FM Issue: Energy Management 2.0
By James A. Peck, RPA, FMA
Published in the September 2009 issue of Facility Executive
In a marketplace where operational excellence and maximizing value are compulsory just to survive, facility managers (fms) are re-evaluating energy management strategies to squeeze out every last ounce of savings. As well they should. Energy is the largest controllable operating cost in a building and is the logical place to trim the fat from the expense side of a building’s balance sheet.
And in some buildings, there’s quite a bit of fat to trim. ENERGY STAR® estimates that energy savings of up to 30% are possible through no and low cost strategies. But what do fms do once they have picked all of the low hanging fruit of energy savings? They may still want (or need) to reduce consumption to improve the bottom line and position their buildings as energy efficiency leaders in the market.
That was just one of the issues that sparked the creation of the Commercial Real Estate Energy Alliance (CREEA), a collaboration between the Department of Energy (DOE) and commercial real estate owners and operators who have volunteered to work directly with each other to create lasting change in energy consumption of commercial buildings in the U.S. The alliance formally launched this past April in New York City when DOE officials and top executives from 18 commercial real estate companies met to discuss how to reduce the sector’s energy consumption and greenhouse gas emissions dramatically.
The development of CREEA was preceded by the Energy Independence and Security Act of 2007 that authorized the establishment of the Net-Zero Energy Commercial Building Initiative (CBI). Under the umbrella of CBI are several energy alliances, across different building types, all focused on accelerating the development and adoption of energy efficient technology and sharing operational best practices.
In addition to CREEA, there is the Retailer Energy Alliance (REA), which was developed and launched a year and a half ago. REA served as a template for CREEA.
Drury Crawley, commercial buildings team lead with DOE, has been involved with CREEA from the beginning. “A year ago, we met with the Building Owners and Managers Association (BOMA) International to talk about how DOE might be able to help the commercial real estate industry in a context similar to what we were doing with the Retailer Energy Alliance,” explains Crawley. “We worked together to bring in other companies and groups. It started as a conversation, exploring what the industry needed and how we could move energy efficiency forward.”
Technology Is The Key
Development and access to cutting edge technology may be important, particularly if fms and CEOs ever hope to meet what could be aggressive energy and climate change mandates in the American Clean Energy Security Act (legislation which is currently moving through Congress). Through CREEA, DOE’s role is to bring the latest technologies into private sector buildings by using a massive purchasing type model and working with partners to develop technology when there is not a suitable product on the market.
Says Crawley, “We’re working on procurement and technology specs. It is a lot like mass purchasing, except there is no contract. We are able to specify a demand and work with suppliers so they are able to meet that demand.”
This public /private collaboration and system of feedback also helps to ensure that bad products don’t make it into the market, since DOE alliance members are able to talk directly to vendors about their needs. DOE has had two supplier summits to open up dialogue between suppliers and industry professionals.
“It is an opportunity for companies to be involved in the development of systems that are going to affect the way they operate their buildings,” notes Crawley.
Like many CREEA members, Michael Groppi, senior vice president and national director of engineering with Grubb & Ellis Management Services, Inc., joined the alliance in order to have better access to new technologies as the government starts to mandate and regulate energy efficiency on local and national levels.
“Within Grubb & Ellis, we have made energy management a priority. We expect the technology and operational practices shared through CREEA to drive our solutions and thus the products and practices that we recommend to our owners,” explains Groppi.
Patrick Clark, vice president of property management with Wright Runstad & Co., and formerly with the U.S. General Services Administration (GSA), found joining CREEA to be a natural step for his company, since there are drivers on both the public and private side. Coming from a GSA background, Clark was interested in how DOE brought together both sides.
“There are differences,” Clark observes. “The public sector isn’t necessarily driven by the bottom line, whereas the private sector certainly is. If there isn’t a payback that makes sense, companies typically aren’t going to implement these technologies, no matter how advanced or efficient.”
As energy issues gain legal momentum, facility professionals seek additional guidance from a variety of sources. One well established group, the Energy Bar Association (EBA), may serve as a valuable resource for those in search of legal assistance with energy related matters.
Established in 1946 as the Federal Power Bar Association, today’s EBA is a non-profit voluntary association of attorneys, non-attorney professionals, and students whose mission is to promote the professional excellence and ethical integrity of its members in the practice, administration, and development of energy laws, regulations, and policies.
The organization’s original focus was on those lawyers practicing energy regulatory law at the federal level. But in 1977, the organization changed its name to the Federal Energy Bar Association. Today, the EBA has more than 2,600 members active in all areas of energy law. It is an affiliate of the American Bar Association.
“The rapid pace of change in energy markets and energy regulation creates an escalating demand for the high quality educational programming and legal scholarship that the association provides,” explains Donna M. Attanasio, EBA board member and partner at White & Case LLP. “Our new initiatives this year are focused on assuring our programs reflect the rich diversity of our membership, in ideas, regional interest, and areas of practice, and on refining our use of technology to make information more widely and readily available.”
EBA offers national and regional programs through its 20 committees, including its new climate change committee and system reliability and planning committee, and its six regional chapters. For more information about EBA, visit www.eba-net.org.
Clark is especially interested in exactly how the alliance will affect energy in relation to the existing building market. “New buildings are being constructed to be efficient, but existing buildings come in all shapes and sizes, making them much trickier; it’s a matter of finding the right solutions for each particular building. I think CREEA will be instrumental in connecting the private sector with cutting edge technology—geothermal, wind power, etc. That’s where the DOE labs will be especially helpful. The private sector will create the demand, and CREEA will help facilitate a pricing structure for those new technologies.”
Groppi is optimistic that CREEA will address technology in the short term with strategies that can be applied immediately and “in the long term with the game changers that take longer to develop and implement, such as on-site heat and power generation, photovoltaics, and wind turbines—which are incredibly efficient and sustainable but currently have payback periods that limit their application.”
CREEA members reiterate that these types of public/private partnerships will be critical to maximizing energy efficiency in commercial buildings as quickly as possible, especially in light of the fact that energy legislation is cranking up. CREEA shows that DOE and the public sector have the ability to bridge demand and supply, vet new products and practices, and, ultimately make the adoption of groundbreaking energy efficient technology in private sector buildings more feasible and timely.
Peck is chair of the Building Owners and Managers Association (BOMA) International and senior director, asset services, with CB Richard Ellis in New Mexico. To receive a copy of the CREEA FAQ PDF, send your request to email@example.com with the words “CREEA PDF” in the subject line of your e-mail.
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