Consider Incentives for Existing Buildings, Too

Consider Incentives for Existing Buildings, Too
Further Tax Credits for “Green Buildings” and Senate File 2046

This past week the Business Record published an article by Bill Dikis regarding green buildings for healthy initiatives and tax credits for LEED Certified buildings. Different levels of LEED “benchmarking” would result in higher percentages of tax credits. It is important to note that while most people’s perceptions are that to become a LEED building, it has to be designed and built that way. However, there are also LEED benchmarks available for existing buildings that are updated or retro fitted to improve their use of “natural resources”.

Two well-known Des Moines examples are the new Blue Cross Blue Shield facility which received the highest level LEED benchmark for a new structure, and the rehab of our old library, now the World Food Prize building, which also achieved the highest rating of Platinum for an existing structure. Both buildings earned these ratings through many hours of engineering and design work through talented architects like Mr. Dikis, and many hours of filling out extensive forms and paperwork to receive the rating.

Certainly these buildings deserve some extra incentive to help justify the time, expense and efforts to attain this rating. A LEED building is designed and built in a manner which should result in decreased operating expense, with a reasonable payback over a “standard” building. However, the task of retrofitting a building and the actual application process has become a disincentive for many building owners to undertake the task.

The EPA also has a benchmarking system for existing buildings based on energy usage. The process is comprised of a building survey to determine which measurement factors the building will be compared against. For example, the type of building, the number of computers in use, the location, and size are a few of the details gathered on the survey. Then the past 12 months of energy use (gas, oil, electricity) are submitted with the survey. The building is then compared against other buildings in a similar climate, type, etc., and then a cost per square foot determines the ranking. Any building rated 75 or higher (meaning on a scale of 0-100, the building ranks in the 75^th percentile or better than similar buildings), qualifies for Energy Star designation. This is very similar to the Energy Star you see on appliances and electronics. Once that rating is achieved the building can be submitted to officially receive that designation from the EPA. The final step is to print off several forms and the report, and have them reviewed and certified by a Professional Engineer. These are then submitted to the EPA and in a few weeks the facility receives official approval and a plaque to post.

A much more simple process, but it still identifies a facility that is operating efficiently, also using less of our natural resources. While it does not necessarily mean it is a healthy building like a LEED building is designed to be, and does not take into account all the qualifiers that a LEED building must utilize, it does offer a more palatable process for most building owners to improve or maintain their building. While the benefits of an Energy Star building are less pollution, energy use, and the resultant cost savings, would a tax credit be appropriate for Energy Star rated buildings be warranted? More often than not, HVAC maintenance, controls and lighting can often have very short capital payback and long term energy savings. That alone might be enough justification. If Senate File 2046 rewards a LEED building, which also receives payback on operating costs, should an Energy Star rated building be included? Interestingly the Energy Star rating is only for a 1 year period, which means each year it is reevaluated to make sure it is still performing at 75% or higher against other similar buildings. That by necessity means the building must continue to be properly maintained and as new more efficient technology becomes the standard, the building must “Keep up with the Joneses” to retain their rating.

While minimizing energy use and the carbon footprint is the right thing to do for our environment and health, often the decision is an economic one. The fact that buildings use a very large percentage of our total energy and may be one of the easiest to “fix”, should we apply a little extra nudge in a tax incentive to help justify improvements and equipment maintenance?

Stroh Corporation Receives Leading GreenSTAR Designation

Stroh Corporation has been approved by the Mechanical Service Contractors of America (MSCA) as a GreenSTAR energy solutions provider.

Barbara Dolim, LEED AP and Executive Director of MSCA explained the value of the GreenSTAR designation stating, “This designation clearly demonstrates a company’s commitment to energy solutions, sustainability and environmental responsibility.” This exclusive designation is truly an accomplishment that is only awarded to contractors after careful review and criteria have been met. Ms. Dolim noted that there are only 48 companies in the nation that have received this designation and Stroh Corporation is currently the only one in the state of Iowa.

“This is a further testament to the expertise and forward thinking of Stroh Corporation”, stated Bob Blaskovich, General Manager of Stroh Corporation. “Receiving GreenSTAR designation shows that we are devoted to our customers and our environment through sustainability and energy savings.”

Stroh Corporation is a premier commercial service provider founded in 1935 specializing in mechanical, electrical, plumbing and energy services throughout Iowa and Nebraska. 

Contact Stroh Corporation to discuss how we can help save you money and reduce energy consumption in your facility.

Building Comfort – The Cold (and Hot) Facts

Most people are unaware of the complexities of the systems that provide “comfort” in a building environment.  When you arrive on a hot summer day, the interior space is cooler and less humid, providing a comfortable experience. Likewise on a cold winter day you rush into the building from the biting cold winds, where some magical invisible equipment is keeping the previously cooled summer environment now warm and toasty.  Without a second thought, you proceed on your mission in a much more comfortable environment.

However, behind the scenes is a very complicated system of sensors, controls and highly technical mechanical equipment working hard to provide that seasonal comfort. This equipment is far more complex and costly than a standard residential type furnace and air conditioner installation. While new systems become more and more efficient, the latest U.S.  Department of Energy report assigns 41% of a building’s energy use to heating, ventilation and cooling!

Further, just like any other piece of mechanical equipment, it is slowly wearing out as it runs every day, 365 days a year. While buildings last decades, average replacement age of this equipment (commonly referred to as HVAC) is 12.1 years.  R.S. Means (which is the standard “manual” for estimating building costs) pegs the cost of HVAC equipment at $400,000 for a typical 50,000 square foot facility! So in that facility you are effectively using up over $33,000 worth of equipment, or 1/12^th the cost of replacement for that equipment. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) identified 8 specific areas of Owning and Operating Costs tied to indoor comfort. This includes the above equipment capital and energy costs, as well as repairs, maintenance, labor and lost productivity. Obviously this emphasizes a real need to pay attention to this equipment!

Once the equipment is installed, it needs regular care and maintenance just like a car, production machinery or any other asset that wears out.  Mechanical contractors, like many other building trades, have been hit hard by the recession and some have moved towards offering maintenance services to stay afloat. Unfortunately maintaining a highly technical piece of HVAC equipment is far different than installing a factory fresh system running at peak efficiency! There are several levels of quality services operating today, and few standards exist to help a facility manager or owner select a firm qualified to maintain their HVAC equipment. There is much more involved than changing filters, drive belts and lubrication. Improperly maintained equipment wears out faster, uses more energy and breaks down more often, costing more for replacement parts and loss of productivity.

At a recent talk at a national meeting of the Mechanical Contractors Association of America, the speaker stated that, “Every dollar in a maintenance contract should yield $3 in repairs, except for full maintenance contracts, which should have fewer repairs if the contractor is doing his job.” The typical business model of most mechanical contractors fits this model by design. They make money when something breaks and they are called to repair or replace the item! The incentive is not to spend the necessary time to adequately maintain the equipment, as specified by the manufacturer.

A much better business model is one designed to provide incentive for the contractor to avoid breakdowns and replacement or repair costs. If the contractor assumes liability for all repair or replacement costs, he makes money by maintaining the equipment properly; this not only extends the useful life of the equipment, but also reduces energy usage and downtime.  In addition to the benefit of saving money, it is also good for the environment. As a reminder – saving money goes right to the bottom line, meaning profit!

So how can a building owner or facility manager select the right provider of maintenance services? According to an article in Contracting Business, Earl King discussed how different methods of pricing can indicate the quality of a contractor’s service. Since all contractors within a region have to pay their service techs about the same, parts and materials, trucks, gasoline, etc., cost about the same, variations in pricing are simply a time calculation. If one company is priced disproportionately lower than another company, less time must be being spent on the equipment.

Studies have shown that in the overall life of the equipment, full maintenance saves money versus the typical repair or replace when it fails type maintenance contract. A contract where the company assumes full responsibility for the equipment will naturally cost more than a contract where the maintenance company is “off the hook”, and is able to bill for additional services when a breakdown occurs. The true measure is a comparison of the 8 areas identified by ASHRAE between the two models.

Ask your contractor how long have they been in business, how long have they been performing maintenance contracts, what is their customer satisfaction rate, have they received any recognition from a related national  organization and will they assume responsibility for all repairs and replacements of equipment? That will help you separate the companies that know maintenance from those who use it as a filler between construction jobs.

Tips On Preparing Your Building For The Cooler Weather

You survived the grueling hot summer, but are you ready for the winter?  As the fall colors begin to show, now is the time to prepare your buildings for the impending colder weather.  A few areas to think about as we head into winter would include the following:

• Perform a mechanical inspection on the heating equipment.  Is your equipment ready to safely and efficiently run throughout the winter?
• Adjust or install timers or sensors to meet the changing daylight times.  Make certain outside lights are set up for the shorter periods of daylight in order to provide safety lighting for your employees and customers.
• Check all outside wall hydrants and fixtures that need to be shut down or adjusted in order to avoid freezing that could lead to broken pipes and damage to your building. This includes removing all garden hoses from the fixtures.
• Install snow and ice melting equipment. There were numerous companies affected by snow and ice damage last year.  Avoid costly repairs by updating rooftops, downspouts and gutters before the problems begin.

Winter will be here before you know it.  Now is the time to contact Stroh Corporation to prepare your facility for winter. Call to set up an inspection today at 800-243-8177.

Kick Your Building Into Shape By Reducing Energy Consumption

As the EPA kicks off the 2011 Energy Star National Buildings Competition, now is the perfect time to kick your building into shape. One of the largest areas you can reduce waste and save money is on energy consumption.

Before you get started, it is important to understand how your building is currently using energy. There are three things you should know about your building's energy use:

1.       How much energy does your building consume in a year and how much does it cost you?

2.       How does this compare to other similar buildings?

3.       What opportunity is there to improve the energy efficiency of your building and save you money?

Stroh Corporation has the ability to perform an Energy Benchmark on your facility.  We take a look at your past energy consumption and compare this to similar buildings across the nation.  This process takes into consideration the outdoor climate, the use of your building, and a number of other factors to calculate your Energy Benchmark Score.

We can use this information to determine how much opportunity your building has to save energy and save money.

For more information on Energy Benchmarks, contact Stroh Corporation at 800-243-8177.