Energy management: From audit to implementation

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Through reducing its energy consumption HEI Hotels & Resorts is saving an estimated US$5 million annually. Vice president of facilities and Total Facilities 2012 speaker, BOB HOLESKO shares how his team accomplished this feat and how it is further enhancing installed programs.

Looking back at where HEI Hotels & Resorts’ (HEI) energy conservation program began, compared to what it has become, I realise that I became part of the ‘perfect storm’ for hotel energy conservation. ‘Perfect storm’ is an expression that describes an event where a rare combination of circumstances come together, resulting in an event of unusual magnitude. HEI’s rare combination of events included:

  • acquiring hotels in need of energy conservation upgrades
  • having access to capital, and
  • having the freedom to implement change.

In 2006, I attended the annual Lightfair International Expo in New York City. During a lunch break with my entire team of energy conservation consultants, suppliers and installers, I challenged them all by saying, “HEI needs to win the Energy Star Partner of the Year (POY) Award as soon as possible.”
Winning the award would mean more than helping the environment. It would mean that HEI had developed and implemented a program that was effective, measurable and had proven results. Of course, doing so required not only coming up with the program, but also getting the program endorsed by the ‘C’ level leaders at HEI – chief executive officer, chief financial officer and chief operating officer. It was no small task, but I knew my team and I could make it happen.
In 2009, we won the Association of Energy Engineers (AEE) Award for Corporate Energy Management of the Year. We were the first hotel company to win that award since Marriott won it in 1978. The next year we won Energy Star POY. Our goal had been met. But why stop there? Every aspect of our energy conservation program was effectively saving energy, preventing pollution and saving millions of dollars each year. We kept at it and went on to win POY again in 2011 and Energy Star’s highest award, Sustained Excellence, in 2012.
Building one of the most successful energy conservation programs the US hospitality industry has ever seen may have been simple, but it was not easy, nor did it happen overnight. Key elements of the program included:

  • reliable data and benchmarking – results had to be measureable
  • upper level commitment – executive level leaders at the company had to buy into the program and supply the capital
  • proven technology – while risk can be good, going with what was known to work provided guaranteed results
  • effective implementation of both the capital projects and operational programs, and
  • rewarding success – incentives helped to get the necessarily support from the chief engineer and hotel department heads.

Step one of implementing the program was for HEI to join Energy Star in 2006. This allowed use of Energy Star’s Portfolio Manager Program for hotel-by-hotel benchmarking through use of utility data.
This benchmarking supplied the hard data and performance results needed to sell the investment rational of energy conservation capital projects to ‘C’ level management. The net present value (NPV) discount rate had to exceed 20 percent in order to get that buy-in.
In 2005, HEI had already performed lighting retrofits on nine hotels. Using the Portfolio Manager Program, I could show that this initial round of lighting retrofits delivered a 33 percent return on investment (ROI). That made it a slam dunk as an investment. From then on I had nearly guaranteed approval on any project that delivered an estimated three-year ROI or better. This set me up nicely for step two.

Step two, which began in 2007, was the aggressive implementation of proven energy conservation capital projects. Many of these projects were augmented with utility supplier and state-funded demand side management (DSM) rebate programs. Energy conservation measures (ECMs) and projects that were implemented portfolio-wide – commonly referred to as ‘low-hanging fruit’ or ‘no-brainers’ – included:

  • lighting retrofits – T-12 fluorescent tubes with magnetic ballasts and incandescent exit lights and bulbs were replaced with T-8 tubes with electronic ballasts, LED exit lights and compact fluorescent (CFL) bulbs
  • guestroom thermostats – the replacement of non-programmable stats with programmable stats
  • variable frequency drives (VFDs) – installation on applicable systems with motors 10HP or greater
  • HVAC (heating, ventilation and air-conditioning) controls – energy management system (EMS) software upgrades, and heating and cooling outdoor air reset controllers, and refrigeration and heating equipment control upgrades
  • window film (a rebate-driven project), and
  • miscellaneous initiatives such as the installation of photo cells, motion detectors and timers on lighting systems, plastic strip doors on walk-in coolers and freezers, and high quality scales to weigh loads in the laundry to maximise the efficiency of the equipment.

These items became known as HEI’s Standard Energy Conservation Capital Package and are implemented as needed at all new HEI hotel acquisitions. A major benefit of this methodology is the bundling of projects since, when measured as a stand-alone project, many of the HVAC-related items – and especially the window film projects – have an ROI of more than four years, but, when bundled as part of a package, they hit the three-year ROI threshold. A simple rule of thumb is that any project teamed with a lighting retrofit sells more easily.

The final steps that completed HEI’s ‘perfect storm’ energy conservation program were targeted operational programs, awareness and incentives. Now that I had great benchmarking data, C-level support and a robust capital commitment, the missing link was to bring it all together from an operational standpoint.
At HEI we never stand pat and are always looking for ways to improve our hotels’ financial performance and reduce our carbon footprint. For example, now that we have replaced all applicable 100-watt incandescent bulbs with 18-watt CFLs, we now want the hotel staff to turn off the 18-watt CFLs.
The main operational enhancements implemented companywide include:

  • an energy dashboard – we developed a custom dashboard, trademarked as the Energy Looking Glass or ELG, that allows our chief engineers to monitor energy use daily
  • our FAB 4 Incentive Program – we identified the key energy consuming department heads (chief engineer, executive housekeeper, executive chef and banquet managers) and developed an incentive that instilled an energy saving culture that was lacking, and
  • our Energy Set Point (ESP) Program – we developed a program that certifies the optimum operating parameters for all key energy consuming set points, such as domestic hot water supply and chilled water supply; each hotel can have a few dozen ESPs to monitor.

In closing, key to HEI’s success was the performance, buy-in and commitment of our hotel chief engineers. These are the guys that make it happen and are responsible for steering the ship through the ‘perfect storm’. Without their dedication we would not have been able to reduce our energy consumption 20.2 percent companywide since the programs began back in 2005.

Bob Holesko is the vice president of facilities at HEI Hotels and Resorts. In his current position with HEI, he is responsible for 40 upscale branded hotels totalling nearly 930,000 square metres (10 million square feet) of space valued at US$2.5 billion. Since 2005, Holesko’s programs have drastically reduced energy consumption at HEI, saving an estimated US$5 million annually. He is a certified energy manager and a certified energy auditor.

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