Misguided Benchmarking

Unfortunately, some products and services in life still require cash – coins or paper.  Some of the last places I use these anachronisms include taxis, and… and tips, or an occasional soda machine.  Oh and the beloved antique parking meters and toll roads in some places.  Here is something to consider: if the meter only takes coins, skip it.  You’ll spend $50 of your time finding a few bucks of quarters somewhere and running to the meter every hour or two – all to save a $10 parking ticket.

A few times a year when traveling with others, we need cash or coins for a parking meter.  How much money do you have?  Nothing.  Nothing.  Yes.  Nothing.  Yes?  What does that mean?  As an answer to, “how much money do you have?”, “yes” is about as useful as some benchmarking results I’ve seen.

There is benchmarking, and there is BENCHMARKING.  Most consultants say they do it, but it typically varies somewhere between almost useless and misleading information.  Why?  Because they tell you how many coins and bills they have in their pockets and not how much MONEY they have in their pockets.

The typical benchmarking reports energy consumption in Btu[1] or kBtu (thousand Btu) per square foot.  The value of a Btu of energy depends on its form.  Is a hunk of wood with 100,000 Btu worth more than a therm of natural gas (80 cents on my last bill), or 30 kWh (more than $3 on my last bill) – each with approximately the same Btu content?  A chunk of firewood with equal Btus to that of a therm of natural gas is worth less than the natural gas, and natural gas is worth less than equal Btus in electrical form.  Why?  Because natural gas and electricity are more useful and flexible forms of energy.

In every benchmarking thing I’ve seen, all Btus (electrical and fossil) are mixed together. In some cases, the electrical Btus, which are worth five times as much as fossil fuel Btus, count the same.[2]  This is worse than worthless because it can be terribly misleading.

Recently in a meeting I quipped, “I hate it when fossil and electric Btus are mixed together for benchmarking.”  The guy next to me said, “Well, it’s like city mpg versus highway mpg.”  Come again?  I bit off a piece of my tongue and mentally rolled my eyes.  This is exactly the same as valuing one dollar bills the same as five dollar bills.  It’s worse than worthless.  It is misleading.

Other benchmarkers at least true up the Btus to provide some sort of apples to grapefruit comparison.  They use source Btus, which are those thermal Btus back at the power plant used to generate the electricity.  These are then added to fossil fuel Btus from the site (building).  This is better but still not very useful.

ENERGY STAR® for commercial buildings uses this method to determine the energy score of a building.  This source energy comparison serves its purpose quite well for ENERGY STAR, but what it fails to tell the owner is, where is the opportunity – what fuel, and what might the opportunity be worth?

The table, for example, shows energy intensity[3] for three hypothetical elementary schools, each with full air conditioning, and each with realistic energy consumption.  You can see how terrible site Btus are for comparing energy performance, but yet amazingly, that is what some in our industry use.  It can easily provide upside down results as shown – the worst building has the lowest site Btu consumption because all the Btus used at the site are expensive electrical Btus.

Useful benchmarking takes a human brain with experience because buildings are rarely as clean cut as these in the example.  Buildings are used in different ways, particularly in the summer.  They have additions, sometimes many, with different types of systems.  They may share meters and almost always have multiple meters.  Just knowing if you have all the meters, and only the right meters, takes experience and expertise to flag something that simply does not look right.

Did I mention some buildings, especially schools and some industrial facilities, are only partly cooled all year?  ENERGY STAR® benchmarking for these facilities is going to be somewhat to very misleading. To qualify for the ENERGY STAR®, you can’t cheat, letting occupants swelter in hot weather.  In other words, you can’t earn the ENERGY STAR® by letting the occupants freeze in winter, cook in summer, and sit in the dark all the time.

If your benchmarking tool, or guy, can’t tell you whether a building is a fossil fuel hog or an electricity hog and then convert it to a ballpark energy saving potential in dollars, call somebody else.  You can’t buy stuff with a payback and you can’t buy stuff with an ENERGY STAR® score.  What you need to know is, “What can I do about my cash flow?”