Description
This Measurement and Verification Case Study webinar is the third in a series of case study webinars to highlight the successes of facilities that have achieved Superior Energy Performance (SEP) program certification. This webinar highlights the experience of Cummins’ Rocky Mount, NC facility, which manufactures engines, in achieving Gold-level SEP certification in January 2014 and improving their facility energy performance by 12.6% over three years, saving over $700,000 annually (see the cost-benefit case study). The case study reviewed how the implementation of the SEP program at the Cummins facility has helped the energy team develop a more robust measurement approach of their energy performance, including how to properly measure energy consumption of their manufacturing processes and the testing of engines manufactured prior to their shipment. Download the presentation slides.
Text Version
>> Paul Scheihing
Welcome everyone. This is the third bimonthly SEP case study webinar. Today's webinar will be on Cummins' Rocky Mount Engine Plant. We have, this is Paul Scheihing speaking. We have Mark VanDam of Cummins and we have Bill Meffert of Georgia Tech who will also be speaking with me. Next slide please.
[Next Slide]
So when we talk about Strategic Energy Management, we like to think about it as a continuum in that there are various levels. The first level is the foundational level where we're implementing a systematic approach. There are many utilities around the United States and Canada that have an SEM program at this level. And here we're implementing the plan, do, check, act systematic approach to show continuum improvement. The ENERGY STAR program is an example of a program that promotes such a systematic approach. Next please. And then when we look to ISO 50001, which is the goal of an energy management system. This is not so much at the foundational level in that it's a certifiable system. It's similar to 9001 and 14001. And then with, next level, SEP, this adds measurement and verification on top of 50001 and it is third party measurement and verification. Next please.
[Next Slide]
The ISO 50001 standard is a standard that's been out for four years now. It is the global energy management standard. And it, as the diagram shows, it follows the plan, do, check, act approach, as other management systems do. You can hit the next button please. It is similar to 9001 and 14001. It also, I put in the lighter blue there, like energy planning, operational control, measurement and monitoring – these are the aspects of 50001 that makes it a little different from the other management systems. It's a very data-driven approach. Measurement is strongly emphasized for this standard. It does not prescribe specific energy performance improvement criteria. It does require that you continuously improve greater than zero. Next please.
[Next Slide]
So if you contrast ISO 50001 with the Superior Energy Performance program, ISO is an internationally recognized standard. It's a best practice, if you will, in energy management. It builds on the other ISO standards. It requires energy performance improvement with strong emphasis on energy data and metrics. It has global relevance. SEP requires ISO 50001. It builds on it but has specific energy performance improvement criteria. It is the DOE program. It's a national program accommodating diverse facilities across both industry and the commercial sector. And it has good transparency in that it requires a rigorous third party verification that we're expecting and hoping that the market will reward through supply chains, utilities, or carbon trading. Next please.
[Next Slide]
So to date, there are 14 companies, 27 certified facilities. Actually, I think we're up to 30, but today, next slide...
[Next Slide]
Today, we're going to focus on Cummins, with a case study here. And we have previously done case studies with MedImmune and Harbec. And those, by the way, are on the SEP website and are recorded and this one will be recorded and be able to play back at a future date. Next please.
[Next Slide]
So the purpose of the webinar is to communicate the business value of SEP. Next. Share learnings from these SEP pilots. So Mark and Bill will share their experiences with the measurement and verification relative to the Cummins plant. Demonstrate the rigor and robustness of the SEP verification, in that it accommodates different types of facilities. Develop case studies so we can go back later and read about the lessons learned of these projects. And finally, to hear from you, we want to hear your questions at the end, relative to this case study. And we ask that you, since you're on mute now, we ask that you type your questions as we go along in the chat forum and we will go through each question. Next slide.
[Next Slide]
So now I'd like Bill Meffert of Georgia Tech to take over on measurement and verification.
>> Bill Meffert
Sure, thanks Paul. Welcome everybody. Before we get into the specifics of the Cummins' Rocky Mount Engine Plant, let's step back a moment and talk about how we measure performance under the SEP program. It really is...there are two parts to that performance measurement. But the real rigor is in what we call the top-down, whole facility measurement. So for those of you who are familiar with M&V techniques, this would be method C in IPMBP – the whole facility approach. And so that's where the rigor of the SEP M&V protocol lies. Typically we will monitor all of the energy sources across the boundary of a facility, and when I say model, that means we will typically develop a linear regression for each of those energy sources. And we'll use the variables or the drivers that really cause energy consumption to vary over time. And typically for manufacturing, you would expect production, weather, maybe product mix, maybe input characteristics, those kinds of things, to be the variables that we would consider when we develop our models. And then typically what we'll do is we'll compare what the model predicts to what our actual energy consumption is. So our actual would be what we would get off of our utility bills. And if we build a model during a previous year or baseline year, and then we compare it, say 3 years in the future towards our actual readings, we would have a ratio of actual over predicted. And hopefully, that's less than one. And if it is, that means we have shown performance improvement. There are other...you can model other parts of the 3 year achievement period, but I won't go into that detail. The second part of the M&V is really to do a bottom-up sanity check. So the emphasis here is really on the sanity check. This is sort of a back of the envelope calculation of all the action plans or projects that an organization has implemented. And so they would list those projects. They would look at the savings expected from that to see if the savings improvement really adds up to what the top-down energy performance indicator is telling us because, you know, we want to make that connection between what the model is telling us and what we're actually doing in our energy management system to make sure that there's a real tie in there. So as Mark goes through these next slides, realize that he took this approach when he got SEP certified and I will say that Mark did a very good job and was able to do most of this on his own with very little help.
So I'll turn it over to you now Mark.
>> Mark VanDam
Okay, thanks Bill. Next slide then.
[Next Slide]
Okay, welcome everybody. We're going to go through, what Bill said, some of the interesting things that happened with our certification process, but before we get into all that, I'd like to take a small step back and talk about Cummins' overall sustainability plan and how SEP fits in with that. There are four basic priority areas within Cummins for our sustainability plan and where this one fits in is certainly with facilities and operations. I'm a facilities engineer at the Cummins Rocky Mount Engine Plant. And the facilities/operations piece is all about reducing energy, water, and our waste footprint. Several years ago, Cummins made a commitment to reduce our GHG emissions intensity from 2005 through 2015 by 27% and that's an intensity change. It's normalized against production. You know, we still have to make engines to keep the lights on. But we'd like to do so in a much cleaner method, so we could save tons of GHG emissions over this period of time. The timeline has now been extended to 2020 as well. But you can see in the chart here that we are well ahead of our 20% base, which is another reason for extending our goal to the year 2020 to keep on this pace. We're in kind of a maintaining level for the last few years. But production has also been going up, so where you see a constant percentage of intensity change, you get that against the better levels of production, and so then that's a good thing for us that we're able to make more product and keep our intensity loads low. So next slide.
[Next Slide]
Alright, the Cummins Rocky Mount Engine Plant, we are an industrial facility. That's a picture there on the right of basically our front entrance there of our building. We manufacture diesel engines and we also machine components for our own use, as well as other facilities in the Cummins network and our service industry. We're located in Whitakers, North Carolina, so why do we call ourselves Rocky Mount Engine Plant, right? Well, Whitakers is barely a map dot, but we're pretty close to this larger town of Rocky Mount. And so we've been named Rocky Mount Engine Plant within the Cummins facility. And again, we machine, cast iron in about half of our plant. We take raw castings for blocks and heads. And we machine those into finished goods that we will consume on the assembly side of the plant, as well as assembling those via some cylinder heads for sister plant usages within the US, and some outside the US, as well as our service network. We also assemble, paint, test, and up fit and ship engines here as well. It's important to note right here that we are, that we do not batch build anything. Everything we build is already pre-ordered, pre-paid for hopefully, but it's a just-in-time inventory and our makers can change quite rapidly depending on demand. We have about 1800 folks who work here on a daily basis, around three shifts. And there are multiple business units within the facility. So we've got three shifts here, 5-7 days per week, depending on the business unit and demand. It can change, but there's always one business or two within the plant working three shifts, 5-7 days a week. If you look at our SEP certification level, we were able to certify to a gold level which is between 10-15%. And we actually hit 12.6% during our certification. And that gave us the gold. And our energy management system is of course ISO 50001 which is, we made the decision in the beginning, it's merged in with our 14000 and 18000 systems and database which made it a lot easier to incorporate for our facility. Alright, next slide.
[Next Slide]
Okay, our energy management system scope and boundary, you can see an aerial view of our facility here. Our Cummins RMEP, I'll just say RMEP from now on. When you work for Cummins, you learn to speak a new language pretty quickly that's acronym-based. So rather than dragging out the name, for the rest of the presentation, I'll just say RMEP. We are a 1.2 million square foot facility under one roof. Our scope includes all of the operations you see outlined in red here at that address. We do exclude the training center, which is across the street, or across the highway, in this picture, mainly because it's a completely different rent structure, different utility bill. They don't produce anything and their energy use is so miniscule compared to the plant that it didn't make any sense to include it. So therefore, our boundary is the red line you see here. That includes all the property – our buildings, our parking areas. We have a wastewater treatment facility that's kind of to the right of that picture right there. But all of that is included in our EnMS scope and boundary. So next slide.
[Next Slide]
Alright, now we'll get into some of the meat of our actual facility here – our energy profile. And you can see there that our SEU selected was our air compressors. The picture on the right is one of our air compressors. We have six centrifugal air compressors. They combine in varying formats or varying combinations to supply air to the plant depending on demand, so they can basically make up one compressed air system. They are six centrifugal compressors of varying sizes. We do not trim with anything else, so people will say you can't trim with centrifugals, but due to the large amounts of storage we have at least throughout the plant, as well as some controls software that can cycle the different sized centrifugals on and off pretty quickly, we are able to maintain, I don't know if trim is the right word, but for lack of a better term, we trim with these centrifugals. Again, our ISO 50001 and SEP certification was gold at 12.6%. And you can see our baseline period there from February to January 2010-11. And then our reporting period was February 2012 to January 2013. Our certification date was October 13. And of course DEKRA did our certification. They were the only certification body available. They did a really good job for us. And it was some good work. If you look at our primary energy consumption here, this is where it gets a little more interesting than just talking about dates and whatnot. As you can see here, we are heavy into electricity at Rocky Mount Engine Plant. 86% of our total consumption is electricity. Then our diesel fuel and natural gas is equally divided at 7%. We're a pretty moderate climate here. I think we turned our boilers on for the first time last week. We don't use any steam. All of our natural gas, or the bulk of our natural gas, goes to our boilers. And it's basically creature comforts – space heating. So we'll turn those boilers on sometime around this time of year and they'll go off usually around March depending on if we get a cold snap or two. And of course diesel fuel, we'll talk about that in a little more depth here in a few minutes. But that's the breakdown of our primary energy consumption. And if you take that, we have a pretty elaborate metering system onsite here with our building management system. But that 86% breaks down into the pie chart you see on the right. These are our business units within the plant. Facilities is the purple pie that is 35%. And the bulk of that is the air compressors. For diesel, understanding our air compressors typically consume about 20-25% of our daily electrical use on a daily basis. So you look at that and you say there's a 24% piece of the pie labeled machining A. That's true. But that's not a single line. That machining A is built up of different lines and like I said, these are just business units as you see there. So it's important to note that the compressors are still by far our largest energy consumer at 20-25%. The next closest we have would be a cylinder block machining line which is typically around 10%. Okay, next slide please.
[Next Slide]
Alright, looking at our energy data, excuse me, you can see back to our baseline timeframe all the way through our reporting through 2013. You can look at the blue line which is electricity in kilowatts hours plotted on the X-axis. And the other two, the red is diesel fuel and black is natural gas. They're plotted on the secondary axis just so you can see them. They wouldn't show up otherwise. But in our baseline year, you can see we started out pretty low. It's not atypical for a diesel fuel manufacturing facility to start a year low, especially if there is an emissions year changeover. Our customers will typically pre-buy at the end of the year and then slow it down at the beginning of the year, not unlike other businesses. Beginnings of the year can oftentimes be a little low in production. But you can see that it ramped up pretty quickly. And that's our baseline year. And then you go across and, you know, you watch the little blue line there. It tends to go down slightly as we go all the way across. And diesel fuel is pretty sporadic. And like I said a few minutes ago, we'll talk more about diesel fuel and its challenges in the next couple of slides. Natural gas, you can see I'm not totally lying about we pretty much use it for creature comfort. It spikes in the winter and goes down pretty low in the summer. So next slide please.
[Next Slide]
Alright, now as we get into the model challenges, when we get into using the EnPI tool, and I don't know how much everyone is familiar with it, but like Bill said, where you're doing your top-down assessment, looking at your energy sources, and then you start to model those and run your progressions, you know, you have to go through a series of tests here to make sure you're statistically valid. And when we did this, we took our three energy sources of electricity, natural gas, and diesel fuel, and we selected two variables to start with: weather and equivalent engines. Weather is pretty much going to be in everybody's model because no matter what climate you live in, it's going to impact your energy use. And here we have something called equivalent engines. Like I said earlier, we make components for our own consumption, as well as other facilities. Years ago, our finance folks were able to come up with a measure that says “Hey, so many blocks equals an engine or so many heads equals an engine” and that way we have equivalent engines which gives us a good measurement system to measure the whole plant by. So if we look at our energy sources, first electricity. You know, we evaluated that against equivalent engines, as well as temperature, even though we're pretty moderate. It gets pretty warm here in the summertime and we use a lot of electricity to cool the building or half the building as it were, as well as making engines. But when you look at that data, it passes the testing very well. Our p-values are well below .5 and our r2 was below, I mean above .5, so electricity looked great. And natural gas, similarly we evaluated it strictly against temperature, and it passes with flying colors as well. So we were sitting fat, dumb, and happy and we're going to pass this thing pretty easily and no problems and nothing to it because at the beginning, we weren't counting diesel fuel as an energy source because in our opinion, the only time we were using diesel fuel energy-wise were in our energy sets that we used during some peak-shaving opportunities with our utility. But further discussions within our group and within our corporate structure, we decided that we needed to count the diesel fuel that we're using to test engines in our product engineering lab and in the plant as well for an energy source. So once we did that, you can see the diesel fuel use built the model. And it built it pretty horribly. I spoke of equivalent engines in the beginning and that's not as bad as it gets, but it's pretty daggone bad when you look at it. So we figured that's because we're doing it against equivalent engines and half the plant is making components that have nothing to do with the diesel fuel. So we looked at a couple of other variables here such as engines processed, which would be only off the assembly line, or the number of engines tested. Unfortunately, when we looked at both of those variables, they failed miserably as well. So we worked with the folks at Georgia Tech and our pilot program, and while looking at a bunch of other data trying to come up with some other variables, and if we can go to the next slide please.
[Next Slide]
This is our further investigation where you can see there are three separate consumers of the fuel at RMEP. The generator sets, which I spoke of earlier, we do not count those because based on the protocol, if it's less than 5% of your total, you don't have to put that into the model. And they were. And then we have two other users of diesel fuel: production test, which is a high-valued automated test process. They're running validation testing on every engine we build, to the tune of, typically about 650 a day. And they're testing for about two minutes each. Everything goes through this automated test process. Then we have a product engineering test operations lab. That's also connected to the side of our plant. They run a lot different testing. They run long and short term testing and they're looking at performance, emissions, endurance. They do structural analysis testing, a lot of research-type work, and validation testing on a lot of current and future projects. So two very different users, and that was our challenge: how to...you know, we have two testing areas consuming equal amounts of fuel. So how do we normalize two significantly different users with the same energy source and get it to pass the model? So if we'll go to the next slide please.
[Next Slide]
What we have here, we got into it a little deeper, is we needed to come up with a better variable than what we had found so far that would accurately reflect our production tests, as well as our product engineering group. We got to look in, and production tests records, well they both have a time component, and production tests records minutes per test and the product engineering lab records what we call shaft hours. That's the drive shaft connected to the dynamometer that they're using to evaluate the engine resistance. We have two motoring dynos and six eddy current dynos. But none the less, that's how they record part of their performance, is in shaft hours. So we convert and calculate with the minutes per test and shaft hours and we came up with what we call test hours. It normalizes both product engineering and production tests to their diesel fuel. And when we did that, you can see, it looks like we found a variable that would work. We got a good p-value. We got a good r2 value. And we were able to pass the model. Next slide please.
[Next Slide]
So let's talk about some more of our model challenges. Yeah, we got it to pass with that variable and we've certified and everything is great. The issue that we have though is that diesel fuel continues to be a challenge when we use our EnPI tool on a monthly basis. We'll get a month every once in a while where there's a larger than we'd like to see difference between predicted and actual use that we don't see with our other energy sources. And we believe that has mostly to do with our next bullet point here and the fact that we're producing engines of varying sizes that are a little less than 4 liters up to 9 liters and we're building them for over 350 different customers. Like I said earlier, we don't batch build. We build on order and it can be two weeks out, as close as that, to the orders changing. So we have a relatively large difference, or can have a relatively large difference in makes. So without being, you can see in the third bullet point here, without being able to accurately account for fuel rates and production tests and product engineering, accounting for a mix, or final waiting factor, has proven unrealistic, or that's what we figured. But let's figure out how to put a waiting factor in for the larger engines, consuming more fuel over the same amount of time than the smaller engines. But when we got into that data, it just wasn't reliable data, and some of it just wasn't being captured properly for us to feel good about putting that mix in there as we go forward. So without that, what we're doing now is putting in some diesel fuel flow meters in both production tests and product engineering, another level down from what we were getting before so we can get a much more accurate prediction of the use by those estimates, rather than, I mean by those areas, rather than use some of the estimates done in the past. And we believe, well we hope, that's going to help us account better for a mix because we can look at that versus our production mix. So we know our production rates but fuel rates is what we struggle with during those two minute tests, so we're really excited about the meters going online and seeing if we can make our model even better than what it is right now. But that's part of what SEP does. It's striving us to look at the data and if it passes, yes, but we still don't feel 100% confident with it on a monthly basis. So next slide please.
[Next Slide}
And this is our model results. This is straight out of the EnPI tool. It's the final tab, I think, in that tool. It shows you your graphs so you can see the baseline year back in yellow and then our performance after that. And you can see the line going down, some decent changes being made. Towards the middle and end of 2011, there's changes that were being implemented before that, but that's when we really started to see the results from those changes, and we'll talk about those in a second. But you can see the burgundy line there with the solid dots and down to our 12.5% improvement. Next slide please.
[Next Slide]
Okay, so as Bill mentioned earlier, the bottom-up sanity check, so we've done the top-down analysis and gotten it to pass the model. And it's time to show how we've gotten all this. And when we look at our projects that were implemented during that timeframe, we have one particularly large one. They replaced open blow walls with engineered nozzles on our machine lines, particularly our cylinder block machine lines. You're talking about a facility that was built around 1983. A lot of changes have gone in since then, but we we're still using, well we still machined most of the blocks in head with the dry machining operation. We're milling, we're drilling, we're honing, and we're creating a lot of chips. And we need to blow those chips off because typically the engines don't care to have chips inside them. They don't do quite so well. So basically the original design is what we call open blow offs. It's a quarter inch or three-eighths inch set of tubing, depending on what station it is, that hopefully is bent and angled and has been crushed over the years or moved out of the way. That's being used to blow these things off. It's a large amount of compressed air that the component is cycling. And looking at that, we were able to replace those open blow offs with engineered nozzles that consume a large amount of...or a lot less air than what we were before. And compressed air is extremely expensive to make. So that project in and of itself was 5.3 million kWh we saved annually. Then past that, we had upgraded our lighting system, going from the old t12s to t5s, t8s electronic balance throughout the facility. And then there are two projects here around reducing compressed air leaks, one on a two valve cylinder head line and the other one on B Blockline. Thanks to out metering program that we had put in the year or so before that, we were able to see a lot of misuse during non-production time. And a lot of these leaks, you could detect them all personically potentially. But a lot of them, we just didn't know where they were coming from, didn't know they were there until we got the metering in place so we could see this stuff. And you can see both of those were a little over half a million kWh each. They were six sigma green belt projects. If you are into six sigma, metering and SEP is your thing, because it's clear, crisp data. You can see when you make changes. You can measure it quickly. You don't have to wait 6 months. Green belts and black belts love it. So our total annual project savings is listed here at a little over 27,000 MMBtu. That was a little over 11%. And that got us over the 10% hurdle for gold SEP certification. And not listed here are a couple of smaller projects that we also went over during the certification with the auditors. And when we did all of that, it was like three more projects, they got us up to the 12.6%. Okay, next slide.
[Next Slide]
Alright, let's start talking about benefits of SEP implementation. Outside of all of the math and the modeling that engineers typically love, SEP also provides you a tool for communication to your upper management, customers, and employees. It's really about making your energy use visible. You can see here, we use this chart a lot, in a lot of our presentations; this is the RMEP Energy Reduction Glidepath. That's a Glidepath, a word that a lot of VPs like to hear. But if you look at it, what it's telling you is you can see we certified in 2013. But what this is basically telling us is with our efforts from 2010 to 2016, I can build the same number of engines in 2016 that I did in 2010 and consume about 16% less energy in the process. That is a huge amount for a facility like ours that out of all of the...Cummins has over 300 facilities worldwide with varying sizes and distributorships, plants, office buildings, and whatnot, RMEP is the largest energy consumer in all of Cummins. We account for about 10% of the annual use within Cummins. So being able to build the same amount of engines with 16% less energy going in is quite a feat for us. So next slide please.
[Next Slide]
Alright, some more benefits, you provide the pathway to quantify your savings and secure, for us, secure future funding for metering and equipment. You know, metering is tough. You don't have to have metering to do SEP. It certainly helped us. We were fortunate in that Cummins had done a pilot project about a year or so before. We got into this and metered a couple of our electrical substations. So we can really show some good data. But since then, thanks to SEP and us being able to show all of that, we've gone further. We've metered every substation in the plant. And we've been able to prove how metering and using tools like SEP can highlight energy misuse and help you correct those. What you're looking at here is just a sample of basically our energy dashboard. These are drawn out charts you can go all the way down to the breaker level with some. You know, once your metering is installed, it's all software after that and programming. We're looking at, on the right, a dashboard that shows us our kWh per equivalent engine. We will be, in 2016, we're going to be rolling out an energy dashboard to the individual business unit owners in the plant to show them their kWh, as well as their CFM per equivalent product that they're making. Everybody's got a baseline, or a minimum amount. It's basically a measure of efficiency to show them when you're making this much product, you're either making money or you're losing money depending on how much energy and how much product you're making. It's just a good visual aid. Then when you can do all of that, you also get, hopefully get some preferences for future products. You can see on the right there just some LED tubes. We are currently in the process of changing out all of the lighting in our plant with LED. And below that stuff, there's a compressed air dryer. We're also getting some new air dryers. And none of that would be possible if we weren't SEP certified and continuing to improve and requiring improvements like this. We'll talk about our funding here in a second as well. But I just want to say, the whole point is this is it may not sound like it but once you get started, it's a process that helps you improve your system and hopefully acquire funding for greater improvements because you have to continue to improve. Next slide please.
[Next Slide]
I think we...was there one before that? Nope, maybe not, okay, I'm sorry. Oh, that's right, it's got two. Okay, so in our closing comments here, just some observations. RMEP was greatly aided by Cummins' commitment to energy and GHG reduction and the establishment of a dedicated corporate capital fund. There is an energy efficiency fund within Cummins that doesn't detract from the plant capital. If you're in facilities, you know it can be difficult getting capital funding because you don't make anything. But fortunately for us, there was this energy efficiency fund within Cummins and, you know, when you can prove that you're saving energy and SEP helps us to prove that, you show that you're good stewards of the money, and it's making a difference, then that certainly helps you in the future. We also have here what we call an Energy Leader Program. It's a cross-functional group of folks from within the plant. They volunteer. They become energy leaders for their specific business units within the plant. They go through ten weeks of training. It's just one hour a week, so it's not quite like boot camp. But it's a lot of really good training to teach them. And it can be anyone from finance to a maintenance guy on the team. And they go out and they look for energy waste and they communicate within their teams all the projects that we're working on. They do treasure hunts; look for other ways to save. Also we have...this is probably one of the biggest things that I push when we talk about SEP and 50001; expertise in both energy systems and management systems is a must. Bill said we did this without much help. He's correct. We didn't really utilize a coach or a consultant for our certification. But that's predominantly because we had a management systems expert onsite who had done our 14000 and 18000 certification work. And she had set up the system. She knew it. She knew how to merge the 50001 requirements and the SEP requirements into that system and allow me to focus solely on the energy systems piece, the EnPI tool, the projects, and whatnot. So having a team of at least a couple people who know both of those systems separately but also as experts, is a must in my opinion. SEP drives everyone to be energy conscious from planning to maintenance. You know, once you're certified, you don't just stop. You got to keep going. And so, it's become pervasive throughout our plant. People know that if they're about to make a change or put in new equipment, they're going to have to come talk to us and we're going to have to account for it. Or if they come up with new ideas, we reward folks for some of their ideas and whatnot. It's just a great plan to keep folks motivated. I think if you hit enter, there's another section here. Okay, so next steps, what we are going to do now? We've certified. We've gone through two surveillance audits now. For our next steps, Cummins is looking to certify internal auditors. We do not currently have any certified internal auditors like we do for other systems. Although I can say, I understand the need for it; we have been extremely happy and beneficial to get the aid of Georgia Tech to be our internal auditors. They're experts in the system. They come and do our internal audit for us. They don't just audit. They help us improve and keep us abreast of changes that are coming and things like that. So it's been a great relationship. Even though we'll be moving to internal auditors in the future, I hope to squeeze a few more out of Georgia Tech before it's over with. We're currently assisting other facilities within Cummins. After RMEP certified and we showed the results and showed what a great tool this system can be, with the right folks in place, now we have three other plants or other facilities, one is an office building, but they're all attempting certification as we speak. We have some challenges right here at RMEP, specifically associated with an expansion. It's an increase in consumption. We...I told you, we have a machine side of the plant and an assembly side of the plant. The machine side of the plant was never air-conditioned fully, just had spot coolers. So in the last few years, the challenge was taken on to air-condition that side of the plant. It's 750,000 square feet. And we're not making more engines in the process. So we're going to be adding probably another 20% potentially to our electric bill. So we're going to have to figure out what that's going to do to our model, whether that knocks the gas and diesel fuel below the 5% level. So a whole lot of things are about to have to be evaluated once this system goes online next year. So along those lines, that's our final next step here. What's our future certification, you know mature pathway really isn't what we're calling it anyway, but how do we go in the future, because we've done a lot of work. We've saved a lot of energy. We're about to add a pretty significant load. We can take the one time exemption if that's what we want to do. When do we want to certify next? There are a lot of questions that Georgia Tech is helping us with right now. So I guess the message here is just because you certified, you don't stop. You're continuing to drive for future products and where you're going to go next with it. I think that's what I like most about SEP, is that it's not just a management system that once you're approved, you know, you worry about it at the end of next year when you're about to do your surveillance audit. It's something that drives you on a monthly basis to be watchful of energy use and mindful of what's coming in the future and how it may impact that. So I think that is all of what I had to talk about today.
>> Paul
Thank you very much, Mark. That was excellent.
>> Mark
Yes sir.
>> Paul
Let's see, if you go to the next slide, I think it's just a summary slide.
[Next Slide]
Yeah, there you go, website addresses. We will be doing another webinar in two months. And what we can do now, we have about 12-13 minutes left. We can take questions. I will read the questions and we'll figure out who is going to answer them. So one question is: Could you describe how Cummins valued the return on investment process going forward? Do you expect the ROI to increase marginally as the processes are better understood and implemented? I guess Mark, if you could take a crack...
>> Mark
Yeah, Cummins, we use ROI to evaluate projects when we're looking to get funded from the energy efficiency fund. We typically want a three year or less payback. But that's not the deal breaker, depending on the metric tons of carbon you may be saving, as well as a projected ROI. Maybe it's not a three year payback, but it's still a pretty heavy payback that is projected at a four or five year range. You can still qualify for that funding. So where a lot of measurement systems are strict, the ROI plan, we love ROI. It's certainly something we evaluated against, but it's not the main evaluation tool. It's just one of the evaluation tools we use. So that and yeah, we do project, we've seen these projects go in and, you know, it's those projects where a lot of them are calculations. We've had some perform better than we calculated. And we've had some that have not performed as well. But again, with SEP and your bottom up sanity checks and whatnot, you know, we have that data to go back and analyze these projects and see how well they did and how well we did.
>> Paul
And the 12% improvement, if correct, I think it came up to about $700,000 right?
>> Mark
Yes sir.
>> Paul
Yeah, so that's certainly...that's $700,000 per year, which is well above, I think, most of your savings with some capital investment.
>> Mark
That's correct.
>> Paul
Yeah, but you got a lot of low cost, no cost savings here.
>> Mark
That is correct. I guess I should have hit on that. When you look at the engineered nozzles, that was certainly a capital investment. Lighting was a capital investment. But the work with the compressed air leaks or the machine lines, those were basically no investment. Now the metering was already in place, so I don't count that as a capital investment to make those improvements. What that did was prove to the folks that hold the money, as well as other facilities that, you know, if you have metering, you make this energy visible or energy use visible, you can save a lot more money than what you expected. Or we could, anyway.
>> Paul
Yeah, so we have two other questions that are pretty much the same. You partially answered it, I think. Did Cummins get any incentives from their electric utility? Yeah.
>> Mark
Actually no, we did not. We looked into it. There are some opt in and opt out type programs within our rate structure. We did not get any direct incentives. I can say though, we did get a free coach out of our utility. Part of our monthly bill, there's a small piece of everyone's bill that goes to fund this group out of Raleigh. And we did have him on our team and used him. He went to the training with us. Though incentive wise, monetarily - no, but from headcounts and labor and coaching - yes.
>> Paul
Okay great. Here's a good question. Did you have to make any non-routine adjustments for your reporting period?
>> Mark
No, we did not. You know, we were...and I know that's probably not the norm. But with us, we were pretty fortunate in the fact that the year before we went into the pilot program, Cummins had made a pretty big commitment to do in these pilot projects at several facilities to do some metering, to do some compressed air improvements. And so about time, that was perfect for our baseline year. And then the improvements had gone in so we were able to use the forecast method and did not have to make any adjustments. Now we're probably not going to be so fortunate in the next level with the added load that we're about to put in.
>> Paul
Okay great. Okay, here's a good question. You sort of addressed it, but maybe you could embellish on it a little more. For a company that isn't currently using another ISO certification, what would you say is the value of using ISO 50001? Are there any challenges you would tell them to anticipate?
>> Mark
Well I think the benefit, to start with, of using ISO 50001 is to go through the whole SEP standard and the M&V protocol. It's basically ISO 50001 with the added features of statistical analysis and verification. So if you're going through SEP, you're going to be doing 50001 anyway, so you've got to do 50001 and then a little bit more to do SEP. So yeah, I would say you have to use 50001 if you're going SEP. I don't know of another option. I don't know if you do, Paul?
>> Paul
No, I mean, as I described in my diagram, there are plenty of utility programs, ENERGY STAR...
>> Mark
Right
>> Paul
...that is pretty close to ISO 50001. But, you know, you chose the SEP path and you seem to like it. Okay
>> Mark
Yes. What was the second part of that question, Paul? Oh, I'm sorry...
>> Paul
Any challenges?
>> Mark
Well, you know, challenges for us versus someone who, I'd say if you didn't have the other management systems in place, then yes, I'd say there's going to be a challenge because you have got to learn how to put those management systems in place. So having an expert in that area is certainly beneficial.
>> Paul
I'm not sure you can answer this one. How does the energy efficiency project evaluation measure compare to corporate project approval criteria? Different criteria?
>> Mark
Well, no, if I'm hearing that right, our funding comes from corporate. And even if it weren't, our capital process would be driven up through corporate. So the calculations, the estimates that we're making, all of that is going to be driving up through our corporate facilities and energy efficiency folks for evaluation as well, if I'm hearing the question right.
>> Paul
Alright, is Cummins using SEP for other facilities as well?
>> Mark
Well like I've said, we got three more going right now.
>> Paul
Right, right
>> Mark
Basically what they've done is, like I said we we're the number one energy user, so we got picked to go first, and then once we were successful and showed that there are good benefits from that program, the next three in line were chosen. And I believe we're going to be going to an enterprise system here in the future and they'll be putting more facilities in the process.
>> Paul
Yeah, we're partnering with Cummins to implement an enterprise approach. Bill, this might be for you. And I'm trying to understand the question. But let's see here if you understand it. What is a good resource for the SEP M&V minimum criteria (r2, f-values, p-values)?
>> Bill
Right, I think of course, the SEP M&V protocol is the place where you're going to be able to get all those statistical test requirements. And on the slide right now is the link, Paul that you have. Well that's to the energy management professionals. But you can also get to the other sites where the tools are.
>> Paul
Bill, the SEP website
>> Bill
Yeah, you're right
>> Paul
Energy.gov/isosep
>> Bill
Yeah, yeah
>> Paul
Go to resources and tools, resources and the M&V protocol will be there.
>> Bill
Right, right, it has all of the required p-values, the f-tests, and the r2 for the statistical models that are required for the energy sources.
>> Paul
Here's one on lighting. I'm sure LEDs and t8s were discussed for lighting. What were the reasons that t8s and t5s were chosen?
>> Mark
Well you know, back then, that was the 2010 approval timeframe for that project. And while LEDs were around, they were still relatively high cost and payback wasn't as high. And so we had actually started that project, we were doing it over phases, so some of the lighting had already been changed over and they pursued that path. I can say now, like I said earlier in the presentation, we are probably 50% done with changing all of that out with LED now.
>> Paul
When you replace out, when you take out working lights with LED, what kind of typical payback do you get?
>> Mark
Well we are...it's interesting because we are replacing and retrofitting. In a lot of the office areas, we will be bypassing the ballast, removing it, and putting in the LED tubes. And then in our manufacturing areas, we're using some high-bay LEDs and some tubes as well. So that's what we went through, in order to get our payback like we wanted and evaluated warranties and whatnot. We were able to get about a 2.8 year payback with this project, which in the past; yeah anything under three with LED was almost unheard of. But we were also able to partner with an LED manufacturer, rather than using a second tier supplier.
>> Paul
And it's a fairly low-risk investment, if you're pretty sure you're going to get that.
>> Mark
Yes, yes
>> Paul
You know, electricity prices aren't going down.
>> Mark
That's correct.
>> Paul
Okay, anymore questions for people. Great questions! So we have about two more minutes. Again this has been recorded. If you want to share this with a colleague, you can do that. We'll be sending out an email to everybody that attended with that link to the webinar. And it's recorded. Okay one last question: can you share who the energy dashboard vendor was?
>> Mark
Sure, we actually, we are...Niagara AX is our building management system software that we're under, and through that, a company called IP Logics out of Charlotte, NC. They developed a lot of the software that goes through AX. A periscope, for example, is a package where we pull some information, but we are contracting with them to develop our dashboard.
>> Paul
Okay, excellent. Anymore comments, questions, final thoughts Mark?
>> Mark
Well, I think it's a little bit of work, but once you're SEP certified, you will probably be surprised how beneficial it is, you know, past what you were doing before. We use the EnPI tool a lot. It's how we communicate our results because now it's giving you a prediction based on some real numbers. In the past, we were just reporting kWh and we didn't know if they were good or bad or not. So outside of, you know, proving that you're saving energy, that's what I tell people a lot about it, it helps us communicate savings and secure future projects.
>> Paul
Excellent, well thank you so much Mark and thank you Bill. I think this concludes our webinar. I don't see any more questions. And thank you all for attending.
>> Mark
Yes sir.
>> Paul
This concludes the webinar. Bye.
>> Bill
Thanks Mark.
>> Mark
Alright, bye