Volume 2, Number 2 : June 1998

Operations: Energy Deregulation Meets Campus Greening at SUNY Buffalo

by Wynn Calder

The State University at Buffalo (UB), located in the western corner of New York, has been fighting for the environment since the mid-1970's. In the area of green operations, UB is a leader among universities both nationally and internationally. In 1982, Walter Simpson became the University's first Energy Officer, and under his leadership the "Conserve UB" program was conceived. This initiative achieved over 300 retrofit activities within ten years. In 1993, Senior Vice President Robert Wagner endorsed six policies for greening the campus drafted by the UB Environmental Task Force. Since then, other policies including recycling, campus wildlife and heating have been submitted and approved.

In 1994, with over $4 million in incentives from Niagara Mohawk Power Corporation, and in partnership with CES/Way International, a Texas-based energy service company, UB embarked on a more comprehensive $17+ million retrofit project that has included major heat recovery and lighting system upgrades.

The latest issue affecting the energy conservation movement is deregulation. The privatization of the electricity market will affect all institutions of higher education for better or for worse. Simpson, among others, has worked very hard at UB to ensure that deregulation is not used as an opportunity to sacrifice energy savings for dollar savings. A new campus energy policy was approved this year, perhaps the first of its kind in the U.S., which attempts to deal with these broader market changes. This article will explain some of UB's environmental achievements in campus operations, giving special attention to energy conservation and the challenge of deregulation, and suggest a course of action for other institutions.

UB Operations Policies

UB's Environmental Task Force (ETF) has worked diligently to bring environmental policies to the campus since its founding in 1990. It consists of approximately 40 faculty, staff and student members and is responsible for "studying campus environmental impacts and developing policies and programs to mitigate those impacts."

The Environmentally Sound Products Procurement Policy, which was among the first six approved in 1993, requires that purchasing of "environmentally friendly" products by all university offices occur whenever possible. Such products should include the following attributes: durable (not single use or disposable); made of recycled material; minimally toxic (preferably biodegradable); highly energy efficient in production and use; manufactured in an environmentally sound and sustainable manner (by environmentally responsible companies); and produced locally or regionally (to minimize environmental costs associated with shipping).

This policy has been difficult to enforce, says Simpson. UB's Purchasing Office does not actually control individual office and department purchases, so they are still free to buy a variety of less sustainable products. To offer better choices, UB now provides an office supply catalogue supplement that features environmentally friendly products. The policy also encouraged the campus to negotiate State contract pricing for a more highly recycled (and non-chlorine-bleached) paper which some offices and departments are using. "This policy has been primarily an educational tool," Simpson reflects, "to raise awareness on campus about the impact of purchasing decisions." Simpson's office is now in discussion with various State offices about raising State requirements on post consumer recycled content for base bid specifications on all State contract purchases of copy paper, paper towels, tissue paper and toilet paper.

Other policies approved by the administration include the Recycling Policy, the Third Class Bulk Rate Advertising Mail Policy, the Wildlife Policy, and the Heating and Cooling policies. The Recycling Policy calls for a minimum 50% recycling of UB's solid waste stream. This is in accordance with the NY State Solid Waste Management Act of 1988, which set a statewide waste reduction and recycling goal of 50% by 1997. UB's policy requires that University Facilities develop complete guidelines and mechanisms for campus recycling and monitor progress (with assistance from ETF's Building Conservation Contacts Network, which consists of 170 staff and faculty volunteers representing most campus offices and departments). All faculty, staff and students are expected to participate in recycling efforts. The policy also recognizes that waste reduction is preferable to recycling, and therefore strongly encourages waste reduction techniques, especially in University offices and departments.

Simpson claims that UB is continually working toward a 50% recycling rate. While the current rate is about 30%, programs are underway in many areas to improve. In April, for example, 40 student volunteers, with support from UB's facilities department, did a "dumpster dive" to analyze a day's worth of UB trash. UB is also currently testing a student-designed public area recycling kiosk. These are expected to be distributed throughout the campus by the end of the year.

The Third Class Bulk Rate Advertising Mail Policy was designed to ensure efficient and reliable University mail service at a minimum cost given the burden of increasing volumes of unsolicited third class advertising mail. The policy includes limiting the distribution of such mail and returning (to the U.S. Postal Service) or recycling all unclaimed mail. While it was difficult to have this policy approved due to certain legal ramifications, it is now being carried out by the campus mail department.

The Wildlife Policy evolved out of a concern for pigeons which were being poisoned to reduce their numbers and prevent them from nesting in building ventilation systems. The policy states that the University will not kill any wildlife or use any lethal means of control on campus except as allowed by the official UB policy of Public Safety. This office's policy says that a suspected rabid or dangerous animal can only be killed when it presents a clear and present danger to a member of the campus community.

The UB Heating Policy is aimed at maximizing energy conservation both to save money and to decrease environmental impact. The policy requires keeping offices heated at 68 degrees F from 8:00 a.m. to 5:00 p.m., and dropping the temperature to 55 during off-hours, weekends and holidays. Simpson is especially concerned with this policy given that annual costs of overheating amount to about $100,000 per degree on UB's two campuses (comprising about 100 buildings). Prior to this policy, which includes fan schedule regulation, temperatures were two to three degrees higher and fans were overused, running all weekend in some buildings. The policy has produced a more consistent and efficient operation. Even so, Simpson notes that a random UB temperature survey last February found the average indoor temperature to be 70.5 degrees, indicating considerable room for improvement. As the air conditioning season approaches, UB will shift its attention to implementing its Cooling Policy, which calls for cooling buildings to 76 degrees F. Simpson is confident that both heating and cooling policy goals are within reach.

The CES/Way Project

The CES/Way project, started in 1994, is estimated to be saving $3 million per year in energy costs. The project involves numerous initiatives, including a 50,000 fixture lighting retrofit, energy efficient motor and variable speed drive installations, numerous heat recovery installations, electric to natural gas heating conversions, and upgrading of the computerized energy management systems on UB's campuses.

Recently, the project won the Association of Energy Engineer's 1997 Energy Project of the Year award. Overall, UB energy conservation efforts are saving $9 million annually, with total savings thus far estimated at $60 million. Aside from financial benefits and physical improvements in indoor and outdoor lighting, as well as better temperature control, UB is having less impact on the environment. The CES/Way project can be credited with reducing annual air emissions at the point of generation (i.e. the power plant) by 31,000 tons of the greenhouse gas carbon dioxide, 70 tons of sulfur dioxide and 107 tons nitrogen oxides, both associated with acid rain and other kinds of air pollution.

Energy Deregulation

U.S. colleges and universities cannot avoid the inevitable changes that deregulation will bring. The restructuring of the energy market is a vast and multi-layered process. While the power generation market will open up generally in most places, it is anticipated that the transmission and distribution of energy will remain strictly regulated. In some regions there will be more regulation over the next five to ten years due to the recovery of "stranded costs." For a large institution like UB, however, long-term planning is essential, and Simpson has been working hard to lay the foundation for an environmentally sound and reasonable energy purchasing policy.

"As a matter of prudence or fiscal responsibility," says Simpson, "all campuses will want to aggressively take advantage of the dollar savings potential of electric deregulation. Ingenuity, creativity and commitment will be required to do this while maintaining or expanding a campus commitment to energy conservation and efficiency."

In general, lower electric prices will reduce the value of energy savings that come from energy conservation measures. The result will be a lengthening of payback periods, which will make energy saving projects less appealing financially. Until now, many states had demand side management programs which gave rebates and other subsidies to encourage energy conservation and efficiency. Many such programs are being reduced or eliminated through the deregulation process.

A deregulated marketplace will offer a greater choice of rate structures. Unfortunately, this will often encourage increased energy use. For example, a "declining block" or "marginal" rate structure will offer a decreasing unit price of electricity ($/kwh) as consumption increases. Such rate structures will also make energy saving projects less economically viable.

Retail competition will allow new companies to generate power and sell it directly to customers. A college or university may be able to buy from a local utility (as before), a competitively operated regional power exchange, an energy broker or an independent generator. Choosing an energy source will include deciding whether to buy dirty or clean power: coal-fired power plants without pollution controls are the dirtiest; oil-fired plants with pollution controls are cleaner; and gas-fired plants are the cleanest of conventional sources. While nuclear power produces no emissions, it is rejected by environmentalists for other reasons such as radioactive waste disposal problems.

Other choices will include "green power," which requires minimal environmental impact. This includes the use of fuel cells, a new electrical energy source, and renewable energies such as wind and solar. Hydroelectricity has its well-known environmental drawbacks. Various energy marketers and environmental groups have taken on the task of evaluating green power sources, and this information will become increasingly available. Initially, green power will cost more. If a campus is a big customer, a small incremental cost could add up to a significant dollar amount, making green power purchasing difficult to justify. Colleges and universities will begin to face the choice of either paying more for renewable power and being praised as environmentally responsible or saving money and being criticized as polluters.

Campus Strategies for Achieving Energy Conservation with Deregulation

Simpson suggests that there are ways to benefit from the price saving that energy deregulation promises while continuing to achieve energy conservation and efficiency. First, he advocates getting involved in the public policy debate. Electric industry restructuring will vary depending on the state and environmental goals may or not be a priority, so it is critical for campus environmental leaders and energy officials to become involved. Policies which will preserve energy conservation include: financial incentives for both customers and distribution companies to promote efficiency; restrictions on rate structures which encourage electric load growth and thus discount energy waste; and recovery of stranded costs on the basis of kilowatt hour consumption instead of through fixed charges.

Second, Simpson advocates that campuses address deregulation directly by developing an electricity purchasing policy that takes environmental protection fully into account (see below).

Third, energy conservation measures should be focused on increasing the campus load factor (defined as average demand- in kw- divided by peak demand- in kw), and thus flattening the campus load profile. Some anticipate that the emerging power market will be able to provide lower cost power to facilities with higher load factors.

Fourth, contracts with power suppliers should include energy services that assist with load reduction, energy efficiency and conservation.

Fifth, universities should bid for energy contracts that include conservation-promoting rate structures. The economics of energy conservation are supported more effectively through flat rate than marginal rate structures

Sixth, when evaluating energy efficiency and conservation projects, one should use "life cycle cost/benefit analysis." It is not enough simply to calculate the number of years it takes an energy-savings project to pay back its initial cost. One should also include all costs and benefits associated with the duration of a project, such as capital improvements or maintenance benefits. From a comprehensive perspective, energy-conserving initiatives will be easier to justify.

Seventh, whenever possible, sustainable design and efficiency considerations should be included in the construction of new buildings. This invariably saves money over time and avoids having to perform future retrofits (which may be more difficult to justify in a deregulated environment with lower energy prices).

UB's New Energy Policy

Through the work of its Environmental Task Force, UB adopted an Electricity Purchasing Policy in April 1998. In keeping with the issues and recommendations outlined above, the policy calls for buying electricity in a manner that is compatible with campus conservation efforts. It advocates flat rate structures that maintain financial incentives for energy conservation, and states that UB will attempt to incorporate energy efficiency services in all electricity purchase agreements. Furthermore, the policy advocates buying environmentally clean power: choosing natural gas-fired electricity over coal power and exploring the purchasing of a percentage of power from renewable sources.

UB's new energy policy supports the university's commitment to the environment now, and anticipates its relationship to the energy market of the future. As the process of power industry restructuring unfolds, Simpson believes that state public utility commissions must hear from colleges and universities about the need for demand side management programs and price structures that encourage energy conservation. It is this kind of vision that all institutions must embrace to help ensure a sustainable future.

The Path to Campus Greening

When observing innovative environmental practices such as UB's energy program, the general question often elicited is: "How do we get there? What 'green path' should our college (or university) take?" A "green path" can be defined as a broad course of action in which a critical proportion of the campus community establishes environmental programs, systems and practices that become, over time, an integral part of the institution. For every college or university this path will take different twists and turns. Nevertheless, some general guidance can be given. The following are fifteen actions suggested by UB's Walter Simpson and others for an effective campus environmental stewardship program:

1. organize a campus environmental committee (or task force) with participation of key faculty, staff and students;
2. secure top level campus administrative support;
3. try to obtain resources for starting new programs and increasing participation in existing ones. This includes office space, telephones, access to office equipment, start-up capital for a specified program and, if possible, a guaranteed line in the campus budget.
4. form a network of "environmental contacts" who represent the various departments and offices on campus, and assign a network coordinator. This provides an effective way to reach all segments of the campus community;
5. get the Facilities department on board since it is critical to campus operations;
6. seek the appointment of an energy officer and recycling coordinator, staff members who have the know-how, enthusiasm, resources and authority to make energy conservation and recycling improvements happen;
7. hold regular committee meetings and conduct regular follow-up with network members (by the coordinator). Circulating a newsletter can help maintain momentum;
8. conduct a campus environmental audit to identify impacts and conservation measures;
9. develop, obtain administrative approval for, implement and publicize campus environmental policies;
10. create awareness programs which take the "moral high ground" and continually publicize the environmental benefits of your work to the campus community;
11. view your campus as a learning lab for students interested in studying and reducing campus environmental impacts;
12. since campus energy consumption represents one of the major environmental impacts of your institution, an aggressive and comprehensive campus energy conservation program should be a central "green campus" objective (without it few will take your program seriously);
13. a first-class fully institutionalized recycling program is also critically important, given its environmental impact, campus visibility and high levels of participation;
14. document savings and demonstrate to administrators how waste reduction measures save money;
15. strenuously defend your energy and environmental programs against apathy, inertia and very real threats like those associated with electric deregulation.

Wynn Calder is Coordinator of Outreach and Membership for ULSF.

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