ENERGY UTILIZATION IN U.S. RETAIL CHAINS: MOVING FROM CONTROL TO MANAGEMENT

A White Paper Prepared by C&C Building Automation Company, Inc. For the CIO Summit on Energy Management

Session: A Value Leap for IT

Chuck Chavez Sr. and Bob Alpers P.E.

August 2013

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1.0 INTRODUCTION—ISHA’S STORY

Necessity is the mother of invention. Usually. But sometimes just plain old annoyance can be a pretty powerful impetus for innovation. Take Isha Khare, an eighteen-year-old high school student who lives in Saratoga, California, situated in the western foothills above Silicon Valley. What really bugged Isha was her cellphone battery…or more specifically, its tendency to die in the middle of texting with her friends; it left her feeling unplugged. And she wasn’t too crazy about how long it took her smart phone to recharge either. So the teen decided to tend to two issues with a single stroke— Isha would solve that pesky battery problem and in the process come up with a nifty entry for the school year’s Intel International Science and Engineering Fair. And that’s how it happened that Isha Khare, in most ways a typical American high school senior, came to invent a device called a super-capacitor that can charge a battery in 20 seconds, is small enough to fit inside any cellphone and holds the charge significantly longer than conventional products on the market. By taking concepts she’d learned in an elective class in nanochemestry, a field she’ll pursue at Harvard in the fall, and re-arranging them in her own fresh and nuanced way, the young woman designed and then constructed a prototype able to generate 10,000 refresh cycles for today’s mobile batteries instead of the conventional 1,000. In May of this year (2013) Isha Khare traveled with her family to Phoenix, Arizona, where she received Intel’s Young Scientist Award along with a check for $50,000. Does the gadget have legs? Google seems to think so; it’s currently in talks with the college-bound teen to bring her prize-winning invention to market in their next iteration of mobile phones. But what about other applications, other uses in devices that are powered with batteries? And more importantly, might not the concepts behind the high school science project have implications for the much broader questions of, and obstacles to, large-scale electrical power storage. Research scientists the world over appear to be nodding their heads. So, why begin a white paper on energy management for the U.S. retail industry with a feel-good story about a California teenager who finds time between her studies and dances and football games to dream up a contraption that’s got Google knocking at her door? Simple. Isha solved her dual problems…coming up with a science project and reducing the number of dropped calls on her I-Phone… in the same way that a handful of industry innovators have brought EMS technology to its current state—she, and they, thought out of the box. They found a way to step out of the confines of conventional problem solving and begin to visualize a different landscape and different strategies for traversing it. This paper will tell the story of why and how the energy management industry came into existence, it’s early advances, its time spent wandering in the wilderness, and its explosive re-birth ignited by the twentieth century’s version of the Great Industrial Revolution of the Eighteenth Century. And the white paper will trace the movement of one firm’s journey over that same expanse of time and geography and tell the story of its own out-of-box experience, one that, like Isha’s, holds game changing promise.

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2.0 ENERGY MANAGEMENT YESTERDAY, TODAY AND TOMORROW

It’s not at all surprising that anthropologists have evidence suggesting that our earliest cave-dweller forbearers were conscious of the need to conserve energy. Firewood was a precious commodity, one that could mean life or death in the struggle against the frigid cold of the waning ice age. And only recently new discoveries demonstrate a direct link between early man’s discovery of cooking and the relatively sudden and dramatic growth spurt of his brain. Since a full 25% of the calories we take in go directly to powering the energy-hungry brain, finding a faster, more efficient means of taking in nourishment, (just the act of chewing raw vegetables and meat is said to have taken up close to fifty percent of the humanoid’s time), cooking, and the fuel that was needed to do it, literally made we humans who we are. Effective energy management was for early man, as it is today, critical to the bottom line. This paper’s review of energy management will skip over those centuries during which acquiring energy ever so gradually became less and less difficult and costly. Rather the review will begin in the latter quarter of the twentieth century when, for the first time, the cost of heating and cooling and lighting and manufacturing in the industrialized world began to rise instead of drop. 2.1 Energy Management, 1973-2010; from OPEC to the Arab Spring

In retrospect it seems inevitable that the planet’s biggest producers of oil would eventually get around to claiming their piece of the pie, but when the Arab members of OPEC, the Organization of Petroleum Exporting Countries, announced an oil embargo in October of 1973 after decades of falling income, the West, and particularly the United States, was somehow caught flat-footed. The “oil price shock,” as it was called by international trade and monetary pundits, played a key part in the 1973-‘74 Wall Street crash and subsequent recession. Its transformative impact on the global economy was the strongest since the great depression, and the natural order of all things financial, it seemed, had been changed forever. Federal price controls and gas rationing were the first reactions to the “new normal,” but within a few years sweeping and, for the most part, non-partisan, legislation sped through the House and Senate and almost overnight a broad range of initiatives were underway to both increase energy production and systematically reduce its consumption. (The latter half of the equation would eventually become known as DMS or Demand Side Management.) And equally important, the Carter Administration and a Democratically-controlled Congress found the money to jump start programs on both tracks. With the August signing of the Department of Energy Act of 1977 energy management industry was born. The wave of grants and subsidies that flowed from Washington realized its intended purpose almost immediately; dozens of business ventures, from very small to very large and located from coast to coast, took up the Commander in Chief’s call to arms. Businesses began developing, field-testing and then selling products and services directed at reducing the energy used to light, heat and cool residential, commercial and industrial spaces. As shown in Figure One—THE EVOLUTION OF ENERGY MANAGEMENT SYSTEMS, efforts in that first decade focused mainly on on/off clock controls; nothing terribly sophisticated but compared to pre-embargo conservation efforts, very effective. Only a few of the larger vendors, e.g., Johnson Controls and Honeywell, attempted to bring the power of mainframe computing to bear on the energy consumption problem, but their use was, for the most part, limited to time-clock functions and, relative to today, small-scale data collection and analysis. The systems being installed by the end of the 1970’s were almost exclusively limited to large facilities on a single site, were self-contained and were mechanical rather than

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electronic in nature. For the most part they concerned themselves with the most rudimentary of on/off lighting and air-handling control decisions. Lots of control was happening, but very little management.

As OPEC’s strangle hold on the global economy began to loosen in the 1980’s, the tidal wave of federal dollars earmarked for research and development in both energy production and energy savings became more of a trickle and the result was a sorting and thinning out of the majority of the ‘70’s start-ups. At the same time, however, established control manufacturers began to enter the marketplace. By now all the serious players had turned their attention to the microprocessor, which, by the beginning of the decade, was already powerful enough to assume a number of tasks theretofore left to mainframes. The black box era had begun. By the middle of the decade these compact devices were doing HVAC and lighting control, generating rudimentary energy utilization data, and taking on alarm and security chores. Though too expensive for small to medium retailers in the early 1980’s, the explosive microchip revolution taking place in California’s Silicon Valley had, by 1988, driven prices down and the little black boxes spread through big-box retail stores from coast to coast like wild fire. So too had advances in microprocessors enabled the once store-bound devices to be controlled centrally via telephone modem, and open protocols were now being designed into some equipment that actually encouraged multi-tasking. But even the most advanced devices coming out of the 1980’s still had serious limitations. Cutting edge, state-of-the-art, marvels of engineering, the black boxes were still, in a word, dumb. Sure, it followed instructions with obedient precision, but once programmed, it was a slave to those instructions, due to limitations in memory and, perhaps more to the point, a less enlightened appreciation of microprocessor potential. The black box could not think for itself, could not adjust to the changing conditions around it and, worst of all, as human kind moved inexorably into the Information Age, the sleek black box crammed with printed circuits had the analytical capacity of a clock radio. It was here that the energy management movement, with all its promise and potential for helping to achieve, at least to some degree, true management of consumption, stalled out for most of the 1990’s. Mid-decade a few of the mega HVAC manufacturers bought up EMS firms and began integrating intelligent controls into their equipment, but, with few exceptions, they ultimately failed due partly to stubborn performance problems and partly to an all-or-nothing marketing strategy—if you want to buy XYZ electronics then you replace all of your machinery with XYZ machines. But the one thing upon which everyone in the business could agree during the decade that saw the two Germanys become one again, Forrest Gump philosophize over a box of chocolates and the upstart Napster turn the music industry on its ear—the new thing with the funny name…the Internet…was going to change everything.

And that’s just what happened. The dust had barely settled following the Y-2-K Armageddon that was barely avoided when the world-wide-web suddenly, almost over night, morphed from being one gigantic and utterly static cyber bill-board to an almost magic and boundless pipeline for sharing information in TWO DIRECTIONS. Like a sub-atomic particle swirling ever faster around a nuclear accelerator, the Internet grew and evolved at blinding speeds made possible by new high-speed wireless communication, exponential growth of bandwidth, chip technology that turned lap-tops into super-computers before your very eyes and mind-numbing search engine algorithms that made pretty much all information instantly accessible to pretty much

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anyone with a smart phone and a hot spot. The new new normal was here, and the EMS companies with the wherewithal to jump in, jumped in feet first.

2.2 Energy Management Today; the World in Every Pocket

Today, as we move closer toward the mid point of the second decade in this new century of ours, large retailers expect from their energy management systems everything they’ve learned to expect from technology writ large…plus a lot more. The tactical actions taken by smarter and smarter controllers resident at large stores do an increasingly better job at squeezing out energy savings wherever they can be found. ‘Great’, you can almost hear from the board rooms, ‘you’ve helped us save a lot of money, become a recognized contributor to our bottom line, but what have you done for us lately?’ The corner offices of America’s big box firms expect from their energy management teams and the EMS industry that serves those teams a track parallel to the tactical tools born of the tumult in the Middle East forty years ago. Today’s CEO’s and CFO’s and CIO’s want a track for making strategic, long-range decisions about how, when and where their energy dollars will be spent, (i.e., the difference between controlling and managing,) and a maturing and progressively more agile energy management industry is only happy to oblige. Big data, or more precisely, big data analytics, is a relatively new term that describes the practice of mining large, often seemingly unrelated data sets aimed at unearthing buried patterns, unseen relationships, unanticipated correlations and anything else that might happen to pop up and be found to be useful in creating or sharpening the competitive edge of one business venture over its rivals. Although pouring over mountains of facts and figures and statistics has historically yielded excellent results for those patient and discerning enough to exploit the time-honored approach, the Internet and everything it has come to entail has made looking for needles in haystacks a downright corporate imperative. And no industry has more readily or enthusiastically embraced that new imperative than retailing, long the undisputed driver of Americas GDP With respect to data collection, storage and analysis, today’s EMS providers strive to create energy management systems that…

1. Centralize all energy consumption controls, monitoring, analysis and planning into a single, integrated system; one that is flexible enough to accommodate variations in facilities and their geographic locations, but structured enough to achieve the highest possible level of chain-wide standardization;

2. Use the limitlessness of cyberspace to grab hold of the tiny bits of information

generated by energy consumption controls at a hundred or five hundred or a thousand different sites and use it to build vast longitudinal data bases;

3. Use the almost infinite universe of the world-wide-web to search out and then

capture data about the environment in which their corporate clients exist and compete, information that can range from weather and climate histories and forecasts to consumer shopping patterns, to energy industry trends and everything in between; and

4. Use ever-faster, ever-smarter computing machines to burrow through

mountains of data in ways that would have seemed implausible just a few years ago, asking the kinds of questions that allow master planners to craft extraordinarily nuanced short-term tactics and long-term strategies for stretching energy dollars.

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2.3 Energy Management in Future

Of course all is not sunshine and blue skies as corporate facilities staff and the vendors that support them step cautiously into an uncertain future. At least as much remodeling and retrofitting as new construction is being done; how will twenty-first century tools be used to manage energy utilization in stores built in the middle of the last century? Legacy systems still abound, as do two or three generations of black box controllers, and will for the foreseeable future; how and how quickly can these be folded into new, centralized master control and information entities? Energy costs and, really, the very nature of the energy industry itself, continue to be a volatile and fast moving target; how will the energy management firms still standing in the next decade build new products that can accommodate, and even draw strength, from these uncertainties? The next section of the current white paper offers an overview of how one of the energy management industry’s leading and longest-lived companies has positioned itself for thriving in what many futurists call the new normal.

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3.0 A UNIFIED VISION FOR THE NEW NORMAL

3.1 C&C Building Automation—The First Thirty Years

C&C was one of the early entrants into what was essentially a brand new industry in the last half of the 1970’s. Almost immediately founder Chuck Chavez, Sr., who would eventually be joined by his son, CJ, settled on a strategy for his new energy management business and immediately set about implementing it. First, Chuck would focus on lighting controls because, at the time, power spent on lighting was where the greatest potential for savings existed; second, he would target medium-size multi-site retailers because they offered the best chance for quick, sustained growth in the new and as yet untested EMS industry; third and unlike most of his competitors, Chuck had a background more aligned with electrical than mechanical engineering, and early on he sensed that it would be the electric, (read electronic), side that the greatest innovations would occur; and fourth and most significantly, the young technician-turned-entrepreneur would carry and install a wide range of sensing, relay and control products. Unlike those with whom he vied for market share…firms that supported one, or at most two, equipment manufacturers…Chuck understood that building solutions from the ground up to match the precise needs of customers required a full tool box. What’s more, maintaining the broadest possible product line would give him a competitive edge in winning retrofit contracts. Sure, his competitors had an easier time of it…learning the hardware, and later software, elements of a single product line was a good deal simpler than mastering those of five or six different systems…but the owner of C&C Building Automation let it be known that he would work with his customers to find the energy savings solution best suited for them. After all, Chuck told himself, he was in this business for the long haul; every new system and concept trick of the trade he learned now would surely help him down the road. In just a few years and with not much more than word-of-mouth advertising, customers began searching out C&C. The decision to invest time and money in learning the intricacies of multiple systems eventually meant that the young contractor could mix and match different product lines in a single installation. Once that began, Chavez became known as a leader and innovator in system integration, which to this day remains C&C’s hallmark. Still in its infancy, the firm won its first big retailer, Century Theaters, in 1982. Large enough to keep the small contractor busy, the theater chain’s multi-year contract gave C&C the necessary time to develop capacity and gave its founder the hands-on experience to transform himself from a clever and intuitive novice to a widely-respected expert in a field with precious few experts. When Ross Stores came on board about five years later C&C Building Automation was well on its way to becoming one of the top four or five independent control contractors in the nation, doing large-scale installations throughout the continental United States and Hawaii. With help from his son, CJ, who by the late ‘80’s had become a full partner, the elder Chavez had purchased five EMS equipment dealerships and had expanded C&C’s menu of services to include consultation, energy audit support and re-selling. By 2008, the business was among the largest independent energy management providers for retail in the country and, now even more highly regarded for its prowess in product and systems integration, C&C was approached by Cisco Systems. Would the father and son team be interested in partnering with Cisco and becoming a principal reseller of the networking giant’s Mediator Energy Management system? You BET they would.

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3.2 Time to Take Stock—12 Product Development Principles

It was right around the beginning of the Cisco collaboration that Chuck Sr. decided to come up for air; he’d traveled a long way in nearly three decades, growing the business at a frantic pace, but now it was time to take stock in what he’d built, and at the same time have a hard look at big chain retailing, which, though still the life blood of the American economy, had undergone its own tumultuous transformation. Despite thirty years of near continuous growth and greater and greater product sophistication, a vague and shadowy question, there from the early days, began to take on greater clarity: wasn’t there a difference between energy control and energy management? And, if as the elder Chavez suspected, there was, what would it take to move that next step, the step from simply controlling lights and air in large commercial spaces to actually managing them…managing in the broadest sense of the word. The two partners hired a northern California market research firm, Competitive Advantage Group, to pull together information that could be used to steer the firm into its fourth decade. Roughly forty-five interview candidate companies were contacted from a pool of both the largest and fastest growing publicly traded retailers in the United States, (Big Lots, Dillard’s, Macy’s, Tractor Supply and Victoria’s Secret to name a few). A wide-ranging series of issues were covered during the structured telephone sessions of roughly one hour each. VP’s for property management, long-range planning and operations, facilities, energy, and development managers…all were asked a set of standard questions about their respective firm’s current energy management efforts and then given the opportunity to play futurist. Figure Two—TOPICS RAISED DURING INTERVIEWS, offers a snap shot of the study’s scope and breadth.

In the months that followed publication of the research report, the C&C team used its results, along with the practical lessons learned from over thirty years of listening closely to its corporate clients, to identify key trends among both providers and users and from them formulate a set of principles that could guide future efforts. Twelve Product Development Principles eventually emerged:

1. Energy management must be done at the macro level; products must help

centralize day-to-day control and long-term decision-making across the entire chain while preserving local autonomy when it is required.

2. The continuous, system-wide and fine-grained collection of internal data is as important to effective energy management as daily systems control; any new product must capture around-the-clock information and save it longitudinally.

3. Traditional and non-traditional information related to energy use and costs must be retrieved externally in real-time; new products must exploit the vast stores of information that flow through the world-wide-web.

4. Bringing internal and external data together in ways that generate actionable insight are key in both strategic and tactical energy management; new product lines must have built into them the analytics required for mining big data.

5. Hosting system software and user data at a centralized site and making it available on the Internet via secure servers is becoming the new delivery model for EMS; local hosting of products will allow faster and more efficient maintenance, trouble shooting and version updating.

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6. The value of energy management data for short-term, mid-term and long-term

control and planning is only as good as the users ability to handle it quickly and easily; product interface must be intuitive, simple and customized to user need and preference.

7. For the foreseeable future a significant volume of energy management legacy systems, as well as early generation control devices, will continue to be used in large-scale retail operations; product lines must include in their design interfaces that will accommodate dated EMS solutions. (Note that this principle in particular has been key in honing in on C&C’s natural market niche, and indeed, in creating its primary message to retailer--Manage your energy with your existing EMS/BMS systems!)

8. No single off-the-shelf energy management system can offer optimal functionality

and usability to more than a single customer; all products developed in the future must begin with a core suite of tools and features that can then be tailored to the unique needs and environment of the specific user.

9. The level of expertise among corporate energy management personnel will continue to rise; for them to remain viable over time, new products must keep pace with user sophistication, particularly as it relates to user need/demand for customization.

10. The nearly instant access of graphical information from the Internet that has

become the norm for most of the web-using public will be an essential feature of any successful energy management system; products must be designed to fully exploit cloud technology, removing capacity limitations and ensuring instantaneous data acquisition and display.

11. As dependence on big data to achieve more nuanced, precise and incremental

optimization of power consumption and cost avoidance increases among the larger retail chains, overall responsibility for energy management will move away from operations and facilities and into IT; new products and services must reflect the shift from mechanical to information technology.

12. Expanding energy research in both the public and private sector and the brand

new, broad-based technologies it has spawned will only increase the number of different sensors, controllers and switches available in the marketplace; single hub control solutions must be designed to communicate using multiple and varied protocols and platforms.

3.3 Omniboard—A Management System that Actually Manages

Omniboard, or at least the concept behind it, was no accident. It had been floating around in the back of Chuck Sr.’s mind for years, a nagging belief that there had to be a better way. Like the young prize-winning high school senior and her stubborn refusal to unplug from her world for a couple hours while her hand-held recharged, Chuck wasn’t completely satisfied with the products he brought to the market place. What he wouldn’t give to design an energy management system, from the ground up, that actually manages how retailers use energy… one that would bring all pertinent information from the customers entire inventory of outlets together, weigh multiple options, select the optimal trajectory and then collect and evaluate its success or failure, all on a single screen?

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As fate would have it, it was C&C’s acquisition of the Mediator dealership that breathed life into Chuck’s long-held vision. The birth, however, was not to be an easy one. Cisco’s Mediator was, by all accounts, head and shoulders above any other multi-site energy management black box available in the marketplace. It was the kind of attempt at an ultra-sophisticated, web-based, cross-platform, multi-functional app you’d expect from the world’s largest networking company, and, because it carried the Cisco brand, sales reps had no problem scheduling demos with big-box retailers around the country. Even though quite new and relatively untested, at least in its Cisco iteration, (the networking giant had just recently acquired it), Mediator was a salesman’s dream and marketing was fierce. Actually, a bit too fierce. As happens only too often in industries fueled by the latest, most rapidly changing technologies, the Mediator Energy Management System, and more specifically its graphical user interface, was over-sold; promises were made, expectations soared, and very soon after the first installation, the hottest new product on the market… Cisco’s splashy new entrant onto the energy management stage… the system that was, above all else, sang the chorus of sales folk, fail safe…began to fail. Of course, when your brand new Gran Cherokee breaks down along the road you don’t call Chrysler and ask to speak with CEO Sergio Marchionne. No, you call the dealership where you bought the shiny new car and ask to talk to the boss. Or, if you’re Ulta Beauty, Inc., the first customer to jump on the Mediator bandwagon, you ask to talk with one of the Chucks…or maybe both. With a thirty-plus year reputation on the line, the two partners were committed to standing with the cosmetics giant and making good on each and every contractual obligation. The cut-and-run option was never even on the table. C&C’s senior engineer and its two new programmers were called in and given their marching orders—work with Cisco, find the bugs, do whatever it takes to eradicate them, and do it fast. But the engineer, along with the two programming wonks, returned to their bosses a few days later with an alternate crisis management plan. Why not, they asked, replace the GUI software rather than fix Mediator’s? Why not build a new energy management system and a powerful graphical interface from scratch? And while we’re at it, the three went on; why not build an EMS that really manages energy utilization, chain-wide, from display cabinet lighting to gigantic rooftop air handlers and everything in between? Show me on paper how it could work, came the boss’ response. They did, and the next day coding began in earnest. Figure Three—KEY FEATURES OF OMNIBOARD, displays a bulleted overview of C&C’ Automation’s newest product, an intelligent retail building enterprise software package. Born of a vision three decades in the making, a near catastrophe, a set of guidelines culled from a cross-section of customers who knew exactly what they wanted and two young asp.net programmers who’d recently cut their teeth on the world’s largest search engine, Omniboard is now being used by retailers across the U.S. to manage their consumption of energy.

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3.4 Four Scenarios

Following are four-single page narratives, each loosely based on C and C's early experience with its new product. Although hypothetical, the scenarios tell the story of how Omniboard can be used to tackle real problems in real retail facilities.

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SCENARIO ONE—NIGHT AND DAY

Client: Personal Products Retail Chain Annual Sales: $2,120,000,000 Installations: 700 Sites Nationally The Problem

Over four years C&C deployed traditional EMS microprocessors, manufactured by four different makers, across the entire cosmetics chain. The firm’s facilities manager, a conscientious believer in information-based decision-making, continuously evaluated organization-wide energy utilization and costs using: 1) metrics he’d developed himself; 2) limited information he was able to extract from most but not all EMS equipment in the stores he oversaw and 3) detailed monthly utility bills. Based on the data and his analysis, the manager felt relatively confident that energy utilization across the 700 stores was not optimal. But with four different types of equipment from four different black box vendors, and with as many different software packages being used by staff, extraction of the data needed to be certain was all but impossible. Bottom line, the facilities manager needed comparable, chain-wide information to fully understand the nature and magnitude of the problem and then, more importantly, to solve it. The Solution

With the installation of Omniboard, with its web-based, broadband connection to all retail sites, its around-the-clock data collection cycle, its high-speed computational capability and the graphical user interface that brings together pertinent information from all sites, the facilities manager now had a continuous and global view of energy use across the continental U.S. At first blush the initial Omniboard report displayed on the facilities manager’s screen was precisely what he’d expected and hoped for after he plotted all of the sites, sector by sector and then overlaid all the profiles for comparison. Factoring in up-to-the-minute temperature reports from all 700 locales, (which OB does automatically), he saw daytime kW usage was consistent across the chain and well within established operational standards. But when the manager and his energy analyst called up the same data set for nighttime utilization it was a different matter. Immediately the two were able to identify a handful of outliers and it was then that they realized that for years their entire focus had been on daytime utilization. Why look at nighttime? Everything in all the stores was powered off, right? Wrong. The immediate red flag of course led to further analysis and it was discovered that energy use among the 700 stores during unoccupied hours varied from 3 kW to a whopping 48. The relatively small number of outliers brought the chain-wide average of nighttime power consumption to 13 kW, 8 points above the 5 kW bench mark. During an onsite walk-through of 25 randomly selected stores to confirm the variance flagged by Omniboard the offending equipment was discovered; an HVAC unit, water heaters, refrigerators, heat lamps, computers, printers, some uncontrolled lights, signs and coffee pots--all were left running at night. In addition, at one store a long bank of lights was found to be improperly wired causing it to burn through the night. Once adjustments were made average energy consumption was brought down from 13 Kilo Watts to 6, representing a $4,000 savings per store and $2.4 million in cost avoidance company-wide. Kilowatt average was reduced from 13 kW to 6 kW across the entire 700-store housing stock.

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SCENARIO TWO—GOLF DEMO

Client: Sporting Goods Store Annual Sales: $500,900,000 Installations: 150 stores The Problem

Taking their lead from domestic and foreign automakers, air-handling manufacturers have begun equipping their newer models with onboard diagnostic equipment. The sensors, micro processing unit and control panel are designed to make fast work of repair jobs for the manufacturers technician…fast, that is, after the piece of equipment fails and the failure is noticed by store staff, or worse, reported by unhappy shoppers, and a call is made to the manufacturer. And, of course, the dispatched repairman who eventually arrives has been adequately trained and is familiar with the diagnostic codes, codes which are unique to the particular manufacturer. For someone without that training and knowledge, reading what appears on the panel’s LED would be like trying to decipher hieroglyphics. Recently Scenario #2’s subject, a national sporting goods retailer, had two dozen of its oldest stores retrofitted with HVAC roof-top units and all twenty-four were fitted with on-board diagnostic gear. At the same time the roof-top units were brought in, Omniboard was installed chain-wide and, at the twenty-four retrofit sites and was immediately communicating with the diagnostic panels of each of the new air units. Through a mutual use agreement with the manufacturer, Omniboard was loaded with all pertinent diagnostic code information. Not long after the dual installations, one of the twenty-four stores, the chain’s best performing outlet and the only one located in the heart of Chicago, holds a special Saturday morning promotion featuring a revolutionary new golf putter. By 11:00 a.m., on the hottest day of the year, the store is jam-packed with golf enthusiasts and, at precisely the same time, the diagnostic gear up on the roof is sending out an SOS…trouble with the compressor; the unit is stressing and likely to go down.

The Solution

Out on the West Coast Ominboard receives word of the problem and because it’s familiar with the diagnostic codes, OB understands exactly what the issue is and communicates the prognosis in simple, plain English to the EMS operator who in turn calls the sporting good chain’s repair service provider. In a matter of a few minutes a service tech is communicating with Omniboard via his I-Phone and grabs the parts he needs to do the fix…pressure switch, new compressor and tank of refrigerant…and heads downtown. Once at the store, the technician again uses his I-Phone to communicate with Omniboard, which provides him with a graphic display of the facility’s floor plan and leads him to the rooftop HVAC. The fix is made and the golf pro doing the demo doesn’t miss a stroke. Omniboard has kept the sporting goods store open for business on an especially profitable day; it’s prevented a serious equipment failure that, left to occur, could have damaged other high cost equipment and possibly have been a safety hazard; it’s pinpointed the problem and its cause and thus eliminated the chance of costly misdiagnosis remediation; and, by storing and cataloguing all relevant details of the incident, Omniboard has added a footnote to the new HVAC’s preventive maintenance plan.

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SCENARIO THREE—FLU SEASON Client: Women’s Apparel Store Annual Sales: $820,200,000 Installations: 400 stores The Problem

Equipment failure alarms…specifically the manner in which they are generated, reported, assessed, categorized and finally acted upon…are at the heart of any energy management system. State of the art or old school, chain-wide or single-site, the way alarms are handled by a firm’s EMS can have a profound impact on its bottom line. The subject of Scenario #3, a regional women’s apparel chain, has been around for a long time. Across its inventory of 400 sites can be found grand old structures dating back to the early fifties to brand new stores, and just as varied are the systems that monitor and help control energy utilization. They range from primitive old black boxes that haven’t been programmed in a couple of decades to new and powerful stand-alone processors capable of monitoring, controlling, data collection and even low-level analysis. The manner in which this broad array of alarm equipment communicates with the chain’s centralized facilities unit is equally as varied; some use DSL, some phone dial-up, others home-grown Intranet networks and even a few use email. With so much diversity in its housing stock, energy management systems and communications protocols the apparel concern employed a small army of techs who, housed in a single, cramped office, was tasked with responding to a wide-ranging assortment of alarms as they came in from cities across a large area of the country. Many were crossed trained in the various energy management equipment deployed throughout the chain, others were not; some had years of experience and had been around when ancient black boxes were installed years before, others weren’t even born when the systems were put in place and were learning on the job. It was a tough, high stress job but the team members had an informal process for sharing with and supporting one another and for the most part kept the clothing stores open for business. But then a flu bug swept through the open-space bullpen that housed the facilities specialists and within a few days the majority were phoning in sick. Temps were brought in and provided with outdated procedures manuals and quick and dirty training and everyone pulled together as best they could. Then, half way through the crisis, on a Saturday morning, an alarm came in from the company’s central IT facility. The center’s cooling system had crashed…a huge deal at any computer installation…but the alarm that came into facilities was mistakenly classified as priority--low by one of the sub techs. The CPU’s in IT’s clean room began overheating and then crashing, one by one. And, one by one, point-of-sale terminals began going dark at store after store. The problem was fixed after being discovered four hours later…an eternity to hundreds of store managers.

The Solution

Not long after the flu epidemic, Omniboard was installed. An interface was established with 100% of all the retailer’s existing black box energy management controllers, regardless of age, platform or manufacturer, establishing an energy management system, a single, standardized set of procedures for handling alarms and a single, intuitive graphical interface. Although Omniboard is flexible enough to accommodate many different facility-specific control systems and alarm response protocols, the software’s graphical user interface, (GUI), is the same for all team members. Polling all 400 stores in a matter of seconds, incoming alerts are time-stamped, categorized and sorted and then made accessible to techs in map, graph or spread sheet formats. And as for dealing with flu season, new staff training, cross-training, human resource deployment and even more efficient and effective use of temps have improved down in the specialist’s bullpen thanks to OB.

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SCENARIO FOUR—The “BIG DATA” EFFECT

Client: Clothing Store Annual Sales: $9,700,000,000 Installations: 1200 The Problem

Homeowners simply pay their utility company for the energy their family consumes during any given month. Not so with businesses; their utility bills are based on both how much energy they use as well as when they use it. Power used during peak demand periods is sold at a premium since utilization during those time frames puts extra stress on grids and, in the worst cases, can lead to blackouts. This is especially true in metro areas where energy use is heavily concentrated; the premiums paid for using power during high demand periods in these huge population centers can be staggering. In the final scenario the subject is once again a clothing store chain, but a significantly larger one and for that reason scale and scalability are the focus. With the preponderance of its thousand-plus outlets situated in major cities across the U.S., the firm has long been acutely aware of the high demand-high price dynamic and has been proactive in addressing the challenge. To the extent, in fact, that early on it installed relatively sophisticated monitoring equipment that could regularly collect and analyze use data and alert its EMS team when demand threatened to exceed limits. In such cases, thermostats were raised, utilization was reduced and, because of the massive scale of the national chain, even just an increase of a few degrees in the shopping environment saw seven figure savings. But it was a short-lived strategy; after only a few summers enough financial data was collected to determine that any savings in energy costs were overshadowed by a sharp dip in overall store receipts. Sales dropped in proportion to raised thermostats. Shoppers, it turns out, instinctively head for their air-conditioned automobiles when the shopping experience becomes less than optimal.

The Solution

As stated and re-stated in this paper, energy management has entered into its big data era, and it was precisely some very big data, collected and analyzed twenty four/seven by Omniboard, that allowed the mega chain to revive and to ultimately succeed with its peak-demand avoidance strategy. Like the chain’s old system, OB monitors the power used to cool stores, but in addition it pulls in a wide range of climate and weather information, both current and historical, residing on the world-wide-web. Using a predictive algorithm, the system forecasts daily temps and when they reach a certain threshold HVAC’s are powered on at precisely the right times in early morning to be able to cool down retail spaces before peak demand periods are reached; then the units are randomly shut down during the peak. True, lowering temps in spaces that are already cool and, what’s more, unoccupied, could at first glance, appear counter-intuitive; but the power used for this early morning air handling costs far less than that which is needed to keep shopping spaces comfortable during the warmer, high demand, parts of the day. So effective has been this finely nuanced approach to keeping customers cool and happy while avoiding peak utilization penalties that the clothing company has taken a further, more ambitious step. In several of its high-density metro areas, it’s begun participating in demand response list programs offered by utilities. During dangerously high demand periods that raise the specter of black outs, power providers can call on participating retailers to temporarily shed a specified kW demand load. The premiums paid by the utilities to businesses on the DR List can be impressive.

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4.0 CONCLUSION

In 1965 Gordon E. Moore, co-founder of Intel, wrote a scholarly paper in which he hypothesized that the number of components in integrated circuits would double every two years. So accurate has the industrialist’s prediction been in the nearly half century since it was made that his utterance has taken on the elevated status of a scientific law. One could argue that without Moore’s Law, or rather the truth of it, this white paper would have run its course many, many pages back. Early reductions in energy use, the kind achieved back in the late 1970’s with simple light and motion sensitive switches and HVAC’s built with improved thermostats were, in their time, dramatic. But it was the sudden, and in some ways unexpected, eruption of the information age and all of the breakthroughs in all of the disciplines that made it happen which is truly responsible for making the energy management movement more than just a flash in the pan ignited by a handful of oil producing countries determined to get their fair share of the spoils. Today’s technology prognosticators have now gone on record saying that by 2015 Moore’s law will have run its course and chip growth will slow by about 150% due just to the natural laws of physics; there are, after all, limits, even to the number of angels that can dance on the head of a pin. But even if the forecast proves to be correct, (and it should be noted that this question is by no means settled…quantum computing, some argue, could see the doubling effect in the processing power of integrated circuits drop from two years to a couple of months), the fact remains that the new tools we’ve been given to mine information and then to extract and refine and distribute the nuggets that are worth exploiting will keep the managers of energy consumption busy for decades and decades to come.