Chapter 15

This chapter will provide the tools to help you to lower costs and reduce pollution. Within a number of days, a concerned manager could reduce his/her lighting expense by as much as 40%, through the replacement of ballasts and lamps. Done correctly, this effort will also reduce the cost of air conditioning, and will improve cash flow within thirty days! That is what I call a win-win situation.
To make a more informed procurement decision when considering lighting product, managers should know that the National Energy Policy Act was signed into law by President Bush on October 24, 1992. According to an executive summary of that legislation, by Norman Blake of Sylvania Lighting, this legislation mandates lamp energy efficiency. One provision of this act will eliminate the income tax consequences now applicable to utility rebates, while another provision will require that manufacturers no longer manufacture lamps that do not meet the new efficiency standards. This will force many lamp types off of the market by the end of 1995. You should be wary of some imported lamps, or of deals that are too good to be true, as the lamps may be full wattage types. While the bargain lamps may cost less to buy, they will cost you more to operate.

Speaking of the operating costs of lighting, the breakdown of your lighting dollar is that:

85 cents is for electricity
10 cents is for labor, and
5 cents is for the lamp.

As you can see, there is absolutely no financial reason to buy a cheap lamp. Every time you go that route, you are throwing cash at the utility company. In fact, the typical savings realized, just by switching to energy saving lamps, is 20 cents of your electricity dollar!

Did you know that many electrical utilities will pay you cash, sometimes known as a rebate, for conserving electricity? To avoid the risky, capital intensive, and environmentally insensitive construction of additional power plants, many power companies will pay you to reduce your energy needs. You are already being paid to reduce your expenses, in the form of lower utility invoices. Even if your utility is not involved in a rebate program, your firm will still save a lot by making changes in how you operate the lights. Typical cost reductions range from 20 to 50 percent annually!

In order to save a lot of money and to reduce pollution, I am recommending that you retrofit your ceilings. Specific recommendations include: (i) change fluorescent ballasts from the old magnetic units to electronic, (ii) use T8, 1" diameter fluorescent warm tone (2500 - 3100 Kelvin) energy saver lamps, (iii) use motion/infrared sensors and timers to operate lights, and (iv) use timers to control the thermostats that regulate your heating and air-conditioning systems.

For optimum return from your retrofit efforts, you should give strong consideration towards the use of parabolic reflectors/fixtures.
Keep in mind that WATTS x HOURS = ENERGY. While reducing the wattage of a lighting system will indeed help to conserve energy, it is the management of the energy being used which is critical. I am stating this because the vast majority of firms that offer a retrofit service are not interested in performing this task completely. When negotiating with these firms, I have been told by several of them that I should not consider occupancy/daylight lighting controls to turn fluorescent lamps on and off. They correctly state that a fluorescent lamp's anticipated 20,000 hours of useful life, will be diminished, the more frequently the lamp is turned on and off. Their advice is to leave the lights on to preserve lamp life.

Now for a bit of insight. A fluorescent lamp has an average life expectancy of approximately five years or 20,000 hours. When the lamp is turned on and off, it will reduce the lamp's life. However, while the lamp will not last a full 20,000 hours, it will still last for five years.

To further clarify this seldom discussed issue, I offer the following excerpt from an article titled Occupancy Sensors: Their Effect on Lamp Life, published in Mainlighter magazine, on June 1992, authored by Brad Jensen, a product line manager for Heath Company. He wrote:
Each time a lamp is started, the life of the lamp is degraded by materials sputtering away from the cathode. As you would expect, when the lamp is cycled more frequently, the life of the lamp is degraded. In an extreme case where lamps are only on for six-minute periods, the life of the lamp may be degraded to below 5,000 hours. One point to remember when using a sensor, is that while the lamp is turned off it is not using any of its expected life. Every additional hour that the lamp is off extends the calendar life of the lamp by one hour. This suggests that it may not be a bad idea to use a shorter sensor time setting if the result will be an increase in the amount of time that the lamp is off.

"In general," states Brad, "I would recommend using time settings greater than six minutes. If maintaining lamp life (calendar life) is very critical, then my suggestion is to go to a higher time setting which insures that the lights aren't coming on before people come in to work in the morning and turn off early in the evening, rather than staying on until the cleaning crew is done."

The decrease in actual hours of operation will reduce your energy cost, and will not increase your labor cost to replace the lamp.

Remember, 85% of your lighting cost is electricity.

Pollution

According to the U.S. Environmental Protection Agency, every kilowatt hour of electricity generates the following air pollutants:

Sulfur Dioxide (SO2) 5.3 grams
Nitrogen Oxides (NOx) 2.8 grams
Carbon Dioxide (CO2) 1.6 pounds

In a small office environment with only 12 fluorescent fixtures containing two 4 foot lamps each, consuming 93.5 watts per fixture per hour, knowing that it takes 1,000 watts to equal one kilowatt, and assuming that this hypothetical office is open 50 hours per week for 52 weeks per year; it is generating 2,917.2 kilowatts annually, which is causing:

Carbon Dioxide (CO2) 4,668 pounds
Sulfur Dioxide (SO2) 34 pounds
Nitrogen Oxides (NOx) 18 pounds

of pollution annually, even though it only costs you twelve cents per kilowatt hour, or approximately $350 to purchase the electricity from the local utility company. To offer you a perspective, the average automobile releases 5.5 tons of carbon dioxide per year.

As everyone knows, light causes heat. In the summer months, in the southern regions of the United States, and within sealed buildings, the heat generated by your lighting system requires additional air conditioning expense. Of course, the electricity utilized to power air conditioning systems also adds to the pollution problem.

To most managers, "the lights" have been treated as necessary evils, also known as fixed expenses. These guardians of the firm's wallet, typically replace lamps only after a large percentile of the lamps in the ceiling have failed, utilizing the cheapest lamp available. A few more enlightened managers have paid a bit more for energy efficient lamps, but have insisted upon the cheapest lamp, a lamp that gives off a ghostly blue or dirty color.

Is it a Boy or a Girl?

The most often used fluorescent lamps (approximately 4500 Kelvin) give off a bluish (Boy) or dirty color. Everyone uses them because they are inexpensive. Health clubs, cosmetic counters, and the meat departments at many grocery stores have long ago discovered the value of utilizing warm (approximately 2500 - 3100 Kelvin) pink (Girl) tone lamps. Yes, they do cost a bit more, primarily because the present demand for this color is so much lower than the demand for the cool lamp. I believe that a demand shift for the warm tone lamp would cause the prices to invert.

Just as parents and family greet the arrival of a newborn baby, your staff will react in a similar way to your changing of the lamp color. These warm lamps are easier on the eyes, and have a very positive psychological and/or subconscious impact upon people, as their skin no longer appears to be green or sickly. I have deliberately installed warm lamps in environments where conflicts were strongest, and have watched productivity increase and conflict decrease. From a morale perspective, this particular change in the work place was a bargain.

In keeping with my desire to provide managers with the tools to stay self reliant, I have an excellent suggestion for those who are responsible for large facilities, and who do not want to be at the mercy of vendors during the entire decision making process.

To evaluate retrofitting alternatives, a "what-if" type of software, known as SYLVIA/PC, will help you to:
* rapidly get a detailed analysis of how various lighting options compare on such critical aspects as Return on Investment, life cycle cost, and group relamping;
* eliminate the guesswork and tedious hours of manual calculations that go into analyzing various lighting options;
* easily factor in rebates, decreased cooling loads, and increased heating loads that affect the overall cost and savings associated with various systems;
* compare up to three lighting systems in one analysis;
* quickly determine the best lighting options for the most environmentally ef ficient system;
* access a comprehensive and up-to-date, built-in lamp database for detailed in formation, including electronic ballast wattages, for hundreds of lamps.

To obtain this self-help software, you need to send $50 to:

GTE Marketing Services Center
70 Empire Drive
West Seneca, New York 14224

They will need to know if you want: 3.5" or 5.25" disk, computer type: ___PC/XT ___286 ___386 ___486 ___other, memory capacity: ___less than 640K ___640K, printer type:____________________, monitor: ___color ___b&w, hard drive: ___yes ___no

RECOMMENDATION: I have had a great deal of success with Sylvania Lighting Services. They will even finance the retrofitting project, enabling you to obtain a measurable improvement in cash flow within 30 days of installation.

Heating & Air-conditioning

The most constructive and immediate thing you can do to reduce expenses from between 30% to 60% in this area, is to insist upon retrofitting existing motors with variable-frequency controllers. According to Jack Mans, more than half of the electricity consumed within the United States is used to power electric motors.

The benefit of the aforementioned retrofitting is that a controller can be added to the older single-speed motors, and that one controller can regulate multiple motors, even if they have different horsepower and different initial speeds. Of course, this application goes beyond just simple heating & air conditioning, to almost anything that uses an electric motor, such as compressors & conveyors.

When establishing requirements on the procurement of replacement technology, you should look into high-efficiency motors.

Also, I would also recommend the use of electrostatic filters, instead of paper filters. Just as constructive, but a bit more time consuming, is to switch to variable speed drives within your air conditioning systems.

Granted, the present value of $1.00 per month for a paper filter is difficult to cost justify, on first glance, to the $50.00, 120-month metal electrostatic filter. Your cost of labor to clean the metal filter will probably exceed the long run savings of this conversion.

However, according to Golden Eagle Filtration Systems, in Rockwall, Texas; their metal permanent filter (guaranteed for 120 months) will virtually eliminate the typical preventative maintenance (cleaning) of the air-conditioning coils and duct work. How much are you paying for that? Because paper filters are only five to ten percent efficient, you must dust furniture and clean carpet more often than with electrostatic filters, which are reported to be up to 95% efficient. How much are you paying for the difference in janitorial work?

From a soft dollar perspective, the cleaner air may curtail allergy-caused productivity reduction by staff.
Lastly, do not forget that when saturated by dirt, a paper filter can collapse and thereby provide absolutely no protection to this expensive asset.

Conclusion

Balance. It is a goal that should always be considered, regardless of the effort involved. Whether you are evaluating diet versus exercise, or work versus play, harmony is found by seeking a balance.

As a consumer, whether on an individual or corporate level, you have a need to balance all of the selling efforts directed towards you. Selling is an art, selling is a science. From a formal perspective, there are people who either teach or have a degree in Marketing. The purpose of marketing is to discover who, what, and where the firm's customers are, and to separate them from their money.

There are an almost infinite number of selling customs that have taken on a life of their own. Over time, these customs have been ingrained into the very fabric of the work place, and have been accepted as credible, of being as universally accepted as one of the laws-of-nature, kind of like gravity.

What may be surprising for some people to know, is that during the ten years of night classes that I had attended to earn an Associates of Science, Bachelors of Science, and Masters of Business Administration degree, it was never a part of the curriculum to consider procurement nor to contemplate a defense against marketing professionals. I did have to take two classes in Marketing.

According to a recent computer search of book titles, which was kindly performed by the staff at the Woodland Hills, CA. BOOKSTAR, there are 362 books (excluding text books) that either contain the word SALES or SELLING within the title, while there are only 15 books that have the word COST, and only 57 books that have the word BUDGET within the title. Most of us are familiar with sales titles such as GORILLA MARKETING. Hopefully the day will come when COST CUTTING COMMANDOS, or a similarly catchy title becomes a household word.

Consider Cost Containment to be a self defense book. Let this effort serve to protect your wallet, and the jobs of your peers and subordinates, from the organized efforts of marketers.

Find that balance between what you need and what those needs should cost. Pay for substance, not perception. May I suggest a simple mathematical formula from which to manage one's business and life:

SUBSTANCE > 1
PERCEPTION =

This formula suggests that appearance should not have any more value than performance. What one does should be more important than how one looks.

It should be understood that the topics discussed within this book, are not inclusive of all the procurement issues that may be a part of your budget problems.

This book gives you a great deal of ammunition from which to make the restructuring process less painful. In fact, for many, funds that, in the past, were unnecessarily going to vendors, will now be available to preserve jobs.

This process should be practiced in our nation's capital. Their deficit reduction efforts could be more lasting, if they would only concentrate upon the basics, instead of concentrating upon your wallet.
You should find that the money for much needed equipment has always been at hand. Before now, it has always been in someone else's hand, that's all.

Undoubtedly, you will be faced with policy and procedural changes that can, and will, alter what people do and how people do it. The jobs that were learned only yesterday will need to be modified or eliminated today.

While all of your problems may not have been spelled out in this book, I am confident that the elements are here from which you can tackle your specific or unique problem.