September 1999

The Official Newsletter of International District Energy Association Volume 15 Number 2

Conference Update...

IDEA would like to make you aware of an important date change for its 91st Annual Conference & Trade Show. Originally, our conference was scheduled to take place June 17-20, 2000 at the Montreal Bonaventure Hilton in Montreal, Quebec. Several weeks ago, the organizing committee of the Grand Prix, held annually in Montreal, changed their race dates to coincide with our arrivals. Since this is the most popular weekend of the year in Montreal, with accompanying limits on hotel availability, we decided to move our meeting up a week. The new meeting dates of our conference will be June 10-13, 2000. The decision to move our meeting up one week was done with the best interest of our members, specifically to ensure that all of our attendees would be assured a hotel room and be able to get airline reservations in and out of the city. Aside from the date change, everything else will remain the same.

Long-Term Energy Scenarios Reflect A Changing World

{Editor's Note: This article was reprinted with permission from the March-April 1999 issue of Private Power Executive
Magazine}

Recent International Energy Agency (IEA) projections indicate that by 2010-2020 fossil fuels will contribute about 90 percent of the market for global primary energy consumption - the same as today. Oil, according to IEA, will play the most important role until about 2050 when natural gas will become the main source of energy.

Over the longer term, however, renewable energy will have a discernable impact on world primary energy use, although it will remain marginal until fossil fuel prices rise considerably. Evaluations by the Massachusetts Institute of Technology indicate that by the year 2100, the global share of fossil fuels will have to be less than 67 percent in order to reach greenhouse gas emission targets.

Gas-fired cogeneration is the preferred power plant technology option in the new post-Kyoto world. Primary fuel

savings achieved by cogeneration are typically 30 percent to 40 percent, and carbon emission reductions compared to centralized, large-scale coal plants are about 50 percent to 60 percent with oil, and 60 percent to 70 percent with gas.

In fact, cogeneration is the most effective means to cut the carbon emissions without extra cost. And cogeneration plants can generate power at considerably lower costs than centralized, large-scale plants when transmission costs and investment costs are taken into account. In the future, baseload coal plants can be replaced by baseload oil, gas or nuclear plants. And, replacing old coal-fired steam plants with oil and gas-fired diesel combined cycle (DCC) plants having 55 percent electrical efficiency will save 30 percent of primary energy. The CO2 emissions would then be 40 percent lower with oil and 50 percent lower with gas. With the present prices of heavy fuel oil, however, they generate power at ECU37/MWh to ECU39/MWh, a level 15 percent lower than current coal plant costs.

Record Climate Disasters

Cox News reports that Hurricane Floyd is adding to a decade of record climate-related disasters. Seven of the 10 most destructive hurricanes since 1953 have struck in the '90s according to FEMA. Among U.S. weather-related disasters of all types, 42 have caused more than $1 billion in losses since 1980 with 34 of them occurring in the 1990s, according to the National Climatic Data Center. Seven of these billion-dollar disasters occurred in 1998 alone. In 1999, the January tornadoes that hit Arkansas and Tennessee as well as the May tornadoes in Oklahoma and Kansas surpassed the billion-dollar mark. The evacuation costs alone for Floyd have been estimated at $2 billion.

U.S. Census Report and BOMA International's
Experience Exchange Report Agree:

Phoenix and San Antonio are a Good Bet

The Building Owners and Managers Association (BOMA) International, which recently released its annual Experience Exchange Report, wasn't surprised to hear that Phoenix and San Antonio topped the U.S. Census Bureau's June 30 report on fastest growing big cities: the commercial real estate trade association also had those two cities on its list of Top 10 Cities with the highest income growth potential, which is calculated by analyzing the difference between existing office income levels and year-end asking rents.

Two other big cities on BOMA International's list - San Francisco and San Jose - also had positive population growth, clearly an influencer of which cities will have a good chance at another booming year for real estate.

Stanford University Commissions New Thermal Storage Facility

Stanford University's Facilities Operations Department commissioned its new thermal storage facility in August 1999. The new facility uses ice
on coil technology that allows the university to produce up to 93,000 ton hours of thermal storage nightly and generate 37 to 42 degree chilled water during the peak daytime cooling period. Stanford currently has a peak cooling load of approximately 16,000 tons. The new ice storage system will be able to provide approximately 14,000 tons of cooling during the peak cooling period.

The new 18,000 square foot facility currently houses two, 2250 horsepower, screw compressors manufactured and installed by IDEA Member FES, which is located in York, PA and is a division of Thermo Power Corporation. The screw chillers utilize refrigerant R-717 ammonia. A third chiller will be installed this December, with space for two additional future chillers reserved in the new plant. FES also provided the plate and heat exchangers used for the refrigerant evaporators and condensers.

IDEA Member Baltimore Aircoil provided the ice on coil technology. The galvanized steel coils were installed in an existing 4 million gallon, underground storage tank that was used since 1976 for chilled water storage at 43 degrees F. The new ice coils have tripled the tank's capacity, with space remaining for another 25,000 ton hours of ice storage. The ice on coil technology will allow Stanford to produce lower temperature chilled water and reduce its pumping costs. It will also reduce campus electrical loads during the daytime peak period. Stanford's goal is to minimize operation of all electric chillers from noon to 6:00 pm during the peak demand season.

The system is an 'internal' melt system, which utilizes ethylene glycol to transfer heat from chilled water plate and frame heat exchangers to the ice coils located in the adjacent tank. Glycol at 35 degrees F is used to cool campus chilled water returning to the plant at 58 degrees F to 41 degrees or lower. Stanford University staff designed and installed the new facility's control system, which allows remote equipment starting, shutdown and monitoring. IDEA Member RMF Engineering of Baltimore, MD provided mechanical and electrical design services to Stanford, also an IDEA member.

Boiler/Pressure Vessel Industry Deaths

Decline by 50 Percent

Human error continues to play a significant role in boiler/pressure vessel accidents, according to the 1998 Incident Report released by The National Board of Boiler and Pressure Vessel Inspectors.

Despite a 50 percent decline compared with 1997, all deaths reported in 1998 were the result of preventable human factors. By comparison, just two-thirds of the reported fatalities in 1997 were attributable to human error.

For the first time in recent history, there were no reported deaths in 1998 attributed to boilers. All involved pressure vessels. Compared to 1997, the number of total injuries (31) also decreased by 59 percent, and an 18 percent decline in total accidents (2,011) was reported.

Additionally, the 1998 report noted a 49 percent reduction in the number of low water condition accidents, primarily the result of a significant 72 percent decrease in the heating boilers (water) category. For the first time since 1992, low water condition was displaced by operator error/poor maintenance as the leading cause of boiler accidents.

Calendar
of

Events

14th Annual IDEA
Cooling Conference
October 6-8, 1999
Sheraton Atlantic City
Atlantic City, New Jersey
Contact: IDEA, 202-429-5111

6th COGEN Europe Annual Conference and Exhibition
October 14-15, 1999
Europa Intercontinental Hotel, Brussels
Contact: COGEN Europe, +32 2 772 50 44 (fax)

IDEA Upper Midwest
Section Meeting
October 15, 1999
Holiday Inn
Burnsville, Minnesota
Contact: Tim Johnston,
507-266-0668

11th Annual IDEA
Distribution Workshop
November 3-5, 1999
Kansas City Club
Kansas City, Kansas|
Contact: IDEA, 202-429-5111

European District Heating & Cooling Week
November 9-12, 1999
Finlandia House, Helsinski
Contact: EuroHeat & Power, unichal, +32 2 779 9279

13th Annual IDEA College/ University Conference
February 23-25, 2000
Vancouver, British Columbia Canada
Contact: IDEA, 202-429-5111

91st Annual IDEA
Conference & Trade Show
June 10-13, 2000
Montreal Bonaventure Hilton
Montreal, Quebec, Canada
Contact: IDEA, 202-429-5111

Trigen-Cinergy Solutions' University Project Wins Award from National Council for
Public-Private Partnerships

Trigen-Cinergy Solutions (TCS) announced that its combined heat and power (CHP) project at the University of Maryland College Park (UMCP) received a Project Award from the National Council for Public-Private Partnerships (NCPPP). The award was announced at the NCPPP's 13th annual conference in Washington, DC. The NCPPP is a non-profit, non-partisan association whose primary purpose is to explore ways in which the public and private sectors can work together to provide public services and develop, finance and implement infrastructure and community facility projects.

The Council's Project Awards recognize outstanding national projects that embody the effectiveness and value of partnerships between governmental agencies and private companies to provide public services or public facilities. The TCS project was recognized for its technological innovation in deploying a state-of-the-art CHP system, its "first-of-its-kind" character for the outsourcing of public university energy infrastructure, and the significant cost-savings that it provides to UMCP.

TCS was selected to provide utility services to UMCP under a 20-year contract. TCS is responsible for all production and distribution of steam, chilled water and electricity over the term of the contract. UMCP will receive over $120 million in savings over the term of the contract. TCS will manage $71 million of new capital improvements, including the installation of a 26 megawatt combined heat and power plant that will meet virtually all the university's electricity requirements. Heat from the on-site electric generation plant will be used to provide heating and cooling for 150 buildings on the 1,350 acre-campus. TCS expects to achieve an annual efficiency of 75% at UMCP, more than double the national average efficiency for central electric generation.

New Energy Facility to Be Designed

DOE's Federal Energy Technology Center (FETC) announced a new type of energy facility will be designed by three teams. The so-called "co-production plant" will produce a combination of electricity, heat, fuels and chemicals, unlike today's power plants, which typically generate only electricity as their primary product.

FETC picked as leaders of the three teams Waste Management and Processors Inc., Frackville, Pennsylvania and Dynergy Power Corp. and Texaco Natural Gas Inc., both of Houston, Texas. The total value of the three projects could approach $30 million over the next three to five years, the center said.

"The ultimate objective is an energy facility that will extract virtually every usable molecule of BTU of energy from a range of fuels -- coal, biomass, municipal waste, or possibly various mixtures of these fuels," Robert Gee, assistant secretary for fossil energy, said in a statement Wednesday. Gee said the three projects announced last week are the "first step" toward developing advanced technology modules that would ultimately be integrated into a plant that would be ultra-efficient and nearly pollution-free. DOE calls that concept "Vision 21."

Also related to Vision 21, DOE last week issued for public comment a draft solicitation for various research projects. The department expects to issue the formal solicitation on or about September 30. Information on the draft is available on the Internet at http://www.fetc.doe.gov.

We hope you will join us in
welcoming the following new
members of IDEA!

Doug Benschoter, PE
Vice President
Affiliated Engineers, Inc.
625 North Segoe Road
Madison, WI 53705
(608) 236-1214
(608) 238-2614 fax
E-mail: dbenschoter@aeieng.com
URL: www.acieng.com

Herjinder Hawkins
Senior Business Partner
New West Energy
1521 North Project Dr., PAB 200
Tempe, AZ 85281-1206
(602) 236-0291
(602) 236-6981 fax
E-mail: hkhawkin@newwestenergy.com
URL: www.newwestenergy.com
Referred by Jerry Pittman, NRG Thermal

Paul Jones
Planning Analyst
New West Energy
1521 North Project Dr., PAB 200
Tempe, AZ 85281-1206
(602) 236-0231
(602) 236-0260 fax
E-mail: pajones@newwestenergy.com
URL: www.newwestenergy.com
Referred by Jerry Pittman, NRG Thermal

Xuebing He
Associate Professor
Chong Qing Jian Ziu University
Heating & Ventilation Dept.
College of Urban Construction Engineering
Shapingba District
Chong Qing, P.R. China 630045
011861399910276
E-mail: hexueb@cq.cngb.com

Michael A. Solms
Director of Business Development
The Stellar Group
2900 Hartley Road
Jacksonville, FL 32224
(904) 260-2900 x3195
(904) 268-4932 fax
E-mail: msolms@thestellargroup.com

Trigen's Grays Ferry Cogeneration Plant Receives 1999 Powerplant Award

Trigen Energy Corporation announced that the Grays Ferry Cogeneration Project in Philadelphia was awarded the 1999 Powerplant Award by the McGraw-Hill Companies, publisher of Power magazine. The award was presented at the International Joint Power Generation Conference and Exposition in San Francisco.

The Grays Ferry project was selected for transforming an aging power station into a modern district heating facility with unparalleled energy and environmental benefits. McGraw-Hill's prestigious award recognizes leadership in the application of advanced equipment designs, O&M techniques and creative management practices that optimize among competitive economics, energy efficiency and environmental impact.

The Grays Ferry Cogeneration Project is a 150 MW combined cycle gas turbine facility, which provides steam for Trigen's customers in its Philadelphia steam system and sells electricity to PECO Energy. Commercial operation commenced in January 1998, following a 21-month construction and testing period. The plant, which combines the production of heat and power, achieves fuel conversion efficiency of 75%, more than twice the national average for utility generation. Trigen is a 50% owner of the project with Cogeneration Corporation of America.

Top Ten Tips...

from the "How to Do Business with BOMA Members" Seminar

1. Create a bond or strong business relationship -- establish a business partnership beyond just making the sale.

2. Get involved with the organization to demonstrate a strong commitment and interest -- help your client "save time and look good."

3. Be a reliable information provider and keep your client up-to-date -- property managers and owners count on vendors to gain the latest information on current trends, codes and legislation.

4. Know the market and the building -- proposing long-term service goals aren't going to mean a thing if the building is going to be sold in six months. Do your homework!

5. Make your bid as detailed as possible and clearly justify your numbers.

6. Offer a unique, yet vital angle that your competition has overlooked to differentiate yourself.

7. Talk in the owner or property manager's language -- otherwise he or she won't even look at your proposal.

8. Don't do a dog and pony show -- time is precious for today's property managers, so make your presentation short and
concise.

9. Strive to always add value and increase FFO (funds from operating).

10. Always be there in a clutch -- how you perform in a crisis can make or break your reputation depending on the outcome. Make sure you're prepared for the worst case scenario and are able to accommodate your client's needs. Nothing will gain you more credibility or loyalty in the future than "saving the day."

People in the News

* Tom Davison, formerly the Energy Center's director of marketing, has been promoted to vice president of the Minneapolis Energy Center. Davison is responsible for the Energy Center's day-to-day operations, including sales, operations and engineering. The company has grown significantly during Davison's tenure as director of marketing, having added to its customer list such notable properties as the new Federal Reserve Bank, Piper Jaffray Center, Target Tower and U.S. Courthouse.

Why Tenants Stay

Reasons given as to why tenants stay in a particular office location are markedly different than the reasons given for a relocation decision. Once again, the main reason to renew relate to location and cost. However, issues surrounding the office space itself are mentioned as being of considerable importance. Specifically, tenants tend to stay if their office space is flexible enough to expand or contract or to use as an open or closed space. Good quality heating and air conditioning (HVAC) is a feature that also prompts a renewal decision.

Overall, the analysis indicated that in general terms, real estate professionals and tenants are "in-sync" with each other, but each group tends to use different terminology. Other conclusions include:

* Service is not as important an issue in terms of attracting new tenants, but it is vital for tenant retention.

* Responsiveness and relationship building are key service-related issues.

* Tenants want to talk about "gross unit costs," not just rent.

* Important features and amenities include cleanliness and parking.

A Not-So-Candid Camera Captures Boiler Operations

A boiler works under pressure, and it is not possible to see what is happening inside it. The terms "wet steam" and "carryover" are everyday idioms in the steam industry, yet very few people have ever seen these phenomena, and the actual water movement inside a boiler has remained highly speculative...Until now.

IDEA Member Glenn Hahn, New Technology Manager, Spirax Sarco, Inc. has actually videotaped the insides of boilers under various operating conditions. In his estimation, what he has recorded definitely illustrates the effects of steam quality (versus boiler efficiency) during different boiler and steam systems demands.

Biomass Executive Order

President Clinton issued an executive order coordinating federal efforts among DOE, USDA, EPA and the National Science Foundation to accelerate the development and use of biomass products and bioenergy. The agencies are to develop a series of specific recommendations for the FY01 budget within 120 days. In a separate memorandum, Clinton set a goal of tripling U.S. use of bioenergy and bioproducts by 2010. Meeting this goal could create $15-20 billion in new income for farmers and rural American and reduce annual greenhouse gas emissions by over 100 million tons -- the equivalent of taking more than 70 million cars off the road. The executive order notes that energy from biomass sources currently accounts for about 3% of the total U.S. energy supply -- mostly from wood and wood waste.

ASTM Introduces Standards Via the Web

The American Society for Testing and Materials (ASTM) has inaugurated online access to its technical standards for materials, products, systems and services. This is the first such Web-accessed system to be developed.

According to ASTM, the availability of ASTM standards online will greatly ease the work of professionals in many fields, helping ensure quality. Users of ASTM standards include engineers, architects, lab technicians, researchers, industry consultants, and others.

Through the newly developed Web-based system, users can purchase as many or as few ASTM standards as they need.

All of ASTM's more than 10,000 standards may be accessed by using a Verity search engine. For more information, or to download sample preselected ASTM standards, visit the demonstration site at http://demo.astm.org/connect.

International Energy Funding

The Wall Street Journal reported that the President's Committee of Advisors on Science and Technology (PCAST) is urging the government to triple its funding for programs helping energy companies develop and promote new energy technologies abroad. The U.S. now spends about $230 million a year on programs aimed at influencing energy use abroad; the largest share focuses on safety improvements for Soviet-designed nuclear reactors and on an international experiment in fusion energy. PCAST is calling for boosting the budgets for federal agencies involved in the projects to a total of $750 million a year within the next five years. The new money would target relatively clean energy technologies, low-energy building designs, more energy-efficient cars and buses, and smaller power plants that sell heat as well as electricity.

U.S. Private Sector Office Market in Very Heathy Position

For more than 70 years, BOMA International's Experience Exchange Report (EER) has been the premiere benchmarking tool for the industry -- depended upon by countless building owners and managers as they compare their income and expenses with their colleagues' throughout North America. This year, BOMA's EER shows continued good news for the industry as a whole. In the United States, net operating income (NOI), which is one of the key indicators for office market performance, increased for the fourth year in a row. Findings from the recently released report indicate that NOI was, in fact, $10.07 per rentable square foot (rsf) in 1998, up 9.69 percent (7.97 percent in real terms) from the 1997 level. Building owners and managers accomplished this positive NOI growth by increasing total income by 3.34 percent while reducing total expenses plus leasing by 2.34 percent.

On the expense side, most operating components increased from 1997 except for utilities, which decreased, and roads/grounds, which remained unchanged. The largest increase occurred in security expenses, which is due in large part to the recent bombings of office buildings and also to the fact that many high-technology-based firms are very security conscience.

The increase in total income and the decrease in total expenses plus leasing resulted in a 7.20 percent increase in NOI for the aggregate of downtown buildings. It appears, therefore, that the research pundits were correct -- 1998 was a year of revival for downtown office buildings.

District Energy Now is a monthly publication of the International
District Energy Association

Marie Williams, Editor
Barbara Erickson, Graphic Designer

All copy and correspondence should be sent to: 1200 19th Street, N.W., Suite 300
Washington, DC 20036-2422
(202) 429-5111 phone
(202) 429-5113 fax

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