the residual effects of these two major events have manifested as an increased and angered public awareness on energy policy. In the aftermath of these events, politicians and influential think tanks are working on a comprehensive energy bill, and facility managers are focusing on energy management practices and reliability solutions for their companies.

Fortunately, many resources are available for facility executives that are implementing measures to reduce electrical usage. The Association of Energy Engineers (AEE) publishes three technical journals, two of which members receive for free. In addition, the AEE also offers a line of books on dealing with facility management issues. Also, their Web site offers many free services, recommendations, and surveys on the industry (www.aeecenter.org).

Another resource for energy management tips is the Web site of the Federal Energy Management Program (FEMP) in the office of Energy Efficiency and Renewable Energy at the Department of Energy (www.eere.energy.gov/femp). The site has an entire section on operations and maintenance, as well as utility load management. There is also information on energy retrofit projects and how to finance them.

Lighting

There are many "best practices" that facility managers can implement to reduce energy usage. One important aspect of any energy management and conservation plan is lighting. Energy Star reports that lighting is the second largest energy offender in businesses.

Vendors have felt the public's concerns by witnessing an increase in business due to the energy-related problems of the last few years. The lighting industry has has been especially impacted starting with the fallout, from the California crisis.

"We saw the public respond; there was a big jump in the requirements for compact fluorescent lamps," explains Paul Walitsky, environmental affairs manager, of Sommerset, NJ-based Phillips Lighting. "People got the message that you could save energy quickly by changing a light bulb."

Phillips Lighting has a few suggestions for lighting conservation. The following options may help decrease lighting costs:

• Consider daylight harvesting. Facilities with expansive windows or skylights can set lamps on dimmers or shut them off completely to dramatically.
• Use CFLs instead of incandescent bulbs. A CFL bulb can reduce energy usage by 75% and saves $26 over the life of the light bulb.

"Lighting efficiency management has several different components," states Al Thumann, director of the AEE. "First, use the ASHRAE/IES 90.1 standard in an existing facility to find out what the base watts are per square foot. The recommendations, in many cases, find that there are too many watts per square foot.

"Then the facility manager has a tool, along with the foot candle readings, to determine the strategy," Thumann explains.

He has a number of suggestions for facility executives on lowering usage, "Should it be replacing the lamps with more efficient lamps? Should it be replacing the reflectors? Should it be changing colors of ceilings and walls to get more reflectivity and a better coefficient of utilization? Should it be putting in day lighting, as recommended by the LEED standards? Should it be lowering the lighting to where it is needed, using task lighting. Or should it be lighting controls, such as sound activated, motion controls, and ultrasound?"

Management

Jason Sheppard, marketing manager, of Victoria, BC-based Power Measurement sees effective management as the lynch pin for energy savings.

"Studies have shown that beyond the installation of energy-efficient equipment (e.g. lighting and HVAC systems upgrades), energy savings can be dramatically increased and maintained over time by adopting consistent energy management practices," explains Sheppard.

As evidence, he points to a Department of Energy (DOE) paper that studied energy efficiency projects at more than 900 buildings. In its findings, the DOE reported that projects that used best practices in measurement and verification realized higher savings and an additional ROI of nearly 10%.

According to Beth Shearer, director of the FEMP, "What facility energy executives should do is look at the full life cycle of the building. The full life cycle of a building starts at new construction. It considers energy retrofits, equipment procurement, operations and maintenance, and how you are managing your utility load.

"What time do you turn your equipment on? In some cases it might make sense for you to turn on your equipment early. Let's say you are in a hot climate. You might want to turn on your HVAC early to super cool the place. So when there's a peak load, when the prices are most expensive, you've cooled more than you needed to. You can turn off the air conditioning. The temperature will drift up and you can turn on the HVAC again, but you've probably missed that high peak demand time," Shearer explains.

Avoiding the peak demand time is key to managing energy costs. Ross Malme is the chairman of the Peak Load Management Alliance (PLMA) and CEO of Retx Technologies, a demand-response provider. The PLMA is the trade association for the demand/response industry.

"How do you value this resource and how do you turn demand-response performance into money? One way we are doing this in the U.S. is behind the Independent Systems Operators (ISO)," Malme says. "They are in charge of reliability in a region. What the ISO becomes is the price setter in those markets. Think of the ISO as the NASDAQ for electricity in those markets. They become the logical place to take this demand response asset. So the PLMA has helped create markets for the little guy to participate in this market."

Through demand response, the PLMA creates the market for sustainable energy, renewable energy, distributive generation. The organization provides the technology infrastructure for companies with the capability to cut back on electrical usage or generate power to sell back into the grid during peak demand times.

"If the ISO is the NASDAQ of the utility industry, my company Retx is the broker, connecting the individual asset to the market. All we care about is that the end users have the capability to slow down the meter," Malme explains.

"We need to educate facility managers on how to access these markets and benefit financially from this," he adds.

Reliability, Alternatives, And The Grid

Many industries were effected by blackouts this summer in the east, from both the August 14 outage and a widespread loss of service in the wake of Hurricane Isabel. In addition, many companies on the west coast are still affected by the rolling blackouts in California that began in 2000.

This has led end users to seek other solutions for their energy needs. "People who are looking for alternatives and people who have added security to their agenda," says Dennis Orwig, CEO, of Windsor, CO-based Encorp. "If it wasn't reliability alone, or it wasn't reliability and economic return, it's now become security on top of that."

Orwig explains security as being the ability to have back-up power on site. These are the reasons people are calling his energy technology company.

Many officials are offering opinions on who should be responsible for transmission grid reliability, but the bottom line for facility executives is that some entity needs to have unambiguous authority over the lines to encourage investment in the system.

Jerry Taylor is Director of Natural Resource Studies for the Cato Institute, a nonprofit public policy think-tank in Washington, DC. According to Taylor, a true deregulation would lead to investment in utilities infrastructure. He feels that the utility companies need to have a choice in who can use their transmission lines and how much they can charge for their use.

"Some companies are more sensitive to supply interruption than others," Taylor states. "In an ideally functioning market, opportunities would exist for rate payers to negotiate different reliability regimes with suppliers and at a premium.

"Obviously, for some consumers, interruption of service is not a particularly consequential matter, but for others it is extremely consequential. Reliability is never free and it would be best if people were able to make their own arrangements based on their own economic conditions and willingness to pay," Taylor explains.

Whether the upcoming energy policy takes the stance of increased central regulation or privatization of the transmission lines, it is clear that some authority must be exerted to accomplish a retrofit of the existing infrastructure. And that is going to be the easiest part.

"The challenge is that it takes a long time to take technology that's over fifty years old and upgrade it, and a lot of money and resources," says Thumann. "How do you buy the nation time to provide the facility manager with the tools to keep the plant running with possible blackouts occurring randomly and possible higher costs of energy?"

No matter what Congress decides upon with the energy bill, facility managers are in a position to exert control over their energy usage and costs by taking a three prong approach: balanced energy resources, energy efficiency technologies, and load management.

With these tactics, facility managers will realize energy savings and work towards keeping that omnipresent bottom line looking a little smaller.