MARLAND: LEADS IN ENERGY CONSERVATION
Marland has made significant strides in reducing energy consumption and cost. Beginning in late 2003, Bob Overly, Plant Engineer, initiated a series of steps that have not only reduced the overall consumption of electricity, but have also reduced the price paid for each kWh (kilowatt-hour). Presented below is a description of our progress through November, 2007.
Lighting
We built our building in 1999 when we weren’t as concerned about energy consumption as we are today. Starting in 2003 our first step was to eliminate redundant lighting. Office space in particular had more lumens than required and we went about eliminating bulbs from our 4-bulb fluorescent fixtures. We let everyone have control of this effort so that the people working in a space determined the level of illumination that was appropriate.
There were opportunities in the production area as well. A grid of 400-Watt metal high-lit fixtures was installed throughout the manufacturing space when the factory was built, but before the equipment locations were established. Where the quality lab was built in the center of the manufacturing space, for example, there were lights doing nothing more than illuminating the roof of the lab. These lights were removed from service. These efforts saved an estimated 253,232 kWh per annum.
Reducing Peak Demand to Lower Rate
The reduction in redundant lighting reduced mean daily consumption by 25.4% and brought Marland below the 350 kW peak demand threshold that qualified us for the lower G2 rate where previously we were charged the higher T2 rate, a savings of 14% on what we are charged for all electricity employed. To retain the lower G2 rate Marland had to have a mean peak demand for any 30-minute period below 350 kW. The G2 rate went into effect in January, 2004.
Managing to Stay Below the 350 kW Threshold
When we qualified for the G2 rate we were concerned that we had very little margin to stay under the 350kW demand rate threshold. This would be a particular problem when the warm weather returned and we had to employ air conditioning to maintain a controlled environment and as we grew the business.
Marland uses a lot of compressed air. We were employing an older generation 40 HP piston-driven compressor as our primary compressor and a 50 HP rotary screw compressor as backup. We received help from our electric company, Western Massachusetts Electric, in the form of a grant and low interest loan. Working with our vendor, Air Compressor Engineering of Westfield, MA, we were able to replace the 40 HP piston compressor with a new 25 HP rotary screw compressor with VFD (variable frequency drive) and to rebuild and upgrade our existing 50 HP rotary screw compressor and equip it with VFD.
Employing the new 25 HP rotary screw VFD compressor as our primary source of compressed air saved Marland approximately 30,768 kWh/annum. At current rates, this saves Marland an estimated $3,500/annum for a net outlay of $13,000. This translates into a 27% return on investment, exclusive of repair costs on the older equipment and enhanced reliability of the new.
The greater savings, however, was that reducing overall consumption by 30,768 kWh/year enabled Marland to meet increases in demand due to air conditioning and business growth without crossing the 350 kW peak demand threshold.
The graph below indicates the success of our efforts at energy conservation that began in October 2003. Our costs for electricity at the peak month of 2007 are less than they were in the peak month of 2003 in spite of the significant growth in our business and multiple rate increases.
Peak Shaving
As the spring of 2005 approached our apprehension grew as to whether we could stay under the 350 kW peak demand threshold as air conditioning season began. We contacted Climate Heating & Cooling of Pittsfield, MA to see if they could come up with any recommendations. They were extremely helpful.
Under the guidance of Climate Heating & Cooling we took an old laptop computer and they programmed the computer to monitor real time Marland’s electrical consumption and to calculate the mean peak demand. If the computer determines that Marland is at risk of exceeding the peak demand threshold of 350 kWh, it will send a signal to switchgear that we installed for this purpose and shed non-critical loads and/or turn on our emergency generator. The 150 kV emergency generator is powered by natural gas and is more than 20 years old but is in good condition.
The total cost for switchgear, cables and programming was $7,500. This peak shaving strategy equipped Marland to stay below the peak demand threshold well into the future, even allowing for generous growth in our business. The success of our peak shaving is illustrated below.
You will note that we crossed the threshold once in 2007, but that was due to an error on the part of the electric company and so we did not lose the G2 rate.
2005 Continuing Effort
Energy conservation continued in 2005 with the following additional initiatives:
- Marland has 2 heated cleaning tanks for cleaning of parts. The heaters for these tanks are now turned off over the weekends.
- There was only one lighting switch for the manufacturing area. The area is now zoned so that we illuminate only those areas that are in service.
- Installed electrical timers and insulating blankets on 2 hot water heaters.
- Operate our heat treat ovens at off-peak times when ever possible.
2006 Projects
We replaced all the metal high-lit fixtures in the production area during the first quarter of 2006 with modern high efficiency fluorescent lighting. We were assisted with a grant from Western Massachusetts Electric. This was completed in the first quarter of 2006 and generates savings of an estimated 217,000 kWh.
Future savings will not only come from the reduced consumption for lighting, but the metal high-lit lamps gave off tremendous heat that had to be taken away during the summer with air conditioning. It is estimated that the new lights will require 40 tons less air conditioning than those previously in use.
2007 Developments
There are new developments on the energy front of significance in 2007. There are two major categories of charges appearing on our electric bill: Delivery Charges & Supplier Charges. The Delivery Charges are set as a matter of regulation. We have managed to maintain the lower G2 Rate through peak shaving and this saves us about 14% on the Delivery Charges portion of our bill or about $8,400/annum.
The rate paid for the Supplier Charges portion of our bill is based on the contract that we are able to negotiate. Marland pays $0.0749/kWh currently under a 3-year contract which expires in early December, 2007. We have negotiated a new 5-year agreement with Constellation Energy that establishes our rates as follows:
Period Rate Capacity LFR Total
12/07 – 12/12 $0.0956 $0.0100 $0.001 $0.1066
The Capacity and LFR charges are added to the contracted energy rate charge that is fixed. The Capacity charge is based on the maximum demand Marland has for electricity. The LFR charge (Locational Forward Reserve) is in essence a tax established through regulation to encourage the development of additional capacity. Inasmuch as Marland peak shaves and maintains maximum demand below 350 kW, we elected to not seek contractual guarantees for these rates as we believe that this will be the less expensive option.
The combination of increases raised our Supplier Charges from $0.0749 for 2007 to $0.1066 thru 2012, a 42% increase or about $40,000/annum. The good news is that the contract will put a lid on major increases for the next 5 years. It is also important to keep in mind that our earlier investments in energy conservation reduced our overall usage by about 500,000 kWh/annum which now translates into annual savings of $75,000 inclusive of all charges.
We have signed a contract with DemandDirect to participate in the Independent System Operator New England (ISO-NE) Load Response Program. This is an organized effort to avoid problems when the New England energy grid is over loaded. Marland agrees to reduce energy consumption by a predetermined amount upon 20 minutes notice. In return, DemandDirect will pay Marland the monthly amount indicated below for the periods as shown:
200 kW Monthly Payment Period Covered 300 kW Payment
$549 11/1/07 – 5/31/08 $824
$675 6/1/08 – 5/31/09 $1,013
$738 6/1/09 – 5/31/10 $1,107
Marland agrees to respond within 20 minutes of receiving a call from DemandDirect to reduce our energy consumption by 200 kW. In addition to the monthly payment, Marland will be paid $.50 for each kWh saved during the energy reduction period. The history of the program indicates that we will be called on hot summer afternoons and are likely to be called only once or twice a year. In the event that we are not called in a given year, there will be a test call just to insure that the system is working and that the participants are meeting the terms of their participation.
We are purchasing a used diesel generator of 280 kW for an installed price in the vicinity of $35,000. This will allow us to achieve three goals:
- We will continue to be able to peak shave and have redundancy with our existing 150 kW generator so as not to exceed the 350kW threshold due to mechanical failure of the generator.
- We will be able to increase our participation in the DemandDirect program from 200 kW to a max of 300 kW and thereby increase our monthly payment as illustrated above. The larger capacity and redundancy insures that we will be in compliance with the terms of participation for the ISO-NE Load Response Program for the foreseeable future without loss of productive time.
- We will be protected from localized power outages that occur (particularly in the winter) so that we will avoid having to close the shop. Payroll per day is in the order of $8,000 and we will be able to fully function during any such emergency employing both the current 150 kW and the new diesel generator set.
It should be noted that the additional revenue for the increased participation from 200kW to 300 kW will pay for the additional generator.
Savings to date total in excess of 500,000 kWh per annum. Combined with the lower G-2 rate we are charged for all electricity employed, Marland is saving approximately $80,000/year. As we grow and as prices rise as they are expected to, these savings are expected to grow each year. The chart below reflects both growth in sales and the reduction in the use of electricity.
Cumulative electric energy savings are in excess of 500,000 kWh/annum which helps to decrease greenhouse gases and environmental damage by the following amounts each year:
- 680,000 pounds of Carbon Dioxide
- 1,956 pounds of Sulfur Dioxide
- 735 pounds of Nitrogen Oxide and
- 3,569 mg of Mercury
We took energy consumption into account as we replaced the five company-supported vehicles this year. Marland leases two cars, pays for two others through auto allowance payments and owns one van. The two leases ran out this past year. One of the replacement vehicles is a hybrid obtaining mileage 42% better than the vehicle it replaces. The other lease car obtains mileage 15% better than the vehicle it replaced. One of the auto allowance cars replaces a pickup truck and obtains mileage 50% better than the pickup. The other auto allowance car gets 9% better mileage than the vehicle it replaces.
The new van obtains gas mileage 8% better than the vehicle it replaces. Based on the miles we drive, we estimate that we will use 740 gallons less each year with this array of vehicles than the vehicles they replace. This translates into 3,950 pounds less carbon dioxide we contribute to greenhouse gases.
We will continue to look for ways to improve upon this record. We have been asked why it is that we are so willing to share our strategies for reduction in energy consumption with possible competitors. The answer is simple – the more people work together to reduce greenhouse emissions the better off we all will be.
Written by:
John A. Barmack
President/CEO
January 2008