Combined Heat and Power System Puts Building Owners Out In Front of Rate Hikes

Aegis Energy Services, Inc clients guard against impending rise in energy costs with efficient Combined Heat and Power (CHP) units.

The rate hike news is everywhere.

United Illuminating has notified Connecticut state utility regulators of an application for a rate increase. Jersey Central Power & Light has asked to move homeowner rates up 4.5% next year for North Jersey and the Maryland Public Service Commission has already signed off on BG & E’s application for an increase in natural gas and electricity rates.
For buildings like The Hamilton in Midtown Manhattan, the rising rates that are ubiquitous in the Northeast will have much less of a bottom-line impact thanks to some forward thinking investments made by the 305 East 40th Owners Corp, owners of The Hamilton, back in 2010.

“I had been searching for a way to reduce, or at least contain, our annual energy costs,” says Clark Lydic, Board President for the Owners Corp. “Those costs make up a significant expense item in our annual operating budget.”

Lydic met with representatives of Aegis Energy Services, Inc to discuss the viability and projected cost-savings of installing a Combined Heat and Power unit in The Hamilton.
The building is a residential cooperative that was built in 1963 and contains 359 apartments as well as a landscaped roof deck, laundry room, and two commercial spaces that house a supermarket and garage. The building was originally heated by Con Edison steam but had converted to #6 fuel oil before 1983.

“The managing agent for our building provided historical data on fuel oil consumption and electricity usage to the Aegis engineers,” Lydic said. “Aegis prepared detailed projections of energy savings if we were to install a Combined Heat and Power, or ‘cogeneration’ unit.”
The Aegis CHP system reduces both costs and emissions for medium and large commercial, industrial, and residential customers by simultaneously generating power and thermal energy from a single fuel source. Aegis Energy Services, Inc uses proprietary software to combine the site’s historical data with information gathered from an on-site inspection to develop a savings analysis for the building.

“In the first six months of continuous operation our monthly maintenance reports showed a significant reduction in energy costs in both fuel oil and electricity,” Lydic said. “That performance had exceeded both our expectations and the initial savings projections.”

For The Hamilton, and buildings like it, those savings will become even more pronounced in the face of the recent rate hike news. Many of the requests are the result of costs related to Tropical Storm Irene, the 2011 Nor’easter, and Hurricane Sandy. The financial impact of the more recent winter storm Nemo has yet to be figured into the equation.

In a written statement, James Torgerson, president and CEO of United Illuminating directly referenced the recent storms as the catalyst for the need to invest in capital improvements.

“These investments are essential to replace aging infrastructure, maintain reliability, and harden our delivery system to better withstand extreme weather events,” he said.

At The Hamilton, rising fuel and electricity costs mean higher savings thanks to the Combined Heat and Power system installed in the fall of 2010. The building has also benefited from the 24/7 remote monitoring of the system by Aegis service technicians.

“The daily operation of the CHP system is monitored online by the Aegis staff,” Lydic said. “The operation is so smooth that the Aegis staff is made aware and can react to any issues immediately. In fact, they can react faster than our own building staff.”

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