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Remote and condition monitoring offer tremendous “avoided costs” potential but often hard to justify

March 3, 2014

When evaluating adding an Energy Monitoring System to Reduce Energy Costs, don't overlook the Potential Savings from Condition Monitoring and Avoided Costs

Watson: I’ve been reading about Remote Monitoring and Condition Monitoring in Plant Services and they seem to make a lot of sense. What has been your experience?

Holmes: My first exposure to Condition Monitoring was as a Captain in the Air Force when I was assigned to the Special Project Office for the F-15 fighter at Wright-Patterson AFB in Ohio. I worked with the very first On-Condition Maintenance System on an Air Force plane. The whole idea was to perform maintenance based on actual measured data rather than on hours of service or a failure as maintenance had been done in the past. It made so much sense that when I got out of the service I designed a system to do the same thing in buildings.

Watson: How long did it take before you realized benefits in buildings?

Holmes: Not long; On my very first job after I started my Energy Services business. It was painful. It hit me in the wallet so I have never forgotten.

I had signed a contract with a Mental Health Hospital to serve as their Energy Manager for a percentage of documented savings each month and I quickly discovered that nearly all of the energy systems were running flat out 24/7. I started spending time in the building checking temperatures and occupant comfort, manually shutting down equipment that wasn’t required and reading utility meters by hand. One afternoon when I left everything was in pretty good shape. When I returned first thing the next morning I was greeted by a large stream of water overflowing the cooling tower and running into the parking lot drain. When I went into the boiler room, every piece of equipment was on; all of the boilers, chillers, pumps, etc.

From the meter readings I calculated that whoever had turned all of the unnecessary equipment on had cost me about $1,000 out of my pocket in excess gas, electric, water and sewer costs. I realized I either had to buy a sleeping bag and move into the Boiler room or come up with a Remote, On-Condition Monitoring System similar to the one in the F-15 that could monitor everything continuously and warn me when conditions exceeded normal limits. As described in the linked article, an engineer friend, my first employee, my 10 year old son and I ended up designing, building and installing our first Energy Monitoring System that communicated with my home office using a 300 baud Hayes modem and a dial-up telephone line. Read the Article About the Project that Cut the Energy Costs 59% with no Capital Projects.

No more unpleasant surprises when I drove into the parking lot. We eventually built alarms into the software along with appropriate control responses that would send us a message by phone dialer and start backup equipment before our service tech could get there. Our goal was to detect and correct problems without the occupants ever becoming aware of them.

Watson: Do you have another example of the value of Remote Monitoring that sticks in your mind?

Holmes: I sure do. I got a call one day from the engineer at a cement plant where one of our monitoring systems was installed. He said, “Your monitoring system saved me more than $100,000 yesterday. It detected high amperage on a 3,000 Hp motor so we shut it down. Inspection showed we had avoided a catastrophic failure which would have cost more than $100,000.

Watson: Would Remote Monitoring have much value during routine operation?

Holmes: With remote monitoring, if something went wrong, we would get an alarm, call up the building on the PC and could see exactly what had failed and when. A technician could go the facility and go directly to the problem which saved a lot of on-site troubleshooting time and expense.

We were surprised to learn that the alarms were not just infrequent when a piece of equipment failed, they occurred nearly every day as a result of the people working with the systems. We estimated that we spent 1/3 of our time every day restoring things that had been working perfectly that someone had screwed up the previous day. If we hadn’t been there to respond to the alarms, it wouldn’t have taken long before everything was back running 24/7 the way it was when we were hired.

Watson: Why has it taken so long for people to realize the value of Remote Monitoring?

Holmes: I’m really not sure. The benefit seems so obvious. But I have always run into problems justifying the cost of instrumentation with companies that use a strict ROI mentality. Since you can’t attach a cost to future avoided costs and come up with an ROI, many companies seem unwilling to fund monitoring systems that offer such tremendous benefits. I even published an article about it - How to Justify the Cost of an Energy Monitoring SystemRead the Article.

Tell us about your experiences, both good and bad with energy professionals, what has worked and what hasn’t. Send us your comments, thoughts and suggestions on how to improve our profession so we can all continue to learn from each other. Thanks – Holmes & Watson

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