neighborhood business energy project

Kent County/MSU Extension-Rebuild Michigan Community Partnership 1

EVALUATION

of the

NEIGHBORHOOD BUSINESS ENERGY PROJECT

A Project Developed for the Rebuild Michigan Community Partnership

July 29, 2009

Michael Raley Extension Intern

MSU Urban Collaborators

and

Carol L. Townsend Community Development Extension Educator

Kent/MSU Extension (616) 336-2029

[email protected] 775 Ball N.E.

Grand Rapids, MI 49503

mailto:[email protected]


Executive Summary In late 2007/early 2008, energy audits were conducted for ten small businesses in the West Fulton and Eastown business districts. This was the primary focus of an energy efficiency project initiated by Kent/MSU Extension in partnership with the Eastown and West Fulton business associations. Funding was provided by the State Energy Office through a Rebuild Michigan Community Partnership grant. This project had the dual purpose of assisting small business owners reduce their energy consumption so that their utility bills could be reduced in these tough economic times while at the same time having a positive affect on the environment through reducing carbon emissions. In addition to the energy audits, the project gathered data on usage and expenditures for electricity and natural gas from each of the businesses, and a report was issued that indicated trends in individual usage and suggestions for efficiency improvements. From May through July in 2009, a follow up study was conducted, in which utility bills were gathered from each of the businesses to assess whether the businesses were able to improve their energy efficiency after their energy audit. Their energy consumption and costs for the past year were then compared to their utility bills from before their energy audit. Only eight of the ten businesses were able to submit electrical utility data. The data showed that five out of the eight businesses decreased their electricity consumption, with three reducing net spending on electrical bills. Only six of the original ten businesses were able to submit natural gas data. Gas consumption was a different story, with only one business reducing consumption. When energy usage for all eight buildings was combined, it was found that the overall consumption of energy increased, as did the cost. The overall carbon footprint of the business districts did not decrease. Some businesses did manage savings, however, as their energy costs decreased in 2008. Only one building owner managed to save on overall spending. Thus, the great victory of this project is constituted by a decrease in electricity consumption by a majority of businesses.


EVALUATION OF THE NEIGHBORHOOD BUSINESS ENERGY PROJECT History Neighborhood business owners in Grand Rapids were feeling the pinch from the tough economic climate in Michigan in 2007 and were looking for ways to reduce their overhead. At the same time, there was a growing awareness that we must reduce our dependence on foreign oil, improve our environment by reducing our carbon emissions, and that each individual must do his/her part to be more energy efficient. Kent/MSU Extension partnered with the West Fulton and Eastown business associations in applying for (and receiving) a grant from the State Energy Office, Michigan Department of Labor and Economic Growth. The grant was part of the State’s Rebuild Michigan Community Partnership initiative. Additional financial support was provided by MSU Extension, the two business associations, and MSU Urban Collaborators. The project consisted of an energy assessment conducted on ten commercial buildings located in the Eastown and West Fulton business districts. The assessments were done by Kevin Cook, an energy consultant. He then wrote a report for each building that included recommendations to improve energy efficiency and an analysis of current energy usage, which he reviewed with each building owner. Purpose This report is intended to provide an evaluation of the Neighborhood Business Energy Project a year after the project was completed to measure any usage or cost savings that has occurred. The evaluation consists of a comparative analysis of energy use prior to and following the energy audits that were conducted on each of the ten neighborhood commercial buildings as well as a comparison of overall energy consumption by the businesses. Method For this evaluation, energy usage and cost data were collected from each of the initially participating businesses. The data were then compared on a monthly basis, and annual sums for 2007, 2008, and 2009 were calculated for comparison as well. Despite our best efforts, complete data were not able to be collected for all ten businesses due to many different reasons. For two of the businesses, there was not sufficient data for them to be included in this evaluation at all. Eight businesses were included in the electrical analysis, but data for only six of the businesses could be attained for the natural gas analysis. For some others, estimates had to be made


for a few months where data were missing. The cost analysis details how fair approximations of these data were calculated. It should also be noted that billing periods vary, sometimes being as short as 27 days, or perhaps as long as 40. This can have a relatively sizeable effect on the cost incurred by each business per what has been defined in this report as a “month”, and therefore makes for unavoidably imperfect comparisons. With all necessary figures either gathered or calculated, the data are compared on a monthly basis. January 2009, for example, is compared to January 2008 and January 2007. Also taken into account is the average daily temperature (ADT) of each month. ADT can be an important factor in energy use, as temperature is a primary determinant of how much gas or electricity must be used in order to achieve comfortable conditions in a facility. In the winter months, a noticeable rise in gas usage is necessitated by colder temperatures. Likewise, the air conditioning used to battle the heat of summer requires an increase in electricity. A colder winter or hotter summer will require greater usage of the furnace or air conditioning, respectively.


Usage Analysis: Electricity, 2007-2008

In what was likely the greatest success of the project, five out of eight businesses with which we were able to obtain data managed to reduce their total consumption of electricity, these being the W Group, Lots o’ Pots, Nawara Bros., Fulton Pharmacy, and Spirit Dreams. All, save for the pharmacy, have been using Compact Fluorescent Lamps (CFLs), and all have also cited awareness of usage as another possible cause of this reduction. As for the businesses that have seen increases, it is rather difficult to determine the exact cause. Nitecap has made the switch to CFL’s, and the business owner is unaware of any reasons why their electrical use had risen. The large industrial-grade transformer outside of the building may be a part of the problem, and the owner is discussing the issue with Consumers Energy. It should also be noted that restaurants, in general, are one of the highest users of energy. The Grand Valley Behavioral Research Center saw the greatest percent increase in usage, consuming over 50% more electricity in 2008. The owner of the building does not necessarily monitor closely the activities of his tenants, but has related that the building was not used very frequently in 2007. This may very well be true, as the building’s usage was rather low compared to buildings of a similar size in 2007, and has only now climbed to approximately the same level as the other buildings in the study. The increase in consumption for UCS is not entirely alarming, as the change was only marginal. The owner was unsure as to why the building’s consumption increased, so chances are UCS has not changed its behavior with regards to electricity, and such a small deviation is to be expected for any business. As a secondary measure, the total, cumulative electricity usage for all eight buildings actually increased. This occurred because the increases at Nitecap and the Grand Valley lab were large enough to offset the decreases of the other buildings in the subject group. Given the number of businesses that managed to reduce consumption, it can be inferred that the others are likely capable of reduction as well. The following tables illustrate electrical usage for two years for the eight commercial buildings that participated in the energy project.


Electricity Consumption 2007-2008

Usage Totals (kWh) 2007 Figure 1.1

Usage Totals (kWh) 2008 Figure 1.2


Cost Analysis: Electricity, 2007-2008

While five businesses did manage to decrease usage, only three paid less for their electricity. This indicates that the cost of electricity increased during this period, and thus, while no actual savings occurred for two of the businesses in comparison to the prior year, they likely managed to spare what could have been an even greater expense. Therefore, these businesses should not discontinue their good practices, as they are still, in a way, saving money. A problem faced by Nitecap has been the hefty capacity and power factor adjustment charges levied on the business every month, costing a total of usually $400-$500 per month in extra fees not directly related to actual usage. The owner, though unsure as to how the power factor charges are calculated, attributes the power factor adjustment charge to bills that estimate not only high usages, but a low power factor as well. He has related that he was assured by our inspector and by a Consumers Energy representative that the power factor issue could be addressed by installing capacitors, and he did so. The owner is presently discussing the issue with Consumers Energy. The issue with Nawara Bros. was particularly troubling, as electricity charges were up very consistently from month to month, with usage following a seemingly downward trend from 2007. We have not been able to reach the business owner to discuss this, and are therefore unable to draw any conclusions. It can be speculated, however, that the rate, unbeknownst to the owner, may accidentally have been changed by Consumers Energy. This occurred at Parkside Foods, a grocery store that participated in the first portion of this project. In the case of the Grand Valley lab, it is fairly obvious that with such an increase in usage, spending is likely to follow suit, and it did just that. Thus, there is very little to analyze with regards to the costs incurred at that building. The following tables illustrate the cost of electricity for each of the eight businesses in 2007 and 2008. The charts and graphs that follow further analyze electrical usage and costs, including with the weather.


Electricity Spending: 2007-2008

Figure 1.3

Figure 1.4


The W Group, UCS, and Spirit Dreams saw net decreases in spending as well as usage. Lots o’ Pots and Fulton Pharmacy, on the other hand, saw slight increases in costs while decreasing their usage.

Figure 2.1

Figure 2.2


Figure 1.4

The graph shows normal trends in energy usage for both years, with usage significantly higher in the warmer months of the year.

Figure 2.3

Figure 2.4


While the cost from month-to-month very closely follows consumption, a noticeable increase in costs in 2008, compared to 2007, occurs in almost every month of the year.

Figure 2.5

Figure 2.6


Usage Analysis: Natural Gas, 2007-2008

When it comes to natural gas consumption, there are far fewer winners than there were in electricity usage. In fact, there was only one business that reduced overall gas usage in 2008, and that was Nitecap. The owner is uncertain as to why gas usage was reduced, but it is likely just a fluke, as his behavior regarding gas usage has, according to his testimony, not changed at all as a result of the study. The change is rather marginal, but it is strange no less, as all of the other businesses saw their usage levels increase. What is likely the most significant problem with reducing gas consumption is the greater up-front expense that a business faces. Whereas electricity consumption can be cheaply reduced through the use of CFL’s, natural lighting, turning off computers, etc., significant gas usage reductions will generally require such expensive means as replacing a furnace, re-insulation, etc. Fulton Pharmacy installed a new roof, but even that did not reduce usage. Several businesses acquired a programmable thermostat and saw no change in their consumption levels. The owner at Fulton Pharmacy noted that she and her staff monitored usage very tightly before installing the programmable thermostat, and thus, usage may have remained the same, but without as much effort on the part of the pharmacy staff. This may be the case for other businesses as well. Fulton Pharmacy also had problems with bills being estimated, thereby increasing costs during certain months. Typically, an energy company might compensate for this by reducing the bill for the next month or two, but it may be possible that sufficient compensation is not awarded in this manner. The following graphic data show that gas usage is much more at the mercy of weather than electricity. These factors make it much more costly and difficult to reduce the consumption of natural gas in any given building. As was noted previously, data on natural gas usage were only available for six of the buildings participating in this energy efficiency project.


2008 CCF Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Total

(yr.)

W Group 293 409 257 165 51 30 29 23 29 51 112 371 1820

Lots o' Pots 244 102 40 164 153 20 158 158 151 151 194 264 1799

Nawara Bros. 487 535 270 67 21 23 23 18 24 74 332 544 2418

Fulton

Pharmacy 360 401.2 173 39 0 0 0 4 3 39 184 581 1784.2

Nitecap 1130 1159 545 316 316 264 234 259 257 350 801 1261 6892

Spirit Dreams 204 239 103 1 2 0 0 0 0 0 46 218 813

Monthly Total 2718 2845.2 1388 752 543 337 444 462 464 665 1669 3239 15526

2007 CCF Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Total

(yr.)

W Group 253 381 293 159 38 34 35 29 32 42 102 316 1714

Lots o' Pots 230 259 49 104 101 75 244 134 25 92 94 89 1496

Nawara Bros. 553 586 213 91 19 21 21 23 21 48 317 460 2373

Fulton

Pharmacy 263 109 123 669 0 0 0 0 0 17 41 292.05 1514

Nitecap 1595 1062 538 398 254 242 257 234 249 303 813 1144 7089

Spirit Dreams 159 252 22 95 3 0 0 0 0 1 45 200 777

Monthly Total 3053 2649 1238 1516 415 372 557 420 327 503 1412 2501.05 14963

CCF Totals 2008

CCF Totals 2007

Natural Gas Consumption: 2007-2008

Figure 3.1

Figure 3.2


Natural Gas Spending: 2007-2008

Figure 3.3

Figure 3.4


Figure 4.1

Figure 4.2


Once again, very normal trends occur during both years, with very low usage in the warmer months, and rather high usage during the winter.

Figure 4.3

Figure 4.4


As is the case with electricity, spending on natural gas very closely follows trends in consumption. Gas prices, however, are shown to be more volatile, with spending sharply down from the prior year in certain months, and relatively high during others.

Figure 4.5

Figure 4.6


Cost Analysis: Total Energy Spending Assuming the accuracy of all data, the businesses that managed to participate in both portions of the follow-up collectively spent $50,536.33 in 2007. In 2008, utility spending rose to $58,119.11—a net spending increase of $7,582.77. Two businesses—the W Group and Spirit Dreams—saw net-spending decreases of $20.30 and $871.11, respectively. As indicated in the data, gas prices have not been stable, and thus, those businesses that were misfortunate enough not to conserve enough to stave costs when prices likely saw an increase, regardless of whether or not their usage in those months might have decreased. Electricity prices have been more consistent, although slightly higher, thus causing greater expense as well for the businesses.

From 2007-2008, only Spirit Dreams and the W Group managed to reduce overall spending on energy. Only the former managed a reduction visible in the above representation

Figure 5.1


Analyzing 2009

It will not be possible to completely compare 2009 to prior years until the year is over, and this project shall end before then. What can be compared, however, is the first four months of the year, for which data were either accessible or calculable. 2009 is not looking very different from 2008, but there are some notable differences. Electricity usage is only being kept below 2008 levels by three businesses, but costs are down thus far for five. This may, again, be connected to the estimation problem addressed in the 2007-2008 analysis. The fact that costs are down could either indicate a trend toward lower prices, or foreshadow a pending increase to come later in the year. All businesses are claiming not to have altered prior behavior, and continue to maintain their physical improvements. Fulton Pharmacy should see reductions in electricity consumption if, after finishing façade improvements, it can manage to replace current lighting with CFLs. Gas usage is still proving difficult to curb, which is to be expected. Lots o’ Pots managed to decrease its usage, which the owner attributes to a reduction in business, meaning that kilns are being fired less frequently. Businesses that have seen unchanged or increased gas usage say that behavior has not changed since the prior year. Costs are down even for some businesses that increased usage, but this may, once again, be an estimation issue, and an attempt to equalize these figures may yet come later in the year. On the whole, three businesses are keeping net spending on energy down from 2008 levels. These changes are miniscule at best, but only so much more reduction can be achieved every year before striking a plateau. It cannot yet be known what 2009 will hold for these businesses, and what types of situations might occur later in the year to either increase or decrease net spending, so the only conclusion that can be drawn as of yet is that in 2009, two businesses have seen noticeable reductions in energy spending, one has seen a significant increase, and the rest are very near their levels from last year. The following graphs illustrate energy usage and costs so far for 2009.


Figure 6.1

Figure 6.2


Figure 6.4

Figure 6.3


Figure 6.5

neighborhood business energy project

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