ALBERTSONS CUTS ENERGY COSTS 15% VIA RETROFITS 2004-09-27 (1)

JULIE GALLAGHER

DALLAS -- Applying strict project management rules to retrofits of motion sensors, lighting, refrigeration and HVAC systems, Albertsons is saving 108 million kilowatt-hours per year, a 15% drop in its energy costs.

These results were part of a presentation on retrofits given by Jim Vannan, engineering manager for Boise, Idaho-based Albertsons, at the 25th Annual Energy and Technical Services Conference held Sept. 13 to 15 at the Adolphus Hotel here.

"Although there are many challenges surrounding retrofits, they're the right thing to do," said Vannan. "You can save your company millions of dollars while at the same time conserving natural resources."

The 2,500-store retailer has reduced its energy expense by as much as 25% at the individual store level. Vannan noted that one store is saving $88,330 in energy costs per year as a result of equipment upgrades that reduced its kilowatt-hours from 9,000 to 6,800 per day.

Overcoming budgeting, communications and training challenges, Albertsons is optimizing its retrofits through more stringent project management guidelines, noted Vannan. "In the past we installed equipment, paid the contractors and everybody was happy," he said. "We are achieving savings now, not by saying 'tell me when it's done,' but by inspecting the results that we expect."

The retailer's retrofit strategy begins with the clear definition and communication of details at the start of a project. "When we do retrofits, our energy partner [vendor] runs the project though we define the time frame and other specifics of what to do," said Vannan. "Our partner has been our greatest savior. It can take a project from start to finish and make sure that it is done properly."

Albertsons' energy partner also provides much-needed training for contractors. "In a lot of areas, there is limited training available for energy management systems. For instance, some contractors have very limited refrigeration knowledge," said Vannan. "Also, lots of times, contractors have been doing their jobs for years so they have a 'you can't tell me what to do' attitude. It's been a real challenge."

Another hurdle that Albertsons is attempting to scale is associated with internal communications. "A lot of the times [during past retrofits], the store director didn't know why we were in their store," he said. "Now, we are sure to alert them ahead of time and send contractors with a letter that includes a phone number that store directors can call for more information."

Albertsons is also expediting the retrofit process by making its energy management and maintenance department, service contractors and engineers more aware of project plans, said Vannan.

To help manage information, the retailer began maintaining a Microsoft Access database on equipment at each store. "If something isn't working properly, it must be reported and filed in the database so that when questions come up, the database will contain the answers."

Vannan acknowledged that limited budgetary resources are a major challenge associated with retrofits. Albertsons was able to pinch pennies with its choice of database. "The Access database cost us about $13,000 vs. $20 million that we would have had to spend on an Oracle database," said Vannan. "We chose it because it is common and easy to use."

Albertsons also saves money by taking advantage of public utility incentives. Such incentives are often granted by utilities to customers for purchasing energy-smart equipment. They come in the form of cash-back rebates or low-interest financing.

Although these incentives are helpful, they also pose challenges. "Keeping track of the paperwork associated with incentives for each store is very difficult," said Vannan. "Also, a lot of incentives are set for one facility at a time. Utilities aren't taking the needs of a large chain into consideration."

Vannan related that after an Albertsons retrofit takes place, its results are verified through site visits and remote communications. Savings are then documented and reported via a utility-meter management system that is Web-enabled. Information drawn from the utility meter is combined with details on money spent, work done and savings achieved, for the creation of executive reports, said Vannan.

These reports are also shown to contractors as well as those at Albertsons responsible for systems maintenance to encourage project buy-in. "We use graphs so they can see the real value of a project," said Vannan. "By sharing results, we're able to show them that [retrofits] work."

To ensure continued savings, Albertsons has established an Energy Bureau responsible for preventing unauthorized changes to equipment.

"Before a change is made, [contractors] have to contact the Energy Bureau," said Vannan. "If the bureau receives a legitimate request -- for instance, if a store needs additional lighting so that it can begin operating 24 hours a day -- the information is filed in the database. The bureau acts as a monitor so that we can react to excessive energy use."