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Cintas Canada: New Hydro rate builds business case

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"A lot of the time when you get rate changes, it's looked at as a negative," says Gord Spruyt as he talks about the effect BC Hydro's new conservation rate for Large General Service (LGS) customers has on his company "But this is definitely one we can use to our advantage, and it is definitely going to save us money."

Spruyt is chief engineer at the Langley plant of Cintas Canada Corporation, a corporate identity uniform company that rents and services uniforms, towels, floor mats, and other items for companies across North America. The 60,000 square foot Langley plant holds nine industrial washers that can each handle 500 pounds of laundry in a single wash.

Cintas Langley started on energy efficiency upgrades a few years ago, first replacing an older air compressor with a variable speed drive model to ensure the machine was only working when needed.

Educating staff about conservation has made a difference too, as have smaller improvements and upgrades. But one project was harder to push through, until BC Hydro handed Spruyt exactly the argument he needed.

Numbers speak for themselves

"The old [rate] system that we were on, we just paid for what we used," says Spruyt, speaking of BC Hydro's shift to a new rate for LGS customers as of January 2011.(Medium General Service customers will receive a similar rate structure next year.)

"With the new system, our baseline is set at our usage level from the previous three years. Whatever differences we have from the baseline are at the higher rate, whether it's a credit or extra charges. So the numbers are going to speak for themselves."

Spruyt had developed a retrofit project to replace lighting throughout the entire plant, from 400-watt metal halide fixtures to 200-watt high-bay fluorescents.

In a plant where quality control lives or dies on being able to spot stains and holes in thousands of pounds of well-worn uniforms, excellent lighting is a must. The older lighting doesn't provide consistency from one area of the plant to another, so staff are keen to have an improved system.

Worse, in areas that are only used three hours per day, at least 12 fixtures remained lit for the full 19 hour workday, because the metal halide lamps take 10 minutes to warm up before use.

The new lighting will employ occupancy sensors to shut these lights off, since fluorescents switch on instantly when needed.

Total projected savings: 246,000 kWh per year – a reduction of electricity used for lighting by more than 70%. And the project qualifies for incentives of $10,900 (from BC Hydro's Product Incentive Program and LiveSmart BC).

Rate change creates "exciting" payback

The project sounds worthwhile, and it would save money even on the old rate system. But Spruyt was finding it slow getting corporate buy-in until BC Hydro announced the conservation rate for LGS customers.

The new system compares a company's consumption with its own three-year baseline. Electricity used above the baseline is charged at a higher rate. And when energy is saved below the baseline, the company earns a credit on its bill – also at the higher rate. Spruyt says the new rate enriched his business case – and helped push the project forward.

"Without a question, it made a difference," he says. "A bigger project like this has to be submitted and approved by different levels of management and they're responsible for all [280] locations. We've had a few bumps along the way trying to get this approved.

"The big thing they're looking at is payback. The rate changes basically cut our payback in half, and got it down to a point where they got really excited about it, and said yes, definitely go ahead and do it."

Spruyt says the project will save $16,000 annually, and payback will take just over a year.

Even without the next upgrade, Cintas Langley is seeing the benefits of its work on efficiency over the past few years. Since the baseline is set on a three-year average usage level, the plant's accountants anticipate a significant credit this year on their Hydro bill due to the retrofits already done – roughly 10% of their electricity bill.

"We've already had some credits coming in," says Spruyt.

A good financial decision to make

Spruyt says the downturn in the economy created an incentive to look for ways to save money, and energy efficiency projects are "really one of the easy ways to do it."

He already has several plans drawn up to make the plant's pumping system more efficient, by adding electronic controls to vary the pump effort according to demand. The improvement will save energy by reducing pump effort, and by ensuring all intake water is pre-heated in the system's heat exchanger where heat from wastewater is re-utilized. (Due to the current system's design, the heat exchanger is only used half the time.)

After that, he has another list of efficiency ideas, to keep the credits rolling in.

Spruyt has had help with energy efficiency ideas and designs from contractors involved in the Power Smart Alliance, ensuring he has made use of Power Smart incentives where relevant. He has also looked at the new Forecaster tool online and says it looks like it will help companies plan for savings.

As Spruyt says, at the end of the analysis, it is the numbers that speak for themselves – and the new LGS rate just turned up the volume. "By increasing the savings like that, it really sent the message that we should go ahead and do our lighting project. It's a good financial decision to make."