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Demand Savings in Commercial Buildings

As energy experts, we work to help our customers take charge of their energy usage and costs. By understanding the history in the Ontario energy industry, it is obvious that rates will continue to increase. When it comes to controlling operating budgets, it is important to reduce the demand for gas, hydro and water as rates are a lot more difficult to control. Most of our clients have retrofitted to LED lighting and they have pursued some sort of energy management plan but in most cases, there is money left on the table.

By analyzing your historical usage information, an energy expert can compare your current energy usage to benchmark information available, find incentives and audit your energy bills to find potential billing errors, verify that you are not being charged any hidden penalty fees, and search for more complex savings opportunities.

One important energy cost that many apartment building managers overlook is the power factor on their hydro bills, especially because they don’t know where to look and are unsure how it affects them. Most utility companies do not show these chargers clearly but the charges can range from hundreds to in the thousands of dollar per billing cycle of unnecessary charges.

Electric motors require reactive energy to start moving. Most local utility will allow for 10% of this reactive energy as part of the total usage, this means you will not be surcharged if the power factor stays above 90% (note: Toronto Hydro penalizes for anything less than 100%). When the power factor dips below the threshold you will be billed based on the lowest power factor during the billing cycle. Fortunately, there are easy cost efficient ways to correct your power factor, using devices called power factor correction capacitors, and the payback will start instantly because you will no longer get surcharged for the reactive energy you are now storing within your facility’s electrical system. These conditions especially apply to building with electric heaters, chillers, heat pumps or geothermal systems, as these buildings have a lot of compressors and pumps starting and stopping continuously, therefor requiring lots of reactive energy.

HVAC equipment (boilers, chillers, fans, pumps, etc) is one of the largest assets in your building; a typical apartment buildings HVAC equipment will be worth approximately $500,000. One question that everyone apartment building manager needs to know the answer to is: What controls my HVAC equipment? It is very common to have an aging Building Automations System (BAS) or perhaps only local controls. A fully functioning BAS system or simple recommissioning can save as much as 30% in the first year, by ensuring systems work as they were intended to, this provides an amazing payback period and increased tenant comfort. There are incentives available for both installing a new BAS and recommissioning the existing controls.

Update: New boiler efficiency requirements effective January 1st, 2017. The new building codes requires the usage of boilers and water heaters that are 10-13% more efficient than previously required, the following table outlines the requirements as stipulated by the Ontario building code:

This means that it is even more important to engineer replacement of boilers properly, replacing an older style atmospherically vented boiler with a condensing boiler may require different piping configurations and controls, and, if these items are not considered, boiler longevity and performance may not be as desired. New boilers is also increase tenant comfort, reduce maintenance and allow integration to advanced automation systems. Another reason to use condensing boilers is that the gas distribution companies have improved their incentive programs for them, increasing the value of the incentives available. Replacing that old inefficient boiler with a new and improved piece of equipment has never made more sense.

The scenarios listed above can all be identified using an energy audit. The local utility company sets the standards for what is required in an energy audit report and will fund the report up to 50% of the cost of the audit. The incentive available is based on the square footage of the building and will provide you with invaluable information on how to improve your building efficiency, save money while improving tenant comfort. The information in the report will also help you set up to better understand (future) mandatory benchmarking requirements that will soon be implemented by the Province of Ontario.

With a passion for energy conservation, Per Polderman, CEIT, serves as a senior account manager at Mann Engineering Ltd. For close to 30 years the leading energy management company specializes in comprehensive energy audits, engineering reviews, HVAC design/build and retrofit needs. He can be reached at 416-550-3275 or via

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