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Lightening the costs of lighting.

Even though the enormously inflated fuel prices of the 1970s are behind us, energy conservation should by no means be considered "old hat" today.

In fact, electricity costs, which comprise the costs of energy used for tenant lighting, public areas, elevators, and other related purposes, account for 16 percent of the total operating expenses for office buildings, according to IREM's 1991 Income/Expense Analysis: Office Buildings. Only property taxes presented a higher expense. Thus, lighting remains a significant expense for managers.

An array of energy conservation opportunities, or ECOs, are available to property managers today. By carefully evaluating their buildings' lighting needs and existing systems, managers can determine which ECOs could be implemented in their buildings to reduce the energy consumption while maintaining comfort and productivity levels for the building's tenants.

One popular ECO involves retrofitting existing fluorescent fixtures. This allows a substantial reduction in electrical costs and the cost of lamps and ballast while maintaining or enhancing existing light levels.

For example, our company decided to improve indoor energy efficiency in one building by retrofitting existing 40-watt fixtures. We removed the two inner lamps (and their corresponding ballasts) from four-lamp fluorescent fixtures and added a high-quality metal reflector. Socket attachments were added to control the two remaining lamps, and the outer tubes were relocated to the socket attachments--exactly in line with the parabolic reflectors, which maximize the light output and produce uniform lighting levels.

This strategy was employed at a 44,974-square-foot office building in Oak Park, Michigan. What follows is a description of the retrofit and the measures taken to determine that this procedure would in fact be the most beneficial to the building--and its lighting bills.

A case study

The building, which utilizes an electric and natural gas forced-air heating HVAC system, was constructed in 1964. It houses hospital support and administrative services, and actually comprises two separate three-story structures of 22,487 square feet each. Each building incorporates individual office and floor controls, the majority of which utilize recessed fixtures.

The retrofit followed the procedures listed in the Architect's and Engineer's Guide to Energy Conservation in Existing Buildings, published by the U.S. Department of Energy and compiled by Pacific Northwest Library. These procedures can be adapted for use in a variety of building types.

The first step in the procedure involves an investigation of the building's existing lighting system.

Managers should obtain architectural and lighting layouts, and blueprints of the office space--and make extra copies, as they will get marked up--and tour the building to become familiar with the lighting and verify the accuracy of the blueprints. Tour both typical and atypical spaces (computer rooms, kitchens, storage areas, and mechanical rooms), and note each area's lighting requirements.

Existing light levels must be measured in all spaces that are being considered for retrofit. Required lighting levels by task type can be found in lighting or electrical handbooks such as the IES Lighting Handbook, published by the Illuminating Society of America. In our case, the actual light meter readings conducted by a lighting contractor confirmed our initial suspicion that the office spaces were being overlit.

Zoning the building

Next, managers "zone" the building by categorizing each space according to its illumination requirements.

Once the data and the task have been entered for each zone, the property manager may want to outline the different zones by color code or letter. For instance, category "A" may comprise office areas, drafting rooms, kitchens, clerical units, etc., and category "B" may be restrooms, enclosed mall concourse areas, stairways, active storage areas, and so on.

Next, managers should determine the type and condition of the light lenses and fixtures. After touring the areas, one begins to notice patterns emerging (e.g., identical lighting systems, task requirements, duration of the tasks, the quality of illumination).

At this point, managers should discuss their walk-through with the on-site staff. Specifically, managers should identify any operational or maintenance problems and discuss with the staff which areas would be most appropriate for retrofit. This sort of communication is critical because the on-site staff has first-hand knowledge of all the building's operations.

At this point, potential lighting costs and savings can be modeled by determining the wattage reduction of the installed retrofits. Before the retrofit, the building's lighting system used energy at a constant rate, operated on a known schedule, and interacted with the other energy streams at a relatively predictable level. Therefore, a change in the connected load can be calculated with some accuracy.


Check your local utility companies to find out what kinds of subsidies they grant for energy conservation retrofits. In our case, the Michigan Public Service Commission's Office of Energy Programs, in cooperation with our local utility company, offered a lighting rebate program to 790 commercial customers in Oak Park.

The rebates covered the purchase and installation of energy-efficient fluorescent tubes, dimmer controls, screw-in fluorescent lamps, reflectors, electronic ballasts, and occupancy sensors. The rebate value was approximately 30 percent (up to a maximum of $4,000 per customer) on the purchase and installation costs of this equipment, and it could not exceed 50 percent of the installed cost.

Comparing this information to the data we had collected from the building, plus the cost per retrofit and the current kWh cost, we constructed the cost/benefit breakdown shown in Figure 1.

Armed with this information, we presented our case to senior management and quickly won approval for the retrofit. Our chief executive officer consented to our plan to finance the project through the use of a rearrangement of budget items and utility incentives.

This was based on two critical assumptions: first, that the State of Michigan consent in writing, before our procurement of this equipment, to our two applications for rebate, as the buildings were separately metered; and, second, that the Oak Park office building would qualify for the maximum rebate of $4,000 for each building.


In order to mitigate any future problems with the retrofits and to ensure that the new lighting system will continue to satisfy our lighting levels, we attached a lighting specification sheet and the manufacturer's warranty to our purchase order.

The State of Michigan also provided reflector specifications, the most notable of which were:


* The contractor shall measure the light level in each space before installing reflectors and shall advise the owner if existing light levels are inadequate and if they would be inadequate after the installation of the reflectors.

* An installed reflector shall provide at least 75 percent of the initial light output without cleaning the diffuser or replacing the tubes.

* Reflectors shall have a minimum total reflectivity of 85 percent, and the specular component shall have at least 80 percent.

* Reflectors shall be easily removable for re-ballasting.

* Each installation crew shall be under the supervision of a licensed electrician.

* The contractor shall furnish the owner with instructions for cleaning the reflectors so as not to harm their finish.

* The contractor may be requested to replace defective ballasts, sockets, etc., at the time of the installation.

* Reflectors must be UL listed under category 15-70, Fixtures, Fluorescent Lighting and Associated Fittings. The contractor must furnish proof of such listing.

* Reflectors shall be warranted, in writing, for labor and materials for a period of at least ten years from the date of installation.

* The specular reflector shall be guaranteed, in writing, not to discolor, fade, blister, peel, flake, de-laminate, crack, ship, or develop any type of surface deterioration that might reduce source image reflectance due to fluorescent lamp ultra-violet emissions or heat (up to 100|degrees~C) for at least ten years.

* The contractor shall test the light circuits by turning the light switch off, then on again, to ensure the bulbs and ballasts function properly.

As an added security, managers should verify a vendor's claims by calling its references. In our case, we obtained a performance guarantee that the existing light levels would not be impacted by more than 10 percent.

Moreover, we evaluated the first retrofit thoroughly under actual conditions before committing to the large-scale procurement, paying close attention to any sensitive changes in lighting levels. And, within two weeks of receiving our lighting rebate application and the original contractor's invoice, we visited the building to verify that the installation had been made according to our specifications.


Despite the relative stability of fuel prices today, energy conservation will continue to be a factor in the operation of any building. In addition, the current economic climate continues to place additional strains upon real estate managers to improve the financial management of their portfolios.

To the extent we are able to reduce and control building operating expenses through lighting retrofitting, we will be able to maximize shareholder value--and conserve energy. Lighting retrofits can predictably and controllably enhance the bottom line of any real estate portfolio.

Paul Stano is a property manager with High Pointe Realty, Mt. Clemens, Michigan. He received a bachelor's degree in finance and real estate from Eastern Michigan University.

Saving Money with Utility Audits

Utility bills represent as much as 25 percent of the expenses of operating a commercial building. Yet, most managers feel that they have few alternatives beyond equipment retrofits for lowering energy costs. After all, most utilities are the only game in town.

While you may not be ready to set up a generator in the building's parking lot, one possible way to lower energy costs is with a utility audit.

In a utility audit, a specialized consulting firm analyzes water, sewer, electrical, and gas bills to find billing errors and discrepancies. Auditors also will make suggestions on more favorable rates that can be requested from the utility. (A common misconception is that utilities automatically bill at the lowest rate; they do not.)

Because many utility auditing firms work on a contingency basis (taking a percentage only when savings are realized), there is little risk to the manager in undertaking an audit. Companies usually require only one or two years of utility bills for auditing purposes, so the time spent is minimal. It is also valuable to look for a consulting firm whose services include negotiating rate changes directly with the utility.

While an audit will not automatically result in a refund or a lower rate, savings can be substantial. This example, supplied by Equitax, a property tax and utility auditing firm in San Jose, California, demonstrates the potential for savings from better rate structures:
 Monthly Before After
 kWh Monthly Avg. kWh Monthly Avg.kWh
 Used Cost Cost Cost Cost
January 4,736 $ 638 0.1347 $ 345 0.0728
February 4,700 633 0.1347 343 0.0730
March 4,330 583 0.1346 317 0.0732
April 4,533 611 0.1348 331 0.0730
May 4,542 513 0.1350 561 0.1253
June 4,051 545 0.1345 509 0.1256
July 3,961 533 0.1345 496 0.1257
August 4,430 597 0.1348 555 0.1253
September 4,016 541 0.1347 504 0.1255
October 4,400 593 0.1348 551 0.1252
November 4,256 573 0.1346 312 0.0733
December 4,053 645 0.1345 297 0.0733
Totals 52,006 $7,005 0.1346 $5,131 0.0987
For the manager looking for innovative ways to reduce operating
expenses, utility audits prove that you can take on the big
guys and win.
Terry Shea is involved in sales and marketing with Equitax, a
San Jose, California, consulting firm that handles utility-bill
auditing. The firm also consults on property tax appeals.

Green Lights Program Update

Now in its third year, the U.S. Environmental Protection Agency's Green Lights program encourages the use of energy-efficient lighting in private and public buildings. Participating companies and groups have been able to recoup an average of 50 percent of their lighting bills--and help the environment at the same time.

Green Lights participants sign a voluntary "contract" by which they agree to establish a institution-wide lighting program aimed at saving energy.

Among the points agreed to by a new Green Lights participant are appointing a program coordinator, conducting a lighting survey at all of its U.S. facilities, upgrading 90 percent of its square footage with energy-efficient fixtures, and educating employees about the benefits of energy-efficient lighting.

In return for their commitment, EPA promises that Green Lights participants will receive a host of benefits from the agency, including decision-support systems, training workshops, computer-based listings of sources for financing, and advertising and marketing materials to help promote their companies' efforts.

Among the lighting products used by Green Lights participants are reduced-wattage electronic ballasts, which reduce wattage with little or no premium costs (compared to standard-wattage electronic ballasts). In one case study, a 500-square-foot office space lit with reduced-wattage electronic ballasts saved 70 percent of its lighting costs.

For more information on the Green Lights program, contact the EPA at 401 M Street SW, Washington, DC 20460; (202) 775-6650; fax (202) 775-6690.
COPYRIGHT 1993 National Association of Realtors
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related articles
Author:Stano, Paul; Shea, Terry
Publication:Journal of Property Management
Date:Mar 1, 1993
Previous Article:On-site management in a post-CFC world.
Next Article:Appealing property taxes.

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