Businesses Seen Striving to Cut Power

Energy experts say the California Public Utilities Commission’s decision Tuesday to raise electricity rates as much as 46% will galvanize businesses to move quickly to become more energy-efficient--exactly the effect state regulators intended.

“This price increase will pose a big challenge to businesses but also a big opportunity,” said Evan Mills, an energy analyst at the Lawrence Berkeley National Laboratory in Berkeley.

Analysts expect many companies to try to reach the 20% reduction in consumption that would make them eligible for a state-mandated 20% rebate on their summer electric bills. In combination, Mills says, the reduction and the rebate would more than offset the rate increase. And companies that reach that goal will have a significant edge on their competitors.

“Looked at another way, bills would be nearly 60% higher for competitors who took no steps to conserve,” Mills said.

Luckily for California businesses, experts say, there are plenty of low-cost and even no-cost steps--everything from replacing lightbulbs to cleaning air-conditioning coils--to help cut electricity use.

“It’s a realistic goal for the average business, even in this short time frame,” said Robert Rose, a mechanical engineer with the U.S. Environmental Protection Agency’s Energy Star program.

What’s more, various state and utility incentive programs will pay part of the cost of becoming an energy-efficient business, often to the tune of millions of dollars for big companies. But because there is no central clearinghouse for energy rebates and incentives, Rose said, businesses should call the utilities in cities where they operate and the California Energy Commission to check on financial support.

The Energy Commission granted Kmart Corp. $2 million toward the $10-million cost of a project last month to retrofit lighting at 85 Big Kmart stores throughout California. The discount retailer will replace older fluorescent lights with smaller fixtures and more efficient “T-8” lamps, which Kmart estimates will use about 40% less power without reducing light. Kmart said the retrofit will cut 8 megawatts from its peak California consumption and save the company $4 million a year.

Neutrogena Corp., a soap and shampoo maker, plans to move 200 kilowatts of consumption offline by installing a large solar array at its headquarters and research and development complex near Los Angeles International Airport. The Los Angeles Department of Water and Power will pay $1 million of that $1.4-million project.

On a smaller scale, the Los Angeles utility--which is not raising its rates--will pay small businesses $6.25 to $9.50 per fixture to replace incandescent lightbulbs with compact fluorescents.

“The good news is that since the energy crises of the 1970s, we have developed a much larger arsenal of energy-saving technologies,” analyst Mills said.

Businesses that have done the least to save energy up until now will have the easiest time hitting the 20% reduction goal. At the same time, the rebate program may fail to reward good corporate citizens such as Arden Realty Inc. of Los Angeles, which already have cut their usage substantially.

Arden has spent $20 million in the last two years whittling down electrical consumption at the 13 million square feet of office buildings it owns. Indeed, the company’s improvements provide a model for how a big business can pare its power consumption.

Back in 1999, the real estate investment trust checked the energy efficiency of its buildings against a computer model maintained by the federal Energy Star program, said Robert Accomando, an Arden executive.

The giant landlord, which passes on the cost of power to its tenants through lease rates, figured that improving the efficiency of its buildings would give it a cost advantage over competitors.

Arden started with lights, replacing older fixtures with new reflectors and T-8 lamps. The reflectors let Arden replace three lamps with two without decreasing light. At the same time, Arden installed occupancy sensors, which Accomando said proved extremely valuable after-hours and on weekends by limiting most lighting to offices where people were working.

“We cut 65% of our power usage at night,” he said.

The company also installed variable-speed motors for its pumps and refrigeration systems. The motors match their speed--and thus the amount of electricity they are using--to operational demands. Regular motors use the same amount of electricity regardless of how much is needed. A portion of that energy is often wasted.

Finally, Arden re-engineered its air-conditioning systems to use less power. With hot lighting and other sources of energy-hogging heat removed from the building, the air-conditioning could be turned down.

All told, the combined projects cut Arden’s electrical usage about 13% for an investment of about $1.50 per square foot of office space. Utilities paid about 10% of the cost of the improvements.

“We reaped the benefit of our lower operating cost,” Accomando said. “And the truth is that this is all easy stuff.”

Accomando said it will take three or four years to recoup the investment through lower energy bills.

Though Arden’s savings resulted from millions of dollars in capital investments, Rose of the EPA said many businesses can reduce electricity consumption with a much smaller outlay.

A first step is making sure that air-conditioning and refrigeration systems are working properly.

“That could be as simple as cleaning the cooling coils or making sure that thermostats are tuned properly,” Rose said.

DWP offers a free refrigeration cleaning and maintenance check that often results in a 4% to 7% efficiency improvement.

Experts also suggest that bigger businesses check out energy management systems, which provide computerized control of air-conditioning, lighting and other systems. They are typically used in large buildings and can often cut energy usage by 10% or more, just by making sure equipment is turned off when it is not needed.

Comparatively low-cost initiatives, such as changes in lighting and energy-saving window treatments, will get companies much closer to the desired 20% threshold, Rose said.

According to DWP, lighting typically accounts for 40% of the electricity load of a small- to medium-size business. For retailers, it’s even more--as much as 60%.

The first step here is to get rid of incandescent lightbulbs. They are energy gluttons and can increase air-conditioning bills because up to 85% of their energy usage is transformed into heat, according to Southern California Edison, the utility arm of Edison International. Compact fluorescent bulbs will screw into the same sockets but use 33% less electricity. While they are more expensive, they last 10 times as long.

Small fixes to buildings also can cut power bills.

Much can be done with newly developed films that cover existing glass. These films block heat but still let light in.

Another building change is to paint the roof white or use other reflective coverings. Dark surfaces absorb sunlight and hold heat in.

“Cool surfaces don’t cost any more, but you save about 20% on air-conditioning costs annually,” said Ray Darby, who heads a California Energy Commission program to replace dark roofs. The commission will pay 5 cents to 15 cents per square foot to install a reflective roof.

Although many of these fixes will add up to large reductions in power usage, they won’t work for all companies. In the end, some businesses looking to reach the 20% reduction goal will have to resort to some very low-tech methods, Rose said.

“If you have done some things,” he said, “turning up the thermostat by 2 or 3 degrees and turning out some lights might get you the rest of the way there.”

*

Times staff writer Sarah Hale contributed to this report.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Less Power to Them

Companies that achieve a 20% reduction in electricity consumption become eligible for a state-mandated 20% rebate on their summer power bills. Some have already taken action--and are finding several low-cost ways to cut electricity use.

*

Businesses Cutting Energy Use

* Sports Chalet, Marina del Rey: Changed to more-efficient fluorescent tubes that will cut 14,000 watts of electricity use per month.

* Universal Sheraton/Hilton, Universal City: Replaced traditional-ballast fluorescent bulbs with electronic-ballast bulbs in an all-night parking garage.

* Cal State Northridge: Painted the roof of its new gym white.

* Ralphs, several locations: Switching to more efficient bulbs that use less energy but produce more light. Replacing motors used for refrigeration. Project at Panorama City location included replacing 1,700 bulbs.

* Mother Co.: The office building at 10921 Wilshire in Westwood increased its energy efficiency with two new air-conditioning units and new lighting with updated ballasts and lamps.

* Bert Co.: The graphics firm at 1853 Glendale Blvd. in Los Angeles installed a 205-ton high-efficiency air-conditioning system.

*

Energy-Saving Measures

* Cut lighting by 50% during the day, either by removing bulbs or turning on fewer switches.

* Turn off computers at night, or put them in energy conservation mode.

* Remove unused appliances, such as extra refrigerators.

* Install motion detectors on lighting in parking garages and bathrooms.

* Have the air-conditioning systems cleaned and tuned up.

* Install energy-efficient windows.

*

Researched by SARAH HALE/Los Angeles Times

Sources: California Energy Commission,

Los Angeles Department of Water and Power

*