Comprehensive Energy Evaluation

By Paul Hulsey, VP of Energy SalesCore Energy Group

Topics• Why Energy Conservation?• Where do we start?

Historical Utility Usage / Benchmarking• Identify Energy Conservation Opportunities

Building Envelope, HVAC, Operations and Maintenance, Lighting Interior and Exterior and Site Specific Equipment and Machinery, Water and Renewables.

• Federal, State and Local Utility Incentives• EPAct 2005 and Section 179D

The Energy Efficient Commercial Buildings Tax Deduction• Questions

Why Energy Conservation?

• Commercial buildings account for 40% of total U.S. energy consumption– In a typical office building, energy use accounts for 30% of

operating costs, the largest single category of controllable costs.– According to the U.S. Department of Energy, lighting represents

40% of the average commercial building’s electric bill, followed by motors/HVAC (40%) and other equipment (20%).

• Energy conservation = reduced consumption = $ (cost savings) • Typical Savings of 25% to 35% of Annual Utility Costs with an

investment that pays back in 1 year of less.

One Year of Electricity consumption History

Evap

. Cooler

s

Wate

r Chille

rs

Circulati

on Pumps

Air Compres

sors

Air Lea

ks

Exhau

st Fa

ns

IMM: B

arrels

Hydral

ic Pumps

Vac. +

H2O Pumps

Paint C

onveye

r

Paint F

ans

Regrin

d

Cloth Cut

Work

Assembly

Stations

Lost

Core: O

il

Lost

Core: D

ie Cast

Lighting

HVAC: Build

ing AC

HVAC: Barr

el Hea

t Offset

AC

HVAC: Fan

s

Misc. (S

hop Office,

Charging)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

One Year of Gas Consumption History

Paint Line: Preheat, Oven and Washer Plant Heating$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

One Year of Water Consumption History

Toilets, Sinks, General Use Evaporative Cooler Evaporation $0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Identify Conservation OpportunitiesRecommended Improvement Savings Implementation Cost Simple Payback Minimize open time of Shipping & Receiving $3,000 / year $0 (discipline) immediate dock doors Reduce “open” time of high speed lift truck $500 / year $0 (adjustment of timers) immediate drive through doors Minimize running of ceiling exhaust fans in the Winter $9.50 / hour average $0 (discipline) immediate Shut down unnecessary IMMs when not in use $475,000 / year $0 (planning & discipline) immediate Reduce running time of IMM hydraulic pumps Averages $1.20 / hour $0 (planning & discipline) immediate Install separate water meter to eliminate sewage charge $63,000 / year Cost of meter, about $2,000 1 month for water used in cooling tower system Reduce Peak Demand electricity by 15% $75,000 / year $10,000 + planning & discipline 2 months Clean and replace (as required) seals on ceiling & wall $44,000 / year $15,000 4 months exhaust fans Repair compressed air leaks throughout the facility $59,000 / year $30,000 6 months Insulate IMM barrels * $100,000 / year $50,000 6 months Develop and implement HVAC control strategy ** $270,000 / year *** $250,000 *** 11 months Install insulated cover over Lost Core hot baths **** $60,000 / year $100,000 1.7 years Increase Power Factor to >0.90 $25,000 / year $50,000 (maybe less) 2 years Upgrade to low flow sinks, urinals and dual flush toilets $6,000 / year $12,500 2.1 years Install a Building Management System (BMS) $150,000 / year $500,000 - $750,000 3.3 – 5 years Replace Plant metal halide light fixtures with T5 fixtures $96,800 / year $400,000 4.1 years Install air circulation fans at ceiling of Plants (30) $3,500 / year $22,500 6.4 years

Thermal Imaging to locate Heat Lose

Examples of Energy Efficient Upgrades

• Lighting– Energy efficient lighting systems (reduced wattage)– Lighting control system (occupancy

sensors/dimmable lighting)

• Envelope– Energy efficient windows (Low-E)– Highly reflective roofing– Enhanced roof and wall insulation– Light shelves

Examples of Energy Efficient Upgrades (continued)

•HVAC– High efficiency heating systems (condensing boilers)– High efficiency cooling systems– Direct and/or indirect evaporative cooling systems– Energy recovery units– Geothermal heat pumps– Premium efficiency motors– Variable speed fans and pumps– Building management systems– Solar systems (PV and water)

EPAct 2005 and Section 179D

• What is EPAct 2005?– The Energy Policy Act of 2005• Added section 179D (the Energy Efficient Commercial

Buildings Tax Deduction) to the Internal Revenue Code– Is a special financial incentive created and designed to reduce

the initial cost of investing in energy-efficient lighting and other building systems via an accelerated tax deduction.

– Allows building owners (or tenants) to write off the complete cost of upgrading a building’s indoor lighting, HVAC/hot water and building envelope in the year the new equipment is placed in service, capped at $1.80 square foot. Alternately, the owner (or tenant) could upgrade one of these three systems capped at $0.60 square foot.

Lighting Study for EPAct 2005Area lighting Power (kW)

Plant #1 Manufacturing Shop Ceiling Lights 228.0Tasklighting 16.0

Plant #2 Manufacturing Shop Ceiling Lights 76.4Tasklighting 6.8

Receiving Warehouse Ceiling Lights 52.0Re-Grind 4.8Cloth Cut 4.4

Shipping Warehouse Ceiling Lights 34.8

Total lighting in area to be Upgraded 423.2

Lighting Power (kW)LPD (W per sq ft)

Total lighting to upgraded with T8-32W * 400.4

Lighting Power after upgrade with T8-32W * 215.0

Lighting Power Density in Area before Upgrade 0.99

Lighting Power Density After Upgrade w/ T8-32W 0.50

Area Lighting Power (kW)

Misc. LightingPlant #1 Basement 4.8Plant #2 Basement 4.2Exterior 29.2Main Offi ce and HR Approximate 10.0Parrimeter Offi ces Break & Rest Rooms 10.0

Plant #1, #2, Shipping, Receiving and Misc. Total 481.4

Estimated Current Yearly Lighting Cost * $241,010

Estimated Yearly Cost After Upgrade * $131,570

Yearly Savings from Upgrade * $109,440

Yearly Carbon Emissions Saved (1624104 kWh avoided) 2,158,434 lbs

Federal, State and Local Utility Incentives

• Both local utility companies have what they call Prescriptive and Custom Incentive programs for energy efficient upgrades done to commercial and industrial buildings.– Program details and incentive amounts are very similar

• Program incentives are limited customer, per facility and per year. The customer is defined as the business entity, with a taxpayer ID number, that is responsible for the utility bill for one or more facilities.– A facility is defined as a single meter or multiple meters on a single

property for which a single customer is responsible for paying the electricity and/or gas bill.

– (DTE example) Customers saving electricity may receive up to $150,000 per facility per program year; the total customer cap (across all facilities saving electricity) is $500,000 per program year. Customers saving gas may receive up to $25,000 per facility per program year; the total customer cap (across all facilities saving gas) is $100,000 per program year.

So What Does all This Mean with Regards to Upgrading the XYZ Building?

• Based on what we know and what is specified to be installed/upgraded to the lighting and HVAC systems within the building, the potential tax deduction would be between $0.55 to $1.05 per square foot– This means the benefit could be between $75,984.15 -

$145,060.65• In addition, incentives from DTE Energy &

Consumers Energy would be applicable, most likely under their Prescriptive programs

• Increased ROI

Questions?

• Paul’s contact info– (888) 706-4646 Ext. 321 office– (248) 515-2320 mobile– phulsey@coreadvisors.net