Facilities management paper

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Utilities Cost Control

Chapter 4

What are “utilities”?

All energy and water that we purchase for the building, including:

Electricity

Natural gas (nat-gas)

Propane

Purchased steam

Fuel oil

Water

Remember throughout this chapter

We are unlikely to be able to shop around for better utility rates

Therefore, our focus will always have to be controlling our usage of the utilities

If we do this right, we will provide:

Great guest experience

Good, productive work environment for employees

Excellent cost control, so better profit!

Electricity

Electricity enters our building and is measured by a meter

Your electricity service will be measured in two ways

Consumption:

This is how much electricity you use over the length of the billing period

Basically, it’s the total amount of electricity that you used over time

It is measured in kilo-watt hours (kWh)

All buildings are charged for consumption

Demand:

This is the highest amount of electricity that you used during any 15-minute period during the billing period

Basically, this measures the period that you had the highest need

It is measured in kilo-watts (kW)

Not all buildings at this time are charged for demand (usually only larger properties)

Consumption (supply) meters

Traditional consumption + demand meter

Demand meters for commercial accounts

If consumption is similar to a car’s odometer, the demand meter is similar to the speedometer

What rate structure is your property on?

Most electric utility companies offer a menu of rate “tariffs”, or rate schedules. How you are billed.

You should identify with rate schedule your property is on

Is a different schedule more appropriate for your property?

Discuss this with your customer service representative

NV Energy Rate Schedules (statement of rates)

What types of charges will you see?

You will see a variety of charges based on your consumption (kWH)

Your supplier may call these “supply charges” or “usage charges” they are the total amount of electricity consumed during the billing period.

Some properties will also have a demand meter and will see one or more charges based on demand (kW)

You will pay for demand – the highest 15-minute period of demand over the billing period

You may also pay a “facilities charge” – the highest 15-minute period of demand over the past 12 months

Time-of-day billing

Some electric rate schedules include seasonal and time-of-day billing

Summer is always more expensive than winter

Summer rates may be broken into a couple of seasons (on-peak, mid-peak)

Time-of-day schedules include at least two different rates that will apply, depending on when you used electricity

On-peak, mid-peak, low-peak, off-peak

This is the electric company’s version of revenue management

Time-of-day/peak billing rate implications

Under these rate tariffs, you are penalized for using electricity at the same time everyone else does

Summer is more expensive than winter (air conditioning uses a lot of electricity)

Daytime is more expensive than night

Midday is more expensive than morning or early evening

The middle of the day in the middle of summer is our most expensive time to use electricity – it can be dramatically more expensive

Therefore…

We have serious incentives to understand our electric bills and control our electrical usage

Controlling consumption is always good

Lowers overall usage

Lowers our environmental impact

Makes our property and the world more sustainable

Controlling demand

Most people understand the concept of controlling consumption

Demand control is less well-understood by many hospitality managers, but is critically important for cost control (and thus profit maximization)

Reducing demand during peak times:

Can greatly reduce our utilities costs, but…

Has virtually no effect on our environmental footprint

Therefore, the benefits of demand control are strictly financial

Peak-shaving systems

Peak demand control

Our goal should be to control our peak demand to the best of our ability without negatively affecting the guest’s experience

If we do it right, they won’t even notice!

Use an automated load-shedding program

Reads demand (at the meter) in real time

When a demand spike begins to form, and it is close to or during peak rates, the program will shut down pre-selected pieces of equipment (i.e., “electrical loads”)

The equipment will only be turned back on once the program determines that we are out of the billing “danger zone”

Which electrical loads can be shed?

Laundry operations (many facilities operate the laundry at night, to reduce daytime demand)

Non-essential lighting

HVAC systems – yes, we often shut down the chillers and cooling towers (see Chapter 10), which are major users of electricity during summer peak hours

What electrical loads should never be shed?

Refrigeration and freezer equipment

Computers and telecommunications

Fire and life safety systems

Elevators and escalators

Guestroom electrical (remember, they are not supposed to notice)

Sump pumps; ejector pumps

Managing electrical consumption

Work with your electric utility company to survey your property to identify ways to save energy

You may be able to get tax incentives or rebates for upgrading some equipment

Turn equipment and lighting off when it is not needed

Manage plug loads

Use sensors to automatically turn on and shut off equipment

Photosensor- turns lights on (dusk) turns then off (dawn)

Timers – turns equipment on/off same time everyday

Manage the setpoints on your thermostats

Use ceiling fans to supplement your heating and cooling systems

Fans do not lower air temp, the movement of air across skin gives the perception that cooling is occurring

Properly insulate your building

Clean and maintain equipment on a regular basis

Refrigerator / freezer door gaskets (tighter seal prevents air leakage)

Non-seasonal rate structure (Oct-May)

Seasonal rate structure (June-Sept)

Natural gas, oil, and other fuels

Natural gas (nat-gas)

The gas utility company pumps this to your property

It goes through a meter for measurement and billing

Nat-gas is billed in units called therms

One therm = 100,000 Btu

Nat-gas is used extensively in commercial kitchens, and may also be used for heating the building, heating water, and generating steam

Fuel oil and propane

These are delivered to your property by a truck

They are stored in tanks (preferably above-ground, due to past problems with below-ground tanks leaking and contaminating the environment)

Managing fuel costs

Many of the same methods used to manage electrical consumption apply here as well

Since nat-gas, fuel oil, and propane are used to heat, we should only permit heat energy transfer to occur where and when we intend it to happen

Insulate your building and plumbing pipes

Turn equipment off when it is not needed

Only run full loads of dishes or laundry (no partial loads)

Set thermostat setpoints to the proper level

Domestic hot water (DHW) maximum of 115° F at the tap (faucet)

Water and wastewater management

Water billing

We pay for water supply and for wastewater disposal (sewer)

You will definitely have a water supply meter

You will probably not have a sewer meter

Sewer charges are based on the supply amount

In the US, you will be billed either in units of:

1,000 gallon units

Hundred cubic feet (CCF)

1 CCF = 748 gallons

CCF

Gallons

Water billing

Tiered rate structure, the more you use the higher the cost. Cost per 1000 gallons increases as you exceed the maximum gallons per tier.

Your rate per 1,000 gallons or per CCF is not negotiable, so…

You will have to manage consumption

Fix leaks

Use water-conserving fixtures

If you have landscaping, use a xeriscape program (dry, arid areas)

use of native plants and grasses (adapted to local environment)

landscape in a style which requires little or no irrigation

Irrigate properly (don’t over-water the landscape)

Only run full loads of dishes or laundry

Recycle your water if permitted

Proper cooling tower and boiler operation and blow-down (cleaning out mineral build-up)

Proper pool and spa filter back-flushing

Limit cooling tower operation if possible

Waste water (sewer) rates & management

Sewer rates are commonly set based on the amount of water supplied. What goes in must come out, right?

Not necessarily the case for commercial properties

Swimming pools

Irrigation

Cooling towers

Water features

Sewer meters (if & where permitted)

Measures actual discharge

Potential to lower rate

Southern Nevada rate structure

Type of facility (assigned base rate)

Base rate x number of fixtures

Fixtures = anything that carries water away from the facility

Water recycling? Graywater systems

Capture lightly-used water

May require light filtration and sanitizing

Then use it for non-potable purposes

Irrigation

Car washing

Toilet flushing