Summer temperatures in Montana can reach the 80s, and in downtown Missoula, the First Security Bank building’s air conditioning system was near failure. The 1950s-era building had become increasingly outdated and uncomfortable for current tenants and unattractive to prospective ones, who could choose from more modern office space nearby.
As winter 2012 moved quickly into spring, building owner Carol Word and property manager Scott Cooney sought bids for a new HVAC system from three engineering firms, growing frustrated as the firms responded with solutions at wildly different price points.
Then a fourth option emerged from the from BetterBricks, a commercial building program of the Northwest Energy Efficiency Alliance (NEEA).
The goal of BetterBricks is to accelerate the adoption of energy-efficient best practices in the commercial industry. BetterBricks created a strategy to support the adoption of a real estate strategy called building renewal that helps owners, managers and tenants conduct whole-building, deep energy-efficiency retrofits of existing properties.
In Missoula, bidding firms looked at the First Security building and focused on the aging HVAC system. BetterBricks, in contrast, saw an opportunity to provide Word with a customized, integrated plan for improving her entire building’s energy performance, revitalizing its market position and competitiveness, and increasing its asset value.
The holistic approach resonated with Word. This strategy offered the opportunity to rejuvenate and extend the functional and economic life of her building, repositioning it to compete more successfully for high-quality tenants looking for modern, comfortable office space.
The other firms “were just looking at what would fit the bill,” Word recalled, “whereas I got the impression—and this is what happened— that NEEA was looking at our building specifically and what would fit the needs of our building.”
In October 2012, they got to work.
Stage One: Technical And Financial Analysis
A team comprised of NEEA staff; Word and Cooney; contractors and consultants; and a NorthWestern Energy representative were assembled for the project. They began by engaging the Integrated Design Labs (IDL) at the University of Idaho and the University of Washington to run a pressure test on the building. They sealed doors and windows, then checked for leaks.
Word already knew that her air conditioner was about to fail. In addition to the need for a new and more advanced HVAC system, the technical analysis revealed deeper issues, such as leaks in the building envelope; broken dampers in need of repair; and inefficient lighting.
The Value Of A Comprehensive Approach
Next, two holistic building-wide improvement plans, called Integrated Measure Packages or IMPs, were developed. In contrast to a traditional, single-system retrofit, an IMP offers a comprehensive and financially viable plan to address the building’s immediate problems, while at the same time creating a strategic path for enhancing the building’s value.
This big-picture approach addresses the building and its various systems as a whole, revealing connections that can result in more opportunities for improvements and savings. In developing each IMP, contractors and consultants performed energy modeling that estimated what Word would save in both energy and energy costs by adopting the measures in each plan. Then, the team’s cost estimator provided estimates of how much Word would spend on capital costs to make the improvements.
Competitive Advantage And Other Non-Energy Benefits
For owners like Word who want to increase the long-term value of their properties and become more competitive in their markets, non-energy benefits that would result from the improvements are integral to the business case. A financial analysis determined the potential value of non-energy benefits at a floor-by-floor and lease-by-lease level and outlined the risks. Key benefits include:
- Better aesthetics, greater tenant comfort, increased indoor air quality
- Improved capacity to keep current tenants and attract new, high-quality ones
- Improved ENERGY STAR® and LEED ratings, which attract higher-credit-quality government and
- corporate tenants that require such certifications for their office space
- Lower long-term average vacancy rate
- Reduced maintenance calls, and less time and money spent responding to them
Stage Two: Building Owner Approval
After Word was presented with the two different IMPs, she chose the plan that would allow contractors to repurpose some of the building’s old ductwork and to abandon some equipment in place, avoiding the cost and disruption of removal. A recommendation to seal the building envelope surprised Word, because none of the engineering firms she’d consulted earlier had mentioned it.
“That came out of left field for me,” she said. “We were amazed by the energy savings just by doing that.”
Stage Three: Implementation
Energy and cost savings from sealing the envelope, installing cleaner AC filters to improve air flow and other low- and no-cost improvements kicked in almost immediately. Additionally, by sealing the building first, Word was able to purchase smaller, less-expensive HVAC units than an unsealed building would have required.
In the second phase of implementation, Word adopted her IMP’s lighting recommendations. These called for more energy-efficient lighting; fixtures that take better advantage of new technologies; and an overall lighting design that incorporates the building’s ample natural light and matches the needs of the modern workplace. Specifically, with the introduction of higher-quality light fixtures, the old design of 73 to 76 fixtures per floor was reduced to 27 per floor.
Finally, there was the ailing air conditioning, which Word replaced with the IMP’s recommended Variable Refrigerant Flow system—a more efficient, whole-building system capable of providing tailored heating and cooling to match each tenant’s preference.
The result is a better-looking building with more comfortable tenants. The use of fewer, higher-quality light fixtures has created a modern, updated look in the lobby and on the floors. Tenants no longer complain to Word and Cooney about extreme heat and cold.
Stage Four: Measurement And Verification
In this stage the full impact of the improvements to Word’s building will be quantified and confirmed. But the projections are encouraging.
By adopting most of the IMP’s recommendations, Word is expected to save an estimated 46 percent annually in energy costs. The building is expected to use an estimated 74 percent less energy, driving its potential EnergyStar score up to 93 out of a possible 100. Plus, the building is expected to produce an estimated 84 fewer metric tons of carbon per year, equivalent to keeping 17 cars off the road annually.
Lessons Learned: Qualified Contractors Are Key
Even as they were starting to benefit from initial upgrades, Word and Cooney dealt with unexpected challenges that would eventually stretch the project’s 2-to-3 month timeline to 15 months. The delays were driven by local contractors who did not have previous experience with a system of this magnitude.
Looking back, Word said she could’ve avoided the delays by ensuring that all contractors were familiar with the systems they would be installing and by following the IMP’s recommendation to hire a third-party “commissioner” to oversee their work.
A Building’s Brighter Future
Word is excited about the estimated energy and cost savings that are expected to flow from embracing building renewal for her building. She’s already enjoying significant non-energy benefits. Her tenants are happier, she’s been able to recruit new tenants more easily and charge them higher rates, and she can see a brighter, more competitive future for her property.