Five ways to curb utility costs in condominiums

A property management professional shares his approach to energy efficiency retrofits
Wednesday, April 29, 2015
By Michelle Ervin

The Ontario Clean Energy Benefit, a 10-per-cent rebate designed to smooth the transition to a modern electricity system, is ending in 2016. So are the debt retirement charges for residential accounts — except half of a condominium’s bill (the part covering building systems) isn’t considered a residential account.

The Ontario government also recently announced plans to privatize 60 per cent of Hydro One, the implications of which for consumers are not yet known. Meanwhile, the City of Toronto is working on an energy reporting requirement for large buildings, which would potentially give consumers a way to compare the performance of different condominiums.

It was against this backdrop of coming changes that Murray Johnson, Vice President of Client Service Development at Brookfield Condominium Services Ltd., spoke at the Canadian Condominium Institute-Toronto’s recent event The Utility Jolt – Shocked Again.

A decade ago, said Johnson, it was taboo to talk about utilities, even though they typically account for 40 per cent of a condominium corporation’s operating costs. Fast forward to today and real estate lawyers are asking about whether corporations have undertaken energy retrofits to manage utility costs.

“If we don’t keep up with those questions, we’re [boards, managers, industry professionals] going to be left behind,” he said.

Johnson’s personal approach to energy efficiency is “energy reduction should be a cost of doing business, not at any cost of doing business.” In other words, work with the money that’s available to achieve the best value for those dollars.

The goal of energy efficiency projects, he said, should be to decrease, or at least maintain, the cost of living in a building. The key to realizing the benefits of energy retrofits is to sustain fees at their current level. At the least, boards should wait until the savings generated by a retrofit have paid for the cost of the retrofit before lowering fees.

Better, said Johnson, is if boards wait until the retrofit has generated enough savings in the reserve fund to cover the cost of the building component’s end-of-life replacement. This he refers to as his ‘magic formula,’ which provides for measurement and verification, to confirm that the project has generated the promised savings.

He sums it up thusly: “If I do the right energy retrofit and I don’t lower fees, I will never have to pay for this [building component] again, because the savings will continually replace it at the end of its life.”

Once a retrofit has funded end-of-life replacement, Johnson said, any additional savings can be used to fund the reserve, or pay for projects such as lobby renovations, without raising fees. (Too much revenue might jeopardize the corporation’s non-profit status.)

He highlighted the following five inexpensive, easy-to-carry-out energy efficiency projects for condominium directors to ask their property managers about:

Intermittent pumping

Condominium boiler rooms often have full redundancy, meaning they have three boilers for added capacity and in case one fails, said Johnson. Even if only one boiler is on, water is continuously being pumped through each boiler, losing heat as it passes through, before being pumped back into the building and beginning the cycle again. With controllers, these pumps can be programmed to switch on only when hot water is required.

Variable speed drivers

The makeup air unit is what keeps a building pressurized, so it can’t be turned off altogether, said Johnson. These units are, however, normally oversized, having been bought off the shelf, so their fans can be slowed down during off-peak hours using variable speed drivers. This translates to less electricity to run the fan, but also less electricity to cool the air passing through the unit in the summer and less natural gas to heat the air passing through the unit in the winter.

Toilet inserts

The line in the toilet where the water stops after a flush denotes how much water is required to rinse clean the bowl, explained Johnson. Any rippling that occurs once the water reaches this line is a sign of water wastage. At $18 apiece, toilet inserts are a cheap way to prevent this water wastage. What’s more, the inserts alert suite owners to leaky flappers, another cause of water wastage, with a whistling noise that persists until the flapper is fixed.

Plumbing audits

Johnson recommended spending the $8,000 to $10,000 it costs to do a plumbing audit every five years. This price estimate will pay for a plumber (accompanied by a security guard) to go suite-to-suite and check for leaks, replace faucet cartridges (free for new fixtures), and do upgrades for interested owners who wish to pay for them. The plumber also provides a full report on the audit’s findings and the work done, which could result in anywhere from a 15 to 30-per-cent drop in water use.

Lighting retrofits

Johnson is wary of sweeping LED lighting retrofits because LED is a young technology that is designed to be seen, not illuminate rooms. Instead, he pointed to induction lighting, an established and long-lasting technology. He cited a Toronto condominium corporation that replaced their parking garage’s 150-watt high-pressure sodium lighting with a mix of 40 and 60-watt induction lighting. The corporation is now in the fifth year of a seven-year fee freeze, made possible by the energy savings from the lighting retrofit.

After a condominium corporation carries out some of these inexpensive, easy-to-do energy efficiency projects, it will become harder to squeeze additional utility cost savings out of the building, acknowledged Johnson. Speaking to this, he recommended bundling energy retrofits that have short and long payback periods, to reduce their overall payback period.

“Get on the energy train; keep going; remember the cumulative savings are greater than the short-term satisfaction,” said Johnson.

Michelle Ervin is the editor of CondoBusiness.

2 thoughts on “Five ways to curb utility costs in condominiums

  1. I attended the informative presentation on energy management for Condos that Murray gave and learned a number of innovative ideas on making the savings perpetuate to the benefit of the reserve fund. i also suggest that Condo’s consider a serious examination of the timing for the major equipment replacement and apply life cycle costing to see if earlier replacement that will bring in new technologies and the savings they provide as well as get the current utility incentives to improve the payback will be much more beneficial than waiting for the accounting year of replacement and only earning low interest on the funds while suffering the cost escalation on the equipment. We have shown that energy planning can be very rewarding and bring the buildings to new real time comfort monitoring and less operating and maintenance expenses.

  2. There’s another area that can release significant savings in both energy and maintenance cost for buildings. Almost all mechanical retrofits and maintenance costs associated with mixing valves, PRV,s heat exchange units, tank cleaning, anode replacement and lost boiler efficiency are due to hard water scale.
    If you prevent scale you wont be one of those buildings looking for over $700K for boiler replacements.
    Another more creative approach is if you use strategic water treatment on domestic water supply to prevent bacteria from getting into storage tanks you can now turn down the temperature of the boilers thereby using less energy.
    You’ve now reduced maintenance cost, energy costs, delayed rebuilds and protected new equipment from scaling up. Brilliant

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