Why Innovative Manufacturers Conduct Utility Audits

Posted by Admin on Mar 22, 2016 5:12:47 AM

Why Innovative Manufacturers Conduct Utility Audits


“May I have an audit?”

When was the last time you asked that question? For most, the question is usually phrased, “Why do I have to be audited?” Luckily, in this case, we aren't talking about a tax audit. We are referring to an audit that you actually want because it saves you money – a utility audit.

According to several reports, the United States leads the world in energy waste. The country wastes an astounding 58% of the energy produced. For those in the Consumer Packaged Goods manufacturing industries, you know that your market is no exception.

This waste isn't limited to electrical and gas energy. It also extends to water use and solids being trucked to the landfills. Unfortunately, the shareholders are left to pay for it with their profits.

However, there is good news for manufacturers.

You Can Rapidly Change the Status Quo

As manufacturers, you are arguably the best equipped to rapidly change the status quo in each of your factories. The following points illustrate why you have the ability to make a difference:  

  • Utility waste reduction is generally the low hanging fruit for factory capital improvements. With an accumulation of decades of expansions and renovations, a holistic view of utility usage has simply never occurred for most facilities.

  • Collaboratively, plant managers, engineers and energy partners have the technical know-how to facilitate utility improvements. This team can collectively monitor and calibrate the designed and installed utility controls.

  • Boards of Directors and shareholders promote sustainability in their mission statements and welcome strategies that reduce utility usage.

  • If a reasonable return on investment (ROI) can be demonstrated, your leadership has the ability to dedicate capital for utility waste reduction projects.

  • Most manufacturers have the size and credit ratings to secure energy reduction financing that will, in some cases, allow you to treat improvement costs as operating expenses instead of capital.


How Utility Audits Work

While an IRS audit may feel like a nightmare, a utility audit may seem too good to be true. Luckily for you, it’s not. Executed correctly, it will save you much more than it will cost.

Borrowing from experience and great design industry organizations like American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) and the Rocky Mountain Institute, below is a brief step-by-step explanation of how utility audits work.

1. Conduct Preliminary Analysis 

You start out by engaging an engineering (or design-build) firm to perform a preliminary analysis and walk-through (Audit Level 1) survey of your facility. This can take up to three days. It is largely a visual inspection of your facility and a review of your facility’s record drawings and utility bills.

Utility consumption related facility components that are inspected include:

  • Manufacturing process systems

  • Manufacturing packaging and material handling systems

  • Walls and roof

  • HVAC systems (chillers, cooling towers, air handlers, packaged units)

  • Hot water and steam systems (boilers, pumps, valves)

  • Domestic water

  • Compressed air systems

  • Lighting

  • Plug loads

  • Refrigeration systems

  • Building and process controls

  • Employee and maintenance habits and procedures

  • Employee training

2. Identify Improvement Opportunities

Based upon the findings from the preliminary analysis, improvement opportunities are identified for further exploration (Audit Level 2). These targeted opportunities are reviewed in more detail. More data is collected from the plant, and preliminary ROI’s are calculated for the potential solutions in this step.

Once this is collected, the improvements that pass the ROI test are designed in detail, a comprehensive cost analysis is performed and go-no-go decisions are made (Audit Level 3).

3. Select Firm to Perform Improvements

Some manufacturers begin their process with an engineering firm and implement their improvements with another firm. Without an abundantly clear scope, partnering with more than one firm to implement your improvements tends to leave a few gaps in communication.

However, if you select an Engineering-Procurement-Construction (EPC) firm from the beginning, they can perform the audits and the design and installation phases of the improvements. Partnering with an EPC firm greatly reduces your risk because they can guarantee the utility reduction impacts of each improvement. They may also facilitate financing to extend payments for a duration that will equalize with monthly utility bill reductions.

Home Energy Savings vs. Facility Energy Savings

Now, consider the small improvements that you know you and your family could be making at home, but never quite get around to doing. Perhaps you could start using compact fluorescent or LED light bulbs, occupancy sensor light switches, a smart thermostat, lower water flow toilets, low flow shower heads or new weather stripping on your doors. Or maybe you could be more disciplined about tune up maintenance and cleaning filters on your HVAC system. Can you imagine the amount of the savings you could create?

Now, take those savings and multiply them by a thousand, or ten thousand. That is the impact you could have by assessing your company’s utility consumption and implementing practical cost saving measures. How much savings are you missing?

Is today the day you start making a difference in your manufacturing facility? If so, take your first step by discussing your options with Matt Gulden. As an EPC firm, we can be there with you from concept to construction. Be a hero and enjoy the savings!  

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Topics: Innovation, Consumer Products, Energy