The M Files

I’ve written several times about the energy performance gap that we frequently experience on projects seeking LEED certification. That is, the gap between the LEED score card targeted performance and what’s experienced in actual operation. LEED building energy performance can be hit or miss. Yet experience with our portfolio of Guaranteed Energy Savings Agreements has been exceptional, with aggressive energy targets repeatedly scoring direct hits.

An example of the LEED energy performance gap.

So what is it between the two delivery processes that creates such distinction in performance expectations? Let’s start with the LEED goal-setting process. We’ve narrowed it down to three simple points.

1. They aren’t communicated in plain English. The goals are obscure at best. We’re currently working on a LEED project where the energy goal is to achieve 25% below an ASHRAE Standard 90.1 2004 baseline condition. Confused? I thought so. Even the most experienced HVAC engineer needs to do some background checking to figure out what this goal might mean. That kind of technical language intimidates a lot of players on the project team. What are the chances of achieving aggressive goals when few understand what they really are? Since the targets aren’t simply stated, they rarely guide consensus-based design decisions.

2. Nobody is ultimately accountable for achieving the goal. Usually when an energy question comes up during a LEED project’s design activities, all eyes turn to the project’s mechanical engineer. But that engineer usually has little authority over team decision making. Further, the energy engineer is rarely contracted to ensure implementation of various energy model assumptions, including an effective owner-training program.

What happens if a facility owner discovers that his LEED energy goals are missed? Here’s one head-spinning sequence we observed not long ago: The owner called the construction manager, who then contacted the architect, who then contacted the mechanical engineer. After some initial investigation the engineer advised the architect who advised the construction manager that something was wrong with the building automation system (BAS). So the construction manager called in the mechanical contractor who then called on his BAS subcontractor. The BAS sub pointed out that they met their contractual obligation, so the construction manager advised the owner to call in their third party commissioning agent, who held a contract directly with the owner. The commissioning agent wasn’t on the hook for hitting energy goals, either. So, the owner had to pick up the pieces.

Nobody was accountable. The goal was purely a failed theory. The buck never stopped, and I think it’s still running wild despite the LEED plaque on the lobby wall.

3. There’s rarely a sensible plan to measure and verify results. There’s only so much energy efficiency that can be designed into a building. Even the most efficient of designs can fall flat on its face through inadequate operational practices. Yet, despite the ability to gain LEED points through instituting a measurement and verification (M&V) plan, most project teams are disbanded shortly after a building’s substantial completion. When M&V activities are contracted, they usually engage too late in the design process, as if they’re bolted on to a confused and suspicious project team.

A good M&V plan is a road map to energy success. The best plans are conceived during the design development phase, so that they can influence design decisions. Post-occupancy M&V activities create an ongoing energy feedback loop to building operators and designers, allowing them to diagnose problems and make timely adjustments.

So the natural follow-up question to all of this is, How should LEED (or any other) energy goals be set? The short answer is that we should state the goals in plain English, establish accountability measures, and create specific M&V plans early in the design process. I’ll share some of the secrets to our success in our next post.

In 2009, I was wilting under a Florida summer sun while waiting in line with my kids to board a ride at Disney’s Magic Kingdom. As we approached the entrance, cool air from an air-conditioning system comforted us before we even entered the open-door structure. My inner geek emerged. I focused on the massive amount of energy consumed to keep us comfortable and entertained. I saw a regular Pandora’s Box of BTUs, even as we were subjected to a sermon on “Environmentality.”

An all-too-common finding during recommissioning. A closed outside ventilation air damper.

Several years prior to my trip, Disney implemented a highly publicized energy management program. Trade journals and the seminar speaker circuit spread the good news of their successful energy measures. Disney hoped their program could serve as an inspiration to other facility managers. As one article stated, “it will inspire other facility owners to develop their own [energy management programs] and cultivate the economic, energy, and environmental benefits that Disney has.”

One plank of the Disney project was a large-scale recommissioning* effort branded as a Building Tune-Up (BTU) program. That aspect of the energy efforts yielded, by far, the best financial returns. Disney was able to save gobs of energy by making simple, low-cost adjustments like changing set point temperatures and altering equipment schedules. Disney’s case was so persuasive that engineers (myself included) and facility managers latched on to look for similar low-hanging fruit in their buildings. Probably not coincidentally, many AEC industry firms began offering some form of recommissioning services.

Recommissioning efforts became the AEC industry’s magic pixie dust.

Our experience is that Disney’s results don’t necessarily translate to the smaller-scale facility owner. Sometimes we discover energy gold. But more often, well-intentioned recommissioning efforts uncover a host of hidden surprises. The school of hard knocks taught us to keep a wary eye on these three most frequent hidden problems:

1. Higher energy costs: Believe it or not, recommissioning efforts often increase a facility’s energy use. Why? Because the number one industry-wide comfort and energy “fix” is to close HVAC system outside ventilation air dampers. Outside ventilation air is required by building codes to provide a healthy indoor environment. But treating the air is frequently a major contributor to facility energy use and, sometimes, poorly treated air can cause comfort problems. Maintenance crews can avoid complaints and expensive repairs simply by closing the dampers. Frightening, but truly an epidemic.
2. Nickel –dime repair costs: Finding inoperable building systems can be pretty simple. But uncovering why they aren’t functioning properly often comes with a price tag. Small system components like damper actuators and hydronic valves sometimes need replacing to make whole systems work properly again. Bunches of small-scale repairs can add up to big dollars, and it’s impossible to know the extent of necessary repairs prior to opening the investigation. We try to manage our clients’ recommissioning cost expectations by recommending a replacement cost allowance as part of our proposal. We bill against the allowance on a time-and-material basis as we uncover their facility’s deepest, darkest operational secrets.
3. Chronic illness: Sometimes the building isn’t functioning properly because it has an underlying terminal illness. The only way to recommission might include major surgery, in the form of a full-scale capital upgrade to fix a flawed design. Case in point: Once we found a building with an HVAC system operating 24 hours per day, 7 days per week. Additionally, the cleaning crew kept lighting systems energized all night through the week. Thinking we had struck energy gold, we instituted a temperature setback schedule and turned the lights off when unoccupied. Their energy bills fell dramatically along with their employees’ attitudes. We couldn’t maintain warm enough temperatures through the winter months with the new operating procedures due to an undersized HVAC system. The only way to fix the problem was a full-scale system replacement or to turn everything back “on” again.

Do you have any recommissioning stories to share?

*I’ve chosen the word recommissioning in this post. Commissioning purists might point out that I should use the word retrocommissioning. I believe we can get too caught up in those definitions when, ultimately, we’re just talking about fixing broken buildings. My personal experience is that many commissioning authorities spend too much time chasing paper instead of rolling up their sleeves and getting stuff to work properly. Perhaps we’ll address that issue in a future post.

In October of 2009, President Obama issued an executive order to implement a net-zero-energy requirement on federal buildings by the year 2030. This order effectively upped the ante on the Energy Independence and Security Act of 2007, which required federal buildings to reduce energy use by 30% by 2015, from their 2003 baseline condition.

A net-zero-energy building (NZEB) exhibits zero net energy consumption and zero carbon emissions annually, making them completely independent from energy supply infrastructure. Achieving a NZEB requires heavy doses of efficiency, conservation, and renewable energy measures, as illustrated in the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) YouTube video below.

The U.S. Green Building Council (USGBC) and ASHRAE have jumped on the NZEB bandwagon. A great, feel-good vision, it’s pretty easy to latch onto the NZEB euphoria. But the barriers to achieving NZEBs on a meaningful scale are significant.

The topics of NZEBs and deep energy retrofits were front and center at the annual conference of the National Association of Energy Services Companies (NAESCO) in San Diego, in early November. The observations of those in the NZEB trenches confirmed my thoughts on the subject.  I’ve recorded a podcast to share my professional insights and to accompany my summary below. You can listen to my commentary here:

In Summary

• Three federal agency executives expect to fall short of their intermediate goal of 30% energy reduction across their portfolio of buildings by 2015. This is due to a combination of financial, technical, and contractual difficulties.
• With current technologies, NZEBs will only be achievable with very significant capital investments that go far beyond what most businesses and government entities would consider an acceptable return on investment (ROI).
• The challenge is even more significant in an era of reduced government spending.
• The findings of the federal agencies coincide with McClure Company’s experiences from completing energy retrofits on 32 million square feet of Pennsylvania’s building stock: acceptable ROIs are achievable when reducing energy use by 10% to 30%. Deep energy retrofits of 60% or more savings require large capital contributions.
• Finances aside, an assessment by the National Renewable Energy Laboratory found that we could achieve the goal of zero energy on only 22% of our building stock with current technologies as of 2005, while 80% of our existing buildings will still be in use in 2030.

So, putting emotions aside in favor of asking difficult but necessary questions:

• How will we pay for our NZEBs?
• Where will the new technologies come from?
• Who will shepherd the process of reaching this goal?
• Are scalable NZEBs an attainable vision or a distracting fad?

I’d love to hear your perspectives.

This recent clean energy project simply wouldn't have happened without Pennsylvania’s GESA legislation.

The Energy Efficiency Industry is one of the only industries to grow during the recession, hiring people at a time when unemployment seems stubbornly stuck at levels not seen since the early 1980s. According to statistics from the Pennsylvania Department of Labor and Industry, there are more than 106,000 Pennsylvania jobs in the renewable energy and energy efficiency industries.

Energy efficiency is an economic winner. This is not wishful thinking—it’s based on actual market experience.

Currently, the Commonwealth of Pennsylvania has the opportunity to create 19,000 high-paying jobs and provide $2 billion of upgrades to its state and local government buildings without any tax increases, through a process called energy savings performance contracting.

Under an energy savings performance contract (ESPC), energy service companies provide technical, engineering, and managerial expertise, while private-sector financial institutions fund the retrofit projects. This makes buildings significantly more energy efficient.

The costs of design and installation of new technologies, as well as equipment upgrades, are to be paid back out of the energy savings over the life of the contract—at no net cost to the government.

Every $1 million of ESPC project value is estimated to create 10 direct jobs in engineering, construction, and equipment manufacturing; professions hardest hit in this recession. The multiplier effect of the income created by these direct jobs provides another 10 to 12 imputed jobs per $1 million of project value.

ENERGY PERFORMANCE CONTRACTING = Jobs Period!  Not maybe, not possibly, but certainty: ENERGY PERFORMANCE CONTRACTING = Jobs.

This new economic powerhouse is the direct result of innovative public policies like Pennsylvania’s Guaranteed Energy Savings Act (GESA), which enables job creating energy performance contracting. But now, it’s all at risk.

The Corbett Administration is currently evaluating GESA and has suspended any projects currently under development. This has put on hold the proven job creating benefits of the GESA that can continue putting Pennsylvanians to work in this tough economic environment at no expense to the government.

At a time when all policies are being measured against the yardstick of job growth, we encourage Governor Corbett to support GESA and allow energy service companies to get back to business—putting people to work, saving taxpayer money, and reducing energy costs for their customers.

Next week I’ll be participating on a panel at a social media conference in Harrisburg. My panel discussion will feature C-level executive perspectives on the use of social media at work. In my case, the focus will be corporate blogging. The speaking assignment is so far outside of my comfort zone that I decided to commit some perspectives to writing.

Splinter & Dan

My favorite explanation of blogging motivation is by Ken Mueller, in his post 10 Reasons Why I Blog (And Why You Should, Too!) While his post effectively describes my own blogging experiences, I’ve found three additional reasons to keep cranking out the content.

It Builds Writing Muscle. My mom was a full blooded, first-generation Italian who graduated high school as valedictorian. She participated on her collegiate speech and debate teams and later became a high school English teacher. Words mattered in my family. That said, my engineering education was decidedly left-brain focused. I’ve spent a good part of my adult life trying to play right-brain catch-up. Blogging helps me to continually develop my communication skills. Writing is like exercise; the more you work at it, the more developed the muscles become.

A Recruiting Tool. There’s a tendency among executives to focus on the bottom line when executing any marketing strategy, blogging included. I’m asked questions like, “How many new customers has it gotten you?” A happy unforeseen consequence of the blog is in the recruitment of a different sort of customer. That is, future employees and colleagues. Young tech-savvy folks find us through our blog and related Google searches. Many of them like what they see and seek us out. They write things like, “I saw the work you did at the East Lycoming School District and that’s the sort of thing I want to be involved with.” Since we started blogging, recruiting has taken a new twist, with young, highly marketable job candidates knocking on our door. This, alone, makes our blog an essential business tool.

The Splinter Effect. I chose to work for a large contractor under the belief that it would make me a more effective engineer. Think about it: How many engineers have immediate access to the cost, schedule, and constructability issues implied by daily design decisions? But when I left my old consulting firm, many colleagues spoke to me as if I was leaving the engineering profession. I shrug off that attitude now as I did 14+ years ago. I like to say that engineering for a contractor makes you learn in dog years. There’s strength in diversity. Anything we can do to foster interaction among our diverse skill sets makes our business stronger. Our blog is doing that.

I could share many examples, but my favorite is the case of our shop manager, nicknamed Splinter. He and I couldn’t be more different (see graphic for proof). Our responsibilities represent the full breadth of McClure Company activities. While he’s focused on fabricating high-quality large bore pipe assemblies for our men in the field, I’m writing proposals or preparing for our next evening board presentation. Our paths don’t cross frequently enough.
But Splinter enjoys The M Files blog, especially when we talk energy. We occasionally pass each other near the coffee station. Instead of exchanging an obligatory, “How ya doing?” or “What’s up?” we share our views on energy or the latest blog post.

It’s given our respective worlds a new opportunity to intersect. We’re speaking the same language and, whether he realizes it or not, he’s contributing to our written content.

I have more stories to share during our panel From the C-Level: Why Should Business Engage. Hope to meet you there!