Low Cost Energy Conservation Opportunities for Commercial Utility Customers in the NYC Area
While there is a significant amount of uncertainty all around us in today’s world, one thing we know for certain is that organizations and institutions are going to feel the economic pain from this pandemic through 2021 even if a vaccine were to be developed towards the end of 2020. Healthcare organizations will see revenue shortfalls due to the pause on elective surgical procedures, which can account for between 40 - 60 percent of a hospital’s revenue. Higher education will likely see a decline in admissions or applications as many families struggle during this economic downturn. Commercial Real Estate is dealing with empty office buildings and the uncertainty that surrounds our return to work.
With so much that is uncertain, individuals can look to get better control over the things that are defined and measurable, like a building’s energy consumption and load profile. Below you will find a couple of low-cost projects an organization could undertake this summer to help reduce operational costs and improve building energy performance.
Study Your Buildings
Healthcare, Higher Education, and Commercial Real Estate can look to improve long-term cashflow by reducing operational and overhead costs in the near term. One area to focus on specifically would be energy consumption within an organization’s building portfolio. Regardless of a building’s vintage (built in the late 20th Century or completed in 2015), there will always be opportunities to improve a building’s energy performance. If, as a building owner, you don’t know where to start when it comes to identifying energy conservation opportunities; look no further than the New York State Energy Research and Development Authority (NYSERDA). NYSERDA’s goal is to “reduce greenhouse gas emissions, accelerate economic growth, and reduce customer energy bills”. Specifically, they help customers identify energy projects through their Flexible Technical Assistance Program (FlexTech) which “shares the cost to produce an objective, site-specific, and targeted study on how best to implement clean energy and/or energy efficiency technologies”. Typically, this program will fund up to 50% of the cost of an ASHRAE Level II Energy Audit which, when complete, will provide any organization a list of energy conservation measures that could be funded in the near term or incorporated into a capital plan.
Does your organization already have a list of energy conservation measures? Either your internal capital planning or potentially a recently completed energy study? Sometimes (most times) the barrier to completing the projects on your wish list is funding. There are a couple of different ways to help improve your project’s cashflow including Con Edison incentives, NYSERDA incentives, on-bill financing, and partnering with energy service companies.
Con Edison’s Commercial and Industrial Energy Efficiency Program was developed to help fund energy efficiency projects that meet a particular standard for their customers that meet certain organizational criteria. As described in the most recent iteration of the C&I Program Manual, “prescriptive and custom incentives cannot exceed 70% of the customer’s project cost for eligible measure(s) or 100% of each measure cost. Total incentives are capped at $1,000,000 for electric projects and $750,000 for gas projects, per account per year”. Con Edison will incentivize projects that improve the system or unit efficiency of lighting, pumps, motors, VFDs, insulation, chillers, and many other project types. To learn more about Con Edison incentives, please contact us here.
In addition to Con Edison, NYSERDA also offers a variety of programs that were developed to “help you lower your home or business’s energy bills, reduce your environmental impact, and/or support clean energy and transportation in New York State”. Three of the current programs worth noting are the On-Site Energy Manager Program, the Real-Time Energy Management Program, and lastly, the funding available through the Westchester Clean Energy Action Plan. The latter includes the investment of $250 million to be distributed as follows:
- $165 million in grants from the Smart Solutions package that the Public Service Commission (PSC) recently directed Con Edison to deploy toward heat pumps and increasing gas efficiency for residential, multifamily, and commercial and industrial customers.
- An additional $53 million in clean energy incentives and investments that NYSERDA will provide to Westchester customers.
- $28 million will be used for grants for new customers, including low-to-moderate residential developments waitlisted by Con Edison for natural gas to use alternative heating and cooling systems and adopt energy-efficient solutions.
- $25 million will be used to provide grants to improve energy efficiency in Westchester and reduce overall and peak energy demand from existing customers in the region to free up capacity.
- An additional $32 million in low-cost NYPA financing services for its Westchester customers to retrofit heating systems with clean energy alternatives. NYPA is committing to provide energy audits and screenings to support its governmental customer base and identify alternative options.
If you have any questions about the Con Edison or NYSERDA incentives or if your facility is eligible for funding, please contact us here.
If you are unable to get any funding from your organization there are still some pathways forward to get your energy conservation projects installed. One of those pathways would include getting your project financed on or through your utility bill. By amortizing your capital investment over the term of a multi-year utility contract, an organization can effectively delay the financial impact of a capital project while still experiencing the energy savings. Many of your energy suppliers (ESCOs) will offer a similar solution but you can learn more about on-bill financing here.
Energy as a Service
The last alternative for financing energy efficiency projects to be discussed here is the use of an Energy Services company. Companies providing an “Energy as a Service” type offering typically can be viewed as a one-stop-shop for your energy or capital projects. The firm will survey your facility to assist with identifying conservation measures (See FlexTech information above if you would prefer to have someone else complete this audit) and once identified, they will design, build, commission, and finance the installation of a project. Energy as a Service companies will typically rely on or pursue utility and state incentives to further reduce the portion of a project bill that to which the customer will be liable. While this route tends to require larger capital investment from the customer, you gain time and expertise when choosing these types of firms. Rather than go through the process to bid out each component of a particular project, an Energy as a Service firm acts as a one-stop-shop for customers looking to install projects quickly and efficiently. More information about these types of firms can be found here and if you have any questions about the use of these types of vendors, please reach out to Gotham 360 here for more information.
If the allocation of capital is not something you think your organization will move forward with, there are still opportunities to help improve building efficiencies and reduce operational costs. Solutions like the one provided by American Energy Assets involve a detailed look at existing building systems and building automation data with proprietary tools to identify areas of improvement. Those improvements could be in the form of commissioning or retro-commissioning BMS nodes or changing operational sequences for building opening and closing. The structure of their contracts typically will include some type of shared savings agreement, which can be justified with your organization based on the amount of data required to develop their analysis, recommendation, and deliverables.
Utility Bill Auditing
Lastly, if you feel as if none of the above options are viable for your team or your organization, you can always visit the idea of having your utility bills audited. Gotham 360 recommends auditing your utility bills (electric and gas) every 2-3 years to ensure there are no one-off or ongoing billing errors associated with your utility accounts. Typically, we see an 8-15% savings on utility spends when analyzing a period of 3-years. We would also recommend looking at your water bills for the purposes of auditing. Water bill accounting can also present a unique savings opportunity if your facility uses cooling towers in your chilled water production process. Specifically, in New York City facilities with cooling towers are eligible to receive refunds in the form of on-bill credits from the NYC Department of Environmental Protection (DEP). Any building with a cooling tower will create a situation where there is less water being discharged to the sewer due to the process of evaporation. Much of the water supplied to the cooling tower will evaporate as the water trickles down the cooling tower fill. This part of the cooling process can reduce the amount of water returned from the cooling tower by 50% or more. If you have not had a utility audit completed recently or would like to learn more about the NYC DEP cooling tower credits, please contact Gotham 360 here.
Gotham 360 is a national energy management consultancy headquartered in New York City. Our 360-degree approach provides clients with complete coverage of their energy-related needs. Gotham 360 delivers innovative, fully integrated, and cost-efficient programmatic solutions that reduce energy consumption and costs, maximize operational efficiency and help clients navigate the complexities of deregulated energy markets. We understand the complex relationship between the way organizations procure energy, reduce energy consumption, and maintain good stewardship of the environment while operating a reliable and resilient business.
If you have any questions about the topics discussed above, please do not hesitate to contact Gotham 360 today.