North Central / Regional Reports

Energy Project Has Saved Detroit Airport Nearly $2 Million

August 14, 2003
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DETROIT — The Wayne County Airport Authority has announced that its 18-month, $14.6 million energy conservation improvement contract with Siemens Building Technologies Inc. is complete, on time and on budget. To date, the project has saved Detroit Metropolitan Wayne County Airport (DTW) $1.8 million in energy costs.

The contract was designed to increase safety and comfort, as well as reduce energy costs and consumption, within the older facilities at DTW. Major improvements were made to equipment in at least six airport facilities, including the Smith and Berry Terminals, a parking garage, the powerhouse, utility tunnels, and gate areas.

Like most businesses today, airports face severe financial and competitive pressures, said Wayne County Airport Authority CEO Lester Robinson. “These days, airports cannot afford to have both an aging infrastructure and spiraling utility costs. We must be a responsible partner to the airlines and their passengers in terms of innovating cost savings.”

The improvements involved major electrical, mechanical, and lighting systems. The improved facilities serve over 7.3 million travelers and thousands of employees annually.

During the construction period, energy usage dropped measurably — 30 percent beyond early projections, according to Siemens’ Greg Warner, district performance assurance manager. “To date, the total actual savings of approximately $1.8 million exceed the projected finished target by more than 8 percent,” said Warner. “About 84 percent of all utility savings are derived from electricity, with about 16 percent in gas and water. All savings are a result of energy reduction, with no labor reductions.

“Energy consumption savings have totaled 52,604 MMBtu, exceeding the projected savings by 8,528 MMBtu,” continued Warner, “In addition, there were no change orders throughout the entire project.”

“These are impressive results for such a large public works project,” said Airport Powerhouse executive Len Cranston.

Financing of the project also presented a challenge. “We didn’t have the capital funds to replace aging equipment which was getting too expensive to maintain,” said Cranston. “That’s when we decided to try a performance contract or self-funding approach whereby the cost of the contract is funded by the savings generated from the improvements.”

Robinson agreed, “We needed the right financial package along with the most qualified energy services partner that could help us get results.”

Said Mary Lou Posa, the Airport Authority’s principal attorney, “Our strategy was to take a private-sector approach to a public-sector project — and it worked.”

The Airport Authority was able to obtain a favorable financing rate from Siemens detailed performance analyses. “We went to a private investment firm,” noted Posa, “with a well-documented proposal that reduced their risk and our rate. As a result, we were able to save even more money.”

Following qualification and competition for the project, Siemens presented the lowest price with the highest energy savings and won the contract. Siemens also demonstrated how it planned to meet a goal of 30 percent Disadvantaged Business Enterprise (DBE) participation.

The scope of Siemens work included energy efficiency audits of all the facilities, HVAC equipment retrofits and replacements, enhancements to a building automation system, and retrofits to brighten lighting. Also, most of the electrical systems were upgraded to include power monitoring to better manage the airport’s electric power usage requirements.

Greater comfort from improved temperature control is evidenced in a reduction in costly, time-consuming, temperature-related complaint calls. Further, there is improved safety from more brightly lit parking areas. These results, said Robinson, lower airport operating costs and ease the pressure on ticket pricing.

Publication date: 08/18/2003

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