RUSSELL EMWS 2013

UPHILLORDOWNHILL:HowShalltheRockofEnergyEfficiencyRoll?

ChristopherRussell,Principal

Energy PathFINDER .com (443)636-7746

AboutChristopherRussell,C.E.M.,C.R.M.n  Independentconsul?ngsince2006

Principal,EnergyPathfinder

n  Visi?ngFellow,AmericanCouncilforanEnergyEfficientEconomy,2012+

n  EnergyManager,HowardCounty,MD,2010-2012

n  DirectorofIndustrialPrograms,AlliancetoSaveEnergy,1999-2006

n  Comm.&Indus.ProgramManager,AmericanGasAssocia?on,1995-1999

n  MBA,M.A.,UniversityofMD;B.A.,McGillUniversity

2©2013Energy PathFINDER.com

AboutChristopherRussell

TODAY’SPURPOSE:EvolvetheSTRATEGY

ORGANIZATIONCOMMUNICATION&PHILOSOPHY

…ofindustrialenergymanagementintothe21stcentury.

3©2013Energy PathFINDER.com

STRATEGYUPHILL:Proclaim“reducedu?litybills”asyourpurpose.

DOWNHILL:Proclaimavisionforsuppor?ngcorebusinessgoalsthroughstrategicenergymanagement.

4©2013Energy PathFINDER.com

STRATEGYUPHILL:Approachenergymanagementasaproject.

DOWNHILL:Approachenergysolu?onsasaninvestment.

5©2013Energy PathFINDER.com

STRATEGYUPHILL:UseanENERGYAUDITtodeterminealistofprojects.

DOWNHILL:DevelopBUSINESSPLANthatprovidesaroadmaptobusinessresults.

6©2013Energy PathFINDER.com

STRATEGYUPHILL:Evaluateproposedeffortsfortheircosttodo.

DOWNHILL:Evaluateproposals…• forimpactonoverallinvestedcapitalperformance• incomparisontothecostofdoingnothing

7©2013Energy PathFINDER.com

EXPENSES,INTEREST,

ORINFLATION

CAPITALISALWAYSINMOTION

ECONOMY(opportunity)

PLACEOFLOWRETURNS

PLACEOFHIGHRETURNS

CAPITALISNEVERATREST8©2013Energy PathFINDER.com

THEINDUSTRIALFACILITYISAMICROECONOMY

FACILITY(opportunity)

WEALTHINPUTS

WEALTHCREATED

EXPENSES,INTEREST,

ORINFLATION

Whowillgetsuperiorreturnsfromyourfacilityassets?YOURBUSINESSortheUTILITYCOMPANY?

9©2013Energy PathFINDER.com

PURSUINGECONOMICOPPORTUNITY

1.  Benchmarkcurrentcapitalperformance2.  Perceiveopportuni?esforsuperiorperformance3.  Es?mateinvestmentrisk/return4.  Reinvestcapital5.  Con?nuousimprovement.SeeStep1.

FortheECONOMY…FortheFACILITY…

DYNAMICSARETHESAME

10©2013Energy PathFINDER.com

ORGANIZATION UPHILL:Delegateallenergymaherstoasingledepartment(silo).

DOWNHILL:Organizeleadershipandskillsincross-departmentalteams.

11©2013Energy PathFINDER.com

ORGANIZATION UPHILL:Allocatebudget,skills,and?mecommensuratewithenergy’spropor?ontototalexpenses.

DOWNHILL:Fundefficiencyeffortspropor?onatelytothemagnitudeandspeedofcashflowthatitcreates.

12©2013Energy PathFINDER.com

COMMUNICATIONS

UPHILL:Assumeeveryonealreadyknowswhatyou’retalkingabout.

DOWNHILL:Manageexpecta?onsthrougheduca?on.

13©2013Energy PathFINDER.com

1-2YEARS

2-5YEARS

5+YEARS

PRICE/PROCUREMENT

AWARENESS&BEHAVIOR

O&M/PROCEDURAL

CAPITALINVESTMENT

SAVINGSPOTENTIALOVERTIME**Author’sSummaryofIndustryKnowledge

14©2013Energy PathFINDER.com

COMMUNICATIONS

UPHILL:Addressmechanicalperformance.Explaineverythingintechno-speak.Describeresultsasenergysaved.

DOWNHILL:Addresscapitalperformance.Ar?culateoutcomesandrewardsastheyaccruetotheagendasofotherdepartments.

15©2013Energy PathFINDER.com

Asknothowmuchenergymanagementshalltakefrom

currentresources.

16©2013Energy PathFINDER.com

Askhowmuch(andatwhatrate)energymanagementshallcreatenewwealth.

COMMUNICATIONS

UPHILL:Executewithoutinforming,persuadingorcollabora?ng.

DOWNHILL:Declareamnestyforpastprac?ces;seek,encourage,andrewardcompliance.

17©2013Energy PathFINDER.com

COMMUNICATIONS

UPHILL:Perceiveenergymanagementasadistrac?onfromstandardopera?ngprocedures

DOWNHILL:Foldenergyperformancecriteriaintoexis?ngbusinessmetricsandaccountabili?es

18©2013Energy PathFINDER.com

COMMUNICATIONSUPHILL:Usesimplepayback.ResultsdescribeHOWLONGittakesforabudgettoreplenishitself.

DOWNHILL:Useratesofreturn.DescribetheRATEandMAGNITUDEofcapital:(1) Createdviayour

agenda,or(2) Destroyedthrough

inac?on

19©2013Energy PathFINDER.com

Youshouldnothavetodefendsuperiorratesandmagnitudesof

investmentreturns.

20©2013Energy PathFINDER.com

Detractorsneedtodefendtherateandmagnitudeofcapitaldestruc?oncaused

byDOINGNOTHING.

DEFENDINGENERGYMANAGEMENT?

PHILOSOPHY UPHILL:Confuseenergyefficiencywithenvironmentalism.

DOWNHILL:Perceiveenergyimprovementsasbusinessopportuni?es.

21©2013Energy PathFINDER.com

PHILOSOPHY

UPHILL:Perceiveenergymanagementasacostcenter.Facilityassetsareacosttobeminimized..Success=nounusualexpenses;don’tgetno?ced.

DOWNHILL:Energymanagement=profitcenter.Success=crea?ngcash,improvingreturnoninvestedcapital,getno?cedforsuppor?ngotherdepartmentalagendas

22©2013Energy PathFINDER.com

“Yeah,but…”

UPHILL:Keeppushingthesamebuhons…andkeepgeqngthesameresults.

DOWNHILL:Applysomeoftheideasfromthispresenta?on.

23©2013Energy PathFINDER.com

YOURFACILITY…

CANBEANATMMACHINE.

24©2013Energy PathFINDER.com

CONCLUSIONS

•  Demys?fy•  Don’tsave…CREATE!•  Mone?ze•  Collaborate•  Documentandcelebrate

25©2013Energy PathFINDER.com

YOU-TUBE:search“EnergyPathfinderInvestmentCalculator”

Energy PathFINDER .com ChristopherRussell

@ENERGYpathfndr

Feb2008 June2010

THANKYOU!