Renewable Energy Certificates: The Missing Piece to Solve the Puzzle of Clean Electricity

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By: Jim Crockett, Bernhard

For businesses and large facilities that don’t have the on-site infrastructure for renewable energy generation, there’s an inherent problem with committing to using more electricity from “clean” sources. How do you prove the energy you’re using is actually “clean”?

According to the U.S. Energy Information Administration, about 20 percent of the electricity used in the U.S. in 2021 was from renewable energy sources like hydroelectric, solar and wind, while around 61 percent was from fossil fuels including coal and natural gas. This issue is after energy is produced, it all gets dropped into the same power grid, regardless of source. Once it’s blended together, there’s no way to sift the “clean” electrons from the “dirty” ones.

Those who don’t work in the energy sector might think an electron is just an electron. But for facility operators hoping to reduce Scope 2 emissions, meet renewable energy targets, reduce their carbon footprint or publicly demonstrate a commitment to using clean energy, the issue is a real conundrum. Short of building on-site solar or encouraging the U.S. to somehow create a “Green Grid” that only accepts and sells renewable energy, how can organizations prove to stakeholders, their community and the public that some (or all) of the energy they use is from renewable sources?

The Renewable Energy Certificate (REC) was created to help solve this exact problem.

What Are Renewable Energy Certificates?

Sometimes called Renewable Energy Credits, a Renewable Energy Certificate is basically a kind of receipt, used to prove the energy your facility uses was indeed purchased from sustainable sources and is the only facility claiming this energy.

Every time the operator of a certified renewable energy source like a solar plant or wind farm produces and delivers one megawatt hour (MWh) of electricity to the power grid, that producer is awarded a REC. RECs differ from carbon offsets, in that an offset represents one metric ton of reduced or avoided greenhouse gas emissions.

Each REC certifies its owner has the legal right to use one MWh produced by a non-polluting source. The REC tracking system ensures each REC is only held by one legal owner, and allows RECs to be bought, sold and traded electronically. Nonprofits, businesses and individuals can then buy and sell those RECs.

Currently, more than 850 utility providers in the U.S. offer Green Tariff or Green Power programs that allow customers in their service area to purchase RECs. Most charge a premium of around 1.5 cents per kilowatt hour — about $15 per MWh — in addition to the cost of the electricity. The non-profit organization Green-e, founded by the Center for Resource Solutions, certifies energy producers as sustainable and REC eligible, and ensures that RECs are not double-counted. It’s recommended that businesses only purchase RECs related to energy produced by suppliers certified by Green-e.

If a business that hopes to demonstrate its commitment to non-polluting energy uses 5 MWh of electricity in a month, they can buy and invalidate (or “retire”) five RECs. Once officially used, retired RECs can’t be bought, sold or traded again. In addition to supporting renewable energy producers, buying RECs provides end users with documented certification that electricity used during a certain period was obtained from non-polluting sources.

How does the REC tracking system work?

In North America, the process of tracking, awarding and administering RECs is overseen by 10 regional authorities, each with its own specific territory. Much of the central U.S., for example, is part of the Midwest Renewable Energy Tracking System (M-RETS), which stretches from the Louisiana Gulf Coast to the northern border of Canada’s Manitoba Province. Energy users are not required to buy RECs from their home state or regional territory, but they do have to register with their regional authority to participate in REC markets.

One factor to keep in mind when considering RECs is that in many U.S. states are sorted into either “compliance” or “voluntary” markets, which can have an impact on the price of RECs produced there.

Currently, laws in more than 29 states plus Puerto Rico and Washington D.C. require electric utilities to generate a certain percentage of the electricity they produce through renewable sources. These are the “compliance” state markets. If energy producers in those states don’t meet renewable energy targets, they can be required to purchase RECs to offset the difference.There are “voluntary” market states, including North and South Dakota, Idaho, Wyoming, Florida, Kentucky, Louisiana and Georgia. In those states, the demand for RECs is primarily from companies hoping to meet voluntary sustainability goals, or REC purchases by businesses in compliance markets. Due to lower demand and other factors, RECs created in voluntary market states are usually less expensive.

Because energy users in one regional territory are free to purchase RECs created anywhere in the U.S., users in compliance states often purchase RECs created in voluntary market states, where each REC-certified KWh of electricity is often more affordable. In doing so, the system helps support sustainable producers in voluntary states, where a greater percentage of electricity is produced from fossil fuels. Although people are free to buy RECs from anywhere, specific types of RECs may be required to meet regulatory requirements. For example, they may require wind RECs or solar RECs, or require them to be locally sourced.

Like any traded commodity or financial instrument, RECs and the system that allows them to be bought, traded and sold can be complicated. Still wondering whether your business should use RECs to reach its sustainability targets? Nobody knows energy better than Bernhard, and we can help RECs make sense for your large facility’s electrical needs. In doing so, we’ll support renewable energy generation and help more businesses meet their clean electricity goals, creating a brighter future for us all.

About the Author:

Jim Crockett, PE, has 25 years of experience in the HVAC industry in general and 15 years specializing in energy efficiency. At Bernhard, Jim has been the senior engineer on HVAC Energy Efficiency projects around the world and has provided technical guidance in support of the  engineering staff and Monitoring-Based Commissioning program. Jim holds a B.S. in Mechanical Engineering from the Brigham Young University and an MBA with Finance Concentration from Southern Methodist University. He is a registered Professional Engineer in AZ, CA, FL, ID, KS, MT, NM, TX, UT, and WA and is the recipient of the 2021 AEE Region V Engineer of the Year Award.  An accomplished speaker, Jim has presented at AEE World, AEE Arizona, APPA, and EMA webinars. His article on Science-Based Target has been published in Utah Construction & Design Magazine’s 2022 March/April issue.

Sustainable Utility Partnerships Revolutionizing Energy Efficiency Efforts

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We are always looking for the next great idea to help solve America’s energy challenges. Our focus is making our clients’ energy infrastructure more resilient, more robust and ready for whatever comes next.

The latest innovation from Bernhard: Sustainable Utility Partnerships (SUP). An outgrowth of the Energy-as-a-Service (EaaS) agreements Bernhard has been employing for more than a decade to help clients realize millions in annual energy savings, Sustainable Utility Partnerships allow Bernhard to share excess energy produced at EaaS partner facilities with other nearby entities who need efficient and reliable power.

Facilities who choose to join as a SUP or with Bernhard can see a host of benefits, including lower greenhouse gas emissions per kilowatt hour used, reduced expansion and renovation costs and a more stable and reliable energy, all without big capital expenditures.

WHAT IS ENERGY AS A SERVICE?

To understand SUP, it’s important to understand the basics of EaaS.

More than ten years ago, an epidemic of deferred maintenance, cobbled-together technologies and failing energy infrastructure was impacting budgets and mission-critical services at hospitals, universities and other large campuses nationwide. Those issues were particularly a problem in Bernhard’s home state of Louisiana, where powerful hurricanes can unexpectedly threaten facilities where lives literally depend on keeping energy flowing. In response, Bernhard helped pioneer the concept of Energy-as-a-Service agreements in the United States.

An emerging market sector that provides an alternative to typical customer-funded or financed energy projects, the EaaS model allows clients to partner with a service provider like Bernhard to manage the client’s complete energy portfolio needs.

Under an EaaS agreement, a large, multi-facility client like a hospital campus agrees to transfer the authority to operate, manage and upgrade on-campus energy systems to Bernhard for a term of years. The client then makes monthly payments to Bernhard for managing those systems. The regular payments are why EaaS is often called a “subscription-based” energy model.

Large facilities go from the uncertainty of never knowing what their energy and infrastructure costs will be month-to-month to knowing what they’ll be exactly with precise consistency. In addition, Bernhard assumes responsibility for keeping the power flowing and fixing anything that breaks. The stress of managing a large operation disappears.

As part of an EaaS agreement, Bernhard substantially upgrades and retrofits partner facilities in a quest for every possible efficiency. Depending on the project, that often means upgrading energy generation and transmission infrastructure to much more efficient systems, including at the EaaS partner’s Central Energy Plant. For many Bernhard clients, the result is annual energy savings totaling millions per year and — in many cases — excess power the campus doesn’t need.

HOW DO SUSTAINABLE UTILITY PARTNERSHIPS WORK?

If upgrades completed by Bernhard during an EaaS partnership result in surplus energy output from the Central Energy Plant (CEP) at a large facility, Bernhard can offer that excess energy to nearby entities who might want to form a SUP. Potential SUP partners could include schools, private businesses or other large facilities that need affordable, reliable, responsibly-produced power.

Once a SUP agreement has been reached, Bernhard covers the upfront costs required to interconnect the CEP to the SUP partner facility. Once the connection has been made, Bernhard implements a series of energy conservation measures at the SUP partner facility to make it much more efficient. These measures may include lighting upgrades and retrofits, retro-commissioning, water conservation, upgrades to controls and more. In exchange, the SUP partner makes a recurring monthly payment to Bernhard under what’s known as a thermal services agreement.

The benefits to SUP partner facilities are much the same as those realized by the original EaaS partner, including much greater efficiency, savings on annual energy bills, more stable energy costs, operations and maintenance cost savings and more.

SUP partners must be within a limited area around a facility upgraded through an EaaS by Bernhard. However, because Bernhard EaaS projects are often located in densely-populated areas, there’s potentially hundreds of organizations located near Bernhard EaaS projects that could benefit from a Sustainable Utility Partnership.

Bernhard is always looking for the next big idea in energy for our clients and partners. Want to see if a Sustainable Utility Partnership with Bernhard could help your organization reach decarbonization goals while saving money through greater efficiency? Visit us online at bernhard.com, or call 504-833-8291.

Demand Management Technologies and Modern Buildings

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By: Leighton J. Wolffe

Energy markets across the United States continue to rapidly evolve due to regulatory, legislative and energy policy activity at the Federal, State, and regional levels. What has been a historically staid and slow-moving industry has now become supercharged with the advent of deregulation, renewable technologies, and distributed energy resources.

Large scale adoption of renewable energy resources such as solar, wind, storage, coupled with weather extremes and consumer demand are creating increasingly complex scenarios of supply, pricing, and risk. These factors drive the costs of electricity in unpredictable ways, requiring building owners to both understand the markets they reside in, and have ability to monitor, manage and effectively control energy usage. Moreover, they need the technologies necessary to participate in demand response and demand management programs.

In today’s new energy economy, buildings are intended to be part of an interactive energy grid – able to receive and respond to market signals that indicate that grid conditions are taking place due to critical issues with supply and demand. The grid operators now provide hour and day ahead pricing so that when prices are high, customers can elect to use less, or even nominate load back into the market and receive the same income as a power plant.

These new opportunities are being driven in large part by FERC Order 2222, which is specifically intended to open up markets to behind the meter distributed energy resources (DER’s). In summary, a customer can use less, or generate energy to offset what would normally be supplied from the grid and be paid for it.

FERC Order 2222 helps usher in the electric grid of the future and promote competition in electric markets by removing the barriers preventing distributed energy resources (DERs) from competing on a level playing field in the organized capacity, energy and ancillary services markets run by regional grid operators.

In addition, the 2022 Inflation Reduction Act (IRA) executive order further incentivizes DER’s through tax credits. Under the IRA, energy transition projects undertaken by tax-exempt entities will qualify for the investment tax credit (ITC) equal to 30% to 70% of the eligible project cost basis. To put this simply, a qualifying project with an installed price of $1 million will now only cost $300,000 to $700,000 after factoring in the direct pay ITC.

Given the pace of FERC 2222, national and local activity, energy market models in place today will not stay the same as the regulated and competitive markets adjust to the increasing integration of grid scale renewables. This new mix of firm and intermittent energy resources directly impact the way energy suppliers price power purchasing agreements and how consumers pay for electricity originating from traditional and renewable energy sources.

US Deregulated Energy Markets:

In every market, region and zone, the grid operators have to find a way to deliver steady power in real time. However, increased demand can create hot spots and additional supply resources are typically called upon with peaking plants often being the costliest forms of energy. This drives the wholesale prices of electricity up that has to be paid for by the supplier. In order for the suppliers to cover their costs and as an insurance hedge, power purchasing agreements include rates, tariffs, and demand charges that make up the difference more often than not. The customer sees these for every month on their bill.

In one form or another, consumers are directly exposed to these complex energy market dynamics. In the wholesale and retail markets there are structures in place to manage and regulate the relationships and financial transactions between the market participants and the consumers. While complicated, they follow similar practices as stock market and financial trading operations between sellers and buyers – in this case the commodity of electricity. The retailer energy provider serves as the broker, or intermediary between the power sources and the consumer. This role has evolved along with the markets so the consumer can actually sell back unused power to the energy market. Bernhard’s Connect® Platform is the enabling technology to make this happen.

Bernhard Connect® is Bernhard’s proprietary, cloud-based platform for automatic fault detection, measurement and verification, and continuous data collection and archival. The platform provides advanced levels of monitoring and energy management control, pushing the boundaries of existing traditional applications.

New Business Models – New Demand Management Technologies

As the energy markets evolve, new demand management programs are formed to increase customer participation. These programs incentivize customers to shape, shift, and shed load in accordance with a facility’s ability to respond to an event notification and the duration of the event. These range from basic demand response programs where a site develops the capabilities to shed a defined amount of curtailable load, all the way to economic load management programs where hour and day ahead pricing signals inform the building and storage systems with strategies to dynamically control demand. In this way, consumers are paid the same price to shed load as the power plants who deliver electrons.

In this new energy economy, it’s the facilities who have the capability to manage their load through proactive market interaction that benefit. Otherwise, without the necessary enabling technologies, the building operates as a standalone consumer of energy – similar in many respects to a computer not connected to the internet.

Bernhard enables customer participation through Connect by managing the various systems in a facility to lower demand through adjustments to HVAC, lighting and other energy consuming systems, or activating generators and discharging storage batteries.

Connect develops operating strategies to manage demand in context of market conditions – and within the terms and conditions of the power purchasing agreement. This is accomplished by enhancing the customer’s ability to manage their usage that comports with business, operational, and financial rules that are applied under different pricing thresholds. Without Connect, the BAS’s are limited in their ability to interact with energy markets.

When Connect is in place, the customer is ready to engage the new energy markets with confidence and with newfound ability to leverage and negotiate improved power purchasing agreements – because now the customer is able to self-manage risk, and the retail energy supplier has less risk to price.

The customers that have control over their equipment to adjust their demand are going to be the real beneficiaries of the new markets. Those without the ability to monitor and control their buildings will continue to operate blindly and will have to pay the price – whatever it may be.

Dynamic pricing models are coming – depending on which regions your buildings reside, it is either already happening – or coming your way. For example, California’s investor-owned utilities are transitioning to dynamic pricing programs for millions of customers effective April 2023, and utilities around the country have similar plans. Electric rates that more accurately reflect market conditions will help utilities integrate more distributed resources, but many customers have been on fixed rate plans for decades – so this represents changes and new ways for customers to buy and use energy – and this all needs to be supported by solid data to make informed decisions and new technologies to participate.

About the Author:

Leighton J. Wolffe, Vice President Demand Management for Bernhard, has more than 25 years of experience in the facilities and energy industries. His interest in technologies led to leadership positions with energy companies, manufacturers and systems integration firms designing and developing innovative hardware and software applications.

Leighton’s experience across multiple industries and customer segments enables him to play an integral role in the development and deployment of successful strategic business initiatives and enterprise level projects. Leighton provides expertise and domain knowledge to help clients navigate their way through the highly dynamic intersection of energy markets, emerging technologies and industry players.

He is professionally active on a national level with manufacturers, software developers, systems integrators, facility professionals, government agencies and serves in key roles as owner’s advisor, technical consultant and facilitator providing knowledge of technology and industry trends. In a previous position as VP Strategy for Constellation Energy, Leighton founded the NewEnergy Alliance and formed commercial relationships with over 40 energy technology companies to develop applications and deliver solutions around Constellation’s VirtuWatt Platform, which connected buildings directly to energy markets and Constellation’s trading desk. Leighton is co-developer for this ground-breaking platform.

Bernhard Advocates Employee Development with Creation of Young Professionals Program Offering Mentorship and Training

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The past few years have turned business upside down, reshaping nearly everything we thought we knew about productivity, the office, collaboration, the role of management and how companies approach getting the job done.

One thing that hasn’t changed in business, however, is the value of professional development and the contacts and mentoring relationships that can truly shape a career.

Bernhard now offers their Engineering Division employees looking to access training and networking opportunities an avenue to bolster their careers with the Young Professionals Program. The program is free to join, and open to any Bernhard Engineering employee under the age of 30 or less than four years post-graduation from college.

So much more than a social event, Bernhard’s Young Professionals program is a four-year pathway, designed to help the next generation of Bernhard professionals truly make their mark on our company culture and long history. Through mentorship, coaching, networking opportunities, professional development and biannual group training events, the Bernhard Young Professionals program seeks to help every engineering team member fully realize their innate strengths and showcase their unique talents.

The program was developed to provide everything needed to make up for connection opportunities lost to the COVID-19 quarantine and hit fast forward on career goals:

  • Access to patient, knowledgeable mentors who have built careers at Bernhard and know what it takes to thrive.
  • One-on-one guidance, coaching, personalized experiences and focused attention.
  • Twice-yearly teambuilding and training events hosted at Bernhard’s offices in Little Rock. These one-day events will have topical sessions on issues like managing virtual collaboration, developing emotional intelligence, trust building and more. Some events will include external vendors.
  • Pop-up networking and professional enrichment events when members of the Bernhard engineering team travel to your area.
  • Free access to Bernhard’s extensive library of online training materials to boost your social, professional and technical skills, including courses on AutoCAD, Conflict Resolution, Jobsite Safety and more.

As a company with more than a century of history behind it, Bernhard is always looking for the next generation who will lead us to the bright future ahead.

For more about the Bernhard Young Professionals program or to join, contact Katie Thomas at katie.thomas@bernhard.com

Inflation Reduction Act Provides Huge Incentives for Clean Energy Projects

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By: Sam Selig

Signed into law by President Joe Biden on Aug. 16, 2022, the Inflation Reduction Act (IRA) aims to reshape the way the United States uses, produces and stores energy while making significant strides toward the reduction of greenhouse gas emissions.

There’s no doubt the IRA will have a substantial impact on American energy. But, what does it mean for both existing and future energy projects? In short: lump-sum rebates from the government of at least 30 percent on qualifying projects, a boosted and likely locked-in Investment Tax Credit (ITC) rate until at least 2032, a large expansion to the types of projects that can qualify for tax credits and more. Put it all together, and the IRA creates a lot of incentive for nonprofit entities to go big on energy efficiency and clean power generation goals.

The experts at Bernhard break down the new IRA and what it means for the energy sector:

What is the IRA?

A scaled-back version of portions of the Build Back Better legislative package that stalled in the U.S. Senate earlier this year, the Inflation Reduction Act of 2022 is still the most significant federal legislation passed so far in the 21st century when it comes to promoting decarbonization, the transition away from fossil fuels and clean energy production and storage.

Through changes to the IRS tax code and other measures, the IRA makes major investments in domestic energy production, efficiency and manufacturing, with a goal of reducing U.S. carbon emissions by roughly 40 percent by 2030.

The act is funded with $737 billion per year raised through several revenue-building measures, including a new 15 percent corporate minimum tax projected to raise $222 billion per year, prescription drug pricing reform that will bring in approximately $265 billion per year, and enhanced IRS enforcement that will raise an estimated $124 billion per year.

From those funds, the act allocates a total of $437 billion per year for domestic spending, including $369 billion per year for Energy Security and Climate Change mitigation, $64 billion to extend the Affordable Care Act and $4 billion to enhance drought resiliency in western states.

The remaining $300 billion raised annually by provisions of the act will be put toward federal deficit reduction.

What does the IRA mean for Bernhard and our customers?

For large-scale energy customers and projects, the impact of the IRA is multi-faceted. The law appears to be very positive for Bernhard’s projects and customer base, particularly for large hospitals, universities and municipalities that are in the market to decarbonize and reach greater energy efficiency.

Key takeaways from the IRA:

Provides nonprofits with a lump sum cash reimbursement from the government equal to at least 30 percent of the total cost of eligible energy projects: For Bernhard’s customers, this might be the biggest news. Under new changes to Section 48, eligible energy transition projects undertaken by tax-exempt entities — including many universities, hospitals, municipal governments and more — now qualify for Investment Tax Credit (ITC) equal to at least 30 percent of a project’s total cost. That percentage is payable in a lump sum when the project goes online. We say “at least 30 percent” because eligible projects by nonprofits that meet certain very strict requirements — including projects built in low-income communities, in areas with significant fossil-fuel related employment, or which meet domestic content requirements — can claim bonuses amounting to up to 70 percent of total project costs.

Expands the types of projects that are eligible for ITC: Project categories eligible for ITC under Section 48 of the IRS code were expanded significantly under the IRA, and now include solar, wind, biomass electricity generation, battery or thermal energy storage technologies, qualified biogas properties, microgrid systems and qualified interconnection properties. To be eligible for ITC, projects must be placed in service after Jan. 1, 2023 and start construction prior to or during 2025. That means almost any large-scale clean energy project started between now and the end of 2025 by a nonprofit entity would be eligible for ITC.

Makes qualifying projects that are less than 1 megawatt in size jump through a lot fewer hoops to claim ITC rebates (but Bernhard has you covered, even if your project is bigger): Most on-site Bernhard energy production projects are smaller than 1 megawatt. That’s important to customers because under the changes made by the IRA, qualifying projects by nonprofit entities that are less than 1 megawatt in size are automatically eligible for at least 30 percent ITC. Build a $1-million solar plant for your campus that is smaller than 1 megawatt, submit those project costs to the U.S. Treasury and you’ll get a check for at least $300,000. Under the IRA, qualifying projects that are larger than 1 megawatt are subject to stricter requirements to receive ITC, including a stipulation that the contractor completing the project pay prevailing wages and have an apprenticeship program. Bernhard already meets both of those requirements, so eligible clients can supersize their projects to more than 1 megawatt without worrying about taking a financial hit.

Amends Section 48 of the IRS code to return the Investment Tax Credit rate to 30 percent: In recent years, the ITC rate on qualifying energy transition projects has been eroded. In 2020, the ITC rate was 30 percent. It was reduced to 26 percent in fiscal years 2021-2022. Had the IRA not been passed, the rate was scheduled to sink further to 22 percent in 2023. With the passage of the IRA, the ITC is now returned to a full 30 percent. That rate is likely locked in for at least the next ten years, as the IRA specifies a 30 percent rate through 2032, or until U.S. electricity production achieves a 25 percent reduction in greenhouse gas emissions, whichever comes first. Energy demand is expected to rise significantly over the next decade, which likely makes a 25 percent reduction in emissions a high bar. Unless there’s a surprise jump in energy efficiency, an unforeseen new energy generation technology is discovered or a successful effort to repeal the IRA, chances are we’ll see the IRA-adjusted ITC rate on qualifying projects stick around until at least 2032.

Amends IRS code 179D on Energy Efficient Property Deductions and significantly lowers the bar on what constitutes an Energy Efficient Property: As opposed to the cash ITC payments provided to eligible projects through changes to Section 48, the changes made by the IRA to IRS code section 179D relate to tax deductions for projects that realize significant energy efficiency in qualifying commercial buildings. While the threshold to claim these tax deductions was previously a sky-high 50 percent year-over-year reduction in energy usage, tax code changes in the IRA cut that in half, to a much more reasonable 25 percent reduction. These deductions are allocated on a sliding scale, based on square footage of the project building and the energy savings achieved. The deduction starts at $.50 cents per square foot for a 25 percent energy cost savings, then increases by $.02 cents per square foot for each percentage point of cost savings greater than 25 percent, up to a maximum deduction of $1 dollar per square foot. Most nonprofit commercial building efficiency projects undertaken by Bernhard realize year-over-year cost savings of much more than 25 percent.

Makes these “Energy Efficient Property Deductions” transferable to project contractors, which can sell them to offset fees: In other big news for eligible decarbonization clients, if the nonprofit entity undertaking a building-efficiency project doesn’t need the tax deductions, 179D now says those deductions can be transferred to the architects, engineers and designers responsible for the energy-efficiency plan that realized the cost savings. Once transferred, these tax credits can be sold by the contractor to other interested parties, including banks or other corporations. That change to 179D allows Bernhard to fold the anticipated sale price of those credits into the financials of our projects to offset fees, which could potentially lower clients’ final cost on eligible projects.

As with any legislation that deals with the IRS tax code, the changes made by the Inflation Reduction Act of 2022 can be difficult to understand. What comes through loud and clear from these changes, however, is the IRA is a monumental change to the energy sector in America, and a huge boost for energy efficiency and clean energy production.

The IRA is very big news for Bernhard customers, and a big incentive for universities, hospitals and other nonprofits that may be considering clean energy production projects or efficiency efforts. If your nonprofit has been considering making energy improvements but dreading the cost, Bernhard’s advice is to strike now while the iron — and the IRA — is hot.

About the Author:

Sam is the senior vice president of renewable energy for Bernhard. He is responsible for the development of solar and renewable energy projects across multiple sectors and the overall development of Bernhard’s renewable natural gas program. Sam is a Registered Professional Engineer and has over a decade of experience in project development, technical sales, and executing maintenance agreements to create strategic company growth and enhancement in the ESG realm.

Five years of excellence: Celebrating Bernhard’s pioneering 2017 Energy Asset Concession agreement with Ochsner Health

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Bernhard has received our share of awards and accolades in our century of work, but it’s our ongoing partnerships with healthcare institutions that make us most proud. By helping hospital systems find innovative, on-budget solutions to their most pressing energy issues, Bernhard is strengthening America’s infrastructure and doing our part to prepare the nation for the healthcare challenges of tomorrow.

One of our most fruitful partnerships in recent years has been between Bernhard and Louisiana-based Ochsner Health. Celebrating 80 years of service to the community in 2022, Ochsner Health operates 40 hospitals and more than 300 urgent care and health centers across the Gulf South. Ochsner Health facilities treated more than 1 million patients in 2021, highlighting Ochsner’s role in the health and wellbeing of Louisiana.

This year marks the five-year anniversary of the landmark, first-of-its-kind Energy Asset Concession arrangement between Bernhard and Ochsner Health System. Ochsner and Bernhard are only one-third of the way through the original 15-year arrangement struck in 2017, but the partnership has already been a success, hardening critical infrastructure and saving Ochsner millions in energy costs per year.

Bernhard has since entered into similar 15-year Energy Asset Concession agreements with two other Ochsner Health facilities. In the process, we have upgraded critical infrastructure at these campuses while delivering substantial energy efficiency.

Combined, these projects have optimized energy usage for more than 3.4 million square feet of care and clinical space, with a combined annual energy savings of more than $2.7 million per year. Optimizing these facilities allows Bernhard and Ochsner to come together to prepare for whatever challenges may come.

2017: Ochsner Medical Center, New Orleans

In 2017, the flagship facility of Ochsner Health System, Ochsner Medical Center’s Jefferson Highway campus in New Orleans, entered into an innovative 15-year energy management agreement with Bernhard. The overall goal of the agreement is to help Ochsner Medical Center – New Orleans lower energy costs though substantial efficiency, equipment upgrades, mitigating operational risks and addressing long-term deferred maintenance.

The first of its kind, this Energy Asset Concession agreement transferred to Bernhard the right to operate, use and maintain the energy infrastructure of Ochsner Medical Center – New Orleans. The agreement was built on a solid foundation of trust between the two companies, nurtured by decades of successful service and construction projects Bernhard had completed at Ochsner facilities across Louisiana.

Bernhard constructed a new central energy plant to support the hospital’s 11-story West Tower expansion. To reduce demand on the existing central plant and improve operational efficiency, Bernhard instituted campus-wide energy infrastructure upgrades and retro-commissioning. Building automation systems were also upgraded to the latest technology, helping the facility better monitor and optimize energy use.

Once completed, Ochsner Medical Center – New Orleans’ new central energy plant was connected to the existing south campus main central plant. This created a district loop that serves more than 1.8 million square feet of facility space, providing more than 11,000 tons of chilled water capacity for the campus. Bernhard also upgraded Ochsner Medical Center’s north campus energy plant with more efficient pumping and piping.

Only five years in, this pioneering agreement between Bernhard and Ochsner Health has achieved its goal of a sustained reduction of energy use on the Ochsner Medical Center – New Orleans, exceeding initial projections of $2.4 million in annual energy savings.

2018: Ochsner Medical Complex – The Grove, Baton Rouge

Building on the successful partnership between Bernhard and Ochsner Medical Center – New Orleans, Bernhard and Ochsner entered into another 15-year Energy Asset Concession agreement in 2018 related to the under-construction Ochsner Medical Complex – The Grove in Baton Rouge. The five-story, 255,000 square foot medical office building would include a 10-bed hospital and surgical center and house 85 medical providers.

Bernhard provided an energy savings guarantee for the full term of the project, implementing O&M operator training, remote support services and measurement and verification.

With a projected opening date for the facility in early 2019, timelines were tight. To help Ochsner deliver this critically-needed facility on schedule and on budget, Bernhard flexed our logistical and organizational muscle. Coordination between design, construction and heavy trades was crucial for success. Knowing that, Bernhard streamlined the process, constantly re-evaluating the project and adjusting tactics and resource allocation. The biggest obstacles to the construction schedule were weather and site logistics, but together, Bernhard and Ochsner met every challenge.

In January 2019, a little over ten months after Ochsner and Bernhard made history by signing our second 15-year Energy Asset Concession, Ochsner Medical Complex – The Grove opened to serve the people of Baton Rouge. With Bernhard aboard to help find efficiency in every system, the complex is well-prepared for an ever-changing energy future, and is already realizing annual energy savings of $234,000.

2020: Ochsner Baptist Medical Center, New Orleans

In September 2020, Bernhard and Ochsner entered our third historic Energy Concession Agreement. Staffed by more than 600 physicians and specialists, Ochsner Baptist Medical Center is a vital part of New Orleans’ healthcare ecosystem. The hospital campus features more than 677,000 square feet of treatment space, including a 6,000-square-foot ER with two trauma rooms and the Ochsner Baptist Women’s Pavilion.

The ongoing project between Bernhard and Ochsner Baptist implemented electrical infrastructure upgrades at the campus, creating redundancy of building systems while improving their reliability and resilience, especially during adverse events like hurricanes. In addition to making mechanical enhancements to Ochsner Baptist’s central energy plant chilled water and tower water systems, Bernhard installed a security system in the central plant.

Bernhard also delivered campus-wide improvements to energy infrastructure, including the hospital’s water heating system, air handling units, steam system and electrical systems. Further efficiencies were realized through retro-commissioning efforts that installed more energy efficient lighting systems as well as upgraded building automation systems.

Together, these efforts have resulted in estimated annual energy savings of $775,000 per year for Ochsner Baptist, while helping this crucial part of New Orleans’ healthcare landscape stay resilient for decades to come.

Partnership for the Future

In the five years since Ochsner Health and Bernhard struck our pioneering Energy-as-a-Service agreement, our partnerships have remained strong. That includes Bernhard being on-site at all three Ochsner sites during the chaos of Hurricane Ida and its aftermath in 2021. Today, our work continues, realizing even further infrastructure improvements and delivering millions per year in energy savings. We are proud to continue teaming with Ochsner Health to meet existing and future challenges head-on while keeping the Gulf Coast healthy for years to come.

Ready to see what Bernhard can do to help your large facility group meet tomorrow’s most pressing energy and infrastructure challenges? Learn how Energy-as-a-Service works or contact our team today.

ROC Solid: Remote Operations Center Delivers Energy Savings

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Facilities and energy management can be a reactive line of work. Maintenance teams are often chasing after hot/cold calls, control overrides, or utility bill increases and asked to manage more area with fewer staff.

Typically, facilities operations teams are spread across multiple regions and decisions have to percolate through numerous teams, slowing down the process and complicating solutions.

To proactively manage large, interconnected facility groups, monitoring energy usage and maintaining system efficiency have to be enterprise-wide priorities every day.

Uniting systems management through a Remote Operations Center (ROC) utilizing automated fault detection and monitoring-based commissioning (MBCx) can provide the framework for a solution. Drawing on the latest data analytics software to empower maintenance staff, ROCs take a holistic approach to energy efficiency for large, multi-facility systems. This allows a small team to track real-time efficiency data and drive maintenance efforts at several locations – even if separated by hundreds of miles.

Over time, the benefits of establishing an ROC in terms of both energy savings and overall efficiency can be dramatic.

CASE STUDY: BANNER HEALTH

Beginning in 2010, Phoenix-based Banner Health System worked with Bernhard* on retro-commissioning projects at several of their facilities, with a goal of lowering energy costs and minimizing threats to mission-critical services. The non-profit health system has a large footprint, with 32 hospitals across six states.

Banner Health and Bernhard team’s initial efforts to make older buildings more energy efficient achieved significant savings at numerous facilities. However, performance drift eventually set in and annual energy use and cost slowly increased. Identifying a strategy that worked system-wide was a complex problem involving multiple building automation technologies, computerized maintenance management systems, system design standards, and maintenance protocols at different Banner Health campuses.

Bernhard’s team of experts stepped in to help Banner Health develop an innovative pilot program at the Thunderbird Medical Center in Phoenix. The program was built around monitoring-based commissioning with data delivered to a centralized operations hub staffed by a small team of skilled technicians and energy analysts. This hub would collect, store, and analyze data from buildings on the Thunderbird Medical Center campus while standardizing maintenance processes and identifying opportunities to optimize energy efficiency.

The results of this pilot program were outstanding, delivering energy cost savings of $449,000 per year, including saving 4.7 million kilowatt hours of electricity and 13,600 dekatherms of natural gas.

Seeing the promise of a more data-driven energy strategy, Banner Health began an operations initiative in 2015 aimed at leaving behind facility-specific decision-making in favor of standardized protocols and a centralized ROC providing monitoring-based commissioning. By 2017, Bernhard had helped make the Banner Health ROC a reality.

The ROC quickly made headway at lowering Banner Health’s energy costs, identifying maintenance opportunities, and correcting system inefficiencies. In some cases, Banner Health ROC analysts were even able to predict adverse events.

For example, Banner Health central plants sometimes experience chiller surging, a condition where refrigerant backflows the refrigeration cycle. Chiller surging can reduce equipment life if left unchecked. By consulting with refrigeration engineers to understand the warning signs of chiller surge and how it appears in the data, the team is now able to remotely identify conditions that lead to chiller surge, allowing technicians to proactively adjust plant operation.

REAL RESULTS

Banner Health’s ROC initiative has been a demonstrated success. Since 2016, a centralized ROC monitoring more than 15 million square feet of space with a staff of only 12 has worked with the Bernhard engineering team to orchestrate energy projects that reduced annual energy spend by nearly $12 million per year. In addition, real-time monitoring for faults and anomalies has helped save $3.8 million annually that would have been lost to performance drift, while reducing equipment diagnosis and repair times, hot and cold calls and deferred maintenance and repairs.

Bernhard’s system of constant tracking of factors like temperature, humidity and pressure helped Banner Health meet or exceed patient healing environment goals like average patient room temperature and consistent negative air pressure in operating suites and isolation rooms. Thanks in part to these efforts, the American Society for Health Care Engineering (ASHE) awarded Banner Health their 2021 Excellence in Health Care Facility Management Award, which showcases innovative facilities management programs that improve patient care.

Ready to learn more about what remote monitoring-based commissioning could do to help meet energy goals for your large, multi-facility organization? Click here to learn more about Bernhard’s past successes and team of experts.

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*Banner Health Systems was contracted with ETC Group, an energy-efficiency engineering firm acquired by Bernhard in Feb. 2022.

 

3 Valuable Disaster Response Lessons Learned From Hurricane Ida

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As we enter another Hurricane season, it is impossible not to look back and remember the turmoil of Hurricane Ida. We have made it our responsibility to use the past as a guide and build upon our disaster response experiences to better equip our teams to deal with what the future may hold. Storms and natural disasters routinely come with little warning, but that doesn’t mean we can’t be prepared well ahead of time. Our teams have experience providing disaster response for Hurricane Katrina, Hurricane Michael, the Baton Rouge floods, and many more.

When Hurricane Ida entered the Gulf of Mexico on Aug. 29, 2021 and took aim at the state of Louisiana, it seemed like a horrifying case of déjà vu.

Ida was poised to strike on the 16th anniversary of Hurricane Katrina, which inundated New Orleans, took the lives of more than 1,800 people and caused $160 billion in damage and a refugee crisis in the region. As the storm neared, Ida quickly strengthened into a devastating Category 4 hurricane, packing sustained winds of 150 mph.

With hospitals in south Louisiana already at capacity due to COVID-19, officials in Louisiana and beyond feared the worst. Bernhard customers include most of the healthcare facilities in the region, so we knew it would take all the experience, technical skill and ingenuity our teams could muster to keep those facilities up and running to save lives.

As predicted, Ida roared ashore at Port Fourchon on August 29 before grinding inland. By the time the hurricane dissipated, Ida had caused at least $75 billion in damage. Though more than 1 million people across Louisiana were left without power, round-the-clock efforts by Bernhard crews kept clients running throughout the disaster.

Here are a few of the things we learned from our experience with Hurricane Ida:

GET AHEAD OF THE STORM

Throughout the course of the hurricane, many potential catastrophic disasters were mitigated in advance, thanks to Bernhard operators and technicians who were stationed there ahead of the storm, embedded with the clients we serve. In addition, Bernhard teams pre-staged dozens of backup generators before the storm to keep the power and air-cooling capacity flowing to mission-critical facilities, while on-site crews tended the generators and repaired units as issues arose.

While it’s difficult for team members to risk putting themselves in harm’s way, our ability to immediately counteract the effects of the hurricane as it made landfall and came ashore kept several healthcare facilities online, providing care without electrical interruption.

ALWAYS BE READY TO PIVOT

In the chaos of a Category 4 hurricane and its aftermath, with multiple threats to mission-critical infrastructure coming from all directions, a disaster is literally seconds away at any moment. It was important for Bernhard crews to stay flexible, alert and in communication, constantly evaluating and re-prioritizing threats to mission-critical infrastructure.

In one instance, after patients were displaced from another facility by the storm, Bernhard teams eased overcrowding by preparing 15 existing patient rooms, relocating multiple headwall rough-ins and replacing some light fixtures and all outlets. In another instance, after a client campus lost access to the local water supply, Bernhard crews installed an industrial-grade filtration system before switching to a secondary source.

These are just a few of the dozens of ways the flexibility and on-the-fly decision making of Bernhard teams helped stave off trouble for our clients during and after Hurricane Ida. Every solution utilized is a lesson to take into future crises and disaster response scenarios.

OUR JOB IS ANY JOB THAT NEEDS TO BE DONE

In a rapidly-unfolding crisis, an organization that gets bogged down with hierarchy and job descriptions is bound to fail. During and after Ida, there was only one job for Bernhard crews: whatever was necessary to keep client facilities whole and operating. Passing the buck is not an option.

Keeping the power on at client facilities after Ida meant keeping the generators running, which required thousands of gallons of diesel fuel per day. Suppliers who had previously serviced those facilities couldn’t find a route to deliver more fuel due to downed power lines and inundated roads. Bernhard used our logistics and transportation experience to deliver more than 200,000 gallons of diesel in the first five days after the storm.

It wasn’t necessarily our job. But we did it, because that’s what it took to fulfill our mission for our clients. Bernhard’s national footprint allows us the unique capability to better assist with logistical and resource challenges for any type of disaster.

Every experience with a natural disaster is an opportunity to learn. The lessons Bernhard teams take from our experiences in Ida and other disasters makes us stronger and more resilient when the next storm inevitably comes calling.

Ready to learn more about Bernhard’s disaster response services, including our efforts during the COVID-19 pandemic and recent natural disasters? Visit Bernhard.com/disaster-response.

The Role of Asset Management in Providing Long-Term Solutions

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What is Asset Management?

Bernhard’s Asset Management services provide for comprehensive operation and management of energy assets for all Energy-as-a-Service (EaaS) projects. Our focus is on sustainable, long-term solutions that enable customers to achieve energy efficiency and reduce risk associated with central energy plant operation, maintenance, and capital renewal.

We have a dedicated, in-house team of experts who work collaboratively to deliver the right solutions for each customer and each site. An invaluable benefit of Bernhard’s approach is the flexibility and scalability of our team. Regardless of EaaS project size, we scale our team to streamline the project, encourage cross-functional communication, and meet the customer’s expectations and needs.

Our Asset Management team provides for:

  • Operations and Maintenance: Operate your facility and provide resources and solutions needed to maintain energy-efficient operations over the contract term.
  • Emergency and Disaster Response: Ensure preparedness for hurricanes, natural disasters, COVID-related response leveraging a national network of resources and logistics.
  • Capital Planning: Create and execute a long-term plan for capital renewal to keep facility operational and energy efficient.
  • Off-Takers: Identify and market chilled water service to sites nearby to which surplus capacity can be sold.

Asset Management brings together all Bernhard’s service offerings through the lifecycle of an EaaS project. Our work begins with the governance created to manage execution and continues through construction and operations of the upgraded facility to the long-term maintenance and renewal projects needed to maintain energy efficiency through the contract term.

Fulfilling the Energy Efficiency Guarantee

By combining the expertise of engineering, mechanical, and electrical divisions, we guarantee standards are met, and execution is seamless from initial operations turnover through contract completion. Our Asset Management team is the “boots on the ground” staff ensuring the designed solution is properly executed and performs as intended.

Bernhard’s customized maintenance programs leverage preventative and predictive maintenance strategies ensuring energy assets operate at peak efficiency. Through regular monitoring and detailed planning, our team proactively addresses potential issues before they negatively impact energy efficiency or operations.

Bernhard Connect® is key to our operations program. Connect is Bernhard’s proprietary, cloud-based platform for automatic fault detection, measurement and verification, and continuous data collection and archival. With Connect, operations staff have direct access to real-time energy and performance analytics with the push of a button.

The platform provides new levels of monitoring and control, resulting in greater energy and operational efficiencies. Backed by Bernhard’s energy engineers, Connect enables operations staff to quickly identify and resolve issues and ensure operations fulfill–or exceed–the project’s energy savings guarantee.

Integrated Staffing Resources

We recognize staffing for operations and maintenance teams is a challenge. Finding, training, and retaining capable staff for facility operations takes significant time and requires expertise outside of a customer’s core business. Bernhard’s approach to Asset Management reduces this risk by staffing resources for facility operation and providing technical knowledge through a robust training and safety program.

Our on-site teams integrate into the operations at each customer’s site—from the logos on our uniforms to our approach to budgeting. We work collaboratively with leadership at each facility to ensure our team is seen as an extension of the customer’s staff. We partner with our customers on capital planning, operational budgeting, and other issues to ensure the best and most fruitful decisions are made to prepare for future growth and maintain efficient operations.

Beyond a Facilities Team

Bernhard’s on-site operations staff are more than a facilities team. Our employees are backed by the skills and expertise of a national, engineering and construction firm with more than 2,000 employees. We bring resources, knowledge, expertise, and a national network with the ability to fully support a facility’s needs.

Leveraging our national footprint, our on-site staff bring long-term solutions to fulfill a customer’s needs. We can partner on and provide solutions for projects that fall outside of a typical O&M provider’s scope. Our teams have the in-house capability to execute turnkey solutions and provide subject matter expertise on a wide range of issues related to facility operations, maintenance, design, construction, and more.

We are not just an O&M provider: we are a construction manager, engineer, energy analyst, controls specialist, and much more. Choosing Bernhard for Asset Management is partnering with a long-term solutions provider.

Science-Based Targets: Overview and Its Implications to Corporations and Energy Industry

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by Jim Crockett, PE

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There has recently been an important, but largely underreported, tidal shift in the world of carbon emissions and greenhouse gas reduction. Many of the world’s largest companies have voluntarily set internal energy reduction targets and committed to achieve them. This will send ripples throughout the entire business world. In the near future, a company’s carbon footprint might give it a competitive edge – or might put it out of business.

Science Based Targets

Science Based Targets (SBT) is an organization that helps companies set energy reduction targets and records their commitments. Targets are considered science-based if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement–limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. Participants can commit to following either trajectory: 1.5°C (aggressive) or 2.0°C (less aggressive).

Large Multi-National Corporate Participation

As of June 1, 2022, more than 3,000 companies have signed up with the SBT website, and the number is growing quickly. Of the companies who have joined, 1,090 have made net-zero commitments, and 1429 have opted for the 1.5°C trajectory, coming in just under 50%.

Apple, Dell Technologies, General Motors, and Walmart, for example, are four of the 732 companies that have committed to 1.5°C trajectories. Their commitments are as follows:

  • General Motors commits to reduce absolute scope 1 and 2 GHG emissions 72% by 2035 from a 2018 base year. General Motors Company commits to reduce scope 3 GHG emissions from use of sold products of light duty vehicles 51% per vehicle kilometer by 2035 from a 2018 base year. The target boundary includes biogenic emissions and removals from bioenergy feedstocks.
  • Apple commits to reduce absolute combined scope 1, 2 and 3 GHG emissions 62% by FY2030 from a FY2019 base year. Apple also commits to continue annually sourcing 100% renewable electricity through FY2030.
  • Dell Technologies commits to reduce scope 1 and 2 GHG emissions 50% by 2030 from a 2019 base year. Dell Technologies commits to reduce direct material suppliers GHG emissions 60% per revenue over the same time frame. The company also commits to reduce the energy intensity of their product portfolio 80% by 2020, using a 2011 base year.
  • Walmart commits to reduce absolute scopes 1 and 2 GHG emissions 35% by 2025 and 65% by 2030 from a 2015 base year. Walmart will also work to reduce CO2e emissions from upstream and downstream scope 3 sources by one billion tons between by 2030 from a 2015 base year.

Given the size of these four companies alone, achieving reduction targets would be a significant achievement. However, the scope of this reduction is even bigger than it seems.

Scope 1, 2, and 3 Targets

To fully understand the impact of these goals, we need to understand what Scopes 1, 2, and 3 represent.[ii]

  • Scope 1 refers to emissions generated at the participant’s site(s). Fuel-burning equipment, such as furnaces, water heaters, and ovens, would all fall under Scope 1.
  • Scope 2 refers to the emissions generated off-site to create energy that you consume (such as electricity, chilled water, or steam).
  • Scope 3 refers to “all indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions.”
The Market Impact of Scope 3 Targets

Scope 3 reduction targets completely change the game.

General Motors can’t simply reduce the GHG emissions of their factories alone. They must also reduce the downstream emissions of their products, i.e., their vehicles, by 51% by 2035.

It means that Apple must reduce the GHG emissions of its suppliers by 62% by 2030.

Dell has committed to reduce the emissions of its direct material suppliers by 60% by 2030.

Walmart must reduce the emissions of its suppliers by the equivalent of one billion tons of CO2 by 2030. (One billion tons is roughly the annual carbon footprint of 200 million American homes.)

And those are just 4 companies out of 3,091.

Potential Implications (and Opportunities)

The impact of Scope 3 cannot be overstated. Scope 3 not only requires companies to reduce their own emissions, but to reduce the emissions of their customers and suppliers. Suppliers might find themselves contractually obligated to hit emission reduction targets if they wish to continue doing business with SBT program participants.

This will create emissions reduction pressure for existing suppliers but might also present opportunities for potential suppliers with a better handle on their emissions. Large companies with SBT targets could reduce their Scope 3 emissions by replacing an existing supplier with a supplier with lower GHG emissions.

Energy Industry Is Changing

At Bernhard, we are already seeing a change in the attitudes of our current and potential clients. Historically, most of our customers were primarily interested in saving money; now they’re responding to internal and external pressures due to SBTs.

Some companies have achieved their goals by purchasing Renewable Energy Certificates (RECs). However, the nature of RECs includes inherent market uncertainty and risk. Many corporations have set their sights inward, focusing on energy-saving upgrades to their own facilities, making them more sustainable and energy efficient.

If you are thinking about adopting Science-Based Targets or just want to reduce your energy spend, Bernhard can help. Contact us at Bernhard.com

Jim Crockett, PE, has 25 years of experience in the HVAC industry and 15 years specializing in energy efficiency. At Bernhard, Jim has been the senior engineer on HVAC Energy Efficiency projects around the world and has provided technical guidance in support of the  engineering staff and Monitoring-Based Commissioning program. Jim holds a B.S. in Mechanical Engineering from the Brigham Young University and an MBA with Finance Concentration from Southern Methodist University. He is a registered Professional Engineer in AZ, CA, FL, ID, KS, MT, NM, TX, UT, and WA and is the recipient of the 2021 AEE Region V Engineer of the Year Award. Jim has presented at AEE World, AEE Arizona, APPA, and EMA webinars. His article on Science-Based Target has been published in Utah Construction & Design Magazine’s 2022 March/April issue.