CAPTURING EVAPORATION CREDITS

Evaporative credits, also known as sewer credits, can be a little-known financial advantage for businesses that operate cooling towers, evaporative condensers, irrigation systems, large humidifiers or ice machines.  The savings realized can fund energy projects or reduce operating costs.  Equipment costs are relatively low, with return on investment (ROI) typically realized between 10 and 24 months.  Perhaps the biggest advantage is the perpetual nature of sewer credits. If managed properly, credits recur year after year.

Water-cooled refrigeration and air conditioning systems are generally very efficient compared to air-cooled equipment.  There are hundreds of thousands of cooling towers and evaporative condensers in service around the world.  In the USA, when cooling season begins, or summer temperatures climb, water use and associated costs increase as well.  And, since most water and sewer utilities calculate sewer charges based on water consumption, sewer bills also increase dramatically.

THE BUSINESS CASE

Where allowed by local utilities, evaporative credits (sewer credits) can dramatically reduce the impact of water-cooled system operating costs and sewer charges.  Sewer credits are often overlooked or misunderstood.  Consider a business where profits are generally driven by sales.  In many cases, sales volumes of $24 to $30 are required to produce $1 in operating profit.  So annual sewer credits of $10,000 can create the same profit as $240,000 to $300,000 in sales.  If sales are not growing by that amount in 10 to 24 months, sewer credits are a great option to boost operating profits. 

As an example, one national retailer is realizing over $1,000,000 in annual savings with sewer credits from less than 100 sites with cooling towers – equivalent to over $11 million in sales. A  cold-storage warehouse reduced their sewer costs from 97% of their water costs to 51%, and a grocery store in California recovered 55% of their equipment investment in the first two months of operation.  A university in Texas realizes about $500,000 in annual savings with an ROI on equipment of less than 3 months.

Some cities or sewer districts allow credits, while others do not.  Applications, procedures, equipment specifications, meter reading schedules and reporting requirements vary.  Where credits are not currently allowed, a formal appeal may be helpful.

EQUIPMENT REQUIRED

Most utilities require from one to three sub-meters to qualify for credits with two being the most common configuration.  City furnished sub-meters are common, allowing them to read the meters remotely with their equipment.  Where customer meters are required, those should generally match the requirements and billing units of the utility.

Some utilities will read sub-meters with their automatic meter reading (AMR) system or radio-based system.  Others require customers to read and report meter readings regularly.  Most utilities accept email reports; some require readings be posted on their website and a few require a special or faxed form be submitted each month.

Some customer sites have a staff member physically read and report their sub-meters.  But due to the location of most sub-meters (equipment rooms, penthouses, ceilings above other equipment), this method has become less attractive and very inefficient, not to mention unsafe.  M2M solutions are much more effective and reliable.

Sub-meters must generally record in the same units used by the utility, gallons or cubic feet.  A conversion formula may be allowed, but the results can create confusion in the utility’s billing department which often leads to billing errors.

TOTAL PROGRAM MANAGEMENT

Sewer credits produce great returns, but they are not always automatically applied.  Most credits are calculated and posted to utility bills manually.  Meter reading errors and billing errors can reduce savings from thousands of dollars per year to a trickle.  One Rhode Island site received $401 one year until corrected to over $4,000.  The Manager of a Florida site retired resulting in company losses over $20,000 in credits over the next 16 months.

Credits can also reach further than the balance sheet.  An effective Evaporation Credit Program can also detect equipment or operational issues. In Florence, KY, makeup water volume soared during a cold spell in December.  The water line on the roof had frozen and burst.  Early detection through daily sub-meter readings led to the leak being stopped within three days, leading to water savings estimated at $3,700.  Unusually high winter volume in Arkansas uncovered a cooling tower leaking badly on the roof.  Quick response stopped the leak and prevented potential roof damage from pooling water and freezing conditions.  No volume on a blow-down meter in Houston TX uncovered that the blow-down had filled with sand and dirt, blocking the line completely.  Another zero blow-down reading in Fort Worth, TX, uncovered a failed fill valve, putting the tower in overflow and wasting water by the hour.

LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN (LEED) BENEFITS

If you’re considering LEED certification for your existing buildings, metering your cooling towers can qualify for one or two LEED points.  In LEED Recertification Guidance, continuous metering of water used for cooling towers with data logging can qualify for up to two LEED points.

POTENTIAL ROADBLOCKS

Internal accounting rules can also create challenges.  Sewer credits reduce operating costs, and the savings could be applied to new energy projects or other equipment replacements.  However, some companies’ accounting practices will not allow reductions in the utility bucket to flow into the capital equipment account.  So, a dollar of potential energy reductions may be locked away by internal procedures. 

Network cables and equipment need not be an obstacle to starting an Evaporation Credit Program.  Cellular transmitters and encoded meter registers allow accurate, reliable data.  Automatic reporting may also be possible for some utilities, but a hands-on approach is currently the best option for evaluation of the site’s water volume and water flow.

Some utilities also require photos of the meter readings each month.  The development and deployment of a remote wireless camera provides those photos at a very low cost.

SAVINGS SQUARED

If applied to other cost reduction projects, sewer credits can significantly compound savings.  When reductions in water and sewer costs are redirected toward energy projects, savings can be realized in both categories.  Couple that with additional LEED points, and compound savings are evident.

Are your profits truly evaporating?  Maybe it’s time to rethink your cooling tower operating costs.  Check out evaporative credits – you might be flushing dollars down the drain.