#53 John Powers: Reducing Energy Consumption

Griffin Hamilton  

Welcome to another episode of The Modern Facilities Management Podcast brought to you by FlowPath. I'm your host, Griffin Hamilton. This is the show where I interview industry experts who share their stories, strategies and insights into modern day facilities management, from hospitality to commercial real estate and everything in between. We'll learn what it really takes to succeed as a facilities manager. Welcome to another episode of The Modern Facilities Management Podcast, today I am pleased to have John Powers join us as our guest. John, how are you doing?

John Powers  

I just get better all the time, Griffin. Thanks.

Griffin Hamilton  

Well, I appreciate you making the time to connect and for those that aren't watching, they're viewing, I'm wearing my Braves World Series Champion Polo. And I know, prior to hitting record, we were talking about our common love for the Braves here in Atlanta so I know this is going to be a great conversation. But I'll turn it over to you real quick and beyond you being an Avid Braves fan, I want you to tell the audience a little bit more about who you are and how you got into the industry.

John Powers  

Sure thing. Yeah, I've been an energy nerd my entire career. I have been a consultant and a software entrepreneur, kind of half and half for the last 30 years in the energy markets and at Extensible Energy. We're just following up on some of the ideas we had many years ago, just trying to bring smarter controls to facilities management.

Griffin Hamilton  

And so, to some more context here, how long have you specifically been in the energy management space?

John Powers  

Yeah, so energy management, probably just these last five years or so but energy information services before that energy consulting. Just anything around how customers use energy and how they make energy related decisions, I've been in for the last 30 years. I actually started my career in the rates department of an electric utility. So, I actually know how utilities make rates and love to help customers get around some of the nasty tricks that appear on your bill.

Griffin Hamilton  

Yep, and we're all trying to do the same thing and knock that down as much as we possibly can. And so, I think talking to you, you are certainly a subject matter expert when it comes to energy and utilities here. So, I know those listening are going to be excited to hear what you've got to say. I imagine over the last few decades, a lot of change here in the industry, specific to utilities and energy. What has just been one of the biggest eye-opening changes you've seen or one thing that's the industry has evolved in from that standpoint?

John Powers  

So, I'd say more has changed in the last 24 months than in the last 25 years. Because the very rapid adoption of renewable resources on the grid has led to both some benefits in terms of cleaning up the pollution and carbon footprint of the grid. But also, some costs on end users and some shifting and how costs are shifted on to electricity customers. So, you and I pay for kilowatt hours at home, right, on our energy bill but the businesses we work with actually pay anywhere from 30 to 70% of their bill based not just on how much energy they use but on when they use it. And that's something that not all customers really appreciate that shifting energy from minute to minute and hour to hour can have a huge effect on your energy bill. And we try to help customers save by using energy when it's cheaper and cleaner, rather than more expensive and dirtier.

Griffin Hamilton  

Interesting and so is that something that you've seen to be a lightbulb moment for a lot of people where they just had no idea? And you know, knowledge is power, right? And no pun intended with energy but having a lack of knowledge on like, just the way that their bills are made up or construction? 

John Powers  

For sure, yeah, I mean, again, some of this has been around a long time but really the changes in the last few years have been to shift more and more of the cost of electricity on to that portion of your bill that's based on when you use it. So, there's sort of two things, one is a demand charge. So, that's the highest 15 minutes of usage in the entire month and that can be up to half your bill. So, imagine that you're obeying the speed limit for your whole trip all month long. And then you hit one downhill and you go over the speed limit and there's a cop at the bottom of the hill, that's like a demand charge. And the cops are your utility and they never miss because the squad car is your electricity meter. And it always will tell them when you went the fastest on your whole trip for the whole month. So, demand charges have been rising much faster than energy prices as a whole and we all know, energy prices are rising quite quickly. The other half of it is just time of use energy rates, it's much more expensive to use energy on the grid, say in the evening between 4 and 9pm than it is when the sun is shining. There's so much solar now or when the wind is blowing in the middle of the night. So middle of the day, middle of the night, power is cheap, in that 4 to 9pm period, it's very expensive.

Griffin Hamilton  

And so, I imagined the occupants of that building have a pretty big impact on that energy consumption in those bills at those higher demand hours. So, what kind of impact can they have?

John Powers  

Well, so I mean, it all depends on what flexible energy using equipment there is in the building, you know? You don't want to shut off the lights just because the power got a little bit more expensive, right? When you want the lights on, you want them on. But stationary batteries or car chargers behind the meter and in particular, HVAC systems, heating and cooling systems are more flexible. Nobody cares when the compressors run, they only care that it's comfortable inside and that turns out to be a lot of energy that can be shifted by minutes or hours to a more economical time of day. As long as that's done with the proper automation without imposing a burden on either the occupants or the facilities manager, then you can save a lot of money on your bill that way.

Griffin Hamilton  

Interesting and so, I guess going down to the likes of the occupants in the building, is it more education that you've seen to be successful on here's what we need to be doing in order to reduce those costs? Because the ideas behind it of you know, shifting those times and making sure it's still comfortable for everyone, that's there but at the end of the day, there's still a lot that you can do with the actual occupants in the building. Correct? 

John Powers  

Yeah, so it all depends on the individuals, right? But more automation is better than more education because there are many occupants in many buildings that don't care about energy and it's not their job to care about energy. So, the facilities manager has a tough job, right, they're trying to support a very diverse set of building occupants with a million other things on their list of things to do, right? I've never met a Facility Manager that wasn't either overtaxed or understaffed. And so, no, we actually, of course, we provide some education to end customers who want it but more we provide the automation that allows you to sort of manage things by exception. And you really only want to be engaged with energy management systems when something's going wrong. The idea is to have systems you know, that give you less work to do, not more.

Griffin Hamilton  

Yeah, and you brought up automation a few times and so I think that's a good segue way into just different smart technologies that are available or technology for a smart building. And I guess the misconception there, because in my mind, I think of energy and I'm thinking of my you know, nest thermostat. Where I could adjust that for my mobile device and I think I'm good to go but that may not be the full story there.

John Powers  

So certainly, in commercial buildings, the analogy to nest, the analogy is a good one but the equipment is completely different, right? It’s because there are so many zones in a single building, all handled by the same HVAC equipment. You know, a simple sort of one dial Nest thermostat doesn't really do you any good. So, when I speak of automation, I'm really talking about, sort of an automated system that's watching all the different zones against all of your energy usage and that really can't be done manually. It's where artificial intelligence is replacing jobs that aren't being done at all yet. So, it's great to have a computer watch every zone, make sure it's comfortable and yet be optimizing against the electricity tariff or rate that you're on. So right, the automation requires data to be collected once a minute, I have to know exactly what your energy uses over the entire building, exactly what the temperatures are in every zone, exactly what the state of any battery or car chargers or the rest of them are. Because that's the only way you can optimize the energy spend and comfort in the building. So, we're doing a lot more with cloud-based optimization, we're doing a lot more with watching everything in the building every minute. And we've been talking about singular buildings but I have to say, a lot of the facilities managers that we work with are working with portfolios of buildings. And some of them are managing buildings with no facilities management staff on site at all. And I have to just scold the BMS industry, the legacy systems are just not built well for this to be able to actually see what a hot or cold complaint is being caused by from your desk, 50 miles from a building. And to be able to take action to adjust it, it’s a huge savings for all the facility managers we've talked to. So, that's like, you avoid the diagnostic truck rolls, which are hundreds of dollars at minimum, right, you have to call either a service tech or a controls technician or somebody just to go figure out why they're complaining. And you know, if you can figure out that the complaint is due to underperforming equipment, you can just schedule the repair, the equipment right away instead of having two trips, you have one. And if you figure out that the occupants have just made an error in how they are using the thermostats or whatever it is, you can override that from your desk. And so I mean, the automation in this business has usually meant, you put a schedule on a computer that lives in the basement, you hope for the best. And that to us is not the automation that's necessary to maintain comfort and control and cost and carbon management, sort of the four C's that we usually talk about.

Griffin Hamilton  

Yeah, and something else that I wanted to point out there because yes, it is additional trip fees and the hourly rates that you're going to be paying for but that's also time. So, not only is it the trip to go out there, there's a gap between that and the resolution at times. And that gap right there could also lead to an uncomfortable environment which leads to lack of productivity and your employees aren't happy. And so, there's a lot of secondary impact points there for you not having that immediate information and data at your fingertips.

John Powers  

That's right and so the more we can do to make the facilities manager the hero here, somebody who solves problems right away, as opposed to finally calling attention to those problems. You know, we're working to sort of pull unnecessary trips or unnecessary diagnostic visits or unnecessary alerts and alarms, you know, just we're not trying to lengthen the list of things to do for any of the folks we're working for. We're trying to sort of handle as many of those things with automation as we can and only bring to your attention those that you need to address. And you know, that's a huge part of the value yeah, we talked at first about energy savings but really, it's the comfort, control, all the convenience factors that really help bring value to the facility manager. 

Griffin Hamilton  

Yeah, and we've touched a lot on heating and HVAC, right, beyond that because your energy portfolio consists of a lot more than just heating or air conditioning, how else are you tracking that from lighting, for example or water usage?

John Powers  

Right. So I mean, the buildings are changing faster also than they have in many years. When you think of all of the, let's just stick on HVAC for one more minute. You think of all the decarbonization initiatives that are going on around the US, forgetting the federal government, just the state governments alone have promised electrification of everything in the next decade or two? Well, that's going to vastly change how electricity is used in buildings because you're going to have way more heat pumps and way less gas in buildings. You're going to have all these changes that both operationally and on your utility bill make a huge difference. It could be a benefit or a cost depending on whether you control them properly. So, in addition to that, you know, vehicle electrification is a big deal. Workplace charging of electric vehicles has gone from nothing and I mean, nothing, three or four years ago to something that we're running into at more and more sights wherever we go. We do some work with auto dealers; they all have to put in car chargers just to get an allocation of electric vehicles to sell. So, the changes going on in buildings today are also happening very quickly, building environments very dynamic. And you have to have something that's monitoring it all the time and adapting and learning from the usage pattern changes to manage your bills. But sure, I mean, beyond that, there's lots that can be done with lighting, there's lots can be done with sort of one-off energy users with simple on, off switches, just putting those things. The usage of those things away from the peak times of the day is a big savings as well. So yeah, it's certainly not an H-FAC only system, it's an energy controls system for commercial buildings.

Griffin Hamilton  

Yeah, you bring up a good point on how quickly the industry is changing and although, you know, buildings may be older, that doesn't mean that the technologies required to run them efficiently that being a key word here, is something that's changing and evolving very quickly. So, where does the software come in, beyond the data collection, because there's so many different parts of a building and you know, it takes a village, right? So, what else can someone do to embrace these technologies and get out of that mindset of, hey, we've never done this before, if it isn’t broke, don't fix it and keep going the way it's been going?

John Powers  

Right. So I mean, in the small to medium commercial sector where we concentrate, I'd say, I think the statistic is 87%, have no energy management system beyond the sort of biggest thumb of the guy who changed the thermostat last time we walked past it. So, going from a dumb building to a smart building with a one-day installation is a big deal. And you know, that opens up so many other things you can do in the building, it lets the occupants be more comfortable, it lets you track and report on carbon footprint of the building, which is a major thrust of a lot of landlords and corporate owners that we talked to now, to do all the, as you said, data collection. But data collection isn't the same as control, you can collect a lot of data but what you really want is something that will actually control the building to make sure that there's not a lot of energy being used when the building is unoccupied. Make sure that the folks are comfortable without wasting energy in the middle of the day, make sure that all the schedules are kept properly without you know a lot of manual interference. And again, manage this portfolio like it's a portfolio not like you have to drive out to each building in order to make any sort of changes. So, I think that one of the bigger improvements in moving to a more software-oriented sort of intelligent learning autonomous control product is that you don't have to be on site to be able to affect real changes and real improvements in occupant comfort and dollar savings.

Griffin Hamilton  

Yeah, and you know, that's a great point and looking ahead at work, as you mentioned, we're currently going through a very rapid change in the industry and it's only going to change that much more frequently. And the reliance of data and technology is only going to be that much more as we continue to look ahead on top of the different green initiatives that we've seen here over the last couple of decades that are continuing to be more and more common. And so, it very much is, you know, a necessity really to have that data, have the technology in place in order to make these decisions. And at the end of the day, we're all trying to reduce costs, that being a huge part of the budget for any facility manager out there.

John Powers  

Yeah and the final step is to start using your building as an energy asset, right, because of all the changes I described on the utility grid, you know, you can make money off of load flexibility and demand response programs with the utility, like they actually will write you a cheque. And that's something that only buildings that are under autonomous predictive control can do without imposing a lot of discomfort on the occupants. So, if you're able to manage and predict how energy will be used over the next several hours, well, you can respond to a signal from anywhere and that anywhere could include the grid and then you're not just saving money on your bill. Then you're actually earning money from the energy assets in your building.

Griffin Hamilton  

And who said facilities is only a cost center? So, what can someone listening today, what steps can they take in order to get to that point? What very quick wins would you say in just reducing their energy costs and making the first step into getting to the point where they're, you know, generating revenue for the company?

John Powers  

Sure, I mean, better automation and control of identification and control of the flexible loads in the building. So, just sort of separating out things that you always want to have on as soon as you need them. Lights are a good example, you don't want people turning off your lights, just because the price of power went up a few cents but getting a handle on what's flexible and what's not and informing yourself about the options of what kind of automation is available. You know, we're certainly not the only game in town, we just, you know, we take one approach and you should definitely avail yourself of any other resources in this space but I would just say, get a hold of what's flexible and what's not. And look at the simplest way to upgrade the existing systems that you have because anything that's going to require replacement of HVAC systems is a huge project. Whereas anything that requires replacement of thermostats or other control equipment is usually a one-day deal. And you can save a lot just by going with automation of what you got, rather than ripping out everything you already have.

Griffin Hamilton  

Yeah, certainly makes sense. Well, John, one last question and I asked everybody this, who or what has had the biggest impact on you and your career?

John Powers  

So, I'll go all the way back to the start, I'll say Amory Lovins, I'm probably not the only person who's used that name. But Amory Lovins was one of the early, clear thinkers around the role of energy efficiency in energy markets and how saving energy and using it wisely was smarter than just building another coal plant. And so, you know, I went to see him give a lecture when I was in college and I read soft energy paths when I was in college and I thought, this guy is onto something. So, that's an easy one, I'll go with Amory Lovins.

Griffin Hamilton  

That was quick, just immediate knee jerk reaction there. So, clearly had a big impact on what you've been doing here over the decades. But, John, it's been an absolute pleasure, I really do appreciate you coming on. Looking forward to staying in touch with you and the folks that are interested in learning more about what you guys are doing. And can certainly check out the show notes because I will have you guys linked there, that people could access but again, thanks for coming on and we'll talk soon.

John Powers  

It's been a pleasure, Griffin. Thank you.

Griffin Hamilton  

Thanks for tuning in to another episode of The Modern Facilities Management Podcast. Make sure to subscribe for future episodes and follow us on LinkedIn for more facilities management content.

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