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New York commercial, retail and residential property leaders debate strategies to protect region's energy systemSecond Annual ConsumerPowerline Energy Roundtable Surfaces Innovative Strategies to Help New York Avoid Power Shortages
NEW YORK, February 24, 2006 - Engaging in a sometimes-heated debate, nearly two dozen leading energy strategists from the New York metropolitan region's energy stakeholders -- including commercial, retail and residential property owners and managers; regulators; and consumer advocates -- probed the strategies available to help protect Gotham's energy system and create a vision for a sustainable New York City energy market.
ConsumerPowerline, a strategic energy asset management firm, facilitated the conversation and hosted the event at the Morgan Stanley Executive Conference Center, where participants wrestled with a wide range of immediate, near and long-term energy issues that hold significant ramifications for New York's future economic stability. Key issues discussed included developing lease language that promotes and provides incentives for efficient energy consumption, co-generation, distributed generation, steam-based chilling and electricity curtailment.
According to experts in the region, New York City is projected to need an additional 6,000 megawatts of electricity by 2025 to sustain projected growth in residential, commercial and industrial sectors. The current electrical power generation and distribution system cannot support the projected growth unless some significant changes are instituted.
The roundtable kicked off with a status report from Gil Quiniones, chairman of Mayor Bloomberg's Task Force on Energy. Currently New York City is in the second year of the Mayor's six-year initiative/task force on energy policy for the city, a program that was designed to support businesses in the city and offers assistance in accessing a variety of energy incentives to lower consumption, raise conservation and help avoid future energy crises.
"This (roundtable) is a very important event, and a very important initiative from the perspective of not only New York's short-term electricity needs, but also our long-term electricity needs," said Gil Quiniones. "Imagine that if only 10 percent of the peak electrical requirement can be made flexible through peak load management or demand response programs, the equivalent of 3 large power plants worth of electricity could be saved."
Continuing the discussion, Andrew Cooke of Hines/Morgan Stanley stated, ".load curtailment is an essential strategy in the responsible management of our available power supply. It maximizes utilization of existing resources and avoids the cost of building additional capacity, additional power plants, and this ultimately benefits all consumers. ConsumerPowerline is an essential link between large consumers and the utility."
"The most important thing driving this roundtable is that we all need to understand our energy use profiles. So many major facilities are in the dark about how their buildings operate, and how they use power. Understanding these profiles enables each of us to identify avenues, already in the marketplace, that can save money and most importantly, electricity," said Tim Daniels, assistant vice president of energy policy, the New York City Economic Development Corporation. "At the same time, the greater our self-knowledge the greater we can be in predicting and managing the final energy threshold."
The goal of the program was to provide participants access to best practices developed across industries and areas of expertise, allowing each panel member to come away from the process with real, actionable steps that could impact their bottom lines.
John Lembo, Energy Manager for Starwood Hotels said, "The people who run the buildings are concerned with putting heads in beds - which is great. But when you stop to see what's happening in the energy markets today as a result of a Katrina, Rita, and Wilma, it's time to realize that although energy costs represent only four percent of revenue in the hospitality industry, they are over ten percent of EBITDA. So, clearly, these costs hit the bottom line directly."
Mr. Lembo continued, "Now the awareness of these costs is starting to reach the c-level suites across our company and companies like ours with executives starting to ask, 'What do we do about it?'. It really has to do with managing the behaviors of the people at the property level to engage and commit and start to reduce, and become aware of their impact on the whole equation."
One of the key strategies debated was the use of demand response and load management to create grid stability and generate significant economic returns for end users who reduce peak load consumption.
Douglas Lutzy, chief, Rates & Tariffs, Office of Electricity & Environment, from the New York Public Services Commission explained the value of this strategy saying, ".what this is meant to do, essentially, is provide even greater incentives and greater information to customers about the widely varying cost of electricity and when it might actually behoove customers to make even greater efforts to strategically manage their loads and create even greater demand savings than they've found it economically beneficial to do up to this point."
While curtailment was one of the strategies discussed, the area that brought the most heated debate centered around steam-chilling. Jennifer Kearny-Herold, energy program manager for New York Presbyterian Hospitals; Robert Gisolfi, energy manager for Macy's East; and Tom Barone, program manager from NYSERDA all held very different and strong opinions about the costs/benefits associated with this power strategy.
"I think there is a major misconception about the cost to cool with steam, and if you don't know what it costs, then you can't really determine the value of the load shift when determining whether to switch to or from steam resources," said Jennifer Kearny Herold.
"The challenge for all of us is how do we get the biggest bang for every dollar of the $175 million dollar System Benefit Fund available thru NYSERDA, and the $224 million dollars within the Con Edison service territory. So we need to think about the right policies, the right regulations, the right programs so that we use that money as effectively and efficiently as possible," Quiniones added.
"We aim to spotlight sharp, innovative approaches by companies like Morgan Stanley, Starwood, Macy's, Forest City Ratner Companies, New York Presbyterian Hospital and others to capture simple value out of complex market opportunities," said Michael Gordon, President and founder of ConsumerPowerline. "The electricity markets are complex markets. At ConsumerPowerline, we seek to provide clarity and simplicity in the decision-making process and deliver both significant economic value and clout to the end user."
Participants in the Second Annual ConsumerPowerline Energy Roundtable engaged in a dialogue with energy managers, who directly influence at least 2,500 megawatts of building loads and more than $2 billion in annual energy purchasing, and public and private influencers who shape market rules and incentive structures. Participants included:
• John Lembo, Director of Energy North American Ops., Starwood Hotels & Resorts
• Robert Gisolfi, Energy Manager, Macy's East
• Jennifer Kearney-Herold, Energy Program Mgr., NY-Presbyterian Hospital
• Mike Gordon, Founder and President, ConsumerPowerline
• Barbara Tillman, Sr. Vice President, Grenadier Realty Corporation
• John Bowen, Director Of Engineering, Forest City Ratner Company
• John Gilbert, Executive Vice President & COO, Rudin Management
• Dennis Quinn, Energy Executive, Celerity Energy
• Jay Raphaelson, Co-Founder, EnergyWatch
• Tom Barone, Program Manager, NYSERDA
• Shirley Neff, Columbia University faculty, former senior economist US Congress
• Ashok Gupta, Head of Air and Energy Program, Natural Resources Defense Council
• David Bomke, Energy Management Professional, NYECC
• Marc Brammer, Director of Research, Innovest
• Tim Daniels, Assistant VP Energy Policy, NYC Economic Dev. Corp.
• Peter Douglas, NYSERDA
• George Gerritsen, Con Edison
• Dave Lawrence, Mgr. Aux. Market Products, NY ISO
• Catherine Luthin, Financial Management, Luthin Associates
• Douglas Lutzy, Public Service Commission
• Nitin Manchanda, Dir. Of Enterprise Energy Mgmt., Itron
• Douglas Mitchell, Dir. Of Operations, Lincoln Center for Performing Arts
• Daniel Pugliese, Group Chief Engineer, Hines Morgan Stanley
• Bill Sweet, Journalist, IEEE Spectrum Magazine
• Darrell Thornley, Director Energy Ops., Equity Office Properties
• Gil C. Quiniones, Sr. VP Energy & Telecom, NYC EDC
About ConsumerPowerline
ConsumerPowerline (CPLN) (www.consumerpowerline.com) provides strategic energy asset management (SEAM) to its customers under an aligned incentive model while seeking to transfer power and financial returns to the end user. ConsumerPowerline's products and services help its customers pay the least for energy, get the most for energy they buy, and earn the most for what they can reduce. The firm is unique in how it approaches the market - using deregulated market opportunities to first create new revenue for customers. This new income, and the accompanying new information, facilitates customers achieving a lot more a lot sooner. Among the firms comprehensive strategic services are energy curtailment services, engineering, strategic commodity purchase and industrial procurement. These services include advisory plans for companies on how to manage their energy use in times of 'grid crisis,' and to sell the results of this managed use (reduced consumption at emergency moments) back to the local and regional energy markets.
The firm's clients include: CB Richard Ellis, Morgan Stanley, Macy's, Starwood Hotels, Hines Property Management, Forest City Ratner Corporation, Co-op City, Macklowe Properties, RFR Realty, New York Presbyterian Hospital, Newmark Properties, Douglas Elliman Property Management, Cooper Square Realty, Wentworth Management, and dozens of other substantial end-users of energy.