Energy Engineering

ISSN: 0199-8595 (Print) 1546-0118 (Online) Journal homepage: https://www.tandfonline.com/loi/uene20

Improving Your Facility Energy Efficiency Within

Your Capital Improvement Plan

Brent D. Rutherford

To cite this article: Brent D. Rutherford (2019) Improving Your Facility Energy Efficiency
Within Your Capital Improvement Plan, Energy Engineering, 116:1, 41-46, DOI:
10.1080/01998595.2019.12043337

To link to this article: https://doi.org/10.1080/01998595.2019.12043337

Published online: 05 Dec 2018.

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 41

Improving Your Facility Energy Efficiency Within

Your Capital Improvement Plan*

Brent D. Rutherford, CEM, CHFM

ABSTRACT

Maximizing your efforts with limited funding requires building

and following a plan. We have built our Energy Program on a global
review of all capital requests. We start by identifying the functional
condition of all equipment in the building(s) and scoring it based on
the expected remaining life, how much is spent annually on repairs and
the efficiency of the equipment. After making these determinations, we
build a 5-year capital replacement plan and dedicate our budget to ac-
commodate as many projects as feasible. We allocate a percentage (5%)
of the budget to cover unexpected failures and emergencies. This plan
has reduced the frequency and impact of failing equipment over the past
5 years. Second step, look at the equipment to be replaced in advance of
funding and evaluate whether direct replacement is the most respon-
sible option. Look not only at the single piece of equipment, but also
look at the overall system. This is where we can improve operations and
energy usage the most. When you look at a chiller replacement, look at
the entire system. What does it serve? Is it sized appropriately? Can you
make a bigger impact by replacing the entire system to gain more effi-
ciency? Our experience has proven the added changes have significantly
improved our overall operational budgets. The return-on-investment
(ROI) is usually enough to sell the project to our leadership and, when
it is, we all win. The final piece of this plan is to never stop reviewing it
and looking for the best solutions to operations. We conduct third-party
evaluations of the condition of our equipment every 5 years, and annu-
ally, we sit down with the Engineering Department leaders to ensure the
5-year replacement plan is still accurate and the budgets are still good.
This process allows us to make the sell to finance that we are being good
stewards of corporate funds and improving the bottom line.

*Originally published in the 2017 World Energy Engineering Congress proceedings.

42 Energy Engineering Vol. 116, No. 1 2019

BUILDING AND FOLLOWING A PLAN

A capital equipment program needs to include at least 3 to 5

years of forecasting and planning. We prioritize our projects based on
likelihood of failure, annual repair costs, energy efficiency, potential
building expansions or change of use, safety concerns and code com-
pliance issues. Building your plan also requires a knowledge of all the
systems within your building(s). We look at each system from three
global perspectives of (1) each piece of the system, (2) the system itself
and (3) how does the overall system function within the other building
functional systems. Next you need to ask yourself, how do you evalu-
ate your systems? We use the following as our basis of our information.
What is the purpose of the system? What are the needs of the area being
served? What inefficiencies are you struggling with in the area? What
obstacles prevent the system from operating efficiently? Do you have
input from your contractors about the function of your equipment? Do
your contractors provide guidance of what would be a better option?
What is your relationship with your contractors and engineering teams?
Do you trust what they say? If not, why are they your contractor? And,
is there a more efficient equipment selection available for this replace-
ment? Once you have evaluated the equipment being replaced, if you
have determined there is better solution (which is not always the case),
you need to evaluate the options. Many times, there are multiple meth-
ods to the improving the system.

Evaluation Examples
1. As an example, THFW Lab building – load of about 120 tons, we
looked at the air-cooled chillers (three levels of efficiency) and
another direct-expansion (DX) unit. In our evaluation, we looked
at the total life cycle cost of each unit. As we reviewed all our op-
tions, we used an analytic calculation to compare four options. In
the end, the best solution for this application was another custom
DX unit, upsized to 140 tons, so we can use the part-load efficiency
curve that was most efficient. This also allows us to improve the
total air flow because the old unit did not meet the need during the
hottest months of the year. In our experience, we determined below
80 tons it almost always was more efficient to use the DX unit if
chilled water was not already available or in a new construction.
The point where chilled water starts to be more efficient is around
 43

100 tons, depending on the area served. We have also determined,

for operating room (OR) suites, DX should never be utilized. A DX
unit is usually able to get a room down to 65°F while maintaining
humidity. However, most doctors want colder rooms. Even if the
current surgeon staff wants it warmer, who is to say you will not
have a surgeon in the future that prefers colder.

2. In evaluating steam systems, you need to determine if you can get

away from steam storage or if you can only reduce your depen-
dence on steam storage. Understanding if you only have steam
heating coils in your air-handling unit (AHU), you will not likely
be able to get away from stored steam if your system is of any
size. However, if you can install steam generators for your “criti-
cal steam,” that will, at a minimum, help reduce your expenses on
steam.

3. In one of our smaller facilities, we were able to remove stored

steam altogether. We had a 250-hp boiler system with one steam
coil AHU, sterilizers, humidifiers, and a steam pot in the kitchen.
We installed steam generators for kitchen and sterilizers, then in-
stalled hydronic boilers for heating water loop and “on demand”
domestic water heaters. In this arrangement, we have now been
operating for over 1.5 years. Our gas consumption is operating
at 56% reduction. Our electric consumption has only slightly in-
creased.

4. In another system, there are too many steam coils in the building,
so we have completed a full system audit. The goal here was to
identify steam waste. Over the years as equipment was changed or
added, there were many installation conditions that led to waste.
We found components installed improperly, wrong size traps and
valves, non-functioning bypass valves and many other mechanical
or plumbing issues in the system. The result in correcting all these
issues has led to reducing gas consumption by over 20%. This has
also reduced the boiler operations and increased productivity.
Most days, we now only need one of the two boilers. We are also
installing a steam trap monitoring system, so we can respond as
soon as a trap starts giving trouble.
44 Energy Engineering Vol. 116, No. 1 2019

5. Another area you can make a large impact is with chiller replace-
ments. There are several opportunities here. If you are on electric
spot pricing, an evaluation of thermal storage is in order. Currently,
we are experiencing extremely low night-time rates at about 10%
of the day-time rate. Through evaluation of our pricing structure
with our procurement agent, we have determined this trend will
be around for a significant duration. You can take this even fur-
ther, if you can dedicate an ice farm to the OR unit only. This will
allow you to run colder water to the OR for humidity control and
keep your house chilled water warmer to minimize the amount of
simultaneous heating and cooling. We have also been moving to
increase the size of our chillers modestly to take advantage of inte-
grated part-load value (IPLV) efficiency in our units by installing
variable-frequency drive (VFD) controlled centrifugal chillers over
screw chillers. This has allowed us to respond to weather fluctua-
tions better. With chiller selections, depending on the future needs
of the facility, you may need to enlist your design engineers or your
preferred equipment provider to help you evaluate the options.
Depending on your comfort/knowledge level, there is also evalua-
tion software from many chiller manufacturers to help you validate
your selection.

ACTING ON YOUR ANALYSIS

There will always be a cost to installing more efficient equip-

ment. How do you determine the best solution? We use a formula based
on life cycle cost analysis. However, when the equipment needs to be
replaced, we do not take the exact cost to determine the payback. We use
the delta between what an exact replacement is and the more efficient
options are. The initial cost of replacement will already be there regard-
less of what equipment you select. So, ROI, for us is determined on the
added cost to select the most appropriate replacement. In many cases,
you can get an ROI of the delta in the 12- to 36-month range, depending
on size of equipment, ability to negotiate for the most valuable cost, and
your utility rate. The higher your utility rate, the faster the payback. For
example, two identical projects with different utility rates: A chiller op-
timization has an investment cost of $750,000. The annual electrical sav-
ings equals 7,500,000 kWh. If your electric rate is $0.05/kWh, then your
 45

ROI is $375,000/year and payback is 2 years. If your rate is $0.075/kWh,

then your ROI is now $562,500/year and payback is only 16 months. It is
important to include these calculations in your evaluation, to ensure you
get the best investment and payback. How can you get even more out of
a simple replacement in your central plant? We have combined multiple
ECM projects to increase our impact. When replacing chiller(s), we have
also been installing plant optimization systems to gain more efficiency
in the central plant. We have six facilities with functioning optimization
systems. The impacts from most of these have been hugely successful.
In most instances, we have reduced our plant kW/ton from 1.2 down to
0.6 on average. The ROI on these projects have been averaging 24 to 30
months at an electric rate of $0.042/kWh. Over the past 6 years, we have
reduced our utility Btu/sqft by almost 11%. This has resulted in several
million dollar savings. When you have success in reducing the budget,
your finance group/department is more willing to allow you to spend
more on a replacement because they know you can affect the long-term
budgets with the right selection and application. To make even further
impact, installing a live utility monitoring system will pay dividends as
well. It may not have the same direct cost reduction, but by being able
to monitor your systems in real time, you can respond to events much
sooner, which will minimize the impact before a failure. You can also use
the system to validate your savings if you set up the monitors at the time
of the improvements.

CONTINUING THE SUCCESS

Now that you have established a system of evaluation, you need

to complete the process by sustaining this program. We utilize several
continuing processes to ensure our capital equipment program is most
effective. We meet, at a minimum, with each engineering team annually
to review the 5-year plan of equipment replacement. We discuss how ef-
fective we have been over the past year in addressing the highest prior-
ity equipment. We then review the items remaining on the 5-year plan.
All completed projects are removed; the remaining are evaluated to de-
termine their priority. If there is a new need, it will be added to the plan
as well. We consider this plan as a living document; if it needs to change
due to an unexpected failure, we move items around to accommodate it.
We also use third-party evaluators to review our plan every 5 years to
46 Energy Engineering Vol. 116, No. 1 2019

make sure we are addressing the most pressing needs in the appropriate
order. We also perform energy audits on a 5- to 7-year cycle to recog-
nize our successes and discover more opportunities. Another aspect of
our plan includes planning for the unexpected and undefined energy
projects. Each year we allocate 5 to 10% of our total funds to unplanned
equipment failure contingency and 5 to 10% for energy projects. This al-
lows us the flexibility to respond to the needs of our buildings without
compromising the planned projects. We began this process about 12
years ago and, as a result, we have reduced our utility consumption by
10% on a Btu/sqft basis. Another significant benefit we have seen is a
reduction in the number of service disruptions due to unplanned equip-
ment failure. The number of these catastrophic failures has dropped by
over 50% since we began this program. As a result, we have become a
high-reliability department within our healthcare system.

————————————————————————————————
ABOUT THE AUTHOR
Brent Rutherford, CEM, CHFM, is the Manager of System En-
gineering for Texas Health Resources, in Arlington, Texas. His respon-
sibilities include energy management, MEP infrastructure consultation,
and infrastructure capital replacement programs. This role is comprised
of developing and implementing infrastructure master replacement
projects, as well as, utility conservation, reliability, and optimization
procedures for the Plant Operations/Engineering departments of the
14 non-profit facilities. Brent has been involved in healthcare facilities
management and construction for over 17 years in Louisiana and Texas
as a facilities director, contractor and consultant. Brent holds 2 Bachelor
of Science degrees one in Environmental Science from Abilene Chris-
tian University and one in Education from McMurry University. Brent
has obtained the designation of Certified Energy Manager (CEM) and
Certified Healthcare Facility Manager (CHFM). He joined Texas Health
Resources in 2013, after working 12 years in Louisiana.