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Demand Response for Hotels – TMT

March 30, 2021 – Are hotels a good fit for a demand response program? In this video, Strategic Energy Advisor Sam Greenberg explains how hotels can participate in the program and generate extra revenue for their properties.

Video Transcript

Hi! I’m Sam Greenberg, Strategic Energy Advisor with Nania. Did you know enrollment for demand response in PJM is coming to a close for 2021?

Don’t worry — it’s not too late, but spots are filling up fast.

For this week’s Two-Minute Tuesday, I’m going to address whether it makes sense for hotels to sign up for demand response.

What is Demand Response?

Demand response is a program that provides financial payments to power customers for their ability to reduce electricity usage during times of peak grid demand. Think of hot summer days when it is 100 degrees out, and A/C usage is at its peak.

Depending on the amount that you are able to reduce from your average usage, this program could mean additional revenue for your business.

Are hotels a good fit for demand response?

Every commercial property has the ability to curtail their usage, but for some businesses, it may be easier than others.

If you’re a hotel owner, you may think that curtailing is impossible because you can’t tell your guests in their rooms to turn off their air. However, some hotel operators have found creative ways to reduce usage and participate in this program.

  • Does your hotel have on-site laundry?
  • Does it have a heated pool?
  • Do you have a modern building automation system (BAS) that allows you to adjust thermostat temperatures or pre-cool your building?

If you are able to reduce usage for a one-hour test event each year, you qualify for the program and the financial incentives that come with it.

There are other ancillary ways to reduce usage, such as shutting down an elevator or two or dimming LED lights if your system allows for it. The more you’re able to reduce, the greater your payment under the program will be.

Bonus Benefit of Demand Response

Not only is demand response an opportunity to put additional money in your pocket as a business owner, but it also makes your business look good since you’re doing your part to support the grid while prioritizing energy efficiency.

Demand response is not for everyone, but it is a way to capture additional revenue for those who can participate. Given the past 12 months for hotels, signing up for this program before the May 1st deadline could be a great way to ease some of the financial burden that COVID has places upon the industry.

If you have any questions about signing up for demand response, please contact me or any of the advisors on our Nania team.

Thanks for watching, and have a great day!

Demand Response for Manufacturers – MES #4

February 25, 2021 – Did you know that a demand response program will pay you for curtailing your usage? In this video, Senior Energy Advisor Michael Zaura, CEM explains how this program can serve as an additional revenue stream for your manufacturing facility.

Video Transcript

Hello, and welcome back to Manufacturing Energy Success. Thank you for joining me!

Did you know that there is a program that will pay you for curtailing your energy usage? In this week’s topic, we are going to cover the Demand Response program and the additional revenue it might mean for your facility.

What is Demand Response?

Demand response is a program that was designed to alleviate stress on the grid during critical times.

Think about over the summer. 100 degree weather, lots of humidity, air conditioning and probably your machines working a little harder than normal. Demand response asks you to curtail during these extreme times to help alleviate those stresses on the grid and prevent blackouts.

How do you receive payments?

Now let’s get to the good part: how do you get paid for being part of a demand response program?

There is a one-hour test even that usually takes place toward the end of June to mimic what an emergency event would look like. You’re given three- to four-weeks’ notice in order to prepare for this test event. Most of our manufacturers do a scheduled maintenance day or maybe a lunch so they can curtail as much as possible during that one hour.

After that one-hour test event, a few months are used to evaluate the data of how much you actually curtailed during that one hour. Then, your payments are determined. For one client last week, we estimated that they can earn $50,000 annually by participating in the demand response program.

What’s after the test event?

Now that the test day is complete and you’re enrolled in the program, what’s next?

If a critical day is called, you will be asked to curtail as much energy as possible on that critical day. Critical day sounds a little scary, I know. But there are two positives to keep in mind in regards to a critical day.

  1. If you curtail as much as possible on that critical day, you get extra energy payments for whatever you curtailed that day.
  2. There has not been a critical day or a grid emergency called in over 12 years in our territory otherwise known as PJM. So, your chances are very good that the only curtailing you’ll be asked to do during this program is on that test day.

“There’s no way we can curtail.”

The number one comment I get from manufacturers all the time when it comes to this program is “Mike, there’s no way we can curtail.”

Would $50,000 of new revenue to your facility make an impact? I’m guessing it would.

Now when we say “curtail,” keep in mind that we don’t mean a complete shutdown of your facility. “Curtailing” could be adjusting the thermostat by a few degrees for that one-hour test event. It could be shutting down an air compressor, a chiller, a rooftop unit, maybe a manufacturing line just for that hour.

The point is, you can curtail as much or as little as you want. But keep in mind: your payments will reflect how much you curtailed during that one-hour test event.

The enrollment deadline is coming up soon!

In closing, demand response is an incredible program to generate revenue for your facility. If you’re interested in seeing an estimate of what payments might be for your facility, I’m happy to help! The enrollment period is coming up fast — it usually ends in late spring, but it could be earlier depending on how many megawatts are accounted for. In this program, there are a certain number of megawatt-hours available, and once those are claimed, enrollment is shut down until next year.

Thank you for watching! I hope you found today’s video valuable. Join me next week for our final video in the series on energy efficiency. Have a great evening!

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Energy Tips for the Hospitality Industry – TMT

February 16, 2021 – In this FAQ February video, Strategic Energy Advisor Sam Greenberg tackles a question he’s been asked frequently over the past year by our hospitality clients: “What are other companies doing to stay in business?”

Video Transcript

Over the past 12 months, one could argue that the industry most negatively impacted by the COVID-19 pandemic has been the hospitality industry. In this week’s Two-Minute Tuesday, we’ll be tackling the number one question we were asked by our hospitality clients during this past year: “What are other companies doing to stay in business?”

Two Energy Strategies for Hospitality Clients

2020 was painful for all businesses, but the hospitality industry was one of the hardest hit. Revenue plummeted due to both shutdowns and to lack of demand from people traveling.

Many of these businesses had to get creative to save money. Specific to energy, the two opportunities that ultimately provided the biggest return for our hospitality clients were demand response and electricity agreements.

Let’s take a deeper dive into how these two strategies supported our hospitality partners in 2020.

Demand Response

Let’s start with demand response. As a hotel owner, if you haven’t looked in to signing up for a demand response program, I highly recommend doing so now.

Depending on the area of the country and your utility, demand response programs can pay you money for curtailing your usage in a planned one-hour test event. We’ve seen annual payments for our hotel clients between $5,000 and $30,000 for participating in the program.

Energy Agreements

Along with demand response, the past 12 months has put an extra focus on electricity and gas agreements. Several months of 2020 saw natural gas rates fall to their lowest level in 20 years.

Our hospitality clients took advantage of that market opportunity and were locking in these lower rates for longer terms, some up to 48 months. This was helping them reduce their energy costs, creating budget stability regardless of increases in the market, and ultimately ensuring that their rate was going to be lower than most of their competing hotels who were not taking the same approach.

 

Even if you missed out on the low prices of 2020, there are still opportunities in the current market to fix either natural gas or electricity rates. There is a consensus forming around a bullish energy market in 2021, so being proactive and fixing rates now can protect your budget from these possible increasing costs.

If you’d like to hear more about the topics we covered today or ideas around saving money on your energy, please contact me or any of our Nania Energy Advisors today. Thank you for watching!

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3 Energy Opportunities for Your 2021 Budget – TMT

Video Transcript

Welcome to 2021! By the end of last year, you probably set some pretty aggressive goals for this year’s budget. Now, you’re a couple weeks into the new year, and you’re wondering, “How are we possibly going to hit all of these goals that we set?”

In today’s Two-Minute Tuesday, we’re going to explore three opportunities in energy that will help you hit those goals for 2021.

Opportunity #1: Review your current agreements.

Opportunity number one is probably the easiest: review your current electricity and natural gas agreements. You’d be surprised how many people think their agreements expire much later than they actually do.

Say, for example, your agreement expires in June. You have six months’ worth of opportunities to evaluate all of your options. You can set up a market alert or market watch to hit a certain price point that you’re looking for.

When the market hits that price point, you’ll be alerted so you can take action. Your new rate will take effect after your agreement expires in June. Let’s say it was a seven percent savings. You now have seven percent extra dollars in your budget that you didn’t otherwise plan for.

So, taking this simple step of reviewing your agreements can have a significant impact on your budget.

Opportunity #2: Generate revenue.

How big of an impact would it be to your budget if you were to create another revenue stream that you didn’t plan for?

Demand response is a program you can enroll in where it asks you to curtail energy usage during the time of a grid emergency. You get quarterly payments based on how much energy you can curtail, which is determined by a one-hour test event every summer.

If there is a grid emergency, you can earn extra energy payments based on how much energy you curtail during that emergency. Luckily, in our PJM territory, there has not been a major grid emergency where anyone has been asked to curtail energy in over ten years.

If generating a new revenue stream would be important to your budget, you’ll want to act now because the deadline to enroll is coming up in the spring.

Opportunity #3: Energy efficiency.

Say you have dollars allocated in your budget this year for an efficiency project, but you’re not sure which one to tackle first. Consider doing an energy audit.

An energy audit will help you identify areas of need, utility incentives currently available, and the ROI for that project. Whichever project you tackle will significantly lower your energy usage not only for this year and this year’s budget, but also for many years to come.

Seize these opportunities and make the most of your 2021 budget.

Energy can have a positive impact on your 2021 budget. By reviewing your energy agreements and their end dates, generating a new source of revenue, and reviewing efficiency projects, not only will this impact your budget for 2021 but also in the years to come.

Thank you for watching! And if you liked what you saw, please like, comment, or share below.

How to Fund an Energy Efficiency Project

Video Transcript

Another way you can reduce costs outside of commodity is energy efficiency. This is the replacement of any kind of equipment at your site that reduce both your usage and maintenance costs for energy.

Now you might be thinking, “In these times, who has the capital to pay for these types of projects?”

There are many options out there that can help pay down or even let you walk into new equipment without any upfront costs.

Utility Rebates

First is utility rebates. This is going to depend on your state and utility, but many of these programs will help pay for a good portion of the project.

Federal Tax Deduction

Second is the federal tax deduction US179D. It’s only in place until the end of this year (it’s yet to be renewed), but it’s a tax deduction for energy efficiency projects for commercial buildings.

One caveat is that you need to show a profit to be able to capitalize on a tax credit. That is something that we have had to bring up in a post-COVID world.

Funding Options

Third is that there are funding options out there. Previous to COVID, there were a lot of CapEx projects where you would write the check and then the savings would flow to you every month.

Now, there are options out there where you can walk into new equipment without any out-of-pocket expenditures. To dial down on what these options are, we primarily see three out there.

1) On-Bill Financing

Under this option, the energy supplier writes the check for the project. Then, you negotiate a structured fee on your energy bill over some defined period.

There are certain tax advantages with this option, and we’ve seen a lot of popularity in it.

2) Property Assessed Clean Energy (PACE) Projects

This will depend on if your county participates in this program — it’s a national program. A third party will pay for your project, and then you negotiate a structured fee that would actually be placed on your property tax bill.

These programs are very popular with REITs (Real Estate Investment Trusts) or any kind of location that is bought and sold because they’re a lot easier to transfer to a new owner as part of the property tax bill.

3) Performance Contracting

Again, there are no upfront costs. You would pay the contractor back through a negotiated percentage of the savings that are provided by the project.

 

To access the full webinar recording, email info@naniaenergy.com.

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2020 Transmission Rates Increases and Changes

By Michael DeCaluwe

Frequently, we see transmission rate changes that impact the costs on your electricity bill. Understanding these changes and what you can do to counteract them can help you control your annual electricity costs.

What are transmission charges on your electric bill?

Transmission charges are the costs associated with operating the electrical “grid.” The grid is composed of large high-voltage wires that you see running across the country that have a “zipping” sound to them. These wires are managed by an RTO (Regional Transmission Organization).

Your local electric utility pulls power from these wires and delivers it to your home or business at a voltage level that’s safe for consumption.

Depending on the market, transmission costs are usually part of a supplier’s cost or rate and are separate from the delivery costs charged by your local utility.

How are transmission rates determined?

Transmission costs are usually based on an RTO’s rate schedule. That schedule is approved and regulated by the Federal Energy Regulatory Commission (FERC).

Transmission costs typically have two moving components: the RTO’s rate schedule that may vary each year, and your account’ annual demand values that will also fluctuate annually.

When a supplier “locks” your transmission costs for a specific term, they take the risk that your demand values will not go up (resulting in higher costs) during the term of your agreement. They also take the current cost of transmission into account when fixing your rate.

2020 Transmission Rate Increases

FERC just approved an update to transmission costs for many of the delivery areas in PJM, the largest RTO (grid operator) in the United States. As a result, most areas are seeing an increase in their transmission costs.

Here’s a look at those updates:

Depending on the supplier, some customers may see an adjustment to their transmission costs on their upcoming electric bills.

What can you do to lower your transmission costs?

Lowering your electricity usage at peak times can impact both your capacity and transmission costs going forward. One way to do this is to receive Peak Day Alerts, which tell you the date and time that a peak day may occur. These alerts help you plan to reduce your usage during those peak times.

If you’re interested in receiving Peak Day Alerts or have any other questions about capacity and transmission costs, feel free to reach out to us.

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TMT: Energy Challenges for Manufacturers

Video Transcript

Hi everyone, and welcome back to another Nania Energy Advisors’ Two-Minute Tuesday. I’m AJ Brockman, Nania’s Content Marketing Manager. Today we will be talking with Senior Energy Advisor and Mid-Atlantic Manager Mike Eckenroth about the specific challenges that manufacturers face when it comes to energy. So let’s get started!

Energy Challenges for Manufacturers

AJ: So Mike, when it comes to energy, what would you say are the top two to three challenges manufacturers typically face?

Mike E: Good question! I would say number one is probably how to reduce and control energy costs.

Manufacturing is typically an energy-intensive process. You’re taking a number of raw materials, putting them through your process, and converting them into what you want to make. And throughout that process, there’s a lot of energy consumed. So the concern is about how to reduce and control those costs to keep operational costs low.

Secondly, manufacturers want efficiency and confidence in their energy procurement, which isn’t always easy to have. There’s a lot of different choices available — brokers, advisors, consultants, suppliers and products — to choose from. Figuring out a process to determine which method to use for procurement is definitely a challenge.

Tips for Reducing Costs

AJ: And when you talk to manufacturers or decision makers in manufacturing, what sorts of tips or solutions to those challenges are they typically looking for?

ME: So to answer the second point, we did a broker versus advisor video a few months ago, so I recommend they check that out. But, really, it’s about finding an advisor or consultant that you trust and that sits on your side of the table.

You want them negotiating with suppliers on your behalf to achieve your goals. So you should feel that all of those things are being met by them, and I’d recommend interviewing a few different ones to get a feel of who has your best interests in mind and who you have the most confidence in.

Secondly, they’re looking to identify opportunities that they might not have seen otherwise. The number one way to do this is with an energy audit.

You have various operations that you’re doing day in and day out, and you might not realize there are opportunities in front of you for that. This could be things like LEDs or HVAC controls, variable frequency drives, water controls. An energy audit will identify those opportunities, and then we can prioritize those according to your ROI goals. So this is really about making you more efficient, doing more of the same output with less energy input, reducing those costs from that side.

Along that same vein is demand response. Demand response is a voluntary curtailment program during emergencies. So for a few hours of participation a year, a manufacturer could earn tens of thousands of dollars in payment for those.

This is particularly important for manufacturers because they usually have some control over when their energy is being consumed. They can schedule activities at different times and things like that, and so it’s typically a program that works really well for them.

And lastly is tax exemptions. This has been huge for manufacturers that we work with. Nania Energy is not a tax firm, we are not licensed tax professionals that can provide advice on taxes.

However, we’re aware of some exemptions that exist, and we can double check your bills for those. So if you are paying taxes and you shouldn’t be, that’s something we’ll be able to take a look at and either recommend you to one of our partnered tax firms or have you investigate it and recover that money (up to 48 months in some states) as well as remove that cost going forward. So that’s really low-hanging fruit that’s available for manufacturers.

Sustainable Manufacturing

AJ: Great tips, Mike. Lastly, I want to talk about green energy. Sustainability is starting to become more of a factor for both producers and consumers. What advice would you give to manufacturers who are interested in going green?

ME: So what we talked about with energy audits: even though it may or may not seem like that’s the easiest way to go green, it probably is one of the easiest. There’s a lot of wasted energy in a lot of different processes that manufacturers use, and there are ways to recover that. There are ROIs that are increasingly lower and lower to match those 2 and 3 year goals that some organizations have for that. So that would be number one: looking for those efficiency opportunities.

Number two is sourcing your energy with green power. Typically, energy supply agreements are going to be maybe 10 percent renewable, depending on your state or municipality. And there are opportunities for you to source 100 percent of your energy from renewable sources.

You do pay a little bit of a premium for it, but you’re talking about one to two percent, so it’s very manageable if green energy is a corporate initiative or an initiative for your organization. That’s definitely a way to achieve that.

And thirdly is on-site generation. This is typically a little less popular, mostly because you have to have the floor space or the space to dedicate to it. There are requirements, such as how long you’re going to be in the building, lease obligations, and ROI constraints that you have to sort through.

On-site generation is going to have longer ROI, but if you have the square footage or roof space to allocate to solar and you have a longer term that you’re willing to accept the ROI for, that’s absolutely something you should be looking into and could provide some of the results you’re looking for.

 

AJ: Great! Well thanks so much, Mike, for all of that great information. And thank you to everyone for watching our video! If you’re in manufacturing or you’re a decision maker for a manufacturing facility, tune in to our webinar on June 25th. We will be presenting some energy tips that are specific to you.

Thanks again for watching! If you found this video helpful, please like, comment, or share below.

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TMT: Demand Response Program for Schools

Video Transcript

Starting June 1st of 2020, significant changes to the Demand Response program in our region could mean a drastic reduction in your school’s payout.

In this week’s Two-Minute Tuesday, we’ll talk about these changes and what they mean for your school district.

What is Demand Response?

Let’s start with a quick recap of Demand Response.

On days when our power demand is at its highest, relative to the “capacity” available to handle that demand, our grid — also known as PJM — has to ensure that everyone who needs power has it. This prevents blackouts.

Rather than installing expensive infrastructure that may only be used a few hours a year to meet that high demand, PJM started a program known as Demand Response.

In the Demand Response program, participants can voluntarily commit to reducing their power load during times that require it.

The only caveat is that participants have to prove that they can hit those levels during an annual 1-hour test event. In return, those participants receive money from PJM for both the test event and any emergency events, should they occur.

What’s new this year?

Historically, these real emergency events only posed a threat in the summer on the hottest days of the year.

Given recent history, however, the winter now also poses a threat in bouts of extremely low temperatures. So how has the Demand Response program changed?

Well, starting June 1st of 2020, the program will require year-round enrollments versus summer only of previous programs. Your total curtailment amount as a school district is now based off the lower of your two PLCs — both winter and summer.

Unless you use electric heat, this means your total curtailment is likely going to decrease dramatically — and so is your money earning potential.

Some curtailment service providers have adapted their software to accommodate these changes and may be able to offer you a unique solution to still enroll for summer only. But keep in mind: your total payout will likely be half of what it was in the past.

Ask your provider how this will impact you.

If your current provider has not yet contacted you about these changes, reach out and ask them how it’s going to impact your revenue potential.

And, if you have questions about how you can still capture some of the earnings — versus dropping out of the program altogether — reach out to us. We’re happy to help!

Thanks so much for watching. If you found this video helpful, please like, comment, or share below.

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Energy Buying for Schools – Energy ABC’s #1

Video Transcript

Hi guys! I’m Becky with Nania Energy.

When I talk to school business officials about purchasing gas and electric, I’m often given a lot of questions about how the process works, and there’s a lack of clarity and a lot of misunderstanding around it all.

So I had this idea to release this mini-vlog series called “Energy ABC’s” where we’re going to really hone in on the biggest obstacles that school districts face and give you tangible ways to overcome them.

Right now, we’re going to swap seats. I’m going to act as the school business official and go through some of the biggest obstacles that our clients have told us they face.

Obstacle 1

Energy is so complex. There’s so many layers.

You don’t even know which way to purchase — do you use a consortium? Or do you go directly through a supplier like Constellation?

You’re getting 22 calls a day from different providers saying they can offer you a better rate and more savings.

But how do you know who to trust?

Obstacle 2

You also have a lot of customers that you have to appease in your position. You have school board members, you have other administrators, you have the community. So any decisions you make for change you have to take very heavily and very seriously. And you have to make sure all the boxes are checked.

You also are managing a lot of aspects of school business from teacher contracts to lunch programs to maybe even transportation. You don’t have the time to dedicate to energy, and you’re not an expert in that field.

So how do you know what the right choice is to make? And how do you know what the opportunity cost is by waiting until your contract expires versus looking at it sooner?

Obstacle 3

And finally: how do you make your district more green? How do you become more sustainable and keep up with the Joneses, so to speak?

You’re being asked to bring in more green initiatives to your district while simultaneously being asked to cut your budget and reduce your spending. How is that supposed to work?

Learn how to make energy work for your district.

So, over the next couple of weeks we’ll release some videos that really show you how to address these concerns and make them work for your school district. If there’s something that we haven’t talked about today, shoot me a line or drop us a note and let us know of something you’d like us to discuss.

Otherwise, we’ll see you next time on Energy ABC’s where we’ll dive into the 3 main ways that schools purchase energy. Thank you!

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TMT: A Lighting Project + Your Energy Rate

Video Transcript

Hi! One question I get asked quite a bit is, “What impact would a lighting project have on my facility’s energy rate?”

If you’re looking to reduce your electricity usage, a lighting project will help you do that. But another surprise benefit is the impact it’ll have on your electric rate.

In this week’s Two-Minute Tuesday, we’ll show you exactly how.

What pricing factor does a lighting project impact?

One factor that suppliers take into consideration when giving an electric supply rate is your PLC number, or Peak Load Contribution.

This is the capacity and transmission — “demand” — charges that are attached to your facility.

Your PLC is measured over the 5 heaviest days of grid usage in the year. Think of a summer afternoon when everyone’s using a lot of air conditioning.

PJM will measure your usage on those 5 heaviest days and assign a PLC number (PLC tag) to you. The utility — in this case ComEd here in northern Illinois — will post that number to your account in December and it will go into effect the following June.

Lighting Project and PLCs

So here’s how a lighting project affects PLCs.

Think about an LED bulb that you’re putting in, replacing an old incandescent or metal halide or whatever bulb you currently have in your fixtures. The LED will put out much less wattage and use fewer kilowatt-hours over the course of those 5 days that the grid is measuring over the hot summer months.

The immediate impact you’re going to see is on the next month’s bill following the project’s completion. Your usage (kilowatt-hours) will be lower because those LEDs are using less energy compared to older bulbs.

You’ll experience a later impact to your PLCs in June the year after you complete the lighting project. So while you see an immediate change in your usage on next month’s bill, your change in PLC number will impact next year’s bill.

What does this look like?

Here’s a quick customer example.

Working with one of our local manufacturing clients, we started looking at new rates for their electricity contract that’s expiring this year. The did a lighting project for efficiency last spring.

While they got the full benefit in the summer from lower usage (the lighting project reduced their usage by about 1 million kWh), where we really saw the benefit was in the PLC number.

In November, we started looking at pricing for them. And the original pricing came in significantly higher than their current rate. Lighting Project and Energy Rate

Waiting until December when ComEd came out with new PLC numbers starting in June 2020, that PLC number was cut in half — they were in the 500 range and got cut to about 250. This resulted in around 14% savings over their current contracted rate.

A lighting project can impact your energy rate.

As you can see, a lighting project can impact more than your usage. If you’re considering a lighting project for your facility, feel free to reach out to us for guidance.

Thank you for watching! If you found this video helpful, please like, comment, or share below.

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