Common sense management of EISA motor changes

It’s no secret that the Energy Independence and Security Act of 2007 (EISA) is in effect now. The law sets efficiency standards for three-phase AC induction motors from 1 to 200 hp. The new efficiency standards require that motors manufactured after Dec. 19, 2010, conform to the NEMA Premium efficiency standards. Old motors can still be rebuilt and sold, as can new old stock of pre-EISA motors.

Energy prices are climbing faster than most other costs, so we should be able to find a financial opportunity buried in EISA. But face it, guys, when you’re operating at the three-way intersection of the law, electrical engineering, and accounting, it might be a little hard to find exactly the information we need. Manufacturers need to find their way to a solid motor strategy.

A quick review of the law, which is available at http://www.epa.gov/lawsregs/laws/eisa.html, shows that clarification isn’t going to come from there. Fortunately, Plant Services had just completed our annual “Motors and Drives Market Intelligence Report.” This survey provided a good deal of information about the amount of impact EISA and other market forces have had on the way plant managers are making their motor and drive decisions. Hopefully, the combination of this market information, the technical information available from equipment and utility vendors, and our reading of the law will help plant operations people to make sound decisions about their motor inventories.

First of all, these sources agree to some basic truths about the lifetime or lifecycle cost of an electric motor. First, the purchase cost of the motor is typically about 2% of the lifetime cost. Another 2% is the cost of maintenance on the motor. The remaining 96% of the cost of a motor is the cost of the power that drives it. Given these relationships, what are we going to optimize, the purchase cost of the motor or the efficiency with which it uses power?

So far, it’s a pretty easy call, isn’t it? To keep the math easy, let’s say you pay $2,000 for a motor and another $2,000 to maintain it for a lifetime of about 15 years. Meanwhile, the motor, if you use it, say, 6,000 hours a year at 75% efficiency, will cost you $96,000 in energy. That’s $6,400 a year for power.

If you’re actually computing the detailed cost and usage for a brand of motor, you’ll want to get the exact figures from your motor supplier, or you’ll have to do it again for the business case. For setting your strategy, though, these ratios will probably be close enough.

Here are the cost differences between the EISA/Premium motors and the current standard units. Purchase cost for the EISA upgraded motors is about 15% more than the cost of the old standard motors. Power consumption savings vary from about 2.5% at 5 hp to 1.6% in the 50 hp range. Again, the specific numbers for the equipment you are considering will be available from your vendor. Please use them for your business case calculations. For Table 1, we used 2%.

Note that the annual cost of energy is more than three times the cost of the motor. This is not unusual. That is why the upgrade is only a 28-month payback, well within the payback criteria for most companies.

According to the Plant Services Market Intelligence Report survey, most companies look for a payback of 6 months to 5 years for capital purchases, with 2-3 years being the most common values. It was also clear that the silo mentality isn’t dead. One reader told us, “Energy cost doesn’t come out of the maintenance budget, so we don’t see the payback.”