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Retrofit Beneficiaries Make the Case for Investment Monitoring is a Building Block for Energy Management
November, 2008
By Barbara Carss
The timing isn't necessarily optimal to find financing for energy retrofits or to convince cautious rental housing landlords to take the plunge, but proponents of the City of Toronto's ambitious campaign to upgrade aging apartment towers remain optimistic. Furthermore, they argue that it makes business sense regardless of what's happening in the economy.
"Energy retrofit is an investment and people have to stop thinking about it as an expense," Andrew Pride, Vice President of Minto Green Team, told attendees at a recent seminar jointly sponsored by the Greater Toronto Apartment Association (GTAA) and Toronto Atmospheric Fund.
Pride, Adam Krehme, a Principal with O'Shanter Development, and Philip Jeung, the energy manager with Toronto Community Housing Corporation (TCHC), offered insight on financing retrofits and, perhaps even more importantly, on ensuring that energy and water efficiency investments deliver the promised results. In particular, they stressed the importance of monitoring and measuring energy and water consumption - initially to understand what needs to be done and, later, to verify that savings are occurring.
"Utility meter monitoring is a basic building block," Krehme advised. "If one is monitoring the utility usage on an hourly basis, one can establish and identify operating problems very quickly and act upon them."
He outlined his company's monitoring approach, in which data loggers are hardwired into meters and the information is sent to a web server where it can be downloaded and reviewed by staff. This allows for centralized monitoring of O'Shanter's portfolio of approximately 2,400 apartment units.
DATA TELLS THE STORY
"In our organization, there are three of us who watch this database on a regular basis," Krehme reported. "A common pitfall is that the building operator fails to review the data. I have seen, on more than one occasion, good systems set up and then abandoned because people hadn't bought into it and weren't using it. There has to be a discipline to review the data."
The data allows analysts to compare energy use between buildings of the portfolio, and reveals energy performance within each building by separating out data for various building systems. Irregular or unaccountable spikes in consumption can be highlighted and investigated.
For example, data quickly helped to identify an issue with electrical consumption for the heated parking ramp at one O'Shanter building. "Had the problem gone undetected it would have cost about $14,000 per year in additional costs," Krehme said.
Pride shared a similar anecdote about a toilet retrofit within Minto's portfolio that initially did not deliver the promised water savings, while monitoring showed high levels of water use within the building during overnight hours when few tenants were likely to be using water. This helped to discover a flaw in the low-flush toilet mechanism and gave the company the ammunition it needed to push the contractor to correct the problem.
"Measure your performance," he stressed. "It's really good to get that third party verification. You need proper engineering support."
Starting at an even more basic level, however, he urged property managers to take the time to understand where energy is consumed within their buildings and to begin, quite simply, with a thorough inspection of all areas. "I challenge each of you to walk through your boiler room and walk through your mechanical room and all the scary rooms that you don't really want to look in," he quipped.
He also reminded property managers to bring building operators into the process - making sure that they are informed about retrofits and the benefits they should see from both a performance enhancement and labour saving perspective. Building automations upgrades, for example, could eliminate many chores traditionally associated with starting up boilers and chillers as the seasons change.
Additionally, operators have valuable on-site familiarity and experience with the property and all its quirks. "Once operators get on-line with energy efficiency goals they start coming up with great ideas," Pride said.
LEVERAGING PROJECTED SAVINGS
Working within a publicly owned portfolio, Philip Jeung offered some differing insight on the decision making and implementation process for energy efficiency upgrades, but his challenges in dealing with aging, inefficient stock are very similar to those of any private sector manager - except perhaps on a larger scale than most since the TCHC manages 60,000 units and is the second largest social housing provider in North America. "We spend over $100 million a year for water, gas and electricity," he told seminar attendees.
TCHC provides a notable illustration of how anticipated energy savings can fit into an economic formula. Financing for a $100-million energy efficiency initiative, now in progress across the portfolio, was secured based on the projected energy savings.
Similarly, the promise of dramatic operating savings is a key component of the business case for the Regent Park redevelopment - a multi-year phased project to demolish existing social housing with longstanding deferred maintenance issues and ultimately replace it with a new mixed-use neighbourhood including subsidized rental, market rental and ownership housing. "By leveraging savings, we have been able to issue bonds," Jeung said.
Nevertheless, that can be a challenging case for property managers to argue. In a follow-up discussion among panelists and attendees, several third-party managers spoke of landlords' reluctance to make major new investments when they perceive that existing building systems and infrastructure are working well.
"You're still looking at half-a-million dollars up front. You can do all the calculations about the paybacks - at the end of day someone has to write a cheque," one attendee observed. "We're talking about older clientele. They have had a way of doing business for 30 to 40 years that has worked well and has made them a lot of money."
Krehme suggested that utility meter monitoring could provide evidence to support property managers' argument, perhaps by showing owners how their unattended buildings compare to buildings of similar size and vintage where energy efficiency upgrades have been made. Other economic factors might also be convincing.
"I can't believe that with the combination of rising energy costs and aging equipment that the cash flow has remained constant in these buildings," Krehme said. "I would think the cash flow would be shrinking."
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