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Pam Mendelson: Good morning to you in Alaska. Good afternoon to the East Coast, also participating. This is Pam Mendelson. I am with the Department of Energy and I wanted to welcome you to a RACEE Peer Exchange Webinar and let you know that we will be holding on for a few more minutes as people sign on and then we'll get started.
Okay, great. I think we've waited a good amount of time and I've let people sign in. So I think we'll go ahead and get started. I wanted to thank everybody for joining us. This is the second Peer Exchange Webinar associated with the remote Alaska Communities Energy Efficiency Competition. We intend to continue throughout the year. I just need to advance that slide. Super.
Before we get started for the content for today, I wanted to give you a few updates on the webinar operation. Everyone who's joined as a participant has been muted to prevent too much background noise from interfering with the speakers. At any time during the presentation, if you have a question you can type it into the control panel on the right of your screen. There is a section that's marked questions. If you just click on the little plus sign next to "questions" you can find a place to type them in. At the end of the webinar, we'll read off the questions and get some answers for you right away.
Later, in February, you can check the RACEE website for a link to the recording and transcription of this webinar. We've given you the link for that. We will be collecting information from you, anything that you believe should be announced or would be of interest to other communities in the State of Alaska, please, let us know and send your ideas or announcements or funding opportunities that you hear about to Fletcher Souba and we will be sure to include that in future webinars as an update for everybody.
So the goal of the Peer Exchange Network is simply to empower communities in Alaska and native Alaska villages to develop effective tools to advance the use of reliable, affordable and energy efficient solutions and hopefully one that will be replicable throughout Alaska, other artic regions and other remote places. The Department of Energy is very pleased to be able to leverage the existing convening power of the Alaska Energy Authority plus other regional energy efficiency organizations to form the backbone of the Peer Exchange Network that we are building these communities.
After today, we have a list of future webinar topics and including part 2 for the topic we're speaking about today. Some of the other topics, listed here. Without further ado, I would like to transition and make an introduction to Jim Fowler and Lee Bolling who will be our presenters today on Efficiency – Your First Tool to Reduce Energy Costs. So with that, I pass it over to you.
Jim Fowler: Hi everybody. This is Jim Fowler. I'm going to take it from here and then I'm going to hand it over to Lee. Let me make sure I have control here. I'm trying to – there we go. So today – there's two parts of this energy efficiency series, I guess you'd call it.
Part one is today. Part two will be next month. Lee and I are going to talk to you about part one. First of all, we're going to talk about the overall energy efficiency process, why we feel that energy efficiency should be first, what kind of potential savings there are, how does it compare to alternatives. Then the steps; how to get into an energy efficiency project, what kind of strategy needs to be developed, how is the project developed, financed, et cetera. Then next month, Amber Donahue from Siemens and Peter Beardsley from Nortech will be talking about project development again, financing, construction and measurement and verification.
So to start, this is kind of a schematic representation of the energy efficiency process. All of you committed to a 15 percent goal reduction, which is great. So how do we accomplish that? The first step is to really understand what the building inventory is. Everything I'm talking about is on a community-wide basis. There's been a lot of activity in the last up, a lot of energy audits, a lot of building-by-building or owner-by-owner initiatives in terms of energy efficiency but we feel that the biggest impact would be if it were looked at from a community-wide perspective. So building inventory, let's talk about it. You have your own buildings or building, but on a community-wide basis it would be best to have an inventory of all the buildings in a community.
The next step is benchmarking and establishing a baseline. In order to establish a baseline, you've got to get utility consumption data; oil or gas in some of the areas, but mostly it's oil and electricity for a two or three-year period. We'll go into that in more detail.
Then there's what I call portfolio analysis. Let's take a look at the buildings that you have, what they're consuming, what the baseline is. Then from there you move into an energy efficiency strategy. This is where Lee's going to take off later, in about 15 minutes. Part of an energy efficiency strategy is energy audits. After an energy audit, then we've got to develop a scope of work, look at financing, moving into construction and then after construction is complete, an important step is measurement and verification. Did we accomplish what we wanted to accomplish and did we say what we thought we were going to say?
So these steps answer questions. The first question is, "What are we trying to accomplish?" The answer is we're trying to get a 15 percent energy reduction, cost reduction. The next question is, "Well what do we have?" That's the building inventory piece. "What is our starting point," is the baseline piece. "Which building should we focus on?" That comes out of the portfolio analysis.
"What's the plan?" That comes out of the energy efficiency strategy. "What can we do to a specific building?" That comes out of the energy audit activities. "Who's going to do what and how much will it cost?" That comes out of the scope development. "How are we going to pay for it," comes out of the financing piece. "Then let's make it happen," comes out of the construction piece.
Then finally, "Did it work? Did we save what we thought we were going to save? If not, why not?" We've got to find a root cause of why we didn't save what we thought we would and fix it.
So a typical energy audit includes the benchmarking, the baseline and an audit. You can see why just having an audit is not enough. The building inventory piece and the benchmarking piece has been under evaluation or it's been in process for a number of years. AHFC, Alaska Housing Finance Corp, has an heiress database and state agencies and a lot of your buildings have been input into that database. Alaska Energy Authority has a community energy model and part of the RACEE process program was building inventory, acquiring a building inventory and getting some benchmarking data.
The regional planning efforts that have been underway for quite a while and some of the start – the Department of Energy has a Start Program. Part of that was creating plans and strategies. The most comprehensive vehicle, I guess you could say for energy efficiency is what's called an ESCO project. ESCO stands for Energy Service Company. Amber Donahue from Siemens is going to be talking about ESCO projects. Siemens is in ESCO. In that case, all of those pieces are included in the project.
Portfolio analysis is kind of an orphan here. It's not dealt with very much at all and I'm a big proponent of it so we'll get into that in a little bit more detail. So why energy efficiency and how much it is going to cost, how much can I save and what happens if I do nothing?
So the why, the first piece that I look at when I ask – when we talk about energy efficiency is, "Well where are you on the energy efficiency curve?" There are certain energy efficiency measures. I'm going to call them EEMs. They're also called energy conservation measures, ECMs. But I'll use the term EEM. There are certain EEMs like setback thermostats and air sealing that generate a large savings. Then as you move up the curve or to the right, the EEMs start to generate less and less savings. That doesn't mean that they're not important. It just means that the immediate savings is less.
Air sealing and setback thermostats are commonly the most – the quickest return, highest savings measures in small buildings. If you've got a larger building with mechanical ventilation, meaning air handlers, then oftentimes and commonly air handling issues – the amount of outside air that you're bringing in, the amount of exhaust air, et cetera – those are going to be the largest, biggest bang for the buck EEMs. But in the smaller buildings, it's going to be setback thermostats and air sealing.
Then following that is lighting. In buildings with high amounts of refrigeration like stores, village stores, refrigeration is going to be a big one. Then envelope upgrades, even though many buildings need them, they're not a high return, quick payback item. They're typically a 20 to 30-year payback.
So you can find yourself on this curve. If you have manual thermostats, old P12 lighting, building has not been air sealed, you're down in the lower left corner where the zero savings mark is. If you've implemented setback thermostats, then you're starting to crawl up that curve. If you've air sealed the building, you're going higher on the curve, et cetera. But the first question is, "Where do I fall on the curve?"
As part – Kwethluk was one of the five communities in Alaska that was awarded a START grant or an activity technical assistance through the START Program. START, I can't remember what it stands for, but again, it's a Department of Energy program through the office of Indian Energy, I believe. What we did – I was part of the team that went into Kwethluk and performed the analysis there. What we decided and what they approved was a community-wide efficiency program. "What can we do across the whole community to effect energy consumption?" Excuse the noise in the background.
Sorry. Okay, I'm back with you. Excuse the technical difficulties. So what we found was the average homeowner's electric cost is $1,200.00 a month. Their average fuel cost is $4,000.00. The total non-residential energy cost in the village is about half a million. The total residential energy cost is about a million. This was across 188 homes and 25 commercial buildings. The goal in Kwethluk was to implement for EEMs which included setback thermostats in every building, air sealing of every building, LED lighting throughout the entire community and let's up the insulation in the attic to an R60. Those were the four what we call low-hanging fruits.
The savings for the average homeowner would have been or is calculated to be $515.00. The average cost is just over $2,000.00. The payback is four years. On the non-residential side, the average savings was about $3,800.00 per building. The average cost to upgrade the building was about $15,000.00. Again, the payback was four years. The total community-wide upgrade cost was just over three-quarters of a million dollars and the savings is about 190,000. The savings break out you can see over to the left there.
So this example is presented as a way to show you what's possible in a village or in a community, a rural community, if you look at it from a community-wide standpoint. Overall, it's just under 13 percent savings in the community for, again, the four simple lowest hanging fruits that are available in just about every community.
But comparing that to doing nothing, the chart over on the left is – the green line represents doing nothing and the black line represents implementing these four EEMs. You can see that four years out is where they cross over. That's the four-year payback. At the end of roughly 14 years, 15 years, the difference between those two lines is about $7,800.00, almost $8,000.00 which means that over – by the year 2030, the average homeowner will have spent $90,000.00 versus $83,000.00 on energy costs if they did nothing.
On the non-residential side, the chart, the graph over on the right, the difference is quite a bit larger given the annual costs. The average non-residential building owner will have spent $350,000.00 had they done nothing versus $3000,000.00 had they implemented the EEMs. This includes the cost of implementing the EEMs. That's why the black line in the year 2016 is higher than the green line, because it includes the cost of implementing the EEMs. So this is what happens if you do nothing. You continue to spend money, more money each year and cumulatively end up spending a lot more money.
So the difference is I said $7,000.00 on the chart to the left. It's actually $6,200.00 and $46,000.00 for the chart on the right. I consider that throwing away money because it's – you'll never get it back.
So the steps in an energy efficiency process, let's take a look at these three first. Declaring your – putting together an inventory of your buildings is pretty simple. You need the name, the address, the size, the condition, space. So what that means, if you've got a building with an unheated garage, that unheated portion is not conditioned so it doesn't count in the size. You need the use and occupancy.
What's the building used for and how many people are in it? Is it occupied? Sometimes it's vacant. Then gather together the electric meters, the oil accounts, if there's natural gas involved. Then what you're going to do with that information is start to establish a baseline. I like the three-year baseline or electric consumption. You'd send them all the meters, if there's more than one meter, three years of fuel oil deliveries.
Typically fuel oil, in terms of oil, you're going to be looking at deliveries and not consumption unless you have a cumulative meter on your day tank which is strongly recommended. So there's going to be some discrepancies in fuel oil deliveries. For example, if in December of 2015 you filled up the tank, but in December of 2016 the tank was empty, you're going to have a difference there. So you'll want to average that.
You can take this information and put it in a spreadsheet or you can upload it into the heiress database. The folks over the AHFC can help you with that. Then there's a federal tool developed by the Department of Energy called EPA Portfolio Manager. That's basically equivalent to the heiress database but it's on a national scale. You can input your utility, your electric, your fuel oil, et cetera into EPA Portfolio Manager on a monthly basis and it gives you trends and charts.
When you do – if you are going to use a spreadsheet, it can get pretty complicated pretty quickly. There's a lot of data. This is a spreadsheet that has about just under three years of data, fuel oil and electric for about 12 buildings in Kwinhagak.
Benchmarking in portfolio analysis. Benchmarking is when you compare your building to other buildings in the community that has a similar use and occupancy. If there aren't any in the community, then you need to go up into a regional look. If there aren't very many in the region, then you've got to go statewide.
What I use to compare buildings in a benchmarking phase is heating degree days, HDDs. A heating degree day is a measure of the severity of the cold water. To give you an example, there's roughly 20,000 heating degree days in Barrow and there's about 8,000 in Juno and roughly 12,000 in Anchorage. So as you get colder, you have more days of heating and more degrees of heating. Talk a little bit more about that in a minute.
The two measures of comparison that we use in benchmarking is the EUI and an ECI. EUI stands for Energy Utilization Index or the Energy Use Index and the ECI stands for Energy Cost Index. The ECI is not very valuable across regions because the cost of, for example, can vary from $10.00 a gallon to $2.50 a gallon. But within your community but within your own building inventory, an ECI is valuable because the costs are roughly the same.
The portfolio analysis looks at cost and efficiency and it includes other considerations. For example, how much money are you spending on the building? The portfolio analysis will really inform your decisions with respect to energy audits and deeper assessments. Portfolio analysis leads directly into strategy.
This is an example of a number of buildings. I happened – I just picked Office/Library/Museum/Community Centers, so similar tight buildings. The gray bar at the top of each building is the number of heating degree days. You can see the top building there, Barrow – that's the shipping and receiving building in Barrow – has a lot more heating degree days than the courthouse and the city hall in Yakutat.
The orange line is the heating EUI. Roughly, the heating EUI should be equivalent to the number of heating degree days. You can see that in Barrow, it's fairly close. The Unalaska Library, it's pretty close. The Yakutat courthouse is pretty close. But in the case of the community center in Unalaska and the city hall in Yakutat, you can see that the heating EUI is significantly – it's two to three times higher than the HDD. That tells me that those buildings – they've got issues going on in the heating systems in those buildings and we need to look at that.
The electric EUI is the blue line. You can see that there's quite a broad variation there. The Yakutat courthouse was the lowest. Community center, again, is the highest. Electric EUI is often dependent on the number of hours that the building is open and what's going on in that building. Stores, as I mentioned before, with higher refrigeration loads are going to have a higher electric EUI. But these buildings are all fairly similar. So the electric EUI should be fairly close to each other. You can see that it's not. So this is one piece of a benchmarking and portfolio analysis.
This is another piece. This is – I mentioned ECI, the Energy Cost Index. These are – I did a portfolio analysis for the City of Unalaska and the school district down there. These are the buildings that we looked at and you can see that on a _____ either way ECI stands for cost where the – can't get the word. It's dollars per square foot of building. So how many dollars are you spending on energy per square foot in each of the buildings.
Again, I've split out the heating and electric. You can see that the heating ECI is fairly consistent across all of the buildings except that Baler building, which is their solid waste processing building. The electric EUI, it varies quite a bit. The high school's an average. The wash building over to the right, that's pretty high. The heating – so that wash building, what that is is a building that they use to wash down their heavy equipment. They've got a pressure washer that's got heated water. So that's where a lot of that heating is coming in from.
Anyway, this ECI comparison as opposed to the prior slide which was the EUI comparison gives you a little bit different perspective. Was trying to go backwards but it didn't go. Okay, there it is – well no. The third measure that I use in a portfolio analysis is what I call an E factor. Let me see if I can – there we go. So you can look at some of these buildings like the Yakutat City Hall or the Unalaska Community Center.
The Yakutat City Hall is actually a very small building. The EUI, by the way, is – the units are KBTUs or a thousand BTUs per square foot. So again, it's broken down on a per square foot basis. You can see that, for example, the Yakutat City Hall has a very high heating EUI, but that happens to be a very small building. So what I do is take the EUI and multiply it by the total energy costs in that building.
You can see that the high school and pool, back here from an ECI standpoint, it's not that high. But when you look at the size of the building and how much is actually being spent in terms of gross dollars, that building has got the highest what I call E factor. The Baler building is high. This is what I use to determine where – what buildings should we be performing energy audits on? Which buildings should we be looking more deeply into?
Because you can have a small building – for example, let's say all the way on the other end of this chart, the Burma Road Chapel, that could have – it could be a very inefficient building, but you're only spending $5,000.00 a year on it. It's not where you're going to pay attention. High school is a fairly efficient building, but you're spending half a million dollars a year. That's what this E factor considers. It's the cost and the efficiency. Again, this is what I use to determine or to inform a deeper analysis, where we go with energy audits.
So to finish my section here, the benchmarking, baselining and portfolio analysis feed the owners' goals, community goals, maintenance, capital expenses and it informs all of these different other factors. Lee's going to talk about strategy and planning and energy audits. Financial considerations will come later in, I believe, next month. So in my mind and in my world, this first section, the benchmarking, establishing a baseline and performing a portfolio analysis, that informs where you're going to go or what you should be doing moving forward with an energy efficiency program. With that, I'm going to turn it over to Lee who's going to take it from here. Thank you.
Lee Bolling: All right, thanks Jim. This is Lee Bolling here. Let's see if I can get my – control these slides here. I believe I can. So I'm a mechanical engineer with Coffman Engineers. Just a little bit about myself. I'm born and raised here in Alaska. I've been working in the energy efficiency field since about 2008. So it's about eight, nine years.
Coffman Engineers, we're a multi-disciplinary engineering firm. We do everything from alternative energy sustainability, civil and structural engineering, electrical engineering, mechanical. We have kind of a group of folks around the country that specialize in commissioning and energy efficiency. You can kind of see in that list right there, we have quite a different certifications and stuff like that. So we've definitely had a wide experience of projects from projects in rural Alaska all the way if you – things in San Francisco as well.
What I want to talk to you guys about today is really take what Jim says and go to the next level. Jim really focused on that benchmarking and picking the buildings. So now we're going talk about energy audits. So now that you've had someone like Jim look at all the different buildings and we've picked, let's say, the top two or three or five or ten buildings that you want to focus on, now we're going to go into the energy audit and what is involved there and way that's important.
Now the first thing to talk about before we get into energy audits is, "What is your goal?" I feel like a lot of times people don't talk about this, but it's very important because each building is different and each owner of the building is different as well. So I'm going to run you through just a couple of different people, kind of stereotypes of people that – clients that I meet while I'm doing these projects.
The first one is business owner that is all about the Benjamins. He's a very shrewd business owner that is very interested in cash flows and needs to make sure that he's paying his bills. He wants to make sure that he's getting a quick return on his investment. So he, the all about the Benjamins guy is more interested in short term paybacks, maybe one, two, three years, four years. Once you get outside of five years, he's not really interested in that because he may sell the building or do something else from there.
The next person that I meet a lot is the person that I like to call Tenants Are Number One. So energy is important to them, but it may not the most important item. The actual quality of life in the building may be more important than energy. So you have to balance that. They could be someone – let's say there's a clinic in your community or a school or a hospital or a senior center. You want to save energy there, but you also don't want to reduce the quality of life in that building. That's very important for user comfort and satisfaction. We spend a lot of time in buildings and we want to make sure they're comfortable for us.
The other type person I meet is I like to call the Long Term Spaceship man or Scottie. They have a very long view of their building. This might be someone like yourself in rural Alaska where you have a building that you know is going to be around for a long time. A lot of times it's a school district, so the schools in your villages or your communities or the water plant, for example. They're going to be around there for a long time. So they have a much longer timeframe that they're looking at improvements. The Long Term Spaceship man, he can look at 10 or 20-year paybacks and be totally comfortable with that.
Then there's always somebody that is just stoked, someone that is just pumped on energy efficiency. They may not care about the money side as much. They're more in cared about the environment and carbon reduction. So at the end of the day, usually if you're in charge of a building, you're kind of a mixture of all of these kind of different factors. So it's important for you to kind of think about which one of these do you more identify with and what is your plan moving forward.
So now let's talk about energy audits. So now that we have the client's goal – each of these clients on the left has a different goal but at the end of the day, the energy audit is going to match that client's goal with a solution. So the first step is a level one energy audit. We're going to talk about several different audits and level one is the easiest audit for someone like myself or Jim to do. It's called a level one. It's a walk-through audit.
It usually involves a couple-hour site visit to the building, walking around and really looking at those low-hanging fruit. You know what Jim was talking about before about LED lighting, air sealing, how is the building controlled. There's a lot of things that an auditor can find just within the first five minutes of being in a building that can make a huge difference. So a walk-through audit is a very good thing to do. It's fairly low cost because it doesn't take a lot of effort from our part. But the most important part of getting any audit no matter if it's level one or two or three or something else, the key is to get to action. Okay?
An audit itself doesn't necessarily save energy. The audit is your roadmap. So it's a roadmap that you take and it helps you actually do action. Once you complete some type of action, then you reach your goal. So a lot of times people forget about that.
We'll give audits to folks and they'll say, "Oh thanks. We got this audit. That's great. Now we'll sit on it and not do anything for a year." So that's not a very good plan because the audit is not saving you energy or money. You need to go through the list of – a path and develop a project and actually make something happen.
So the next level of audit is a level two audit. This is a little more in depth and usually takes – depending on the size of the building, it can take one to two days going through a building. Really, we're getting into the detail of all the different energy using equipment there. So motors and boilers and fans and taking information from each one of those pieces of equipment. Once we get all this information and we talk to the person that's actually operating the building, we can go back to our offices, pull out our fun Excel spreadsheets or energy model and plug it all in and start running some calculations to really figure out what's going on.
With this level of audit, a level two audit, there's more intense or detailed cost estimating. So really trying to nail down, "Okay, what is going to be the cost for this improvement," because remember it's a balance. You're going to save energy but it's also going to cost you money to buy improvements to get those savings. So it's a balance there and that's where the payback comes in. Quicker payback items are better to go through.
But at the end of the day, you still need to get to action and you still need to get to your goal. So just for an example, the All About the Benjamins guy, he may just want to do a level one audit and get the low-hanging fruit and go to action whereas Long Term Spaceship man, he may want the level two audit because he wants the more detailed engineering analysis and he can deal with some longer payback items.
The last level of audit is a level three audit and this is the most detailed audit. I've personally only done probably a handful of these audits. Most of the audits I do are level one or level two. The reason is because most people don't want to pay for the extra effort that goes into doing a level three audit. But level three audit is much more detailed site visit and really it's taking all of that information and dumping it into a computer model and running that model for every hour of the year. So for 8,760 hours in a year and pumping out results for you. This is usually used in large capital improvements and usually for larger buildings, maybe the school in the community or the water plant. It really involves a more refined cost estimate and it's definitely the most time intensive audit.
One example that I always give with this level three audit is – this is actually a building here in Anchorage that I worked on and it was a large office building. The owner of the building hired us to do a level three audit and said, "Hey, you know what? If someone – this guy has this tinting to the windows that I want to put on. It's going to cost a lot of money, but he promises me it's going to save a bunch of money." We say, "Okay, well let's model this and see what happens."
What we found is that, indeed, putting that window film actually stopped a lot of heat from coming in the building and the cooling system didn't have to work as hard. So they actually saved a lot of electricity. But on the flip side, they had to burn a lot more natural gas to compensate for that heat that they lost. At the end of the day, there really wasn't that much savings and it was going to be like a – I think it was a 100-year payback for doing the improvement. So sometimes it's nice to do these audits to figure out what doesn't work. Sometimes what doesn't work – knowing what doesn't work is just as important as knowing what does work.
I think we're having a little problem here trying to move my slide forward. Hold on a second. There we go. Okay, so the last thing I want to talk to you about is something called retrocommissioning. Retrocommissioning is similar to an audit but it's a lot more hands on. Typically, it's for the larger buildings in your community like the school, for example. Really it's getting in there and tuning up the building. You see this picture of this old Alaska truck right there and that truck needs a tune-up. You can imagine your building getting a tune-up and figuring out what's actually going on and getting it working right again.
The term commissioning comes from ship building. So you can imagine, let's say you have a 50-foot commercial fishing boat out in Bristol Bay that someone's building. It's probably a good idea that before that ship goes out and sails in those seas that they've tested all the different components on that system. You need to make sure the steering works, make sure the radios work, make sure the engine works. A lot of times this isn't done with buildings. A contractor will build a building and then hand it over to the person that bought it but they won't test all the different systems to make sure they're actually working right. So that's commissioning.
Retrocommissioning is the act of doing that whole commissioning project on an existing building. So you may have a building in your community that hasn't been – that was never commissioned or hasn't been retrocommissioned in a long time and those are great buildings to go back to and find out what's going on. A lot of times this gets into some pretty intense details with the control contractor that worked on the building. So the school may have a very complicated control system. Sometimes what we find – the first thing we'll look at is we'll dive into that code and we'll see, "Hey, what's the schedule of the fans and the boilers? How are things working?" A lot of times it'll be one line of code that we'll end up changing and we can save tens of thousands of dollars just with one quick line of code that would allow the fans to turn off at night instead of having them run all day long.
But at the end of the day, all these things are trying to get you to your action and then to the goal. So every part of an energy audit involves taking a building and auditing the energy. Right? I mean energy audits. So we're going to pretty much figure out where all the energy flows in that building.
Now here's an example building for you. This is a pretty big building. You probably don't have a lot of these in your community or any at all, but I wanted to show this to you because it gives a good example of all the different components that can be in a building. This is a building that could be in Fairbanks. It's 25 years old. It's 50,000 square feet. They spend overall about $225,000.00 on electricity or on energy every year. So $153,000.00 on electricity, $72,000.00 on heating oil. That's a lot of money. We need to figure out where all this money's going.
Like Jim said before, you can use different indicators to rate these buildings. This is on an energy cost index, ECI, of $4.50 per square foot. So over a whole year, if you divide all that energy cost by the square footage of that building, it costs you $4.50 per square foot for a whole year. In Fairbanks, for example, buildings can range from about $2.00 a square foot all the way up to $8.00 a square foot. So there is room for improvement for this building.
The next thing on the left is you see the pie chart. This is a great way to look at what's actually happening. If you can see on the far left, the biggest user of energy in this building is space heating. So that's heating oil for space heating. That's about $64,000.00. Interior lights are the next biggest. The blue on the right, for some reason that's not coming through, but that's all the plug loads and the office equipment that's used in the building. You also have pumps and ventilation fans. One thing a lot of people don't think about is server rooms as well or air conditioning.
But this gives you a good idea of what to focus on. For this building, we're going to focus on heating and lights and probably controlling their ventilation system. If you look at the very top, there's the hot water that's used for washing hands. In this building, there's only $1,000.00 of use in hot water. So that's kind of a red flag for me that says, "Hey, you know we probably shouldn't spend a lot of time looking at how to reduce hot water because there's so many other more important things to look at in this building."
Now this is an example of a report that you would get from an energy auditor like myself or from Jim. This is actually a project I did in Kiana this last year. I think Nelson may be on the phone. I worked with him in Kiana. Kiana was an awesome community to go to. I had a blast there. It was beautiful weather. It's like 90 degrees. It was crazy. I went fishing as well. So Nelson, you got a great community up there.
But in your report, the first thing you usually get is – inside the report there's going to be all sorts of details about the mechanical systems and the lighting systems and envelope. But at the end of the day, you kind of want a list of just, "Okay, what are those energy conservation numbers that I want to actually – the measures that I actually want to do and have them ranked?" We usually put that in our executive summary.
You can see some of the things that are the most important are adjusting thermostats, replacing incandescent lights with LEDs, replacing CFLs with LEDs. Also in the studies, the auditor may find things that you should look on for future things to do. Like one of the things we found was that the school was actually a very big building there and quite complicated. That would be a perfect candidate for doing a retrocommissioning project there.
Also doing a lighting design at the school could be great for improving to LEDs. One thing about lighting projects is that if we have a pretty big building, it's usually a good idea to bring in a professional lighting designer. It's easy for an auditor to pick different lights and just replace them in time, but sometimes a better solution is to just do a total redesign of the system and you can get better quality light and energy savings at the same time.
Usually when we're doing these audits, these are the top five low-hanging fruit that we find. So you should be looking at all of these for all of your buildings. You don't really need an energy auditor to tell you this, but – so I just want to give it to you. Pretty much, the first one is how is the building controlled? So that's your thermostat. Turning down your thermostat or doing a nice setback where the thermostat turns down during the nighttime hours is great. One thing to be aware of is if there's a power outage, your thermostat will probably reset itself. So you have to go back in there and reprogram it.
The second one is LED lighting. LED lighting has come a long ways and improvements with LEDs is really great to do. Next thing is weatherization. So filling in cracks, air sealing, all of that good stuff. Fourth thing we usually find is controlling motors on pumps using ECMs or VFDs. VFD is variable frequency drive. Then the fifth thing is reducing the amount of excess outside air. So if you have fans that are bringing in ventilation air for people to breath in the building, figuring out how much air you actually need per code to make a healthy building and not bring in any more than you really need to because that increases cost.
So it looks like we're at about 10:52. I have two more slides that I'll run through pretty fast and then we can go to questions after that. So we have the client's goal. We have your goal. We did the energy audit.
Now we want to get to action. Some clients can take that energy audit and go straight to action and reach their goal, but a lot of times we find is that a client may not have the manpower or just the time and energy to get to that action part. That's where this orange circle called project development steps in. Project development is really taking that list of improvements from your energy audit and getting them in a form that you can actually get a contractor to bid on the work and come do the work. So really, that's creating the scope of work.
"Okay, we're going to replace the lights in the school, but how many lights are we going to do? Where are the lights going to be stored? What kind of light are we doing? Where's the contractor going to stage his equipment?"
Also you may need to obtain design and engineering costs. Before the contractor could install these lights or let's say a boiler system, you would need to get a stamped design from a professional engineer, a mechanical engineer. So there's costs associated with that engineering. So that's something to look at.
Once you have engineering design, it really helps – you have a scope of work and you have design drawings if you need them. Then you can give that out to a contractor. You can give it out to three or four or five different contractors and get bids on the work. That's a great way to make sure the contractor understands what the project is and to see what the range of prices are. A lot of times, there'll be a wide range in costs from a contractor and from low to high. Usually you don't want the lowest cost and usually you don't want the highest cost. You want somewhere in between. Like they say, you get what you pay for. But it's a good way to figure out what's going on.
Looks like we had something pop up there. Yeah, the great thing about this RACEE program is that it wouldn't have been efficient for an auditor like myself to just go out there and do one building. So what they did is combine these into a bunch of different buildings. I think I looked at ten buildings in Kiana. So that's the economy of scale. Also, if you do your lighting projects, try and do them in all the buildings if you can at once so you can have one contractor out there that does all the work.
Financing is another part. We're going to talk about that more in part two. Amber and McDonough and Peter Beardsley will go over that. But a lot of times if you want to get financing, you need to get this project development side all taken care of so that someone can trust your findings, trust the cost estimate and will loan you the money to do these projects. So that's about all I have.
One last thing. I do see is there's a lot of hurdles out there when we do these projects. One of them is the waiting game. A lot of times people want to wait for someone else to pay for an audit or pay for improvements. But the reality is that these improvements are great investments. If you have the money and have a good auditor, they can help guide you through making a good investment.
Also, like Jim said before, if you're not paying for an improvement, you're actually paying for wasted energy. So you've got two hands, right. You've got two fists of cash. You can either have one fist of that cash. You can have it burning up and not using it at all or you can take that money and instead of burning it up with wasteful operations, you can actually use that money to pay for an improvement.
The last thing is to think about as energy efficiency as an investment like you would invest in a stock or a bond. This is a great way to get a return on the building that you own that you can't get anywhere else. So with that, I'm done talking. Let's open it up to questions. We'll go from there.
Pam Mendelson: Thank you. We do have one question come in that says – hold on. Let me pull it up. "Would it be possible to develop a spreadsheet for a customer to fill out and send in to get a low level energy audit?"
Jim Fowler: This is Jim. I'm not quite sure I understand the question. Are they asking to have an audit from a distance based on a spreadsheet? Let's assume that that's the question. The answer would be you can tell some of what's going on in the building by looking at a monthly graph of electric and oil consumption.
You can get some suspicions I guess I would say from looking at a graph, but ultimately you probably need to do a site survey, at minimum a level one walk-through to either confirm those suspicions or find out that they're wrong and find out what actually is going on. You could based on some kind of a benchmark, you could tell whether that building is performing as it should or it's 20 percent above average from the standpoint of costs and consumption or it's 30 percent below average. So you could get that kind of information from a spreadsheet with monthly energy consumption data for two to three years.
Lee Bolling: Yeah, this is Lee. I agree with Jim. Have an onsite site visit is definitely the best way to really dive into your building. I guess for myself to make recommendations and actual like savings calculations and costs, that's what would need to happen.
On the other hand, if someone does have a building and they just want to talk about it and get kind of high level improvements without any what the saving – actual numbers of what the savings are going to be, that's something you can do over the phone and talk about the operations of the building. But that's a pretty high level. It's hard to really see the whole building from a distance, like Jim was saying.
Pam Mendelson: Perfect. Thank you. Then we have one more question. "When presenting audit findings to the decision makers under the RACEE projects that Jim and Lee have been involved in, what seem to be the factors that most influence their decision to act on the recommendations?"
Lee Bolling: This is Lee. I can speak to that a little bit. I haven't worked on this next step of the RACEE yet with decision makers, but I do know from my other projects, pretty much one of the main decision points is the payback. When are we going to get the money back that we're going to spend on this? It is a good idea to do the quicker payback items first.
Just get those out of the way. Get them done. Once you have those items done, then move onto longer term payback items. So I would say that the economics are the most important factor that I see with clients. I don't know Jim if you want to add anything more to that.
Jim Fowler: Yeah. I'd stay in the economic answer because I agree with that but I'd broaden it out a little bit. I think – I worked with Port Lions and Sand Point and Sand Point ended up not submitting for the phase three funding and Port Lions did and was awarded phase three funding. What they then needed to do because the funding wasn't for all of the recommended EEMs, they needed to go back into the list of the EEMs – I worked with them on that – to select the most appropriate ones based on their [audio skips out] and what can we do with it. That's what dictated which EEMs they implemented.
Lee Bolling: Another thing to add to this as well, if you are meeting with a decision maker about what projects to do, bring in the auditor that actually did the report. Having someone like Jim or myself there as well at the table can add value by explaining the economic side, why it's important and how it's going to save money. So another thing to think about.
Pam Mendelson: Perfect. Thank you. That's all the questions that we had come in. So I just want to say thank you to Lee and Jim for speaking. As a reminder, this webinar will be available online at the RACEE website in mid-February. This concludes the webinar.
Jim Fowler: Thank you all.
Lee Bolling: Yeah, thank you.
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