ACHRNEWS

Lessons Learned From L.A.’s Airport Center Project

December 20, 2001
Old chillers are energy gobblers, but in days gone by, the price of electricity was low enough that building owners put off replacement. Today, with California’s soaring utility costs, looking for ways to save energy has become one of the hottest games in town. Then along comes Los Angeles’ Department of Water & Power (DWP) to give owners a push — cash incentives for replacing older chillers with new, energy-efficient models, provided they have them up and running by December 31 of this year.

By working with owners who are ready to make the chiller-replacement plunge, Los Angeles- area contractors can cash in on energy rebate programs too.

STATE INCREASES EFFICIENCY STANDARDS

“Title 24’s state-mandated standards currently call for efficiencies of .75 kW/ton or better,” says John Lockett, utility marketing representative for the DWP’s Chiller Efficiency Program. “In October, Title 24 standards became much more stringent, dictating a minimum efficiency of .576 kW/ton for any new installation. That’s a dramatic change, since many new chillers being sold are far less efficient than this.”

“There are a bunch of large buildings in downtown L.A. with chillers that are 20 to 30 years old,” says Trane sales engineer Brett Gaviglio. “According to my own survey, 75% of the machines are an average of 15 years old or older.”

“Currently, the average chiller out there is running between .80 and .90,” says Lockett. “New Title 24 standards will really influence the market.”

As of the end of November, the DWP had 120 large commercial buildings under contract for the rebate program — totaling some $7.8 million in incentives. Thus far, the program has shown 38 megawatts (MW) of peak demand load reductions. The aggregate reduction for all rebate programs (see sidebar) currently stands at an impressive 90 MW.

“This reduction is so huge, so dramatic,” says Lockett. “It’s the largest megawatt-reduction program ever in the nation. It far exceeds our original target of a 40-MW reduction.

“Title 24 has three chiller ranges — less than 150 tons, 150 to 300 tons, and more than 300 tons. My focus has been on the larger chillers, because that’s where we find the biggest bang for the buck, but I don’t want to discourage anyone.”

AIRPORT CENTER A CASE IN POINT

The four chillers at Airport Center, a three-building complex a few blocks from the Los Angeles International Airport, were built in 1961, 1964 and 1969. In short, they were well past their prime. “We probably would have replaced the chillers in another three or four years,” says Andy Mircovich, Airport Center’s general manager, “but with the rebates and the expected energy savings of $250,000 a year, the equipment and installation will be paid for in about two and a half years. After that, we’ll be saving a quarter of a million a year. “With those kind of figures, I sat down with the owners, Jupiter Realty, and within five minutes they approved the chiller replacements.” “Usually with chiller replacements, you’re looking at a payback time of five to six years or more,” says Gaviglio. “Here it is less than three years. That makes a big difference.” Mircovich says the 860- and 725-ton chillers and one of the 400-ton chillers (the other was redundant) were “ordered, manufactured and fully installed in three to four months” and became fully operational by June 30.

DOING THE NUMBERS

“In one particular building (at Airport Center), at full load, the chiller was using 625 kW — a lot of power,” says Gaviglio. “We proposed an alternative of 392 kW. The DWP gave them $100,000 to make this efficiency improvement.”

The price of the three chillers totaled $600,000, plus installation. Combined with additional rebates totaling another $150,000, the utilities paid approximately 40% of the purchase price.

“What we’ve found is that, generally, owners don’t buy the high-efficiency machines because they’re too expensive,” says Gaviglio. “But with the rebate program, they’re actually paying less for a more-efficient machine than they would have paid if they’d kept their old, less-efficient machine.

“Looking at the efficiencies alone, you have an advantage when you replace a 300-ton chiller. By the time you’re looking at a 1,000-ton machine, it’s an unstoppable advantage. And with a 1,500-ton machine, it’s a no-brainer.”

The rebate program has definitely made some projects happen that would not have gotten over the cost-deterrent hump in previous years. Though many building owners have done studies to determine that they need to replace their old chillers and though they have wanted to go with more-efficient machines, it took the DWP’s rebate programs — as well as those offered by the gas company — to push them into action.

Gaviglio is confident that more and more owners will see the sense in replacing chillers. Some may not be ready this year because of the inconvenience of the change-out. “It takes two to four months to get a chiller and the building is without chiller capacity for one to two weeks during installation,” he says. “Unless you’ve got a lot of redundancy, it requires creativity and timing to retrofit.”

Other owners may be taking a wait-and-see attitude, assuming that if the DWP has this rebate program, it will have others. It’s not in the budget for this year, but may be added to next year’s or the year after’s wish list.

“Rebates will influence the majority of owners,” says Gaviglio. “The ones who aren’t yet ready for it this year will be ready in the next couple of years.”

“The energy-savings issue isn’t new,” says sales manager Pat McGuire of Azusa, CA-based Centrifugal Technologies, Inc. “In the last 12 years, the operational efficiency of centrifugal chillers has been improving. Owners have known that ‘Gee whiz! If I change out a .85 or .9 rush kW/ton chiller to .55 in kW/ton yield, I’ll have 35-45% energy savings.’ The arithmetic is very simple. But not many people are making the capital budget allocations to do it. This rebate program gives them a little boost.”

“The life cycle return on the investment is so high and the risk is so low, that it would be foolish not to change.”

Sidebar: L.A. DWP Energy-Efficiency Programs

The rebate programs apply to projects completed prior to March 31, 2002:

Chiller Efficiency Program: Chillers installed by December 31, 2001, are eligible for up to $850 per kW reduced beyond Title 24 standards, depending upon when the installation occurs. In addition to this incentive, use of a new, high-efficiency chiller can result in electricity savings of hundreds of thousands of dollars over the chiller’s operating lifetime.

Thermal Energy Storage (TES) Program: The TES program offers incentives of up to $600 per kW of peak demand shifted for commercial and industrial customers who install TES systems that shift building cooling load from peak to off-peak. Tanks store ice or chilled water produced at night to be used for cooling during the day. In some cases, the DWP also pays the cost of feasibility studies — up to $10,000. In the long term, TES reduces building peak demand and thereby utility costs, and can also lower cooling equipment capacity requirements and initial capital costs with the downsizing of the chiller.

Hvac Incentives Program: Both commercial and residential customers are eligible for cash incentives to tune-up or replace hvac equipment. For the a/c tune-up option, the DWP picks up all but a modest co-payment: no more than $60 for commercial units and no more than $40 for residential units. Tune-ups include, but are not limited to:

  • Cleaning evaporator and condenser coils;
  • Inspecting suction line insulation, system airflow, ductwork, supply fans, motors, and belts; and
  • Measuring and recording electrical performance of package units before and after tune-up.
For the new-equipment option, the DWP pays contractors incentives for installing heat pump or a/c units rated at Energy Star efficiency levels, as follows:
  • All units < 24,000 Btuh, $75/unit;
  • Heat pumps of 24,000-120,000 Btuh, $150/ton; and
  • Other package or split a/c of 24,000-120,000 Btuh, $115/ton.
Contractors, in turn, offer owners lower equipment purchase and installation costs.

Commercial Lighting Efficiency Offer (CLEO): For small and medium-sized business customers, the DWP offers cash incentives for the installation of qualifying lighting and reduced electricity costs for improved workplace lighting, as well as reduced maintenance costs.

For all comercial/industrial customers, the DWP offers cash incentives of up to $600 for every peak-period kW reduced with lighting retrofits, as well as those reduced below existing Title 24 standards for new construction.

Publication date: 12/24/2001