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Looking for savings? Don't waste your energy.

Wring Out the Moisture,

Ring In the Savings

Aunitized air conditioning package, a big solution to a big problem, is readied to be installed atop a superstore roof. As shown in the diagram, the heart of the unit is a gas-fired, honeycomb wheel containing a desiccant. As the wheel slowly rotates, it removes moisture from the return and make-up air before injecting it into the store. These new systems, suitable in all but the dozen or so states where humidity presents no major problem, are supposed to pay for themselves within a year. Retrofitted systems will pay for themselves in less than two years. Gas is used because of its relative economy.

Energy Savings on a

'Makro' Scale

Two and a half years without product loss due to refrigeration failure would be a good record for an average supermarket. For a store like Makro of Atlanta, no product loss among $750,000 worth of refrigerated inventory is a source of immense satisfaction.

Don Dionne, assistant store engineer for Makro, explains, "We've got four times as much perishables inventory as a regular supermarket and our energy management system has brought us savings in energy to go along with product integrity. The system sets priorities on all energy control strategies so that they do not conflict, protecting the equipment and protecting full shelf life for products."

The Atlanta Makro is one of four operated in the U.S. by the 46-store chain based in Holland. The 200,000-square-foot Atlanta store devotes 110,000 square feet to food, in which it carries 37,000 items. The store is cash and carry, catering to small businesses, and to not-for-profit organizations such as schools, hospitals and associations.

By automatically controlling and monitoring 200 tons of refrigeration and air conditioning, as well as heating, the Toledo Energy Micro-System is credited most for its ability to alert personnel before a problem occurs. Dionnne says, "We know before a product loss occurs so we can do something about it. The system can isolate a problem, so you really only have to troubleshoot two or three things at most, itstead of starting from scratch when the system alarms."

Dionne and store Engineer Harry Garland alternately monitor hard-copy printouts every 24 hours, examing the recorded high, low, and average temperatures in the cases so as to spot inconsistencies and head off troubles. If a problem develops, the system is programmed to signal the beeper the person on call carries constantly.

Both men take a portable printer home in order to monitor the system while away from the store. "It gives you a lot of flexibility," says Dionne. "All you need is a telephone and a 110-volt outlet. Without it we'd have to double the staff."

Monitoring the system pays off because the store is better able to attack problems during regular working hours, avoiding premium pay for nights or holidays. About 80% of the mechanical work is handled in-house, with the "sealed system" work farmed out.

Garland says, "This system is almost maintenance-free. We've spent less than $300 on maintenance costs in the two and a half years we've had it. It may be the Rolls Royce of energy systems, but ours has paid for itself four times over already. You need to play with the system when you start up, in order to get temperature ranges correct. But once the system is fine-tuned it's a dream."

Low-Tech Routes:

Negotiate Lower Utility

Rates, Cut Energy Taxes

One way to reduce energy costs is to reduce consumption. Two additional ways are to analyze your utility rates and the taxes you're paying on energy use. You could be paying more than you should.

The first place you may be overpaying is on utility rates. It's a fact that utility rates are not fixed but are negotiable. But the burden to get better rates lies with you. Utility companies are under no obligation to notify you that a more beneficial rate structure is available.

Sarkis Soultanian, executive vice president of National Utilities Service of New York City, a consultant firm that claims more than 25,000 clients worldwide, says, "Too often businessmen attribute their rising utility bills to inflation or those mysterious 'fuel cost adjustments' and then just pay them without question, unaware of the special rate cuts, term discounts and varied rate classifications that are available."

As an example, National Utilities cites the experience of one of its clients, a Florida-based supermarket chain. It was determined that the power and heating load of the chain's various locations was being erroneously computed by the utility. When the error was corrected the result was a $2,000 to $3,000 annual savings for each of the chain's stores.

In another instance, a Midwestern supermarket chain realized an annual savings of $23,000 after it was made aware of a more economical rate schedule that took into account the relatively constant energy needs of the chain. The rate assigned to the chain by the utility was based on the more costly "peak demand" structure.

Also worth examing are charges for gas, oil, petroleum products, water telephone and other telecommunications.

You can, of course, monitor your own costs and then sit down with the utilities and try to negotiate a better deal. But it isn't easy because of the tangle of regulations, rules and special conditions that affect rates.

National Utilities, like most consultants, charges a one time fee for start up of the analysis, and shares in any refunds or savings that it brings about for the supermarket operator. National Utilities works only through the clients and does not deal directly with the utilities.

Savings energy in this way is a worldwide business. National Utilities operates in 10 other countries and says it is achieving savings for its clients on the order of $100 million a year.

Save on Energy Taxes

Another way to reduce costs is to review sales taxes paid on energy. Some 20 states provide a tax exemption on utilities used for manufacturing or production. This becomes an ongoing savings. What's more, you may receive a refunds for up to three years' worth of such exempt taxes that were unwittingly overpaid.

Rules vary, but typically, if 51% or more of a store's activity is devoted to production, the utility sales tax on the energy consumed in such production is exempt. Therefore, the gas used to operate the ovens of an in-store bakery would be exempt from the sales tax as would the electricity used for the meat preparation room. Perhaps 80% of the energy to heat the store's hot water would be exempt and even the "production" portion of the store lighting, heating and air conditioning may be exempt.

Just as with utility rates, you could make this a do-it-yourself project. However, doing so requires voluminous documentation of which equipment uses what kinds of energy, in what amounts, at what consumption rates and for what purposes--probably by hour of the day.

Because of that documentation, you may want to hire a consulting engineer. If you don't, you'll probably have to settle for the tax man's idea of the average exemption for supermarkets or a negotiated, lower figure than you are entitled to.

Kurt Jonsson, president of Value & Energy Consultants of Burnt Hills, N.Y., is one of a handful of such experts saving grocers and wholesalers big chunks of tax money. Jonsson cites a few examples: a 22-store chain that was refunded $38,000 and won an ongoing tax deduction of $16,500 a year; a wholesaler that saved some $38,000 a year for its 60 members, after they shared in a $101,000 refund; and a chain that received a refund of more than $300,000 and then began saving about $50,000 annually.

In some instances a consultant can secure a sales tax refund on the purchase price of production equipment and even on the portion of the maintenance contract that is set aside for replacement of parts.

How do you find such consultants? Shop around. And check with your fellow operators and state associations. There may be real savings to be found.

3-Step Energy Program

Starts at the Top

'The most important part of Marsh Supermarkets' Energy Management Program has no relation to technology whatsoever," says Robert V. Hughes, director of Construction and Retail Maintenance for the Yorktown, Ind.-based operator of 76 supermarkets.

"The primary ingredient in our success has been the commitment by top management to support the program, not only in financial terms, but also in dedicating the manpower it takes to do the job," he says. "Without that commitment our program would be significantly less valuable to the company."

The Marsh program has two high-technology components and one low-tech:

* A microprocessor-based energy management system;

* Installation of capacitors on equipment to improve the power factor and thus gain a lower utility rate; and

* Annual analysis of utility bills to ensure lowest rates. (See accompanying article for details on how to use consultants for this purpose.)

The majority of the program's effort is dedicated to the energy management system package. The system has replaced the electro-mechanical devices formerly used to control refrigeration, heating and air conditioning, lighting, and water heating.

Operating in conjunction with electronic sensors, the system is able to respond more quickly and effectively to changes in demand as they occur, rather than having to depend upon preset parameters based on temperature changes or time of day. The result is energy consumption that more closely matches exact needs and the eliminated of power surges, which result in expensive "peak load" utility rates.

A second benefit stems from the reduction of perishables losses because the energy management system usually detects refrigeration failure in time to prevent product deterioration. Says Hughes proudly, "The empirical data we have demonstrates that we have reduced such perishables losses by 80% since installation of the systems."

Yet another benefit comes from eliminating the need for store personnel to detect refrigeration problems and then contact the central office. The system automatically alerts the office so a maintenance person can be dispatched to correct the problem. Says Hughes, "It is impossible to place an exact value on his capability, but the advantage is self-evident. Presently we are showing a net 16% energy reduction for the stores that have installed the (management) systems. As with our other energy efforts, we expect a payback in three years or less."

A New Capacity for Savings

An often overlooked source of energy savings can be tapped by improving the power factor at which a store's equipment is operated, in order to earn a lower rate per kilowatt hour. "We contacted the power company and requested an analysis of our utility bills, so that they could estimate the potential savings from installing capacitors on electric motors to increase the power factor at which they operate," Hughes says. "These retrofits typically provide us with a deduction of 2% to 5% of the utility bill for each installation. They have an annualized payout of less than three years."

The third component of Marsh's energy program, the annual analysis of utility bills, has brought "significant savings without any capital investment." Hughes says, "The power company will analyze your utility bills with you to indicate the most economical rate for your stores and other buildings. But it is up to you to pursue the best rate structure. They have no obligation to come to you."

Ice Thermal Storage

Makes Sense

The idea is simplicity itself. Make ice during off-peak hours when electricity rates are low and use it during peak daytimes hours to subcool liquid refrigerant, thereby lowering kilowatt demand when electricity costs are high.

Since the ice-making process takes place during nighttime hours with cooler outside temperatures, overall use of kw hours for compressor/condenser operation should decline, bringing a net savings on energy.

And it works. Initial calculations by engineers of the New York State Energy Research and Development Authority indicated that peak demand would decline by 35% due to the off-peak operation, and the overall use of kilowatt hours would decrease by 15%, bringing a net savings of 15% to 20%. Test results were close to their estimates.

"Even with the additional cost for equipment to make the ice, an installation in a 40,000-square-foot Finast store worked out to have a payback period of 3.7 years without a tax credit, or 2.4 years with one," says Ramond Albrecht, project manager for the Authority.

Using a tank size of three tons and operating in parallel with the existing system in case of problems, the supermarket lowered its demand level by 75 kw and reduced usage by 1,811 kwh, saving $2,500 in a year's time.

The store had four 20-horsepower medium temperature compressors with satellites of 5 horsepower and 10 horsepower, and four low temperature compressors of 15 horsepower each. One very low-temp. unit was 7.5 horsepower.

How well the system performed compared to the control store is shown in the accompanying table.

Unequal Parallels

Equal New Savings

'Operating 91 conventional supermarkets, 27 combination stores and 33 superstores is a costly business," says Ralph Mehringer, vice president of facilities and construction for the H.E. Butt Grocery Co. of Corpus Christi, Texas. "A year's energy bill for one superstore might be as much as $310,000. That's why at H.E.B. we are willing to try new technology to cut costs."

The chain's latest efforts, supplementing a comprehensive maintenance program, consist of a microprocessor-based energy management system and a new refrigeration package featuring unequal parallel compressors with enhancements. Following a year's experience, the package promises to generate energy savings of about 16% or $50,000 a year in the company's typical superstore.

Currently six stores have the energy management systems and while the contribution of the systems has not been calculated yet, they are scheduled to be added to all stores eventually.

Each system consists of a keyboarded microprocessor--made by Action Instruments of San Diego--which is housed in the energy management room of the stores, usually on the mezzanine, and a CRT terminal, printer and telephone modem, all located in the manager's office. The system monitors almost 70 pressure ad temperature sensors spread throughout the store.

Dean Calton, mechanical engineer for H.E.B., says, "We had been paying about $40,000 a year for a system totally designed and supplied by an outside source. But they really didn't see all the opportunities available. Besides you end up buying their software over and over again, every time you add a store to the system. So we devised our own system and software and cut our costs by half."

The software takes into account the complete specifications and history of each piece of equipment, with targeted temperatures, maintenance schedules and so on. At any time the system can show actual vs. targets, the status of demand defrost, whether a case is calling for refrigerant, the opening and closing of switches, the status of heaters, lights, etc.

Says Calton, "The energy management system is capable of reacting to actual conditions and needs with far greater flexibility. Before, many control functions were scheduled. Defrost, for example, may have been timed for 40 minutes when conditions only required 30 minutes. Now the system is instructed that "if this is true, and this is true--but that isn't--then do this.' And unlike busy store people, it won't forget. It operates 24 hours a day to stay on top of things."

The prototype unequal parallel compressor package, designed by Foster-Miller of Waltham, Mass., has proved its worth after a year-long test in a San Antonio H.E.B. supermarket.

Davis Walker, project manager, says, "You don't have to be an engineer to see one of the main advantages. Refrigeration packs usually have three equal size compressors. Say there are three 12-horsepower units needed to handle maximum load. When 25 horsepower is called for, all three units must kick in. Two are not enough--but three are too many. So the third constantly keeps cycling on and off. They can respond only in 33-1/3% capacity increments. Obviously this is wasteful--and to make matters worse, there are other, more complicated factors that add to this basic inefficiency."

By using compressors of 5, 10 and 20 horsepower, however, the operation can more closely match demand. The compressors can respond in different combinations with increments of only 14%. Although four compressors could create increments of only 7%, the additional cost is not warranted by the savings.

The unequal compressors are but one of the energy savers of the package. Explains Calton, "The name of the game in efficient refrigeration is to keep the suction pressure high. This system does that exceedingly well. It keeps condenser pressure low, too. And it subcools the refrigerant by taking advantage of the ambient outside temperature differences."

Calton likes the unitized construction of the compressor package because "it installs easily on the roof, out of the way. And the unit can be prebuilt and wired offsite, a great time saver when a store is undergoing construction."

His final tribute is something unheard of only a few years ago. "So complete and reliable is the heat reclaim that no backup systems of any kind are needed for hot water and space heating."
COPYRIGHT 1984 Stagnito Media
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Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Title Annotation:ways to cut energy costs
Publication:Progressive Grocer
Date:Dec 1, 1984
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