April 2012
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Open and Honest
Smart Buildings at Their Best
Len Pisano
Len Pisano
Partner, CEO
8760, Inc.


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Distech Controls

Our country has been spoiled with the notion that cheap abundant power is a given right.  For generations, we have told our children: “money does not grow on trees.”  We should be conveying the same message about electricity.   Peak demand for electricity is a mounting problem for utility companies as weather conditions prove to be extreme.  Customers pay more for power in the absence of peak demand mitigation.  Appliances may be operating more efficiently through programs such as Energy Star, but the use of plug in devices has significantly increased energy usage.  Building performance in general is pretty poor.  Energy reduction is a preventative measure for energy providers and customers alike.  With better information comes better decision making and that is where the Smart Building begins.

When referring to energy and cost savings opportunities, the U.S. Department of Energy reports that commercial building stock is responsible for 18% of primary energy consumption in the U.S. as well as use of 36% of the nation’s electricity in 2006.1   To capture those opportunities, our government is legislating mandatory benchmarking and will soon be hitting every state and town in the United States.  Capturing these metrics will help determine how blackouts and brownouts may be avoided.  With Oregon, Connecticut, Massachusetts, Vermont, Maine, Colorado, New Mexico, Illinois, Tennessee, and Maryland on the way, cities like Washington, D.C., New York City, San Francisco, Austin, and the states of California and Washington are already requiring building owners to measure and publicize their energy usage to prospective buyers and renters.  Focusing initially on 50,000 SF commercial buildings or larger, these target locations already requiring benchmarking will extend to non-residential and multi-family residential buildings greater than 10,000 SF this month.2

US Commercial Benchmarking Laws

What does that mean for building managers?  Gear up for sweeping change that will be coming down the pike.  Proactively measuring and improving energy management strategies now will bring forth profitable results before it is mandated. 

Smart Building technologies and services are constantly changing and that is precisely why our model enables our customers to remain flexible.  Our commitment to delivering a fully open environment enables them to make impactful decisions today that can be readily supported over time.  Our goal is to continuously provide our customers with the ability to sustainably manage the lifecycle of infrastructure, data, information, and knowledge of their assets in real time.  

My first experience with proprietary building system architecture and its high cost of ownership occurred from the mid-80’s through the mid-90’s at New York University where I held Facilities Engineering and Facilities Director positions.  I inherited a vertical transportation system of over 200 elevators that were in need of major refurbishment due to age and neglect.  While looking at elevator maintenance contracts for over 50 facilities I came across a new dormitory that NYU had just completed, then being serviced by Schindler.  The monthly costs to maintain the newest elevators on campus were four times higher than the average cost for all other buildings!  After performing some due diligence, I found out that the controller technology specified and approved by the design engineers included proprietary Schindler controllers. No other company could service the elevators in this facility.  We were being held hostage at four times the cost with no other option.  After an exhaustive search, I found a company that developed a truly open architecture for elevator controls: Motion Control Engineering (mceinc.com).  We specified MCE elevator controllers for many subsequent projects, ensuring that quality, price and service would always be priority, saving significant capital and operational dollars along the way. 

8760, Inc.’s larger competitors claim to be open as we are.  To explore the term “open”, it is best to first look to the meaning of open by one of the big guys.  

Reliable Controls One proprietary manufacturer states:  “Open means options - providing a system that uses only a single standard protocol doesn’t provide options.  Having options provides a system with the flexibility to provide solutions to specific customer needs…. Adding vendors always complicates the operation of a facility.  Unless a customer has a specific tangible goal in mind, the costs may outweigh the benefits of bringing more vendors on site.”3  This statement tells it all.  Since these manufacturers do not embrace a truly open environment, they view options in a product centric way, which means multiple vendors supporting multiple systems.  Truly open means ONE platform that could be supported by whatever vendor or vendors the customer chooses.

As industry trends show, end users are becoming more educated.  The Smart Building market will depend on the expertise of systems integrators that possess a wide and deep understanding of how to integrate the many disparate legacy systems we encounter, ultimately onto a portfolio level platform.  

As a systems integrator, 8760, Inc. offers complete control and monitoring solutions that include building automation, energy management, and decision support through a fully integrated platform.  We deliver effective energy and facilities management solutions utilizing cutting edge technologies guaranteeing optimal and measured performance 24x7x365. 

When we began our business as Automated Building Controls back in 2002, we adopted LonWorks protocol because of their open environment and believed that is where the market was headed.  LonWorks’ ground-up design is implemented with communication at the device level.  Representing 82% of the building controls market world-wide, LonWorks promotes the use of logical routers for data transmission without gateways.  It is intended for interoperability of sub-systems, such as lighting, access, and security, not simply HVAC.  The growth of our ability to study energy usage is directly proportional to our customers’ need for additional services and incorporation of other functionalities.  The more open we are, the easier it is for us to remain flexible as innovators create new products and end users crave more options.                          

Measure & Verify


Closed Versus Open

On the energy side we can study kWh down to the device level.  On the facility side we can study, for instance, the performance of Variable Air Volume (VAV) unit on individual floors of a building. Granularity is what we are after because the more we are able to study remotely, the less our customers will have to physically expend resources at each of their buildings.  We track how our diagnostic efforts result in HVAC service calls avoided over any period of time and have demonstrated for our customers a significant reduction in costs associated with gas, emissions, time, and fees for service tech visits.  Analytics gleaned from monitoring keep a building operating within the tolerance of how it was designed, whether existing or new. 

Dashboard

What are business trends in relation to greening building stock?  Green Biz’s State of Green Business Report 2012 concludes that companies see emissions as, “a byproduct that has no value to the company or its customers, a proxy for inefficiency.”  By equating consumption to costs, company decision makers are already attuned to integrating financial and environmental sustainability.

In fact, former Vice President and staunch advocate for renewable energy, Al Gore recently co-authored a Manifesto for Sustainable Capitalism with David Blood, former Goldman Sachs Asset Management CEO, asking the question “Why does an absence of sustainability not damage companies, investors and society at large?”4   They blame the short term vision of volatile investors on our unprecedented economic income inequality.  Proponents of integrated reporting, Gore and Blood only see positive value generated from companies integrating environmental, social, and governance metrics into their financials.  And this is something we at 8760, Inc. have realized and are setting into action.  We have started compiling a new monthly automation newsletter for our client, a Fortune 50 financial institution, prefaced with a summary highlighting observed operational metrics.  Any repair or service event is tracked from inception to completion, delivering 100% accountability.  This provides key feedback necessary for actionable decisions. CEO’s and CFO’s are accustomed to synthesizing numbers and statistics yet, in addition to their positive ROI figures, they crave a most comprehensive summary of the performance efficiencies on an operational level as well as the benefits their behavior modification offers society.  Through our reports, we demonstrate to our client how their actions are impacting the planet for the better.   

The best advice I have for organizational leaders and building owners is this: Get started measuring your energy usage now and you will be ahead of the game.  To be a strong leader, take the initiative to understand your facility’s operations inside and out.  This will reveal not only economic and environmental waste, but human redundancies as well.  We have found that when our customers have their building stock’s functional information at their disposal, then and only then are they capable of making the most informed decisions from the Boiler Room to the Boardroom.       

___________________

1 “Building Technologies Program.” Energy Efficiency & Renewable Energy, 24th Jan 2011, Web. 23 Feb 2012 
2  Bloom, Eric “City of Seattle Joins Commercial Benchmarking Movement.”  Pike Research Online, 18th May 2011, Web. 23 Feb 2012
3Open System Technology Power Point Presentation, www.controlmanagement.com/Demos/OpenSysTech.ppt
4Gore, Al, and David Blood. "A Manifesto for Sustainable Capitalism: How Business can embrace environmental, social and governance metrics." Wall Street Journal. Web. 16 Feb. 2012. <http://www.generationim.com/media/pdf-wsj-manifesto-sustainable-capitalism-14-12-11.pdf>


About the Author

Len Pisano - Prior to joining 8760, Inc. as partner and CEO in 2008, Len amassed rich experience in Building Management systems during a 10 year career at New York University as Facilities Engineer and eventually Director of Facilities Management.  His entrepreneurial appetite led him to start turn-key energy management solutions company built upon a foundation of combining energy and operations into long-term, sustainable performance plans.  Len led business development and organizational change management for successful start-ups and later consulted for several energy services and technology companies.  He received his Bachelor of Engineering Degree in Marine/Mechanical Engineering from SUNY Maritime College and his Master’s in Business Administration from NYU’s Leonard Stern School of Business.  Len also earned a US Coast Guard 3rd Asst. Engineer License along with NY City Stationary Engineer and Refrigeration Licenses.

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