RETAILERS TAKE SEVERAL APPROACHES TO REIN IN ENERGY COSTS

MICHAEL GARRY

PHOENIX - Facing surging energy costs, 125 energy-management executives from food retailers gathered here last week to seek ways to reduce the consumption of energy by in-store refrigeration, lighting and HVAC systems.

"I'm here because of my energy rates. Southern California Edison raised electricity costs by 28% in the Los Angeles area," said Joe Perry, director of maintenance and construction, Super A Foods, a 12-store retailer based in Commerce, Calif. "I'm looking at alternative energy sources like solar energy."

Perry was one of several retailers and energy vendors queried by SN at Food Marketing Institute's 27th annual Energy & Technical Services Conference at the Wigwam Golf Resort & Spa.

Glenn Barrett, senior manager, energy management, Albertsons, noted that the cost of electricity and natural gas in some parts of the country had risen 30%-40%. To manage its costs, Albertsons, a division of Minneapolis-based Supervalu, is using "pricing management" in purchasing energy, he said. In addition, Albertsons is "taking an integrated approach, coupling energy management with maintenance," Barrett said.

Managing refrigeration and HVAC systems is "the most important part of asset management these days," said Carol Duquette, director of maintenance and site development for Wegmans Food Markets, Rochester, N.Y. Its importance is underscored by rising costs and "the dramatic changes in technology that's happening almost daily," she added. "You have to stay on top of that."

For some retailers, skyrocketing energy costs have been a wake-up call, said Dick Torpey, vice president, marquee account sales, Emerson Climate Technologies, Atlanta. "Until recently, retailers didn't realize the value for the bottom line of energy control. But now energy is not only on the minds of energy people but on CEOs minds as well."

But retailers' energy concerns vary somewhat by region. In Pennsylvania, "it's not so bad now; we're paying about $9 per kilowatt-hour," said James Galehan Jr., refrigeration/HVAC manager, Giant Eagle, Pittsburgh. However, he is looking ahead apprehensively to 2007, when state caps on utility rates are slated to come off.

Preparing for that eventuality, Galehan is looking into energy-monitoring systems. Giant Eagle is already testing fiber-optic lighting in refrigerated cases, and has begun employing LED lighting in some signage, he said.

An executive for a mass merchant who asked not to be identified said his company is trying different ways to procure energy in order to reduce costs. The retailer is also engaged in commissioning, a rapidly emerging process to ensure that the performance of facilities and systems meets defined objectives.

Bi-Lo/Bruno's Supermarkets, Mauldin, S.C., is converting lighting at its stores from a 400-watt HID system to fluorescent 2-by-4 bulbs with a T8 lamp fixture, said Brian Davis, manager, engineering services. "We're up to 58 stores," he said. "It's worked out well for us."

Bruno's is expecting a two-year payback on the new, more energy-efficient lighting system, but that depends in part on new federal tax deductions for energy efficiency. "We're waiting for the final rules so we can see if we qualify," Davis said.

Retailers at the conference also discussed their progress in converting from ozone-depleting refrigerants, such as R-22, to refrigerants that do not contain chlorine, such as R-404a. "We still use R-22 in most stores, but we're going to R-404a for remodels," said Super A Foods' Perry. But he added that his main focus was on "energy-saving refrigeration systems" rather than on just refrigerants.

Retailers like Perry were well-served by an announcement made at the conference by the U.S. Environmental Protection Agency, which said it was launching a program, dubbed GreenChill, aimed at increasing the energy efficiency of supermarket refrigeration systems.

"Our goal is to create an alliance of the EPA, the supermarket industry and other stakeholders to promote the adoption of new [refrigeration] technology and best practices that will lower the emission of ozone-depleting substances and greenhouse gases," said Timothy Juliani, with the EPA's Office of Air and Radiation.

FMI said overall attendance at the Energy Conference exceeded 500, compared to 460 last year and 400 the prior year. "This is our most successful educational conference by far," said Michael Sansolo, senior vice president, FMI, Washington. "The topic is so important because energy costs are only getting worse."

Four large food retail companies are taking advantage of new technology services offered by Prenova, Marietta, Ga., said Mark Newsome, senior vice president, sales. Prenova taps into a retailer's energy management system to perform an elaborate diagnosis of its HVAC and refrigeration systems. "We put equipment through a 'physical' to determine how well it's performing vs. industry standards for its age and geography," he said. Underperforming systems can then be brought up to speed.