Cadmus Group Data Shows Utilities Need to Re-Think
Residential Energy Efficiency Programs

Lower Delivery Costs, Higher Participation Needed

In its August 2013 report entitled "Residential Efficiency Crossroads: Opportunities For The Future," Cadmus Group presented utilities and the broader energy efficiency community with a much-needed wake-up call: utility-driven residential energy-efficiency programs are at a crossroads and what worked in the past is likely to fall short in the future. Cadmus' exhaustively researched, data-driven report is a must-read for all of us who work to engage customers in lowering energy costs and consumption.

As a developer of lower-cost customer-engagement initiatives for utilities, on both the residential and commercial side, Kilojolts Consulting Group has a keen interest in Cadmus' findings.

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Lighting the way: Vesta uses new energy efficiency program for multi-family housing

"There are many resources available companies and residents that aid in energy efficiency, and sometimes we forget the most obvious option – ourselves," said Josh Greenblatt. "Behavior-based efficiency is being aware of the consumption and potential waste around you so you can make a change. While we are looking to the future and utilizing all resources available, we don't want to be the ones to forget the basics," he added. "This is where Kilojolts has been such a great partner. Kilojolts has also aided in decreasing our energy rates and has been instrumental in helping us make capital improvements to improve energy consumption."

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Take Control of Lighting Audits

"One size doesn't fit all for lighting design—not even close. What works for someone in a research lab probably won't work in a space where people are designing with CAD on computers," [Gary] Markowitz says. "You've got to plan ahead and look at recommended practices for lighting the specific type of space in every case." Don't neglect to measure the average traffic as well. Where do building occupants tend to congregate? Which spaces are empty more often than not? Existing building schedules can help shed light on additional sources of savings.

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Seeing Green

With a host of operational and merchandising solutions at the forefront, equipment suppliers are poised to help grocers improve their green profiles on both the sustainability and profitability fronts...Kilojolts Consulting Group has worked to reduce energy expenditures with a variety of food retailers and wholesalers, including Safeway, Supervalu's Star Market subsidiary, Big Y Foods, [and] C&S Wholesale Grocers.

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5 ways QSRs can reduce energy costs

As the New Year looms, operators may be thinking of resolutions they can implement to help make it through the economic recovery. One key area where operators have the potential of seeing significant savings is in energy management.

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Save Your Energy

Gary Markowitz, founder/president, Kilojolts Consulting Group, says it's important to look at energy costs on both the purchasing and the usage sides of the equation. "One step to take is to buy energy better," he says. "It's important for restaurateurs to understand that energy is a commodity and they may have options."

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How To Tackle High Energy Costs
Defining a winning strategy in a market of rising prices.

With energy prices at near-historic levels, hospitality companies are faced with spiraling costs and future price instability. Because utilities comprise 12 to 20 percent of a hotel's budget, it is the right time to get an energy containment strategy that covers both the supply and demand sides of the energy cost-center equation.

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New England Hotel Magazine

Anyone who owns, manages, or even eats at a restaurant doesn't need an energy consultant to tell them that prices for gas, oil, and electricity are at all-time highs with little relief in sight. Since October 2004, the market price of natural gass has increased by 105% and electricity costs have increased by 85%.

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New England Hotel Magazine

Whatever energy commodity is purchased, the first critical step is to get the absolute best price. Gary K. Markowitz, president of Kilojolts Consulting Group in Lexington, Mass., suggests going through an independent broker.  He strongly recommends paying a fee for their service.

“If you’re quoted a service for free, you better flee,” warns Markowitz.” 

While substantial chains should be putting bids out, other properties should use an independent broker rather than one supplier.

For example, if your property consumes five million kilowatt hours, a broker might charge $.001 per kilowatt hour, equaling $5,000. A broker’s flat fee would only be between $2,500 or $3,500 for the same amount or even greater amounts of usage.

Energy savings are not only about one-time buying decisions. It is also about shifting employee behavior.

“Create an army of energy monitors,” advises Markowitz. 

Individual decision-making, from closing doors to turning off computers will have an impact on energy savings.  The objective is to create a common concern among the entire hotel staff. It could be achieved through an education program focusing on the environmental consequences, or a financial reward program, but the staff needs to be working toward that goal.

Markowitz recommends a comprehensive approach, including posters, stickers, teaching guide, etc.  He also suggests the creation and placement of a logo and a memorable phrase to instantly trigger the employees’ association with energy savings.

Conservation and culture shifts are keys to restaurant energy cost containment
By Gary Markowitz

Energy costs rank among the top five expenditures in a restaurant’s budget. But each month most managers just scan the bills, shake their heads and write off the expense as an unavoidable cost of doing business.

However, the recent energy crisis in California, which is threatening to make its way across the country this summer, is prompting restaurant managers to take another look at their energy budgets and scour the marketplace for new ways to hold down energy costs.

One of the most efficient ways to tackle soaring energy costs is through conservation. Although often perceived—incorrectly—as an only moderately successful activity, changing human behavior to eliminate waste has an almost immediate and far-reaching effect on energy costs.

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Papa Gino's Reduces Energy Costs
With the advent of gas and electricity deregulation, Papa Gino’s Corp. found itself in the same situation as many other chains: It was eager to reap the advantages of a competitive marketplace but felt it lacked the internal experience necessary to navigate the newly deregulated environment. Rather than let the benefits of deregulation pass it by, Papa Gino’s hired Kilojolts Consulting Group, Lexington, Mass., to act as its energy manager. The decision to outsource energy management paid off: The chain has reduced its annual energy cots by about 15%.
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Greater Boston Consumers may face power rate hikes
Gary K. Markowitz, president of Kilojolts Consulting Group, Inc., a Lexington firm that buys power for commercial and industrial customers, including several supermarket and restaurant chains, said yesterday that he is being quoted prices for next year up to 0.8 cents a kilowatt hour higher for Greater Boston than for other regions..."I'm concerned that a lot of consumers and businesses have no ideas this is happening," said Markowitz. "Is this the right time for a rate increase of this magnitude? The economy's not doing well, and this could be an economic bombshell for Massachusetts."

Eye-Candy: Lighting Can Even Help Stores Sell Candy
Kilojolts Consulting Group aims to reduce watts/sq. ft. while increasing product appeal
By Vilma Barr

Gary Markowitz wants lighting to create eye-candy for retail store customers-but at a fair energy-consumption-to-price balance. "Lighting is for people," says Markowitz of Kilojolts Consulting Group, an energy management and lighting design consulting firm in Lexington, MA. "Lighting also drives sales. People shop and buy with their eyes. In a supermarket, they typically decide if they'll make a purchase in the produce or meat departments within the first 15 seconds or less," he explains. "It's the job of the lighting package to grab the shopper's attention and let them see the product in the best possible light. It's unnecessary to wash the entire store with a high quantity of light," he advises. "Rather, it's the quality of the light on the product that is important, not the light on the ceiling and the floors."

Markowitz offers these tenets of effective, cost-efficient retail lighting:

  • Enhance the store décor, conserve energy, and make it easy for the owner to maintain the installed lighting system. Determine how applicable energy codes will affect the lighting design, and then how to achieve a proper balance of appeal and value for each lighting dollar spent.
  • A flexible lighting system will adapts to seasonal changes, special promotions, or shifts in merchandising strategy.
  • Create contrast on the product versus the background. The minimum recommended contrast is 3-to-1. If above 5-to-1, the illumination on the product becomes overly bright and is counterproductive.
  • Maximize the fixture's light output. Look beyond the obvious. Ask the manufacturer, "Can you do this for me?" if the request is reasonable, they will probably make the change.

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Maximizing Energy Deregulation
(case study on Kilojolts' client Ro-Jack's)

One of the first things Kilojolts did was undertake a full assessment of Ro-Jack's energy usage. It included an energy-billing profile analysis (going back 24 months) and the identification of all energy-saving opportunities. "Deregulation is not about getting discounts," says Gary Markowitz, president of Kilojolts. "The key to a successfully implemented strategy for energy deregulation is to focus on the goal of reducing operational costs. And that's only made possible by establishing a full understanding of how the customer uses energy."

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Designing for Deregulation
Gary Markowitz served on a panel of experts to address the issue of electricity industry deregulation.

On Distributed Generation
"Widespread acceptance of distributed generation technology will be based upon initial economics, reliability, and low maintenance costs. I expect this will change within the next one to three years as more and more companies see the opportunities presented by the growing demand for a product meeting the aforementioned criteria."

On Calculating Payback
"Fixed realized savings of 3 to 5 percent-depending upon load characteristics-may find an audience, but proactive managers have at least gone out to test the waters...The most successful segments have included food marketing, banking or finance, high-tech, and heavy three-shift production facilities. The supplies are cherry-picking the best customers first-those with less than 75% load factor and strong growth."

On Deregulation
"Deregulation provides us with both the ultimate challenge and a tremendous upside. The challenges are in educating the end-user, grooming the end-user for the deregulated marketplace, weeding out the garage-based supplies and negotiating a good contract."

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Local deregulation consultant Gary Markowitz, president of Lexington-based Kilojolts Consulting Group, said the ruling indicates the DTE is trying to create the type of robust competition that deregulation was supposed to bring about with the higher pricing for power generation.

"It will indeed create that marketplace," Markowitz said. "There's always the caveat that customers should be aware of the economic conditions of the energy market prior to making a decision on which option to choose, variable fixed."

Markowitz said there are a lot of barriers to small businesses trying to wend their way through the system. He said there needs to be a more concerted effort to educate small-business customers, possibly through organizations like chambers of commerce or Rotary Clubs.

In contrast, Markowitz works with a lot of larger companies that are savvy about the ins and outs of deregulation. An example might be a corporation with multiple locations throughout the state. "They might take advantage of [fixed pricing]," Markowitz said. "They might say we know what's going to happen, and sign up for a set price for a six-month period."

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Deregulation taking hold in Bay State
Energy consultant Gary Markowitz, president of the Kilojolts Consulting Group in Lexington, said that even well into deregulation, most utilities offer discounts that represent only about 4 percent of total energy costs...Markowitz, a former Raytheon and Star Market executive, helps companies find discounts by aligning them with firms that want their business. He said that by knowing where and how to look-and by being proactive-companies are finding "real discounts" on power.

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What can you get?
The trick, according to Gary Markowitz, president, Kilojolts Consulting Group, Lexington, Massachusetts, is to think outside the box... To find savings in a deregulated market... you should be asking "What can we get?"  Given the uncertainty of utility companies, Markowitz says, "The customer must run the show.  Tell the [deregulated] utilities how your contract will run."...

Markowitz says another option is to mix services and commodity.  Offer a three year deal that includes an [investment grade] energy audit and find out what the [Supplier's partner] ESCO will do for you after the audit.  "The [deregulated] utility must guarantee a savings if you do what's recommended in the audit..."

Whether or not you make your [deregulated] utility provider unravel, Markowitz say in order to get the most out of your [contract] negotiations, you'll need to bring more to the table than a sincere desire for a discount. In most states, generation is only 45 percent of the total bill. So a five-percent discount isn't much of a savings.  But five percent off everything is pretty good... If you don't' ask for it, you won't get it."  However, he adds, "If the customer won't intertwine service and commodity, they'll be disappointed and won't see the [entire potential for] savings."

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Energizing Savings, Nov. 22, 1999
Containing an Interview with Gary Markowitz

On setting up an energy program:
"The formula for finding ways to save [energy dollars] is initially getting a base of information and setting up benchmarks. We set up annual efficiency indexes to better understand the true condition of each store.

"The retailer created a new database that included information on past bills, energy consumption, square footage sales and weather to understand outside influences on costs."

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Without a Safety Net, Interruptible Rates Are a Big Gamble
An interview with Gary Markowitz, March 1999

EUN: Should end-users consider interruptible rates and, if so, under what circumstances?

Markowitz : Interruptible rates can offer economic benefits to end-users, but this economical mode of operation doesn't come without a cost. The term "interruptible rates" is unsettling to end-users because it means you have to give up something and that may be the power needed to run a part of your business. It can also mean that energy management will no longer be transparent to your employees or, worse, your customers, which can be an inconvenience for them.

EUN: In what ways?

Markowitz: A noticeable change in temperature, the shunting or dimming of lights, or the rescheduling of energy-intensive processes may negatively affect the productivity and profitability of your business. I've used lighting system-dimming technologies as a load-shedding tool within production and research areas at an electronics research and development facility company here in Massachusetts. Although it was difficult to measure, many section managers reported they felt an adverse effect on productivity. In the case of a supermarket, interrupting power might lead to a temperature rise within refrigerated cases or elevated humidity levels. These variations can potentially harm product or shorten its shelf life. If the interruption in power affects the general illumination systems and lighting levels are too, low the presentation of product suffers.

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