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Mr. Sentman

Eco-Friendly Practices

Smart Data for Dumb Buildings

Lower Utility Expenses and Higher Efficiency Without New Hardware

By Shannon Sentman, Chief Executive Officer & Founder, SOL VISTA

One-time efforts typically start with a building assessment and sometimes move forward to actual implementation of high return on investment measures. Often, they just end with a thick building assessment sitting on a desk somewhere for further consideration at a "later date."

Although such an initial step is worthwhile for any hotel with the resources and intent to follow through, implementing an effective strategy to better manage a hotel's utility expenses on an ongoing basis will lead to continuous cost reductions with little upfront or ongoing investment. Implementing such a strategy works by leveraging a building's historic data to glean insights into its current performance. These insights are the foundation for flagging issues as they arise, determining their cause, and directing actions to resolve them. Many low-cost software platforms offered today provide both the required data aggregation and analytics to successfully implement such a strategy.

Tapping into Available Data

  • Energy and Water - Effective management of utility expenses typically does not require the level of visibility afforded by retrofitting an existing hotel with hardware to provide ready access to real-time meter data. Although real-time data can prove beneficial - especially when a knowledgeable, experienced engineering team is in place to proactively address issues as they arise - good old-fashioned data sources coupled with advanced analytics will provide a much better return on investment.

    Adequate visibility into utility consumption is achievable from two existing sources: a hotel's utility bills and its meters and submeters. Although data are available to almost all hotels from these sources, implementing a strategy to leverage the sources may require additional staff time. Available software tools can significantly mitigate (or even eliminate) these additional time requirements in several ways, including providing interfaces to simplify logging meter reads into a centralized data hub and automating the aggregation of utility bill data. Although a strategy that incorporates either of these data sources could be effective, combining the two offers the biggest benefit.

    Examining ongoing utility bill data expands visibility beyond just consumption, enabling consideration of the actual utility costs. This cost consideration is an important missing piece from any strategy that relies solely on real-time metering hardware. With adequate expertise, the inclusion of ongoing cost data bolsters a strategy with more than simply cutting utility consumption, focusing instead on cutting utility costs. This may include understanding time-of-use rates for various utilities and scheduling loads accordingly. Such a strategy may not actually reduce utility consumption at all, while decreasing costs significantly.

    Adding meter read logs to utility bill data will increase the overall granularity and timeliness of consumption data being analyzed. The intervals at which meter reads should be logged depends on the level of granularity desired and the availability of staff resources. Logging meter reads after the end of each month is often sufficient to support a successful utility expense reduction strategy.

  • Other Variables - Although utility consumption and cost data are both indispensable, alone they are inadequate to understand a building's ongoing operational efficiency. To glean worthwhile insights from utility consumption data, it is also necessary to gather historic and ongoing data regarding other variables impacting a hotel's operational performance, including weather, occupied rooms, conference attendees, food and drink covers, and laundry volume.

  • Adequate Historic Data - A hotel should gather as much historic data as is reasonably available - 36 months is an excellent target. If historic data is not available, a process should be implemented to gather and record the required data going forward. When acquiring an existing hotel, buyers should require historic utility consumption data along with applicable utility bill copies. This is easily justified as due diligence addressing the operating expenses the seller is providing to justify the property's valuation.

  • Getting More Granular on the Utility's Dime - For those executives who aim for more data granularity and automation than provided by monthly utility bills and manual meter read logging, there may already be real-time data available for your hotels. Throughout the U.S., many utilities have installed networked smart meters that broadcast real-time meter data. These utilities often provide customers with access to the data from these meters through an online customer portal or through the network accessible data streams that use the established Green Button standard.

    This means many hotels can access much more granular data without the cost of installing new hardware. This is especially beneficial for hotels that already have a software platform that incorporates Green Button data. Before making any investments in real-time hardware, utility customers should determine what is already available from their utility companies. If smart meters are not currently installed, a utility may still be able to provide information about planned timelines for implementing smart meters and providing customers with data access in the future.

Knowing When There's an Actual Problem

Data alone does little to help effectively manage ongoing utility expenses. In fact, more data may even paralyze a hotel's existing efficiency strategies by overloading onsite staff with more information than they can effectively process. For real value, data must be analyzed to identify actual anomalous consumption and costs. Getting answers requires analysis that goes well beyond simply comparing a building's utility consumption or costs from a given period in time to another. Both accounting and engineering teams often use these simple comparisons between different billing periods to determine how a building is performing. This method is problematic in too many ways to detail. The biggest problem is the absence of consideration of other external variables impacting consumption and costs in the comparison periods. In the simplest terms, even if a building's utility consumption or costs decrease in a given month compared to historic data, this does not mean the building performed well. The building could have, in fact, performed much worse than expected.

Consider these two scenarios as examples:

Scenario 1: A hotel's natural gas costs for a given bill decrease by 2% in comparison to the same bill one year earlier. The billing period falls in the winter and the hotel's heating fuel is natural gas. During the billing period, the hotel experienced unseasonably warm temperatures. Because the costs decreased, most onsite teams would not delve any deeper to understand if the consumption for the period is actually problematic.

Scenario 2: A hotel's electricity costs for a given bill increase by 50% in comparison to the same bill one year earlier. The hotel's cooling system consumes electricity, and during the billing period the hotel experienced a heat wave. Because the costs increased significantly, site engineers might be prompted to find and resolve the issue that is wreaking havoc on the utility budget.

In both of these scenarios, comparing bills from one year to another is inadequate to determine if there is a problem requiring investigation or not. It may be the case that the Scenario 1 building should have decreased natural gas costs by 30% given the warm temperatures, meaning the building is not operating as expected and the hotel is paying for energy it should not have consumed. Meanwhile the Scenario 2 building may have performed exactly as good analysis would predict given the heat wave, yet site engineers are busied looking for a non-existent problem.

To actually know how a building is performing requires predictive analytics. To identify consumption anomalies we must first know how a building is expected to perform given specific operating parameters. With this information we can then compare the building's expected performance to its actual performance to identify issues as they arise.

Knowing how a building is expected to perform requires analysis of the historic data to establish the impact of the various operating variables (such as weather, occupied rooms, food covers, and laundry) on the building's consumption of energy and water. This is establishing more than just a simple "baseline" for a building to measure itself against. It is establishing a unique building equation that yields the specific consumption impacts of each variable affecting the various utilities serving the hotel. For example, such analysis yields the change in water consumption resulting from one occupied room or electricity resulting from 200 cooling degree days.

To the extent consumption falls outside of the predictions yielded by such analysis it is considered anomalous and requires further investigation.

Identifying the Cause

Once actual consumption anomalies are identified they should be analyzed with consideration of known building systems and equipment to identify the culprits. Onsite staff can then leverage these answers to identify and resolve issues. This is where the real value is: turning information into answers.

Knowing specifics about the type of energy consumed and the consumption profiles of a building's major systems and equipment (namely space heating and cooling and water heating) allows capable site engineers and analytic platforms to identify the likely causes of consumption anomalies. The level to which the problems can be accurately identified to specific equipment depends on the depth of data available about the building's systems and equipment.

Having electricity submeters on major equipment also goes a long way in helping to better tag problems to specific equipment. For electricity, unlike other utility types, submetering individual pieces of equipment can be done very cheaply using clip-on current transformers (CTs). A simple platform to measure a few pieces of equipment can be purchased for under $1000 and installed in less than an hour. There are also options for systems that can be tied directly into many available software platforms that serve the other functions previously discussed.

Proactive Utility Expense Management in Action

As a real world example of how to effectively manage utility expenses without expensive hardware , at two of four hotels currently owned by the Saunders Hotel Group in the Boston area, a hotel-focused software-as-a-service (SaaS) platform automatically aggregates utility bill data directly from the utilities serving the properties on an ongoing basis, connects this data directly to the Environmental Protection Agency's (EPA) Portfolio Manager benchmarking tool, and provides ongoing analysis of operational performance, including alerts for anomalous consumption along with insights into the likely cause(s).

Scot Hopps, director of sustainability for Saunders Hotel Group has been with the company for six years, and he said all the hotels use the SaaS platform to record utility consumption data in the EPA's Portfolio Manager tool - prior to which, the data had to be entered manually.

"I think one good thing is to know what the big energy consumers are," Hopps said. "It's relatively inexpensive to add [electricity] submeters, even if you're not centrally reading them [with a building monitoring system]. You can add on panels where you're running major equipment like walk-ins, exhaust fans, boilers, cooling towers, things like that where the engineering team can check on it monthly. We've found issues where we saw spikes in things like that. It's not real-time, but it's a lot better than not noticed."

Submetering certainly helps, but it is not necessarily required to link consumption changes to certain equipment. Leveraging building data can often indicate which piece of equipment is using which utility, and it can be done with a fair level of accuracy without submeters.

Hopps said that water is becoming a much more expensive commodity, and noted that monitoring and recording water meter readings can result in more than just water savings. Water use for guest rooms and on-site laundry can sometimes indicate wasted energy, such as for water heaters that is occurring elsewhere.

One-time efficiency pushes do nothing to manage ongoing utility expenses and to ensure continuous efficient operations. Utility expenses can be effectively managed ongoing by leveraging readily available utility bill data and logged meter reads. Pairing these data with advanced analytics can provide onsite staff with ongoing actionable intelligence to continuously operate a building at its most efficient level.

Rather than investing in onsite hardware for real-time data, a much smaller investment in a purpose-built software platform will typically yield a much better return on investment. Such a platform can minimize the staff time required for ongoing data aggregation and for analyzing the data for direction into required actions.

Shannon Sentman, Esq., MSRE, LEED AP®, is a recovering big-firm attorney, a wanna-be programmer, and the Co-founder and CEO of SOL VISTA. Since co-founding SOL VISTA in 2010, his leadership has established the company as the hotel energy experts, positioning its Skywalk™ platform as the best utility cost and building efficiency management tool available to the hotel sector. Mr. Sentman is a frequent lecturer at Johns Hopkins, Georgetown and other universities, a former adjunct professor at University of Maryland, and an oft published author. His publications include the U.S. Green Building Council’s “Green Office Guide” and the American Bar Association’s “Green Building and Sustainable Development: A Practical Legal Guide.” Mr. Sentman can be contacted at 410-456-8044 or ssentman@solvista.com Please visit http://www.solvista.com for more information. Extended Bio...

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