Russell EMW 2012

SoIHaveanEnergyAssessment.

NOWWHAT?ChristopherRussell

Energy PathFINDERwww.energypathfinder.com

(443)[email protected]

ENERGYMANAGERS’WORKSHOP

“Inpreparingforba-le,Ihavealwaysfoundthatplansareuseless,butplanningisindispensable.”

--DwightD.Eisenhower1890-1969

34thPresidentoftheUnitedStatesCommander,SupremeHeadquarters,AlliedExpediKonaryForce

2©2011Energy PathFINDER

3

AboutChristopherRussell,C.E.M.,C.R.M.n  IndependentconsulKngsince2006

Principal,EnergyPathfinder

n  VisiKngFellow,ACEEE,2012-

n  EnergyManager,HowardCounty,MD,2010-2012

n  DirectorofIndustrialPrograms,AlliancetoSaveEnergy,1999-2006

n  Comm.&Indus.ProgramManager,AmericanGasAssociaKon,1995-1999

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

PublishedFeb2008

PublishedJune2010

©2011Energy PathFINDER

TheBusiness-as-UsualImplementaKonRates*

4

*ImplementaKonratesarepercentofenergyvolumeunless(*)percentofprojectsSOURCE:C.Russell,“NorthAmericanEnergyAuditBestPracKces”


0% 20% 40% 60% 80% 100%

PGE(CA)TAMU(TX)

NYSERDA(NY)BCHydro(BC)

DukeEnergy(NC)EnbridgeGas(ON)

SCMEP(SC)XCEL(MN)ETAC(PA)

NRCan

CanWeDoBelerthanBusiness-as-Usual?

► Is30-40%implementaKonokay?► HowcanweimproveimplementaKonrates?► Howcanwesustainmomentum:

§  Aneranassessment§  Anerthe“lowhanging-fruit”isgone

► Energycostcontrol:AreweimplemenKngprojects,orsustainedprocesses?


MostEnergyAuditsEndupCollecKngDustonaShelf:WHY?

•  Lackofaclearagenda:Lackoffocuswithinscope.Towhatend:Savings?ProducKvity?Accuracy?Noclear“ownership”oftheresults

•  FailuretopreparestafffortheideaofanenergyauditIsthisawitchhunt,orwhat?Willtheresultsembarrassme?

•  Adense,technicaldocumentthatonlyanengineercouldunderstand

•  Lackofexitdiscussionwithkeymanagers:–  Discussfindings,weedoutopKonswith“poliKcal”issues–  LinkthefindingswithotherbusinessprioriKes:What’sinitforYOU.


Post-AuditIssues► Whichprojectsdowestartwith?► Howdowecompeteforcapitaldollars?► Whichdepartmentpays?► Whichdepartmentimplements?► Whichdepartmentbooksthesavings?► VerificaKon?► IncenKves?


AboutEnergyDecision-Making

NOTICES HIGH ENERGY COSTS ü EVALUATES OPPORTUNITIES ü

PROPOSES SOLUTION ü POSES POTENTIAL VETO n.a.

PAYS TO IMPLEMENT ü IMPLEMENTS ü

MAINTAINS ü RECEIVES BENEFIT ü

ü ü ü ü ü

ü ü ü ü n.a. ü ü

ü ü ü ü ü

ü ü ü

HOME- OWNER

TYPICAL ORGANIZATION

ü ü = STRONG INVOLVEMENT

= MODEST INVOLVEMENT


What’saGeneralManagertoDo?…Delegate!

Procurement? Maintenance?

E/H/S?OperaOons? Engineering?

GeneralManager


The“OneDepartment”Syndrome

•  Managerspre-supposewhatenergycost-controlentails•  Assignenergycost-controltoONEdepartment•  Turfissuesareafactoflife•  So:thatONEdepartment:

–  sKckstoitsturf–  usesitsexisKngbudget–  usesitsexisKngtalentsandprocedures–  accomplishesafracOonofpotenOalenergysavings


ChristopherRussell|Director,MarketOutreachScienceApplicaKonsInternaKonalCorporaKon|[email protected]

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EnergyCost-Control:DelegaOonisaFuncOonofPercepOon

Prices

Big,CapitalAssetInvestments

Housekeeping,Leak/LossRepair

ProceduralDiscipline

PROCUREMENTDIRECTOR

CHIEFOFENGINEERING

DIRECTOROFMAINTENANCE

ENVIRO,HEALTH&SAFETYCOORD.

Hedging,FuelSwitching

CAPEXProjects

O&MProjects

“Policing”Procedures

QuesKonsYouNeedtoAsk

•  Howdoenergyandenergydecisionsimpactyourbusiness?

•  OpKonsfortakingacKon?•  Delegatetowhom?•  Metricstodemonstrateprogress?•  CooperaKonacrossdepartmentallines?•  PrerequisiteorganizaKonalchanges?•  Topmanagementsupport?


WhatisaBusinessPlan?

•  AblueprintforacKon•  CoordinaKngstakeholdersforcommongoals•  Frameworkfor:– EducaKngstakeholders– Defininggoals– BudgeKngresources– Recognizinghurdles– DefiningaccountabiliKes–  IdenKfyingrewards


YouDONOTNeedaBusinessPlanIf…•  Allthekeydecision-makersfullyunderstand:

– Whatanenergyauditis– Whatitrecommends,and–  TheimplicaKonsforbusinessperformance

•  It’sautomaKcallycleartoeveryoneinvolved:– Whowilldothework–  HowtheimplementaKonwillimpactoperaKons–  Thefinancialimpact– Whowillpayforit– Whowillbookthevalueoftheresults


BusinessPlanStrategy:SCENARIOS

•  Businessasusual:Simplypresentalistof“projects,”or…•  OrganizerecommendaKonsintoscenarios,eachreflecKngadifferent

energymanagementstrategy.Forexample:

•  Scenario1:Emphasizeadvancedtechnologycapitalprojects.•  Scenario2:EmphasizelesscostlyoperaKonsandmaintenance(O&M)

iniKaKves.•  Scenario3:PrioriKzeimprovementsthatareleastKme-intensiveorpose

theleastinterferencewithfacilityoperaKons.•  Scenario4:PrioriKzemeasuresthataresupportedbyavailablerebates

andincenKves

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Developscenariosthatappealtokeydecision-makers’agendas


BusinessPlanStrategy:In-HouseorOut-Source?

•  WhobringsthemostcomprehensiveexperKsetothetask?

•  Whatrepresentsthemostvalue:–  CHEAPvs.FASTvs.RISK

•  WhoserecommendaKonsrepresentulteriormoKvesorhiddenagendas?

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STAFF VENDORSCONSULTANTS


CommunicaKonFormats•  ElevatorPitch–concisedescripKonofoutcomesbenefitsand

theproblemthattheysolve•  GraphicPresentaKon–PowerPointwithkeygraphs,images,

stats,coremessages•  Reportdocument–Forcorporate/externalstakeholders.

Magazineformat–narraKve,boldheaders,textboxesforkeyconcepts,photosofkeyopportuniKes

•  Intranet–Internalreadersonly.Performancescorecard,newsupdates,linkstokeyresources


YouTubehlp://www.youtube.com/watch?v=a8lLmdaax44

BusinessPlanDocumentOutline

•  CoverPage•  TableofContents•  ExecuKveSummary•  OutlineofRecommendaKons•  IssuesandOpportuniKes•  ImplementaKonMilestonesandPlan•  Technical&FinancialAppendices


CoverPage•  Lookandfeelofthecompany’sbrand

•  Titlethat’smeaningfulandinspiring:(HowexciKngis“LevelOneEnergyAudit?”)Trythese:–  “Leveraging$200,000inAnnualEnergySavings”–  “BoosKngOperaKngIncomeby12%in2010”–  “EnergyOpKonsforReducingBudgetRisk”

•  Date,keyauthorsorpointsofcontact


ExecuKveSummary•  Shortandtothepoint,plainenglish!•  LeadoffwithreferencetocurrentopportuniKesandbusinessgoals– HowdorecommendedenergysoluKonshelp?

•  Wheredoesthebusiness“hurt?”– Explainhowenergychoicesaddressthosehurts!

•  Recognizewhat’salreadydonewell•  It’sabouttheBUSINESS,nottheENERGY


OutlineofEachRecommendaKon•  BriefdescripKon•  Netvaluecreated•  Costtoimplement•  CostofNOT

implemenKng•  Hurdles•  Resourcesorchanges

needed•  OutcomeanKcipated:

Costsavings?ProducKvity?Greatercompliance?Rebatescaptured?


IssuesandOpportuniKes•  Magnitudeofvalue–  Currentwastesustained– Newvaluetobecreated

•  Hurdles– Money,skills,authoritytoact

•  CriKcalsuccessfactors– Whatchangesneedtobemadeorresourcessecured?Training…rebates…shinsofauthority…

–  ConverKnghurdlesintorewards?•  Impactonbusiness:savingsequivalenttowhatrevenue?WhatvolumeofproducKon?


•  IMPLEMENTATIONistheresultofDECISIONS•  DECISIONSareafuncKonofempowerment•  EMPOWERMENTisafuncKonof:– Awareness– Capability– Accountability– MoKvaKon

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RECOMMENDATIONS DECISIONS IMPLEMENTATION


TheDecisionTree**SusanScol,FierceConversaGonsLEAF

decisions Makethedecision.Actonit.DonotreporttheacKonyoutook.

BRANCH decisions

Makethedecision.Actonit.RegularlyreportyouracKons.

TRUNK decisions

Makethedecision.ReportyourdecisionBEFOREyouact.

ROOT decisions

Conferwithotherstomakethedecision.Thesedecisionsposegreatrisk.


TheDecisionTreeYouWANTtomoveasmanydecisionstothe“leaf”levelaspossible

LEAF decisions

BRANCH decisions

TRUNK decisions

ROOT decisions

AutomaKc;noresourcerisk.StandardoperaKngprocedure.Lilleornoconsequencesoffailure.

WorthyofscruKny.Mayleadtoastrainonresources.

WorthyofconsultaKon.Maypushresourcestothelimit.Mayconflictwithotheragendas.

Requirescoordinateddecision-making.“Unchartedterritory”forprocedures,authority,andresourceuse.


TheDecisionTreeAppliedtoBusinessPlans:

• IdenKfythedecisionsneededtoimplementiniKaKves• RevealimplicaKonsofthosedecisions.ConsiderrestructuringauthoriKesandaccountabiliKes.• Referencepointfordiscussion:

• definecostsandbenefits• recognizehurdlesandsoluKons

• Ahandytoolforgroomingleadership

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AllowstakeholderstoachievesoluOonsthroughinformeddebate


“Keeppushingthesamebugons…Keepgehngthesameresults.”

--AlvinF.Shaw1899–1989

(MyGrandfather)

THANKYOU!

BLOG:hlp://energypathfinder.blogspot.comWEB: www.energypathfinder.com

BOOK:“TheIndustrialEnergyHarvest”BOOK:“NorthAmericanEnergyAuditProgramBestPracOces”

Energy PathFINDER ChristopherRussell

[email protected](443)636-7746

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Documents

Russell EMW 2012