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Utility rebates add to owner bottom line.

Utility rebates add to owner bottom line

Local utilities have been offering cash compensation to commercial users who reduce their power consumption. Rebate programs across the country have helped the utilities to limit growth in peak demand for electricity. Through energy management, the utility avoids building costly new power plants and building owners and facility managers significantly reduce their electric costs while collecting rebates.

Saving energy can be accomplished in several ways -- both through proper maintenance and rehabilitation of existing facilities and through advance planning of newly constructed buildings. Periodic replacement and upgrading of inefficient hardware and equipment can conserve electricity and result in energy savings and paybacks. Several areas on which to focus are lighting, motors and air conditioning systems.

Various utility programs offer generous rebates for replacing inefficient lighting elements--fixtures, ballasts and bulbs--with energy saving products. Hardware rebate programs are being offered by about one-third of America's 3,237 utilities and energy cooperatives. Considering the number of light bulbs that are used in an office building on an annual basis, a considerable amount of money could be saved.

New products are available on the market that may be more cost-effective than what is presently being used. In New York City, Con Edison's rebate program pays $1.80 for replacing a 4-foot F40 fluorescent lamp with a new lamp that is 34 watts or less and $3.50 for replacing the same lamp with a 32 watt F32T8. If the building replaces an 8-foot (F96T12HO) with a new 95 watt or less lamp, the rebate is $5 per lamp.

Utility rebate programs also offer paybacks for the replacement of old motors with newer energy saving equipment. For instance, new motors can amount to an overall building energy reduction or savings of 4 percent if efficiency levels qualify. In addition, new high efficiency motors, used to drive pumps and chillers, have adjustable speed drives that can save electricity. The rebate for systems using adjustable speed drives of motors up to 30 Horse Power is $160 per Horse Power.

Updating of air conditioning systems is another energy saving opportunity that is covered by many rebate programs. For optimal efficiency, air conditioning systems with high Electric to Energy Ratio (EER) should be installed. The higher the ratio number the more efficient the machine and the greater the rebate.

Minimum EER with a ratio of 8.6 is awarded a rebate of $100 per ton; a EER of 9.2, a rebate of $160 per ton. An air cooled condensing unit with a EER of 10.0 can obtain a rebate of $40 per ton; EER of 10.4, $70 per ton.

Rebates are also offered for replacement of chillers, either electric-driven, steam-driven or gas-fired equipment. The less kilowatts per ton that the chiller uses, the higher the rebate. The potential pitfall for owners lies in the selection of products and equipment, which can be expensive but do not always live up to the manufacturers' promises. Prior to purchase, the facility manager with technical assistance from the consultant should obtain test results from the manufacturers. A formal study is required to be conducted by a qualified engineering consultant to determine the right equipment for the building.

Many utilities subsidize the cost of the engineering study. Con Edison pays up to $15,000 for studies that have received prior approval from its office.

Harry Spring Partner Wank Adams Slavin Associates, New York
COPYRIGHT 1991 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Energy & Conservation Supplement
Author:Spring, Harry
Publication:Real Estate Weekly
Date:Sep 18, 1991
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