Today’s Energy Leader Webinar is How to Leave an Energy Management Legacy, being presented by Steve Heinz. Steve is a professional engineer, certified energy manager, and certified measurement and verification professional. As the founder and CEO of EnergyCAP Inc., Steve has published software used by over 10,000 energy managers in 3,000 organizations to track more than 25 billion dollars in energy spending. He was also named the 2013 International Energy Engineer of the year by The Association of Energy Engineers.

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How to Leave an Energy Management Legacy. As I enter my sixth decade, I have begun thinking about a legacy and what is a legacy and how do you leave a legacy? Is there some formula to leaving a legacy? So let’s talk about that today. Well what is a legacy? Legacy as a noun is something handed down from a predecessor. That’s as opposed to the other use of legacy as an adjective.

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Being in the software publishing business, we often hear the term legacy software. Whereas legacy as a noun is usually a positive thing: he left his legacy. When we talk about legacy software, that’s usually a negative thing. Legacy software means software that’s obsolete. It’s essentially out of date. It’s barely functional.

What we wanna do is create and leave an energy management legacy, not legacy energy management.

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Legacy energy management, just like legacy software, is energy management that sooner or later will be obsolete and out of date. Some people might think that as an energy manager if they can get that one big project approved by the organization and installed, that big shiny piece of hardware, that that is there energy management legacy. Well unfortunately, shiny pieces of hardware in retrofit, although certainly might be very, very valuable for a number of years, but those kind of things tend to become legacy energy management in time.

When I was first starting off in the field of energy management back in the 1970s, I saw all sorts of very expensive automation systems being installed in government buildings, and I would bet you any amount of money that not a single one of those is still in operation today. They’ve been replaced.

So those one-time projects tend to be legacy energy management rather than energy management legacy. And energy management legacy is something much deeper than a single project.

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An energy management legacy changes the organizational culture. It makes efficiency and sustainability become permanent priorities. So even when that one large successful project has run its course and it no longer is the latest and greatest technology and in hindsight it seems to be locally inadequate by the standards of the time, even when that happens, the organization is still moving forward to continue to drive down energy consumption and continue to seek out the most energy-efficient means possible.

Let me start off with a little bit of a case study.

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Let’s talk about the Kroger Corporation. Kroger is the largest U.S. grocery retailer. They’re the 23rd largest company in the U.S. in revenue; that’s about 100 billion dollars a year in revenue. They’re the second largest retailer behind Walmart and the fifth largest retailer in the world. They’ve been in business 131 years, and they have 375,000 employees. So that’s quite a significant organization.

And what have they done in the arena of energy management?

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Well versus the year 2000, they’ve driven their rate of energy use down by almost 35 percent. They’ve implemented many technologies to do that, cutting-edge technologies and building controls and refrigeration control, things like that. They’re currently adopting EnergyCAP software for all their utility bill management and calculating their cost avoidance through the energy efficiency investment. They have 557 ENERGY STAR-rated stores.

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Now how did they do this, and how do they continue to do this? It’s mainly due to a strategy of continuous improvement. That’s become part of the corporate culture. This would be what you might call the plan, do, check, adjust cycle, the PDCA cycle.

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In other places it’s called the plan, implement, followup, and adjust cycle. Continuous improvement. If you read the ISO 50001 Energy Management Guide, this is a guiding principle of that. ISO 50001 doesn’t say, “In order to be an effective energy manager, you have to do this project and that project and you have to install this technology.” It’s not specific about a measures or technologies. It’s specific about the cycle: Planning, implementing, following up, and then adjusting through what you’ve learned in the followup and then feeding that back into the plan and continuing to do this so that you have a philosophy and a program of continuous improvement. And doing that your energy management program is not based upon one project or one technology, it’s based upon a process.

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So let me look at five strategies for creating and leaving an energy management legacy that you as an energy manager or sustainability director can do to establish your legacy so that energy management lives long beyond when you’re gone.

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Well first, what happens is senior management doesn’t share the same priorities as you. Your priorities is energy management, energy efficiency. That’s what you were hired to do. Senior management might, I’m sure they do, have other priorities and certainly competing priorities.

What you have to do is show the value of energy efficiency, because at the end of the day, the priorities in organizations are based upon the value to the organization. So you want to equate energy efficiency with net positive value.

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In other words, as in Jerry Maguire, show me the money. So every chance you get you wanna show the value of energy efficiency, and it’s not just bottom-line dollars; it’s value expressed in other ways that could be increased, positive, public recognition and image of your organization and could be increased building value, things like that. But the bottom line is you want to equate net positive value with efficiency.

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One of the problems or challenges that you face is all the clutter, all the noise. When senior management is looking at all the things they have to address, it’s sort of like Times Square. Everything is vying for their attention. It’s like too many bright, shiny lights. Management might not hear you through all of that noise, and someone else, other projects, programs, priorities, might challenge energy management and attempt to preempt. So you have to be sure that management has some tangible ways in which they can understand the value that you bring, and you can do that by implementing energy information tracking and energy reporting.

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Now that’s very important, because as management gets accustomed to seeing energy reports and as you put an effective energy information system in place, that helps to cut through the clutter and the noise and becomes something that the management is accustomed to looking at. That’s a very important step. If you wanna show value, you have to measure it and then you have to report it.

And you want this to become institutionalized. You don’t wanna just grab utility bills after they’ve been paid and create some energy reports. If you can tie in the electronic receipt of utility bills into an energy management platform, tie that into your accounts payable system, it will then become part of a critical business process that the organization can’t do without. So we find that organizations have much more long-lived success with energy software if they’re able to tie it into the accounts payable process, because then it’s an important part of the accounting and the CFO’s chain of command.

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But just measuring energy information isn’t that helpful unless you’re held accountable for the performance. Energy reports are one thing, but being held accountable for performance is a lot more important.

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So my third recommendation would be that after you implement energy tracking and reporting systems, you implement some accountability processes that raises awareness, rewards success, and it helps you to track your performance.

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Just some examples of some EnergyCAP reports showing cost savings and energy savings. Of course there’s a lot of different ways that you might want to report your energy management success. If you keep this in front of senior management, they’re gonna become accustomed to looking at those key metrics routinely. So let me look at another example of a very successful program.

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Montgomery County Public Schools. Montgomery County Public Schools is the largest school district in Maryland: 12,000 teachers, 200 school buildings, and 142,000 students. So it’s a big operation.

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They created a program called SERT in 1994, one that I was involved with when they originally set it up and they set up the energy tracking system for that. So that goes back over 20 years now. SERT stands for School Energy and Recycling team. 20 years later it’s still going strong, and they’ve reported 2.2 million cost avoidance just in the most recent school year.

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So when you see this kind of a thing, a very viable program that is still saving huge amounts of energy every year after 20 years, you have to say what are some of the things they did that make this program so successful and gave it such long life? So let’s look at some of their strategies. Well the first one is engagement of key groups. They learn how to engage the staff, the students, the community so that everyone has a stake in the program. They have ongoing reporting and visibility; they keep this in front of everyone. They have competition recognition and awards, keeps people engaged, and also training so people know what to do.

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It’s what MCPS calls the SERT magic triangle. The building service team, those at the custodial staff and the maintenance staff, administration, staff, students, community. Working together they have maintained a very viable successful program for over 20 years, so there’s something to be learned there from their long-lived success.

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Now one of the problems that you might run into is energy efficiency as seen by management is a one-time thing. Energy efficiency means we implement a retrofit project or we have a short-term goal, and that’s it, a short-term priority.

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So I would recommend number four that you want to set visionary stretch goals as well as some intermediate goals. For instance, an intermediate goal might be to have all of your buildings benchmarked at Energy Star and eventually worked up to the point where all of your buildings have a 75 or great Energy Star rating, which makes them eligible for an Energy Star label. Now we call that an intermediate goal. The long-term visionary stretch goal might be net zero energy buildings, 40 years in the future.

Maybe you want to say by 2050 our vision is that our buildings would be net zero energy. Now will that ever come to pass? I don’t know. A lot of people around the world are talking about that as something that oh a few years ago that would’ve been laughed off: There’s no way that your buildings can be net zero energy; that’s impossible. We don’t have the technology for it. We don’t have enough space for solar systems or whatever it might take. But if you look at the pace of technology, who knows what’s going to be available for a building owner in 2050, so it might be a very viable visionary goal to say that’s where we’re headed at sometime down the road.

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Now sometimes we see that changes don’t take hold because there is no long-range strategy. In the same way there might not be long-range vision, there needs to be long-range strategy, the difference being vision is the big picture: net zero energy by 2050. Strategy is more the specific ways that we’re going to get there. So you need to have a strategy that senior management can understand and can buy into.

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So I would recommend that an energy management strategy that really includes three different kinds of tactics.

First is turning off; that’s the simplest strategy obviously. So turn it off, first.

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Number two is turn it back, or set it back, control it. If you can’t turn it off, at least minimize the use when it doesn’t need to be running full. Turn it halfway back, set your temperatures back. And after you’ve turned off things that you don’t need and set back things when you can, then the third is “tuning up”.

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Now “tuning up” is quotes around it, because I’m not just talking about tuning up a boiler. Tuning up means being as energy efficient as possible, which might mean replacing the boiler. It might mean LED lighting. So I would say all retrofits are included within the “tuning up” category. And really anything that you look at in energy management as far as reducing your consumption, let’s say your consumption of kWh, can be put into those categories. You turn it off. You turn it back, or you tune it up. Let me look at another example.

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Loudoun County Public Schools. Loudoun County is the third largest school district in Virginia. They’re in suburban Washington, just to the west of Washington D.C., and for years has been one of the fastest-growing districts in the nation due to the sort of population boom in northern Virginia, and today about 70,000 students. So again, a very big operation.

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They created an energy management program back in 1993, which is still going strong 20+ years later.

So again, when you see a program that is still viable at that point, a program that is still touted by the superintendent, touted by the school board, by the local media, you know what is it that has allowed a program like this to remain so viable for so many years in a time period where I would say 98 percent of all energy management programs in school districts, the do-it-yourself programs and so on have just fallen by the wayside. So what’s their secret? They’ve documented a 20-year cost avoidance of 58 million dollars, quite significant. They’ve won an Energy Star National Excellence Award from EPA five years in a row and the Governor’s Environmental Excellence Award. So certainly have outstanding results.

How do they do it?

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Well first of all, they have a very effective behavior-based program, organizational behavior and culture change.

They have been very effective in implementing that so that everyone in the district understands the priority of energy management and the value that energy management brings to the organization. They have successful people-based initiatives, but it doesn’t stop there. They’ve also implemented energy-efficient design standards, so as they build new schools, and because they’re growing so quickly they’re building a lot of schools, they’re very aware of implementing the latest design standards for energy efficiency.

They’ve done a lot of retrofits, and significantly they have what I would call codification. They have actually written their Loudoun County support services policies, their own internal regulations that require best practices and energy efficiency. So it’s not just a good idea; it’s actually an internal regulation. So if you can get to that point, the codification point, you have something that will certainly last maybe longer than your tenure.

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On the strategy side, they’ve clearly defined what they’re aiming to do. They recognize energy is an emotional issue, and I like what they say, energy is like oxygen and gravity; you can’t live without it. Recognizing that energy’s used by people. A lot of people would say, “Well buildings use energy.” Well no, they don’t look at it that way.

People use energy, not buildings use energy. The building doesn’t need any energy without the people in it. So you have to make it personal, and they’ve done an excellent job of doing that. And they also relate savings to the core mission. When you look at 58 million dollars in savings over all of those years, that helps to support the core mission of the school district.

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They’ve been very successful with volunteerism, that they prefer volunteers over mandated policies. They say, “Find your advocates. Find those who are emotionally interested in saving energy, who see that as their life mission. We wanna find those people and use those.” Get support from the highest levels, in their case superintendant and school board. And reward success, and of course measure, track, and report on your success. Keep it in front of everyone. Keep the value proposition out there.

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So I would say there’s five questions that you might ask yourself to see how you’re doing in laying the groundwork for leaving your energy management legacy.

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Number one, have you proven the value of energy management and efficiency to senior management? Do they get it?

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Number two, have you implemented energy information system that tracks your utility bills and hopefully interfaces with accounts payable. If you’ve done that, again hopefully it’s a very critical and important business system that departments rely upon not just to look at their utility bills but for budgeting and things like that.

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Number three, do you hold yourself accountable? Have you put processes in place that make you accountable for your progress reports?

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Have you been able to establish intermediate goals like Energy Star and maybe some long-range visionary goals for your building?

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And finally, have you implemented a far-reaching energy management strategy? I would base that on the turn off, turn back, tune up. A lot of organizations really I think miss certainly the first step, because a lot of people think in terms of retrofits and project funding, but there is a role that behavior-based energy management can play in enlisting the assistance of employees and staff, the users of the building to turn things off when they’re not being used, and I mean in a way greater than just a little sticker on the thermostat that says, “Please turn off lights when you leave the room.” But an organizational culture change where everyone is committed to energy management. We see a lot of organizations where they skip over that and all the emphasis is put on project funding. So I would say it’s most important that you look at those other opportunities for saving on an operational basis.

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If you do these things, I think instead of being responsible for legacy energy management, something that’s gonna get ripped out of the building and replaced ten years after you’re gone, you can truly build an energy management legacy that’s going to outlast you. So to review…

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Show the value of energy efficiency.

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Measure it by implementing tracking systems.

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Implement accountability processes.

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Set visionary goals as well as intermediate goals.

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Create a proper energy management strategy that impacts the different ways that you can save energy in your buildings.

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If you follow these five strategies, then creating an energy management legacy that will last long after you’re gone is within your grasp, so reach for it.

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