Terry Singer is executive director of the National Association of Energy Service Companies (NAESCO), Washington, D.C. She can be reached at firstname.lastname@example.org.
Mary Johnson is NAESCO's communications manager and can be reached at email@example.com.
The deteriorating physical condition of many American college and university campuses is well documented and demands positive and immediate action to reverse this trend. Performance-based energy efficiency retrofits, as implemented by energy service companies (ESCOs), offer a solution that allows these institutions to replace aging and inefficient equipment, reduce their energy consumption and associated costs, and improve comfort and productivity levels without spending a dollar from current operating budgets.
The Magnitude of the Problem of Deferred Maintenance
A 1995 survey of the condition of facilities at U.S. institutions of higher learning, undertaken as a collaboration of APPA, the National Association of College and University Business Officers (NACUBO), and Sallie Mae, was based on a sampling of 400 colleges and universities. The survey results verify that higher education facilities in the United States have a backlog of at least $26 billion in deferred maintenance, including worn-out buildings and failing utility systems. Almost $6 billion of these needed repairs are classified as urgent needs. These results were published in A Foundation to Uphold.
Deferred maintenance is defined in the report as the "backlog of major maintenance projects unfunded in operating budgets and deferred to a future budget cycle." Urgent needs are "conditions that, if not attended to now, will...become even more costly to remedy in the future."
The average public research university spends approximately $2.3 million annually on deferred maintenance, against a backlog of approximately $64 million in accumulated deferred maintenance and more than $15 million in urgent needs. According to the survey, a large proportion of colleges are experiencing an increase in accumulated deferred maintenance (ADM) and their ADM amounts represent substantial portions of their budgets. The largest ADM problems are at the largest research and doctoral universities.
The survey results also indicate that American college enrollment has grown sixfold since 1950 and campus space has grown sevenfold during the same time frame. At the same time, institutions of higher learning are encountering the problems associated with aging campus facilities. In 1994, the median age of campus buildings was 28 years.
Despite a growing need to address the problems created by unchecked deferred maintenance, U.S. school districts allocated just more than 9 percent of their net current expenditures (NCE) to maintenance and operation in the 1998-99 school year according to American School & University magazine's 28th Annual Maintenance and Operations Cost Study. This represents the second year in a row that schools allocated a smaller percentage of their budgets to preserve and run their facilities and amounts to much less than the 13 percent of NCE earmarked a little more than a decade ago.
Solving the Problem with Performance Contracting
Performance contracting addresses the problems commonly faced by colleges and universities: severely constrained capital budgets, aging buildings and equipment in need of modernization, incentives to reduce operating costs, and lack of in-house technical expertise. The ESCO designs, finances, installs, and maintains energy conservation measures and high efficiency equipment in a university's facilities. In addition, the ESCO measures, verifies, and reports energy and energy cost savings.
In many cases, the financing of a comprehensive, performance-based retrofit is structured so that other capital repairs and improvements needed at a campus or research facility can be folded into the project and paid for out of energy savings. In addition, these projects typically are designed so that all project costs, including the ESCO's profit, are paid for by the energy cost savings realized with an average payback period of seven to ten years.
Replacement of outdated lighting and HVAC systems offer relatively short payback periods that can be used to subsidize the cost of items such as chillers, boilers, power plants, and combined heat and power (CHP), also known as cogeneration plants, which have longer payback periods.
Based upon the results of a study conducted by the Lawrence Berkeley National Laboratory for the National Association of Energy Service Companies (NAESCO), ESCO projects at university and colleges produced average annual electricity savings of 26 percent and gas savings of 21 percent annually. Of the 780 surveyed projects, approximately 10 percent were implemented at colleges and universities.
An ESCO designed and installed a project at the University of Rhode Island (URI) that included an energy efficient lighting retrofit of 1,600 indoor light fixtures; a 1,500 point energy management system to reduce winter heat demand; energy efficient motors, chillers, condensate feed pumps, boilers, and hot water heaters; and outside lighting. URI's energy savings were maximized by combining cogeneration technology with the energy efficiency retrofit. Three small cogeneration engines provide electricity and hot water to URI's dormitories and a larger unit provides electricity to the campus' main grid, with waste heat used for the main boiler plant.
The comprehensive energy efficiency/cogeneration retrofit at URI enabled the ESCO to use the short payback on items like lighting to mitigate the cost of the longer payback items to finance the entire project over a period of ten years, using only 20 percent of URI's monthly energy savings generated by the project. The $5.5 million energy efficiency/cogeneration project has reduced the university's energy demands by 8,730,000 kWh and 490,000 gallons of oil equivalent (net gas and oil) annually, for energy cost savings of more than $1 million per year.
Outdated campus and research facility utility systems offer a tremendous opportunity for colleges and universities to fund facility upgrades with the energy cost savings available in their facilities. In many cases, the energy cost savings generated by equipment upgrades also can be used to upgrade deteriorating campus structures.
A retrofit implemented by an ESCO at Louisiana State University in Baton Rouge employed partial-load cogeneration technology to provide adequate heating and cooling to cover campus expansion plans within a limited budget. The project saves nearly $6 million in energy and maintenance costs per year and has reduced air emissions by more than 160 tons annually. The ESCO received an award from the U.S. Environmental Protection Agency and the U.S. Department of Energy's Combined Heat and Power Energy Star® Program for the project.
ESCOs adapt the scheduling of their work to the unique requirements of each facility. When working on a college or university campus, ESCOs adjust their schedules to the various uses, daytime and nighttime, that students, faculty, and administrators make of university facilities such as class- rooms, laboratories, libraries, dormitories, and eating and socializing areas.
A project at Bowie State University in Maryland incorporated both HVAC and lighting technologies, along with other enhancements, to create a comprehensive energy savings retrofit. The ESCO on the project replaced a 14-year-old centrifugal chiller with a 160-ton centrifugal chiller which yields approximately 30 percent annual energy savings. High efficiency, modular, natural gas boilers installed in 16 campus buildings replace steam boilers housed in a central plant and are estimated to save $84,000 each year in energy expenses and $236,000 in operational costs. The university's existing energy management system that controlled HVAC equipment in nine facilities have been reprogrammed, some control points were added in current buildings, and the system was expanded to include all of the 21 buildings on campus. To improve energy efficiency at an administration building, the bypass ductwork was blocked and variable frequency drives were installed on the supply and return fan motors. Constant volume reheat air handlers were converted to VAV in a building used for laboratories and classrooms, which improved efficiency by about 26 percent.
An extensive lighting upgrade involved installing T8 fluorescent lamps, power reducing and tandem wired electronic ballasts, specular reflectors, compact fluorescent lamps, metal halide lights, and interior photocell lighting control. In addition, exit lights now use LED lamp strips instead of incandescent lamps, and some lights are controlled by occupancy sensors. According to Bowie, energy and operational savings are meeting projections and surpassed $800,000 in the first year, yielding 28 percent improved efficiency. It is expected that over the next ten years, there will be more than $3 million in energy savings and nearly $5 million in operational cost savings.
The technology associated with energy management or control systems for conditioning space only when it is in use and not when it is lying dormant can also pay big dividends.
A comprehensive energy audit conducted by an ESCO at Ottawa University revealed annual energy consumption of more than 3 million kWh and 32,753 MCF. Application of scheduled on/off controls on the heating equipment, the staging of gas fired boilers, and a night temperature set back program through the centralized energy management system reduced the university's gas bill alone by more than $10,000 annually. The energy management system was programmed to schedule heating and cooling on a preset basis at the student union building, rather than allowing a large multi-zone HVAC unit to simultaneously heat and cool the facility. In addition, the university installed high efficiency lighting, occupancy sensor controls, new natural gas boilers, reciprocating chillers, variable frequency drives, and an energy management system. Through these applications, energy consumption at the university was reduced by 920,000 kWh and 5,009 MCF annually, for cost savings of more than $70,000 per year to be reallocated to support academic programs.
Chillers equipped with the more environmentally friendly and energy efficient hydrochlorofluorocarbons (HCFC) rather than the ozone damaging and less efficient chlorofluorocarbons (CFC) can not only benefit the environment, but can reduce energy costs. In addition, new equipment, such as chillers and air handling units (AHUs), contains energy efficient motors, requiring less power to operate. New equip- ment also ensures less down time brought about by unscheduled maintenance, as well as the need for less general maintenance.
In its first year of measured savings, following an energy savings retrofit, the University of Houston Central Campus achieved energy savings of 25 percent as the result of an upgrade of the existing 18,500 ton central plant with conversion of existing chillers to a non-CFC refrigerant, the installation of a new 2,000 ton chiller, piping and valve modifications, and the installation of a new PLC-based central plant automation system controls. A new 138kV electrical substation was built to serve the entire campus load and a 12.5kV electrical distribution was extended to add outlying campus buildings onto the substation service. Other measures included a lighting retrofit in 56 buildings, installation of variable speed drives, energy management system controls, and window film for auxiliary buildings. Based on a full year of monitoring, the university expects to save approximately $2 million annually on utility costs.
Performance contracting as provided by ESCOs offers colleges and universities a viable solution to the problems associated with aging and inefficient facilities without significant cash outlay. To receive a list of energy service companies containing a more detailed discussion of the services that they provide, and the sectors that they serve, please contact the National Association of Energy Service Companies (NAESCO), 1615 M Street, N.W., Suite 800, Washington, DC 20036. You may also contact NAESCO by phone at 202-822-0950, by fax at 202-822-0955, or visit its website at www.naesco.org.
Source Material Agron, Joe. 1999. "28th Annual Maintenance & Operations Cost Study: School Administrators: A Budget Deferred." American School & University, Intertec Publishing (April).
Goldman, C. A. et al. 2000. "Historical Performance of the U.S. ESCO Industry: Results from the NAESCO Project Database." ACEEE Summer Study on Energy Efficiency in Buildings," American Council for an Energy-Efficient Economy (August 20-25).
Kaiser, Harvey. 1997. "A Foundation to Uphold: A Study of Facilities Conditions at U.S. Colleges and Universities." Facilities Manager, APPA: The Association of Higher Education Facilities Officers (APPA) (March/April).