Coleman Hines, Inc.

Shedding Light on a Rebatable Lighting Project

2012-01-24T21:39:10Z

Whether you are installing new lighting fixtures as part of your new energy efficient project or as part of your capital improvement projects, your goal is to have the proper lighting design that effectively illuminates your space. Lighting represents roughly 40 percent of the energy consumption in the commercial building sector. Upgrades can both reduce lighting costs by as much as 30 to 50 percent and also reduce total facility energy consumption and costs by up to 20 to 25 percent. In addition, it can be an opportunity to earn tax deductions or a rebate from the local utility.

When you are thinking of making a change to your lighting for improved energy efficiency, replacing your current lamps with reduced-wattage lamps with better technology seems like the most obvious as well as most cost effective and easiest solution. While lamp efficiency and technology is important, ballasts are equally critical in lighting operation. Understanding how ballasts work and the different types that are available is important when designing an efficient lighting system for your facility.

Ballasts are used in fluorescent and high-intensity discharge (HID) lights to provide proper starting and operation. When starting, most fluorescent and HID lights require a voltage several times higher than line voltage to create an electron emission or arc. Ballasts were developed to provide the needed starting voltage, with the two most common below.

Instant start-ballast types start lamps without heating the electrodes. Instant start ballasts are a good fit for applications where lamps are not turned on and off frequently.

Rapid start-ballast type lamp electrodes are heated prior to start, reducing the voltage required. Rapid start ballasts provide longer lamp life, but use slightly more energy than instant start models.

Ballast factor is the measure of the actual lumen output for a specific lamp-ballast system relative to the rated lumen output of the lamp. It is expressed as a percentage figure, ranging from 0.78 to 1.2. If you multiply the wattage of the lamp by ballast factor, that will give you actual wattage of the fixture.

A lamp ballast system with a lower ballast factor, even though it reduces lamp lumen output, consumes proportionally less input power. These systems produce the same level of light output as standard ballasts, but do so more efficiently, saving 2 to 5 watts per ballast, and therefore use less energy.

So now you understand that you not only must have the proper fixture and lamp, but also the approved ballasts. To verify if your choice is eligible for incentives or rebates, both lamp and ballast must be on the CEE Qualified Products list. The Consortium for Energy Efficiency (CEE), a nonprofit public benefits corporation, develops initiatives for its North American members to promote the manufacture and purchase of energy-efficient products and services.

The best chance for you to learn about these incentives is to have Coleman Hines’ Rebate Team screen your measures and evaluate your project for possible returned dollars. CHI is here to help from planning to inception and can assist in each step of the process to help “enlighten” you with solutions and “shine” with savings.

What’s Going On With My Light Bulbs?

2012-01-24T21:44:33Z

Confused? You are not alone.

The 2007 Energy Independence and Security Act (EISA) calls for a 30% energy efficiency increase in 100 watt light bulbs by January 2012. This efficiency standard will be applied to other typical wattage ratings through 2014 (i.e. 60 watts), but does not affect decorative, appliance, flood, 3-way or other specialty bulbs. This efficiency standard rules out the tungsten incandescent technology for standard wattage ratings. This older technology is very inefficient and up to 90% of the energy consumed is converted to heat instead of light. Even so, the lighting manufacturers can deliver the energy efficiency with any technology they choose, but it must meet the performance requirements of the Act. Currently, dimmable 72 watt halogen incandescent bulbs which meet the criteria of EISA are ready for purchase at your local retailer.

What about the reprieve I just heard about?

Congress has just passed a spending bill that removes funding for the enforcement of the energy efficiency standard for light bulbs through Sept. 30, 2012. This means that the Energy Department will not be able to impose fines on companies that violate the law due to lack of funding for personnel.

Larger lighting companies have been quoted in various news agencies as continuing to comply with EISA, especially after having spent large amounts of capital in new technologies and re-tooling manufacturing facilities to be in compliance. In fact, the National Electrical Manufacturers Association (NEMA) helped to craft the 2007 law based on technology that its members (Phillips, GE and others) were already perfecting.

This national standard has already been applied in California, which adopted the lighting performance of the federal law a year early, beginning Jan. 1, 2011.

Is the U.S. the only country demanding efficiency standards for lighting?

No. Australia was the first country to begin mandating efficiency for light bulbs, which became effective in 2009. This type of standard then spread to the European Union, the United Kingdom, the Philippines, India, Argentina, Venezuela, Malaysia, New Zealand, Canada, Cuba and now China. China has just announced that it will completely ban the import and sales of specific incandescent bulbs beginning in October 2012. So far, this announcement is not an efficiency standard, but a complete ban.

To stay competitive in a global marketplace, lighting companies must continue to improve the efficiency of the products they offer to consumers. Since the new standard has gone into effect, the import and manufacture of the familiar 100 watt incandescent lamp has ceased. However many of our clients are installing new lamping technologies, such as LEDs, and are benefiting from up to 90% reductions in lighting energy usage as a result. This reduction, when coupled with incentives, can produce a return on investment of less than a year.

Coleman Hines will continue to stay informed on energy efficiency standards, practices and equipment to deliver its clients meaningful rebate programs for energy efficiency projects.

Monthly Market Tracker – January 2012

2012-01-24T21:07:53Z

December Market Conditions

December Market Conditions:

During December the natural gas market continued its downward slide. The NYMEX 12-month strip closed the month at $3.303/MMBtu which was down from the November close of $3.754/MMBtu. Numerous new recent lows were reached for the 12-month strip during the month, with the lowest set on December 30th at $3.303/MMBtu. On that same day a new low for the second 12 month strip (months 13 – 24) was set at $3.985/MMBtu. As a heads up on January, new lows have already been reached for both 12-month strips at $3.301 and $3.965/MMBtu, respectively. Although no new lows were set for the Henry Hub spot market during December, it is already seeing several closings below the $3/MMBtu barrier in early January. See the NYMEX strip chart and pricing matrix below for more details.

As of January 9th the near term weather forecasts, 6 to 10 days, are calling for normal temperatures in the midsection and Southeast portion of the country with below temperatures forecasted for the New England area and above normal temperatures in the West and Southwest. This could have a neutral to bearish impact on the natural gas market; however it could be tempered by the continuing attacks on fracking’s impact on the environment and articles that attempt to associate the process with earthquakes.

The final December Weekly Storage Report showed 3,472 Bcf in storage, that puts this year currently 356 Bcf above last year and 458 Bcf above the 5-year average. Without a major cold blast this season some analyst are talking about a potential for production shut-ins this fall. See the storage chart for more details.

As the case has been for many months, the increase in supply combined with the continuing low demand are the driving forces in the natural gas market. The supply increase is due largely to the new drilling techniques and the demand destruction results from the economic climate which is not showing any signs of a strong recovery. Weather and the new drilling techniques will continue to be wild cards.

UPDATE –

It should be noted that during the week of January 10th the market took a dramatic downturn. The previous week it closed at $3.366/MMBtu on Friday January 6th and by the close on the following Wednesday it fell to $3.114/MMBtu or a drop of 7.5% and was falling further during open trading on Thursday.

ENERGY STAR

2011-11-08T20:00:40Z

ENERGY STAR is the trusted, government-backed symbol for energy efficiency that helps save money and protect the environment through energy-efficient products and practices. It is an international standard for energy efficient products originated in the United States of America.

Equipment carrying the ENERGY STAR logo, such as computer products and peripherals, kitchen appliances, buildings and other products, generally uses 20%–30% less energy than required by federal standards.

The EPA establishes these specifications based on the following set of key guiding principles:

Product categories must contribute significant energy savings nationwide.
Qualified products must deliver the features and performance demanded by consumers, in addition to increased energy efficiency.
If the qualified product costs more than a conventional, less-efficient counterpart, purchasers will recover their investment in increased energy efficiency through utility bill savings, within a reasonable period of time.
Energy efficiency can be achieved through broadly available, non-proprietary technologies offered by more than one manufacturer.
Product energy consumption and performance can be measured and verified with testing.
Labeling would effectively differentiate products and be visible for purchasers.

To encourage customers to buy energy efficient products, products approved to display this symbolic logo will usually qualify the purchaser for a rebate for a portion of the purchase price.

What you may not know is that these specifications are continually scrutinized on a daily basis, and it is not unheard of for a piece of equipment to be on the qualified list one day, and literally fall off the list the next day. Your rebate team at Coleman Hines continually monitors the ENERGY STAR product list. When a client’s previously qualified equipment disappears from this list, CHI immediately notifies your vendor to review the circumstances. Normally this is due to recent specification criteria that has changed, and the revised equipment paperwork is still in review for reinstatement. Below are the most common reasons for revisions in specifications:

A change in the Federal minimum efficiency standards.
Technological changes with advances in energy efficiency which allows a revised ENERGY STAR specification to capture additional savings.
Product availability
Significant issues with consumers realizing expected energy savings
Performance or quality issues
Issues with Test Procedures

The most recent major revision that has prompted numerous models to fall off the list is in the Food Holding Cabinet category. Food Warming Equipment and Crescor models were included in the latest round of affected equipment. Hot food holding cabinet models that earn the ENERGY STAR must meet a maximum idle energy rate of 40 watts/cu ft and must be third-party certified by October 1, 2011 to remain qualified after that date.

Other Commercial Equipment in which specification revisions have been updated or are in development:

Commercial Refrigerator and Freezers-new standards for 2012
Ovens-Plans to include Combination ovens
Ice Machines-air cooled specifications changes
Dishwashers-Draft 3 proposal on 2.0 specifications
Fryers-Must be third-party certified

Make sure you contact your vendor representative to see if these changes will or have effected your ENERGY STAR rated equipment. Without this certification and no presence on the ENERGY STAR listing, your equipment will not longer be eligible for rebate, even if meets the required specifications. Resolution may be as simple as your vendor submitting the required paperwork.

California Adopts Cap-and-Trade Program

2011-11-08T19:04:34Z

Starting next year, utilities and large industrial facilities in California will face new regulations under the state’s recently adopted cap-and-trade program. In October, the California Air Resources Board unanimously approved air pollution controls as a key component of AB 32, the historic law that mandates a reduction in carbon emissions to 1990 levels by 2020.

The cap-and-trade program establishes a statewide limit on facilities that are currently responsible for 85 percent of California’s carbon emissions. In total, the Board estimates that about 350 business will be subjected to the new regulations.

To create the standards, regulators collected three years of emissions data from the largest industries in the state. Regulators then calculated the average emissions by industry and established the benchmark standards for the program. Starting in 2012, businesses will be allowed to emit up to 90 percent of the benchmark. If a business emits less than its allowable amount, it may sell its excess credits on the market. The program works vice-versa for those businesses that exceed their allotted emissions. Those businesses that emit more than their allotment will have to purchase carbon offsets.

Former California Governor Arnold Schwarzenegger applauded the Board’s vote. “Today’s adoption of a cap-and-trade program is a major milestone for California’s continued leadership on reducing the world’s greenhouse gases. As I said both when we signed the legislation in 2006, and when we fought to protect it last year when Texas oil companies attempted to overturn it with Proposition 23, the most critical phase in the fight against climate change is diligently, aggressively, and correctly implementing this law.”

Other supporters, such as Gary Gero, president of Climate Action Reserve, say that California’s program will be a model for other jurisdictions. “People watch what California does and emulate it. Future cap-and-trade programs are going to pick up a lot of the design features we are implementing here. You’ll see regional programs develop. They will put pressure on the federal government. It will send ripples around the country.”

The new program has also generated criticism. The cost of energy is expected to increase as utilities pass any new regulatory costs on to their customers. As a consequence, there is a concern that the regulations could negatively impact California’s already struggling economy by pushing businesses to relocate outside the state or to avoid locating in California in the first place. Critics of the cap-and-trade program may also point to the research done by the independent Legislative Analyst’s Office, which concluded that jobs will probably be lost because of the burden on business.

Commodity Market Activity

2011-11-08T18:59:54Z

California Direct Access Reopening

The California market in the San Diego Gas & Electric (SDGE), Pacific Gas & Electric (PGE) and Southern California Edison (SCE) service areas was initially deregulated in 1997. In September 2001, the Direct Access market was suspended due to the energy crisis. Customers who were on a third-party contract at the time of the suspension could continue to purchase their electricity from a supplier. Customers who were not on a supply contract at that time, or any new locations that opened after that date, were not Direct Access eligible.

In October 2009, Senate Bill 695 was signed into law. This Bill allowed for the reopening of the Direct Access market on a phased-in, capped basis over a four-year period beginning in April 2010. Participation was established through an open enrollment process in which customers had to submit a Notice of Intent. The first three phases of the open enrollment occurred on April 16, 2010, July 16, 2010 and January 13, 2011. The response from customers was so overwhelming that the available load in each of the three open enrollments was fully subscribed in less than 10 seconds. At this time, the final open enrollment is scheduled for January 2012. Coleman | Hines submitted customer documentation during the first three open enrollment periods, and we were successful in getting many locations accepted as Direct Access eligible. We will be contacting you again in November to discuss your interest in submitting paperwork for any additional non-Direct Access sites.

In addition, recognizing that many customers want Direct Access, Senate Bill 855 has been introduced to expand the current cap. This Bill will be heard by the Assembly Utilities Committee in early 2012.

There are also several other key rules being considered that will impact Direct Access locations. One proposal is to reduce the current minimum stay provision from 3-years to 18 months. Another issue under review involves the Exit Fees currently charged to Direct Access customers. The recalculation of these charges will reduce the current Exit Fee and provide retroactive credits to locations in the SCE and SDGE service areas. A final ruling on these issues is expected by the end of October.

Arizona Deregulation

The Arizona markets in the Tucson Electric Power (TEP) and Arizona Public Service (APS) service areas were deregulated in 1997. Although the markets are deregulated, the Arizona Corporation Commission halted the divestiture requirements of the utilities and suspended the licensing requirements for suppliers until a decision could be made on whether deregulation was in the public interest.

At the present time, it does appear that the Commission is interested in advancing retail competition, and a Pilot Program has been filed by APS. The initial proposal for this Pilot Program is restrictive as it relates to customer load requirements; however, interveners and advocacy groups are discussing these concerns.

Monthly Market Tracker – November 2011

2011-11-10T16:40:58Z

Current Market Conditions

The slow downward trend continues. The 12-month strip opened on October 3rd at $4.077/MMBtu, and as of October 24th, it had slid to $3.923/MMBtu. This is the lowest that the index has been since exactly one year ago, October 25, 2010, when it was at $3.930/ MMBtu. All of this is after monthly declines in each month from May through September of this year. The market just keeps going lower. Further, the 12-month strip for months 13 through 24 also reached a recent low of $4.505/MMBtu after setting several recent lows throughout the summer months.

The near term weather forecasts call for below average temperatures in the South and Midwest. However, normal temperatures are expected to return in early November. This will have a bearish impact on the natural gas market.

Storage continues to increase as it gains ground on both last year’s and the five-year average levels. At the time of this writing, the weekly storage report shows the current storage level is at 3,624 Bcf, trailing last year’s level by only 46 Bcf. That is the closest this year has been to the previous year since April of 2011. Also, the report reveals that the current year level continues to increase its margin over the five-year average level which is at 3,511 Bcf resulting in a differential of 113 Bcf.

It is the same old story, but the increase in supply and low demand remain the driving forces in the natural gas market. The supply increase is due largely to new drilling techniques and the demand destruction results from the economic climate. Storage is no longer a concern and mother nature, both in terms of the hurricane season and the temperature forecast, is doing her part to keep prices low. See the storage chart for more details.

EPAct Should Factor Into Project Planning

2011-11-01T23:02:10Z

The Energy Policy Act of 2005 (EPAct) provides tax deductions for the installation of certain energy efficiency measures through section 179D. These measures must exceed (ASHRAE) 90.1 -2001 and can be installed at new or existing commercial properties. Your efficiency projects may be eligible for the maximum deduction of $1.80 per square foot of building space (including garages).

This is achieved in three separate categories (benefits):

Lighting ($0.30-0.60 per sq ft)
$0.30 per square foot = 25% reduction in wattage from (ASHRAE) 90.1 -2001
$0.60 per square foot = 40% reduction in wattage from (ASHRAE) 90.1 -2001
HVAC ($0.60 per sq ft)
Building envelope ($0.60 per sq ft)

Lighting projects typically qualify including LED retrofits.

Effective January 2011, the program was updated allowing a company to deduct the efficiency measures completed from 2006 to the current year on the current year’s tax return. This eliminates the need to re-open previous tax years.

Time Running Out On 2011 Incentives

2011-10-26T22:35:35Z

Fall is in the air, and it’s the time of year when commercial rebate and incentive programs are starting to run out of funds after a very busy year. A number of utilities have already exhausted their 2010-11 rebate program funding and most will not receive additional funds until 2012.

The following utilities are currently out of funding for the remainder of the 2011 program year:

AEP-TX (on wait list status)
Centerpoint-TX
DTE Energy & Consumers Energy-MI
Gas Public Purpose Program Fund-CA for PG&E, SCE, and SDG&E
Oklahoma Gas & Electric (OGE)
Oncor-TX
Public Service of New Hampshire (PSNH)
NV Energy Retrofit

In addition the utilities listed above, funding for the Connecticut Energy Efficiency Fund is nearly depleted.

If any of your fourth quarter projects are within these utility territories, make sure to call the Incentive Team at Coleman Hines to discuss whether it makes sense to move the project to early 2012 when incentive funds will be replenished.

Perhaps you discover some extra dollars in your capital improvement budget that must be spent by year end or prior to your company’s seasonal “black-out period” for construction. Most utilities stop accepting new applica- tions in November. This means that you should submit your projects to CHI by November 1, 2011, so we can start the application process and get them qualified be- fore the close of the year.

It’s also a great time to take advantage of some of the year-end bonus incentives. Energy Trust (OR), Ameren (IL), Xcel Energy (CO), and Long Island Power (NY) are just a few utilities currently offering bonuses to convert inefficient T12 fluorescent lighting systems. (Due to U.S. Department of Energy (DoE) regulations, the manufac- ture of nearly all T12 fluorescent lighting will be phased out in 2012 and will no longer be available).

Solyndra Fallout Could Bankrupt Other Initiatives

2011-10-18T20:38:09Z

Going forward, what role will the taxpayer have in the green energy industry? It’s a topic ripe for discussion considering the recent bankruptcy of Solyndra, the California-based solar cell manufacturer.

In September, Solyndra ended all business activity, laid off its employees and filed for Chapter 11 bankruptcy. Its filing was surprising since the company had the support of a $535 million federal loan guarantee as well as another $198 million from private investors.

Management was quick to blame competition from low-cost manufacturers in China and other economic factors. Though management itself may be partially responsible.

“After we got the loan guarantee, they were just spending money left and right,” said former Solyndra engineer Lindsey Eastburn. “Because we were doing well, nobody cared. Because of that infusion of money, it made people sloppy.”

Either way, taxpayers remain on the hook to repay the loan. But the bankruptcy fuels broader concern about the government’s hand in the green energy industry. Prior to the bankruptcy, Solyndra was President Obama’s highly advertised example of a green jobs future. The White House even scheduled a press event applauding the manufacturer just two days after the half-billion dollar loan was granted final approval in September 2010.

At stake is whether or not the government will continue to act as a venture capitalist for clean-tech companies. When candidate Obama campaigned for the White House, he promised to create 5 million green jobs. To fulfill the goal, his administration expanded the loan guarantee program that was initially established by the Energy Policy Act of 2005. But so far there are just 3,545 new green jobs after disbursing about half of the $38.6 billion available. That amounts to roughly $5 million per job created.

Since Solyndra’s collapse, the White House has been silent about the future of green jobs. This contrasts with President Obama’s initial rapport with the clean energy industry. Within weeks of taking office, President Obama signed a $787 billion stimulus package that included many benefits for clean-tech companies. The signing ceremony itself was symbolic – the bill was signed after touring the Denver Museum of Nature and Science, which has solar panels on its roof, and President Obama was introduced by the head of a local solar company.

Yet the most recent push for more stimulus spending didn’t make any appeal for green jobs or investing in clean energy. In his formal pitch to Congress, President Obama discussed ‘rebuilding America’ by repairing roads and bridges and renovating schools. But the speech delivered in the House Chamber avoided energy investment, renewable or otherwise.

The Obama administration will likely maintain some dis- tance between itself and the clean energy industry as long as Solyndra remains under investigation. If the Solyndra failure involved political cronyism, a concern lawmakers and others have raised, then it could have long term consequences for clean-tech companies that rely on subsidies and other forms of government support.

Just ask Arizona-based First Solar, Inc. The company will not get a $1.9 billion Department of Energy loan guarantee to construct a new solar power plant. The deal had preliminary approval but, according to at least one analyst, fell apart after Solyndra filed for bankruptcy.

How exactly does this affect energy managers? It really depends on the extent of the Solyndra fallout. At a minimum, these types of investments will face more scrutiny. But it could also derail other components of the administration’s agenda that include commercial incentives for energy efficiency. Coleman Hines will continue to follow this issue and communicate any relevant information to its clients.