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July 2007
Power Play

By Janice Cha

Commercial kitchens can deliver a blaze of speed and power in short amounts of time. But like your typical Hummer, those same kitchens hardly serve as shining beacons of energy efficiency.

Just how much energy are they burning through? A typical restaurant uses five times more energy than a hotel, office or retail building, according to the National Restaurant Association. And just where is the power used? The biggest chunk of the energy, as you might suspect, goes toward food prep and cooking, at 32%. The next largest amount goes to space heating and cooling, followed by lighting, refrigeration, water heating, and "other," which includes kitchen exhaust.

Utility companies love the fact that they can sell the foodservice industry so much juice. But at the same time, ever-increasing demand in many areas has stretched the power grid beyond its capacity to produce and deliver. State deregulation has caused electric prices to skew wildly by market. Natural disasters such as hurricanes Katrina and Rita brought havoc to power supplies almost overnight. And building new power plants to meet demand is an expensive, difficult and long-term solution.

Utilities Revise The Message
This is why utility company leaders, including such industry notables as James Rogers Jr., CEO of Duke Energy Corp. and president of the Edison Electric Institute, have begun referring to energy conservation as the "fifth fuel." Powering down by itself can conserve enough energy that we rely less on coal, natural gas, hydropower and nuclear fuel, the thinking goes.

And the energy-conserving "fifth fuel" idea has gained national traction in some very high places. In July 2006, the U.S. Department of Energy and the Environmental Protection Agency led dozens of utilities, major energy users and regulators in creating a National Action Plan for Energy Efficiency, a plan that promises to address the rate-structure problem in states where it still exists and promote energy efficiency through resource planning and conservation. Rather than build a new 500-megawatt power plant, for example, states would try to reduce demand by 500 megawatts more cheaply and without environmental harm.

"It's a real paradigm shift," says Don Fisher, manager of Pacific Gas & Electric's Food Service Technology Center, San Ramon, Calif., and a 20-year proponent of energy-efficient foodservice equipment. "It's groundbreaking in the sense that utilities are shifting from a load-building culture to an efficiency culture." Watch the news and you'll see more and more utility companies rolling out efficiency initiatives. At the beginning of June, Progress Energy Carolinas, the utility serving parts of the Carolinas and Florida, announced a goal of displacing 2,000 megawatts of power generation through demand-side management and energy-efficiency programs. In meeting this goal, the company plans to double the approximately 1,000 megawatts currently being saved with existing programs. The extra 1,000 it saves would be equivalent to the power generated by more than six combustion-turbine power plants.

Nowhere, however, is the efficiency culture stronger than on the West Coast. Last year California Gov. Arnold Schwarzenegger signed A.B. 32, the Global Warming Solutions Act that commits the state to "reduce its global warming emissions to 2000 levels by 2010 (11% below business as usual); to 1990 levels by 2020 (25% below business as usual); and 80% below 1990 levels by 2050."

Also in '06, the California Public Utility Commission directed the state's four largest investor-owned utilities—PG&E, Southern California Edison, Southern California Gas and San Diego Gas & Electric—to collaborate in creating statewide initiatives to cut back on energy use. That's a little like telling General Motors, Ford and Chrysler to work together to get their customers to buy more fuel-efficient cars. Except in this case, it's working.

The four utilities had already been collaborating with the FSTC to develop energy-efficient specifications for foodservice equipment. The logical next step involved standardizing rebates across the state in terms of amounts and processing requirements; setting additional energy-efficient equipment specs, and increasing energy efficiency efforts in the foodservice sector.

A Pause To Consider Rising Energy Prices
Back when energy costs were low and the supplies of oil and natural gas seemed infinitely plentiful, it didn't matter as much if grills, fryers, hoods and other equipment ran full-speed throughout the day. Now it's an entirely different story, thanks to deregulation and the general upward trend in energy prices.

Deregulation, the great market-forces experiment of the late '80s and '90s, was a move to make utility companies face competition so that electricity could be bought and sold as a commodity, and, theoretically, at reduced rates. More than a dozen states, including California, New York, parts of New England, Michigan and Texas, began restructuring utilities, selling power plants and breaking up the vertically integrated businesses.

So with factories in Detroit suddenly being able to buy electricity from, say, Texas, power was being moved around the country at unprecedented levels, putting extra demands on the transmission lines. Another result was that people, like those at Enron, soon realized they could game the system by creating shortages during peak demand times and causing prices to skyrocket.

And a third result that continues to reverberate today is "marginal pricing," a Federal Energy Regulatory Commission-endorsed arrangement that pegs the price of all power to the most expensive form of power: those plants "at the margin" that are turned on last, which are usually plants fueled by natural gas—and you all know where gas prices have been heading.

According to an analysis by the Tellus Institute, a Boston-based not-for-profit research and policy organization, deregulated states without rate caps saw an average annual growth in retail prices of 7% from '02 to '06, and year-over-year growth of 12.3% from '05 to '06. By contrast, rate-regulated states saw average increases of 4.5% from '02 to '06, and only 7.6% from '05 to '06. For the 10 month through October '06, average rates in deregulated states were 55% higher than in regulated states.

And that's just the average rates. Newspapers around the country this spring report price spikes, both actual and potential, of 115% (Maine), 72% (Maryland) and 50% (Illinois), to name a few.

Look For More Use, More Volatile Pricing
Even if deregulation had never happened, energy prices for electricity and natural gas would still be on the march. Current projections by the Energy Information Administration predict that U.S. energy needs will increase by more than a third by 2030, with electricity demand alone rising by more than 40%.

An April report by the EIA entitled "Short-Term Energy and Summer Fuels Outlook" predicts an average national increase of 12.8% for natural gas in '07 compared with '06. Residential electric prices are expected to rise at a slower rate of 3% during '07, although areas undergoing electric power restructuring, such as New England and parts of the West-South-Central, could face "highly volatile" prices over the next two years, the report says.

But those figures don't take the weather (or your HVAC costs) into account. The same EIA report predicts there will be 11% more "gas-weighted heating degree days" in '07 than the year earlier—so not only will you be paying higher prices for gas, you'll likely be using more of it.

On the electricity side, EIA researchers believe we'll see a "return to normal weather" this summer, so they project that the number of "cooling degree days" will drop by 10% compared to last year—a rosy short-term outlook.

But look at the long-term view and you'll see a much hotter picture emerging. A recent NASA study of temperature trends over the next few decades shows that states east of the Mississippi River (the focus of the study) by 2080 will see summer daily highs that are 10 degrees warmer than recent years, making temperatures in the 90s and 100s the new norm. Individual cities will be even hotter.

For restaurateurs, ever-warmer summers will call for substantial adjustments on the equipment and facilities side, including more powerful air conditioning systems, greater ice and cooling capacities, more rooftop maintenance and repairs for HVAC equipment, and yes, even more power use.

Utilities Court Operators
Speaking of power, did we mention that restaurants use lots of it? And that utilities in some states are beginning to wave money (in the form of rebates) at operators who choose to buy more efficient equipment? And also that utilities rolling out demand-management initiatives might be more receptive, shall we say, to requests from major customers who happen to be operating many restaurants? Something to think about...

A few states stand out in terms of efforts to promote efficient energy usage. California is "leading the nation in trying to push preference for Energy Star-qualified products and other classes of energy-efficient products," says Kate Lewis, marketing manager for the EPA's Energy Star program.

""Today nearly 50 utilities in nine states have incentives or rebates for efficient foodservice equipment," Lewis adds. "Two years ago, there was [only a handful]."

Utilities and agencies in a handful of other areas have also begun to ramp up their ties to foodservice. The Energy Star Web site's incentive finder shows a total of nine states that are offering money back for purchases of qualified equipment.

In the East, the New York State Energy Research and Development Authority is this month expanding its commercial kitchens pilot program to serve the entire state. (The program debuted last year in upstate New York.) The current pilot helps restaurant operators reduce energy and capital purchase costs in kitchens. NYSERDA offers incentives ranging from $30 to $1,000 for high-efficiency refrigerators, freezers, ice makers, holding cabinets, combi and convection ovens, steamers, and low-flow pre-rinse spray valves.

The organization also offers building energy assessments to identify cost-effective energy-related upgrades or changes in the building plan, lighting, heating and cooling. On the distributor side, NYSERDA works with manufacturers' reps, equipment marketing firms and dealers to provide information and support for high-efficiency foodservice equipment options.

Operators in the Southeast are getting a boost from their utility, too. Duke Energy, serving nearly 4 million customers in North and South Carolina plus parts of Indiana, Kentucky and Ohio, in May filed an energy efficiency plan (the "fifth fuel" initiative) with the North Carolina Utilities Commission. But for about three years before that, Duke Energy has been operating a Foodservice Customer Resource Center that runs equipment performance and evaluation tests for larger foodservice customers.

Elsewhere in the country, utilities with upcoming programs include at least four in Minnesota—Austin Utilities, Owatonna Public Utilities, Rochester Public Utilities and Southern Minnesota Municipal Power Authority—as well as a utility serving Arizona, California and Nevada—Southwest Gas—and Wisconsin's Focus on Energy Wisconsin. Utilities offering limited programs (refrigerators and/or ice machines) include Oregon Energy Trust, Washington's Puget Sound Energy and Efficiency Vermont.

"We're seeing more merging of gas and electric utilities, and more efforts to promote energy efficiency," says FSTC's Fisher, who travels around the country spreading the gospel on ways to make foodservice operations more efficient.

On Duty: Energy Management Systems
Any operator committed to bringing energy savings to the bottom line should also look into Web-based energy management systems. An EMS uses some of the same smart-equipment technology pioneered to manage large buildings or campus environments, and has now been scaled down to handle small-box retail and restaurants. Chains such as McDonald's, Wendy's, Applebee's and Brinker are among those who have implemented or are now piloting energy management systems.

Before your eyes glaze over at the thought of tracking more data, take heart: The new EMS generation uses pictures, charts and graphs to show you at a glance where problems are developing. You log onto the Internet, look, take action if necessary, and log off. If there's a problem, you get a message from the system via email, text or fax.

Here are some of the key energy points that are typically monitored in restaurants:

  • HVAC temperatures for occupied and unoccupied times of day;
  • Refrigerator set points in walk-ins—38°F instead of 36°F for example;
  • Lighting on/off controls, particularly for exterior lights, which tend to be left on during the day;
  • Time-clock controls on water heaters, booster heaters and ice machines to help spread energy demand levels throughout the day; and
  • On/off controls for exhaust hoods and fans, including often overlooked bathroom exhaust fans.

The number of EMS companies is small but growing. And their styles vary quite a bit. One EMS supplier—the only one to exhibit at the National Restaurant Show this spring—lets you start small and build up, offering services on a monthly subscription basis. A typical restaurant could monitor four areas for as little as $25/month and the cost of a performance dashboard, and up to $150/month for about 40 monitoring points, with no installation fee.

Other EMS companies will design and engineer building controls systems for a purchase price and an optional support fee. And at least one company has a low-risk contingency fee model through which it earns its money by taking a percentage of the savings brought to you, although that could end up being a premium when compared to other fee models. And finally, you can completely outsource your energy management by assigning your utility budget line to a company that will manage all aspects of the expense for a multi-year period.

A little complicated, perhaps, but restaurants successfully using an EMS have seen their energy costs drop by anywhere from 10% to 20%.

Although EMS technology has been around in various forms for nearly 20 years, the challenges of creating a user-friendly interface have kept it from going mainstream. That said, however, given the outlook for energy prices paired with advances in wireless data transfer, "it's hard to imagine restaurants 10 years from now not having such computer control," says FSTC's Fisher.

Wendy's Rolls Out Energy Monitoring
Wendy's Int'l. has saved money for two decades by actively pursuing the best prices in deregulated gas and electricity markets for about 400 of its 1,400 company-owned stores. Now it's going further.

In March the Dublin, Ohio, burger chain rolled out a program that will "improve monitoring and measuring of all costs associated with energy," says Energy Manager Tom Arnold.

The program, in development for two years, involves installing energy monitoring systems at 1,400 locations. The units will control everything from HVAC settings, exterior lighting to water heating and refrigeration. The systems include preset HVAC levels, light sensing equipment and timers for the lighting, and devices on the water heaters and refrigeration units to spread power usage levels more evenly throughout the day.

"It's energy management at its simplest," Arnold says. He expects to reduce energy costs at individual locations by up to 10% when monitoring starts in 2008.

Other parts of the plan include annual review of energy rates and tariffs to make sure stores are getting the best prices, analyzing energy bills for accuracy, and keeping administration costs associated with energy bill review to a minimum.

Brinker Tracks By The Baseline
Brinker Int'l., Dallas-based parent company of Chili's Grill & Bar, Romano's Macaroni Grill, On The Border Mexican Grill & Cantina, and Maggiano's Little Italy, began testing an energy management system at four Chili's restaurants in January 2006. And the monitoring paid off immediately: Early on the system revealed a water leak at a relatively new store that had lasted about two years at a cost of nearly $200 per month, says Architecture and Design V.P. Rick McCaffrey.

The company is now readying a larger rollout to 16 restaurants in different regions. After that comes "a regional rollout based on what we learn from the [next] 16 stores," McCaffrey says. "The energy savings we've seen have been anywhere from 6% to 15% savings in overall electrical usage depending on the age of the restaurant."

The system's key monitoring points include the hot water heaters (logging gas, water and temperatures) and HVAC (setting baselines for gas and electricity use). Gas meters have also been installed on broilers, flattop grills, fryers and exhaust fans.

"Once you have a baseline, you can see immediately when a store has deviated from the norm," McCaffrey says. "Did they leave a walk-in door open? Is there a bad condenser? Is a pressure setting off? It gives a quick reference point for energy saving and maintenance."

Low-Tech Solutions Chip Away At Costs
When it comes to consistently reducing energy use, the devices that tend to work best are those that operate quietly in the background with no special action required, says Richard Young, director of education for the FSTC. The list covers lighting, including astronomic time clocks, occupancy sensors, LEDs and compact fluorescents. A little more complex are demand ventilation and evaporator fan motors.

Astronomic time clock: You tell the clock where you're located geographically, and the clock will automatically adjust your exterior lighting for dawn and dusk throughout the year. No photocell is needed. And if you run multiple circuits, a single unit can control parking lights, building signage, menu boards and security lighting. "They're fairly simple energy management systems for building lighting that continue to evolve and become more functional," Young says.

Occupancy sensors or motion detectors attached to lighting in walk-ins, break rooms, storage areas or other less-trafficked spots are foolproof energy-saving technology, and hands-free operation makes them convenient to boot.

And newer forms of lighting, including CFL bulbs and LEDs, are simple retrofits for existing restaurants that will trim electricity costs.

An equipment upgrade involves changing your walk-in's evaporator fan motor to an ECM, or electronically commutated motor. In fact, as of '08, California law will require this for all new walk-in installations.

"ECMs use electronics instead of mechanical components to control the motor, so there's less friction and more precise control," Young says. "These can be retrofitted onto walk-ins relatively easily."

One test at the FSTC showed that an ECM-driven fan, operating at about 45 watts, used about a third of the energy required by the traditional fan motor it replaced, which drew 135 watts. Annual savings run anywhere from $100 to $300, meaning fans could pay for themselves as quickly as within a year.

Click Here For Energy Savings
Looking online for energy-saving equipment and information from your utility? Start with these resources.

Consortium For Energy Efficiency
This non-profit helps commercial kitchen operators choose from various options to upgrade efficiency. It also serves as a resource for utility companies; its mission is to help them develop program templates and establish specs for energy-efficient equipment while coordinating efforts with Energy Star, manufacturers and trade associations. CEE is funded in part by membership dues and grants from the DOE and the EPA.

Energy Star
In addition to developing energy-efficient specs for commercial cooking equipment, Energy Star has been expanding the foodservice equipment section of its Web site to include an Incentive Finder and Best Practices Tools, and is working to add new equipment categories such as ice machines, warewashers, griddles and ovens to its roster. "Energy Star's role lies in making sure there's a common definition for energy-efficient equipment, plus making the foodservice industry aware of programs, best practices and opportunities," says Kate Lewis, marketing manager for Energy Star.

Electric Foodservice Council
The Electric Foodservice Council has joined forces with industry partners, utilities and equipment manufacturers to help foodservice operators make the best decisions for energy efficiency, equipment technology and development, foodservice design, lighting expertise and more. EFC's site includes articles on choosing the most efficient electric equipment.

Food Service Technology Center/PG&E
The FSTC is one-stop shopping where efficient equipment is concerned. The site includes a list of California equipment rebates, energy use calculators, tips, articles, studies, equipment test results and much more.

Flex Your Power
This site offers a downloadable 30-page booklet covering all aspects of creating more energy-efficient restaurant kitchens—covering electric, gas and water—complete with case studies and handy facts.

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