Mr. Kiesner

Eco-Friendly Practices

Time to Maximize Energy Savings

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

The U.S. lodging industry spends close to $4 billion on energy every year, according to the U.S. Environmental Protection Agency (EPA). If hotels could improve their energy performance by an average of 30 percent, the hotel industry would see a savings of approximately $365 per available room night per year for every hotel room in the country. The good news is that there are many simple steps your staff can take to use energy more efficiently. And the great news is that electric utilities can help you.

The forecast for natural gas prices

According to the latest estimates from the U.S. Energy Information Administration (http://www.eia.doe.gov/emeu/steo/pub/contents.html), hotels and other commercial customers are expected to have paid a national average of about 10 percent more for natural gas in 2008 than in 2007-$12.48 per thousand cubic feet (mcf) versus $11.31/mcf. A few regions, New England-$15.00/mcf; Mid-Atlantic-$13.85/mcf; South Atlantic-$14.25/mcf; and the East South Central-$13.62/mcf can expect to see prices higher than the national average. Keep in mind that the price for a therm of gas is at an historical high. Today's price is a little more than double the price in the 1990s. Prices in 2009 are expected to be about the same as in 2008.

For electricity, the Energy Information Administration estimates that the nation's commercial sector will see about a six percent increase in prices nationwide. Again, some regions of the country, notably New England, Mid-Atlantic and the Pacific, can expect to see higher prices. All consumers-industrial, commercial and residential-are feeling the effects of the higher-energy prices. High prices for natural gas, electricity, heating oil and transportation fuels are having a ripple effect throughout the economy.

Utilities that use natural gas to generate electricity also are feeling the pinch. Electric utilities do not benefit from higher energy prices, since they are often "caught" between high fuel costs and regulatory limitations on electricity rates. Like consumers, these utilities are seeking to use natural gas as efficiently as possible and are switching to fuels that are more economical whenever it is feasible.

There are no quick and easy answers to our energy policy challenges. Increasing the supply and diversity of our nation's available energy resources involves long-term solutions. Eighty-five percent of the natural gas consumed in the U.S. is produced domestically, and almost all the remainder of our supply is imported from Canada. New North American supplies and infrastructure need to be developed for the future, especially in those areas that are currently restricted or off limits in the Rocky Mountains and the Atlantic and Pacific coastal areas.

The nation's electric utility companies are among those who are calling for the new Congress to work with the Administration and the states to increase access to oil and natural gas supplies from our vast onshore and offshore resources, including from the unleased portions of leasehold 181 in the Gulf of Mexico, and to extend the drilling season for selected onshore areas.

Improve your energy efficiency

In the short term, using natural gas and electricity more efficiently is vital. As you may know, your electric utility is a good source for information and assistance to help you get started. Your electric utility will likely have historical data about your energy use. Utility representatives can also help you with answers about their efficiency and demand response incentive programs, discount electricity rates, energy-efficient equipment, or any other energy-related question.

There are also a number of quick and easy steps your company can take right now to step up its control over energy use. These are probably already second nature to you, but here is a short refresher course:

• Get the housekeeping staff on board. Little things they can do in each room-resetting thermostats, opening drapes on sunny days this winter, reporting water leaks, and turning off lights-can really add up.
• Lower the water temperature setting-for hand washing and showering, 110 degrees is the recommended setting.
• Set thermostats to 68 degrees in offices and public areas during occupied hours, and lower during unoccupied hours.
• Turn off unneeded lights in offices and public areas.
• Have your heating, water heating, icemakers, laundry, and refrigeration equipment periodically serviced and adjusted as needed.
• Check automatic controls for proper working condition and settings.
• Keep loading dock doors closed when the loading dock is not in use. For the longer term, it is a good idea to renew your commitment to 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? Before you begin making capital improvements to save energy, understand which appliances are your big energy users. Water heating alone, for example, can account for almost 40 percent of a hotel's total energy cost-and up to two thirds of its natural gas use. Listed below are the areas and the appliances that will affect your energy bills this winter. A small improvement in these places will make a large impact on the bottom line.

• Building Envelope - The envelope-everything that separates the inside from the outside, the roof, windows, entryways, insulation-has a major influence on the heating and air conditioning system. When the building limits heat losses and gains, the building will require less energy.
• Water Heaters - Lower temperature settings, fix hot water leaks, and use heat recovery systems.
• Laundry - Washing linen at a lower temperature and more air-drying can both save money. So can investing in high-efficiency units that use less energy and water.
• Heating/ventilation/air conditioning - Improving efficiency through maintenance and tune-ups can return savings of up to 30 percent or more.
• Lighting - This is usually the largest electricity user and should be the first place to look for savings. Many facilities report savings of 20 to 50 percent through the use of timers, dimmers, keeping fixtures clean, and turning off lights when not needed.
• Refrigeration - Savings come from operating the equipment in an efficient manner, and in carefully evaluating a manufacturer's stated energy efficiency and estimated operating costs before purchasing equipment.
• Food Preparation - Like water heating, food prep can use less energy through more efficient use and through proper equipment selection. In October, President Bush signed into law the "Emergency Economic Stabilization Act of 2008." This bill extended tax credits for solar energy systems and fuel cells to 2016. New tax credits were established for small wind energy systems and plug-in hybrid electric vehicles. Tax deductions for owners and designers of energy efficient commercial buildings were also extended. A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems. These tax deductions are available for systems "placed in service" from January 1, 2006 through December 31, 2013. As with the other tax credits, you should try to combine the federal credits with any applicable electric utility or state incentives.

For more information on the tax credits, please visit:
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#s8.

Two good web sites that show state programs are: DOE's Energy Efficiency and Renewable Energy site:
http://www1.eere.energy.gov/femp/program/utility/utilityman_energymanage.html, and
the Consortium for Energy Efficiency www.cee1.org/com/bldgs/bldgs_ps2005.pdf .

Taking these steps will get your company off to a great start in 2009. They will make it more energy efficient, which can mean operating cost savings. And they can help make it more impervious to energy price spikes as well. Both can add up to greater profitability for your company, and a future with more reliable, affordable and environmentally sustainable energy supplies for the country.

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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