ATTACHMENT A
Oakland University
Annual Energy Report
Fiscal Year 2007
Submitted, September 6, 2007
by James Leidel
Energy Manager
www.oakland.edu/energy
TABLE OF CONTENTS
page
Executive Summary ...................................................................................................... ..3
Introduction ................................................................................................................... ..4
Historical Consumption and Cost .................................................................................. ..8
Utility Cost per FYES and Square Footage ................................................................... 10
Natural Gas Purchasing Update .................................................................................... 11
Phase Two Energy Services Project ............................................................................. 12
Diesel Generator Project ............................................................................................... 12
Wind Power Feasibility Study ........................................................................................ 13
Biomass (Waste Wood) Boiler Feasibility Study ........................................................... 13
LIST OF TABLES AND FIGURES
Table 1
Table 2
Table 3
Table 4
Table 5
Average unit cost per utility with comparisons to previous year ............... ..4
Utility consumption & cost with comparisons to previous year ................. ..4
PROJECTED FY2008 consumption and cost .......................................... ..5
Heating and cooling degree days with comparisons to previous year ..... ..5
PROJECTED FY2008 average unit cost per utility .................................. ..6
Figure 1
Figure 2
Recent increases in the Detroit Edison electric rate ................................ ..6
Eight year combined west campus utility expenditures with cost per
square foot of facility space ..................................................................... ..7
Total utility cost for the main campus per FYES & building square foot. .. ..8
Main campus monthly electrical cost and consumption ........................... ..9
Main campus monthly natural gas cost and consumption........................ ..9
Main campus monthly water & sewer cost and consumption................... 10
Natural gas purchase contracts ............................................................... 11
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7
2
EXECUTIVE SUMMARY
Oakland University’s Facilities Management Department provides the Board of Trustees
with an Annual Energy Report that details utility usage and costs, both historical and
projected.
Increasing utility rates were the driving force behind a $557,000 increase in annual energy
costs in FY2007. Natural gas unit expense was up 21.5% from the previous year;
electricity expense was up 9.2%.
Although FY2007 was colder than the previous year, weather patterns still remain warmer
than the historical averages. In spite of the colder winter, natural gas consumption was
held in check, for a less than one percent increase compared to FY2006. Both electric and
domestic water consumption were down as compared to the previous fiscal year, -4.0%
and -11.5%, respectively.
Projections for FY2008 are for a 2.1% increase in overall utility expenditures based on a
projected small increase in natural gas rates, offset by a decrease in electrical rates.
Electric rates have continued to creep up over the past few years. The retail open market
has not been advantageous, so the University remains with Detroit Edison. We are
beginning a partial, interruptible electric rate with Detroit Edison, taking advantage of the
new 3.3 MW backup diesel generator installation. This new interruptible rate is projected
to reduce the unit cost per kilowatt-hour by 5.2% for FY2008.
Presently, firm gas contracts have been obtained for 100% of FY2008, 60% of FY2009,
and 31% of FY2010.
The energy services and diesel generator projects are both substantially complete. Final
commissioning on a few items will continue into the fall, but all of the mechanical and
electrical systems are fully installed.
Feasibility studies for on-campus wind power generation as well as conversion of our
Central Heating Plant to biomass fuel are both underway and will be completed this winter.
3
INTRODUCTION
Increasing utility rates were the driving force behind a $557,000 increase in annual energy
costs. Forward purchasing in the natural gas market forestalled much of the recent price
increases, but the University is now being impacted by these sustained market costs. The
FY2007 natural gas unit cost was up 21.5% from the previous year, and the Detroit Edison
unit cost was up 9.2%.
Table 1
Average unit cost per utility with comparisons to previous year
Electricity
Natural Gas
Water & Sewer
FY2006
FY2007
Unit Cost Unit Cost
Units
$ 0.0705
$ 0.0770 per kW hour
$ 8.762
$ 9.0870 per million BTU
$ 46.30
$ 46.30
per 1000 gallons
% Change from
FY2006
+9.2%
+21.5%
0%
Although FY2007 was colder than the previous year, weather patterns still remain warmer
than the historical average. In spite of the colder weather, natural gas consumption was
held in check, for less than a one percent increase as compared to FY2006. Both electric
and domestic water consumption figures were down as compared to the previous fiscal
year, -4.0% and -11.5%, respectively.
Although the University saw -11.5% change in water & sewer consumption as compared to
FY2006, usage still remains higher than previous years. Deferred plant renewal projects in
the Central Heating Plant will further reduce consumption of water by December 2007.
These projects will result in noticeable reductions in water consumption.
Table 2 lists the usage and cost for each of the three main utilities, serving the west
campus, and compares these with the previous fiscal year.
Table 2 Utility consumption & cost with comparisons to previous year
Electricity
Natural Gas
Water & Sewer
TOTALS
FY2007
Usage
Units
% Change
from FY2006
35,815,080
278,661
9,182
kW hours
million BTU
1,000 gallons
-4.0%
0.9%
-11.5%
FY2007 Cost
(Millions)
$ 2.75
$ 2.53
$ 0.43
$ 5.71
% Change
from FY2006
+5.5%
+22.6%
-11.4%
+10.8%
Note 1: MMBTU = one million British thermal units
Note 2: This data is for the main campus only, the general funded east campus utilities are under 2%
of total expenditures.
The annual expenditure for propane was $18,493. Propane heating is used for the
Buildings & Grounds Maintenance building and a few other small out-buildings. Fuel oil for
a temporary steam boiler during construction of the underground hot water system totaled
$39,374. This boiler was used to heat the science, engineering, and library buildings for
several months last winter.
4
Utilities for Ancillary activities, like the Golf and Learning Center and Meadow Brook Hall,
are not reported here, but are accounted for by their respective management reports.
Consumption escalations are projected in accordance with a typical 2 to 3% growth in the
student body, measured in Fiscal Year Equivalent Students (FYES), coupled with the
proliferation of additional computers and new academic programs. Historical averages
and trends in the weather are considered. Lastly, a look at the past year’s consumption in
relation to the year’s weather is taken into account.
Table 3
PROJECTED FY2008 utility consumption & cost
FY2008
Projected
Usage
Electricity
Natural Gas
Water & Sewer
TOTALS
36,714,199
290,005
9,457
Units
% Change
from
FY2007
kW hours
million BTU
1,000 gallons
2.51%
4.07%
3.00%
FY2008
Projected
Cost
(Millions)
$ 2.69
$ 2.71
$ 0.438
$ 5.83
% Change
from
FY2007
-2.5%
+6.9%
+3.0%
+2.1%
The weather remains warmer than the historical averages for both the winter heating
season and the summer cooling season. The FY2007 heating degree days were 8%
above the FY2006, meaning it was an 8% colder winter. This is still almost 8% warmer
than the historical average.
The FY2007 summer weather was 11.2% cooler than FY2006, but still about 24% warmer
than the historical average.
Table 4 Heating and cooling degree days with comparisons to previous year
Historical average
Heating Degree Days
Cooling Degree Days
6,444
736
FY2006
5,503
1,024
FY2007
5,945
909
% Change
+8.0%
-11.2%
Degree Days are calculated from the difference between the average daily temperature and
reference temperature (65 deg F). This gives a measure of how much heating and cooling effort is
required to maintain a typical building’s indoor air comfort level. (data source 1)
Future utility projections take into account the expected utility rates along with an
assumption of a small increase in consumption. For natural gas, 100% of the FY2008 gas
supply has already been contracted and the cost is locked in for an expected rate increase
of less than 3%. Water rates have remained very stable and are not anticipated to
change.
1
National Oceanic and Atmospheric Administration, National Center for Environmental Prediction,
ftp://ftpprd.ncep.noaa.gov/pub/cpc/htdocs/products/analysis_monitoring/cdus/degree_days/archives/
5
Table 5
PROJECTED FY2008 average unit cost per utility
Electricity
Natural Gas
Water & Sewer
FY2007
FY2008
Unit Cost Unit Cost
Units
$ 0.0770
$ 0.0730 per kW hour
$ 9.0870
$ 9.3373 per million BTU
$ 46.30
$ 46.30
per 1000 gallons
% Change from
FY2007
-5.2%
2.8%
0%
Detroit Edison electric rates have continued to creep up over the past few years, as seen
below in Figure 1. The retail open market has not been advantageous for the past 4-5
years, so the University remains with Detroit Edison. We are just beginning a partial,
interruptible gas rate with Detroit Edison, taking advantage of the new 3.3 MW diesel
generator installation. The interruptible rate is projected to reduce the cost per kilowatthour by 5.2% for FY2008.
Dollars
per kWhr
$0.085
$0.080
$0.075
$0.070
$0.065
$0.060
$0.055
$0.050
Monthly Electric Cost per kWhr
Trend in Increase = 3.7% per year
$0.045
$0.040
2004
Figure 1
2005
2006
2007
Recent increases in the Detroit Edison electric rate
6
Figure 2 illustrates the previous cost savings from the electrical Retail Open Access
purchasing program in FY2003 & FY2004, followed by several years of rapidly increasing
utility unit costs (mostly in natural gas). Fiscal Year 2008 should see a leveling off of these
recent increases in gas, but electricity will continue to creep upward.
$7.0
$3.00
Total Main Campus Utility Cost
Total Main Campus Utility Cost per Square Foot
$5.71
$5.83
$2.50
$5.0
$2.00
$4.39
$4.0
$3.84
$3.71
$3.73
$3.56
$3.0
$2.0
$1.00
$0.50
$1.0
$-
$FY01
Figure 2
$1.50
Dollars per Square Foot
$5.16
ESTIMATED
Total Utility Cost in Millions of Dollars
$6.0
FY02
FY03
FY04
FY05
FY06
FY07
FY08
Eight year combined west campus utility expenditures with cost per
square foot of facility space
7
UTILITY COST PER FYES AND SQUARE FOOTAGE
Figure 3, below, depicts this same information adjusted for building square footage and
FYES.
This figure is based on our present main campus size of 2,375,000 million square feet, and
14,635 FYES. For a full time, resident undergraduate student with 15 or more credit hours
per semester ($7,927 for both fall and winter semesters), this equates to less than 5% of
their annual tuition.
$450.00
$3.00
$400.00
$2.50
Cost per Annual FYES
Estimated
$300.00
$2.00
FY2007
$390 / FYES or
$2.40 / Sq Ft
$250.00
$1.50
$200.00
$150.00
$1.00
$100.00
Cost per Annual FYES
$50.00
$0.50
Cost per Building Square Foot
$-
$FY01
Figure 3
FY02
FY03
FY04
FY05
FY06
FY07
FY08
Total utility cost for the main campus per FYES
and per building square foot.
8
Cost per Building Square Foot
$350.00
HISTORICAL CONSUMPTION AND COST
Figures 4, 5, and 6 illustrate the monthly utility usage and resulting trends over the past
decade.
$3.0
$2.8
Annual Cost (Millions of Dollars)
$2.6
40.0
$2.7
35.0
$2.4
$1.9 $1.9
$2.0
25.0
$1.7
$1.6
$1.5
$1.8
$1.8
20.0
$1.3 $1.3
$1.2 $1.2
15.0
$1.0
10.0
$0.5
5.0
Figure 4
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
FY99
FY98
FY97
FY96
0.0
FY95
$-
Historical main campus annual electrical cost and consumption
$3.0
350,000
$2.7
Annual Cost (Millions of Dollars)
Natural Gas Cost (millions of dollars)
million kilowatt-hours
30.0
$2.5
Annual Consumption (Millin BTU)
300,000
$2.5
$2.1
250,000
$2.0
$1.6
$1.5
$1.5
$1.6 $1.6
$1.7
200,000
150,000
$1.0
$0.7 $0.7
$0.8
$0.8
100,000
$0.6
$0.5
$0.5
50,000
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
FY99
FY98
FY97
FY96
0
FY95
$-
Figure 5
million BTU
Electrical Cost (millions of dollars )
Annual Consumption (kWhrs)
$2.5
Historical main campus annual natural gas cost and consumption
9
$3.0
120,000
Annual Consumption (Thousand Gallons)
$2.5
100,000
Linear (Annual Consumption (Thousand
trendline
Gallons))
$2.0
80,000
$1.5
60,000
$1.0
40,000
$0.5
$0.30
$0.31
$0.30
$0.29
$0.29
$0.26
$0.32
$0.43
$0.32 $0.48
$0.44
$0.33
$0.32
Figure 6
20,000
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
FY99
FY98
FY97
0
FY96
$-
thousands of gallons
Water & Sewer Cost (millions ofdollars)
Annual Cost (Millions of Dollars)
Historical main campus annual water & sewer cost and consumption
10
NATURAL GAS PURCHASING UPDATE
Natural gas prices continue to be volatile and continue to increase. Summertime natural
gas NYMEX future prices remain in the range of $7-$8 per million BTU and wintertime
future prices have been fluctuating between $9 and $10 per million BTU. Prices are not
expected to fall substantially.
Multiple, forward purchases have been very helpful to hold down costs, minimize risk, and
provide fiscal year budget stability. Figure 7, below, is an illustration of the University’s gas
purchases, their cost, and duration. The different colored blocks represent individual
purchase contracts. Multiple blocks are layered in at different times to supply the total gas
needs represented by the black line. Facilities Management continually monitors the
energy futures markets and corresponds with several industry consultants to make prudent
gas purchases.
50,000
Natural Gas
Usage
FY07 100%
45,000
FY09 60%
Contracted
FY08 100%
Contracted
Contracted
40,000
FY10 31%
Contracted
25,000
$8.06
30,000
$9.95
Gas in Millions of BTU
35,000
$7.25
20,000
$9.465
Contract
$5.00
15,000
10,000
Future
$9.50
Budgeted
$8.99
Contract
State of Michigan
consortium
$9.306 Contract
thru Dec 2009
5,000
$8.32 Contract thru June 2010
$6.50 Contract
Figure 7
May-10
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
May-09
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Nov-06
Sep-06
Jul-06
0
Natural gas purchase contacts (prices are in dollars per million BTU)
11
PHASE TWO ENERGY SERVICES PROJECT UPDATE
The energy services project is substantially complete. Final commissioning on a few
project items will continue into the fall, but all of the mechanical and electrical systems are
fully installed and operational.
The project installations have contributed a portion of this year’s 4.0% drop in electrical
consumption, an 11.5% drop in domestic water consumption, and minimized our natural
gas consumption by several percent, all in comparison to the previous fiscal year.
The energy and maintenance cost savings are on target to achieve $470,000 per year,
which includes a portion of the diesel generator project savings (discussed below).
DIESEL GENERATOR PROJECT
Two packaged diesel generators were installed in a joint effort between the Energy
Services project and the Facilities Management Department. An additional $500,000 was
approved by the Board of Trustees to supplement the Energy Services Agreement to
install these units at our central campus substation. These units will provide emergency
backup power for approximately one half of the campus while simultaneously allowing for a
cost savings from a Detroit Edison interruptible electric rate.
Plans for additional generators will be presented to the Board of Trustees in coming years
as the savings from these two machines are accumulated. The expectation is that 100%
of the campus will have emergency backup power in the next 3 to 6 years.
12
WIND POWER FEASIBILITY STUDY
A 50 meter tall wind sensor tower was installed in February 2006, and has been collecting
wind data for use in a wind power assessment of campus. The Facilities Management
Department initiated the collection of wind data, and the President’s Resource
Development Fund provided assistance to undertake a full feasibility study as well as a
second year of wind data collection.
The study will include a full pro forma for a number of utility sized wind turbines in the
range of 1 to 1.5 megawatts each. Several sites on the golf course and south side of the
main campus are under consideration for siting the turbines. The approach of the study is
to ascertain if a project can be developed with a positive cash flow over a 10 to 15 year
financing period. The results of the study and recommendations will be presented to
University management this winter.
BIOMASS (WASTE WOOD) BOILER
FEASIBILITY STUDY
Facilities Management has obtained a $25,000
grant from the Southeast Michigan Resource
Development Council to study the addition of an
urban wood waste fueled boiler for our campus.
Wood is a relatively inexpensive source of fuel,
and the relative abundance of locally derived
urban waste wood has the potential to make this
project financially attractive.
Central Michigan University presently operates a
wood fueled heating plant to provide most of their
campus heating, and Northern Michigan University
is presently designing a wood boiler addition,
capable of providing both heating and power
production to their campus.
Wood storage silo and smokestack steam
plume from the wood boiler at the Central
Michigan University Heating plant
When combusted in a properly designed, industrial
boiler, wood burns cleanly, resulting in nothing but
water vapor and carbon dioxide out of the
chimney. The combustion of biomass fuels are considered carbon neutral due to the fact
that the growth of the wood fuel pulls carbon from the atmosphere which is then released
back during combustion. There is no sulfur, mercury, or other contaminants in the
emissions that are produced in coal fired power plants. The only issues will be with
properly managing the ash and managing the logistics of fuel delivery and storage. This
type of operation involves additional maintenance and staff. However, a multimillion dollar
reduction in fuel cost could potentially pay for the additional staff and new equipment
needed. This study will review the technical, fuel procurement, and business cases for a
possible project. If a positive cash flow project looks feasible, the results and
recommendations will be presented to University management this winter.
13