Mr. Kiesner

Eco-Friendly Practices

Congress, Energy Issues & Your Hotel

By Steve Kiesner, Director of National Accounts, Edison Electric Institute

The passage of the Energy Independence and Security Act of 2007, signed into law by President Bush last December, will help to improve the nation's energy efficiency. Perhaps its most noteworthy feature is that it will boost the average fuel economy standards for automobiles to 35 miles per gallon by 2020 - the first increase in fuel economy standards for automobiles since they were enacted in 1975.

The new energy law will make all energy consumers more energy efficient. The law increases energy efficiency requirements for a wide variety of appliances and equipment. Notably, the new energy law requires that general service incandescent light bulbs use about 20 - 30 percent less electricity by 2014, effectively phasing out the least efficient incandescent light bulbs. By 2020, lighting would have to use at least 35 percent less energy than they do today. The early target could be met with compact fluorescent lamps and advanced incandescent lamps, while the 2020 standards may require the use of LEDs (light-emitting diodes) and other advanced lighting technologies.

In addition, the legislation sets new minimum efficiency standards for a number of appliances, including dehumidifiers, electric motors, and commercial walk-in coolers and freezers. The law also sets a goal for all federal buildings to cut their energy use by 30 percent by 2015 (compared with a 2003 baseline), and requires new and renovated federal buildings to significantly reduce their reliance on energy from fossil fuels (natural gas, propane, oil, and coal). Compared with existing federal buildings, those built or renovated after 2010 must use at least 55 percent less fossil fuel. And by 2030, new or renovated federal buildings may not use any fossil fuel at all. Given the enormous impact of the federal government's purchasing decisions-it is the world's largest volume-buyer of energy-related products-this measure will greatly expand the availability of energy efficient products and building materials for businesses and homes alike.

For hotels, the new energy law ultimately means it will be easier to get more value from every dollar you spend on energy. This is important, because with today's volatility in energy prices, becoming more energy efficient is the best protection against higher bills. America's 47,000 hotels spend $2,196 per available room each year on energy, according to a recent report by the U.S. Environmental Protection Agency's (EPA) Energy Star program. This represents about 6 percent of the typical hotel's operating costs. If you operate a limited service hotel, and you can reduce your energy costs by just 10 percent, you can add the equivalent of a $0.62 average daily rate (ADR) increase. If you operate a full service hotel, becoming 10 percent more energy efficient is like adding a $1.35 ADR increase.

Importantly, the new energy legislation also complements the efforts of the nation's electric utility industry to help hotels become more energy efficient. The electric power industry has promoted energy efficiency since the first oil embargoes of the early 1970s. The industry has done so through demand management programs that pay large commercial and industrial customers to use less power during peak periods, or to shift their demand to off-peak periods. Some utilities also use programs that offer small commercial and residential customers a credit on their electric bill for cycling their big, energy-using appliances and equipment on-and-off during peak demand periods. And electric utilities use incentives such as cash rebates or low-interest loans to persuade customers to purchase energy-efficient appliances and equipment. Going back to 1989, electric utility DSM programs have saved almost 860 billion kWh through 2006. To provide some context, 860 billion kWh represents enough electric energy to power over 76 million homes for one year. Energy efficiency programs, because they result in the need to generate less electricity, have also had a significant and immediate benefit for the environment.

The efforts by electric utilities to promote energy efficiency are especially important to the industry's ability to reduce greenhouse gases in the short term. In 2005, the latest year for which data is available, energy-efficiency programs are estimated to have reduced the industry's carbon-equivalent greenhouse gas emissions by 13 percent, or almost 55 million metric tons. Electric utility energy efficiency programs have also helped the industry to mitigate the effects of volatile fuel costs, as well as defer the need for new infrastructure investment. And the investment in energy efficiency efforts has led to job creation and healthier state economies.

I encourage you to contact the electric company or companies that service your company. The electric company can often be a great resource in helping you take control over your energy use. The power company will likely have historical data about when your hotel uses energy and how your energy use has changed over the years. Electric companies may also be able to help you save energy through incentives on energy-efficient equipment, discount electricity rate plans or energy audits, or in a number of other ways. These all add up to helping you to get more value from your electricity dollar. Some sample, no- or low-cost electric utility energy management programs include:

• Energy-efficiency incentives-these are offered to encourage electric utility customers to purchase or replace their energy-using equipment with more energy-efficient models. Incentives are often offered on lighting, air conditioning, heating, ventilation, refrigeration, water heating systems, and motors.
• Training courses-these supply the latest information on energy-saving technology and design applications.
• Demand-management programs-these pay large commercial and industrial customers to cut back on their power use during peak periods or to shift power use to non-peak periods.
• A growing number of energy companies may have sustainability and renewable energy programs as well.

There are also many quick and easy ways for you and your staff to start lowering energy bills today:

• Encourage the housekeeping staff to do the following every time they clean a room-check and reset thermostats, close drapes, report water leaks, and turn off lights. These simple steps will add up to make a big difference in energy costs.
• Reduce public area air conditioning use during unoccupied hours.
• Turn off unneeded lights in offices and public areas.
• Raise office and public area cooling settings during occupied hours.
• When replacing bulbs, use lower wattage ones that are more efficient in terms of light output.
• Have your heating, ventilating, air conditioning, icemakers, and refrigeration equipment periodically serviced and adjusted as needed.

For the longer term, it is a good idea to renew your commitment to energy management. Remember that energy efficient technology alone does not guarantee superior energy performance. The common element among all top performing building owners is superior energy management. If you have not done it already, start by building a team within the company or within each hotel. Generally, you will need representatives from management or administration. Top-level commitment is paramount. Pull the team together for a planning session and start laying the groundwork. The team will need to define success with goals that are realistic. Is saying you want to save 20 percent over two years possible? What is the base you will measure against? How and when will you measure progress?

Steve Kiesner is Director of the Edison Electric Institute’s National Accounts Program. Based in Washington, D.C., Edison Electric Institute (EEI) is the association of United States shareholder-owned electric companies, international affiliates and industry associates worldwide. Our U.S. members serve approximately 90 percent of the ultimate customers in the shareholder-owned segment of the industry, and nearly 70 percent of all electric utility ultimate customers in the nation. They generated almost 70 percent of the electricity generated by U.S. electric utilities. Mr. Kiesner can be contacted at 202-508-5000 or skiesner@eei.org Extended Bio...

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