HVAC Quality MaintenanceA New Program for Increased

Energy & Cost Savings

History – Process - Program

May, 2011

Hosted by the California Investor Owned Utilities (IOUs)

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At the live presentations this

slide is used to explain

evacuation procedures at the

facility where the meeting is

taking place.

Welcome & Introductions

Paul Kyllo – Statewide Utilities HVAC Lead

Mark Cherniack – Facilitator

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Is HVAC Maintenance Important?

“Inconsistencies exist within the building industry when it comes to inspection and maintenance of HVAC systems, with some facilities following rigorous policies while a growing number are moving to a run-to-failure approach.”

-Robert Baker, Chair of the ASHRAE committee that wrote Standard 180

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Customers are faced with…

Today’s Business and Economic Realities

HVAC Contractors are faced with…

• Operational Cost Reductions• Predicting Cash Flow• Inefficient Systems

• Ongoing Cost Pressures• Unpredictable Cash Flow• Environmental Quality Issues

“Service is like a bowl of Jello, you can’t put your hands on it. When someone asks what you received you can’t really tell them.”

- Randy Davis, U.S. Postal Service-Engineer/Architect/Administrator

Delivering Value Quality MaintenanceTo the Contractor: Predictability & Uptime

• Creates opportunity to obtain ongoing recurring revenue through service agreements

• Differentiates contractors from their competition

To the Customer: Comfort and Energy Savings

• Reduced total cost of ownership

• Thermal comfort

• Indoor air quality

• Energy savings

• Smaller carbon footprint

Today’s workshop will not just explain the programs that will help maximize contractor and customer returns, but will report

on the groundbreaking process that has led us to this point. There has been historic collaboration among the utilities, the

HVAC, and facilities industries. Here’s evidence...6

What People Are SayingI am delighted with a program based

upon ASHRAE/ACCA Standard 180,

which is the professional maintenance

standard as defined by our industry’s

governing technical body and

recognized by the world’s leading

standards organization, ANSI.

- Michael Gallagher, PE,

Vice President, Western Allied

Corporation

Aligning California efficiency programs

with nationally-recognized standards

maximizes efficiencies, effectiveness,

resources and just plain makes sense. -

Talbot Gee, Executive VP & COO,

Heating, Airconditioning &

Refrigeration Distributors International

Thank you for developing a program we

can support as active participants insuring

its success. We look forward to its

implementation and the energy efficiency

it will bring to the State. - Kevin

O’Dorisio, Executive Director,

Sheet Metal and Air Conditioning

Contractors’ National Association

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This program will promote the energy

behavior that needs to be demonstrated

by building owners if the Long Term

Energy Efficiency Strategic Plan is to be

achieved. We whole-heartedly support

this program. - Richard Sawhill,

Executive VP, ARCA/MCA Southern

California

What People Are SayingWe have recently reviewed SCE’s

Nonresidential QM Maintenance program

design/implementation plan and are

encouraged by what we have seen. SCE has

not only relied upon Standard 180 as a

cornerstone for the program's design, but has

actively reached out to and taken input from

contractors, associations, labor unions, and

even multi-site end-users throughout the

program’s development. - Glenn Hourahan,

Senior VP, Air Conditioning Contractors of

America

With over 4,000 preventative

maintenance agreements as the

“core” of our business the bottom

line is that it saves customer’s

money, prolongs equipment life and

makes their home more

comfortable, so we support any

utility program that incorporates

PMA’s as a part of their energy

conservation programs. - Frank

Harrison, President, General Air

Conditioning & Heating

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I am excited to hear that utilities may support a quality maintenance program based

on ACCA 4 industry standards. As a licensed C‐20 contractor in the state of

California I have invested a lot of time and money in an effort to provide the best

quality service to our customers, so this type of program only helps legitimize my

goal. The fact is that heating and cooling equipment is part of a system and unless

we look at the system as whole with scheduled maintenance programs there will

never be any energy savings or reduced operating cost for our customers. - Tyler

Miner, President, Redlands Plumbing, Heating, Air Conditioning & Home

Energy Solutions

What People Are SayingIn behalf of ASHRAE, I would like to recognize

the industry outreach and collaborative

approach undertaken by Southern California

Edison, Pacific Gas & Electric, and PECI in

development of the HVAC Quality

Maintenance program. Both the program

design and the enabling IT tools support the

intent of ANSI/ASHRAE/ACCA Standard 180

(Inspection and Maintenance of Commercial

Building HVAC Systems).

– Robert Baker, ASHRAE Fellow, Chairman

Standard 180 Development Committee,

ASHRAE

There are no shortcuts to achieving maximum energy efficiency from new or

existing HVAC systems. There are, however, accepted and vetted standards as

developed by a broad base of industry stakeholders such as

ASHRAE/ACCA/ANSI Standard 180 and ACCA/ANSI Standard 4 that maximize

system performance. RSES supports any and all efforts to align California

efficiency programs to such proven industry standards.

- Mark Lowry, Executive VP, RSES

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It is excellent that SCE is

proceeding with a maintenance

program based upon

ANSI/ASHRAE Standard 180. I

and our 2,000 Southern California

members working in the service

and repair field support it..

- Don Tanaka,Director

of HVACR, Service and Repair,

Southern California Pipe Trades,

District Council #16

Agenda

9:00am – 9:05am Safety

9:05am – 9:20am Welcome & Introductions, Agenda Review

9:20am – 9:30am CA Energy Efficiency & Utilities HVAC Program

9:30am –9:40am HVAC Quality Maintenance (QM) Programs Background

9:40am – 10:20am Putting The Industry Standards to Work – Part I

10:20am – 10:40am Break

10:40am – 11:20am Putting The Industry Standards to Work – Part II

11:20am – 12:45pm Q&A, Feedback & Input

12:45pm – 1:00pm Summary and Closing

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California Energy Efficiency &Utilities HVAC Program

James Tuleya, PG&EJeremy Reefe, SDG&E

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Why Energy Efficiency?

“Energy efficiency is California’s highest-priority resource for meeting its energy needs in a clean, reliable, and low-cost manner.”

California Public Utilities Commission’s 2006 publication, Energy Efficiency: California’s Highest-Priority Resource

State of California’s priority orderof energy sources:

1. Customer Energy Efficiency

2. Demand Response/Time-Varying Pricing

3. Renewables

4. Distributed Generation

5. Clean gas-fired plants12

The Big Bold Vision For HVAC

Revitalized HVAC industry

Increased energy efficiency, reduced peak demand

Customers will demand quality installation and maintenance services

Improved comfort, health, safety, and lower energy bills

Installation and maintenance business models change from “commodity” to “value-added”

Sustained profitability for the HVAC industry

“Residential and small commercial HVAC will be transformed to ensure that technology, equipment, installation, and maintenance are of the highest quality to promote energy efficiency and peak load reduction in California’s climate.”

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Quality InstallationQuality Maintenance

Better customer education and decision making tools

ANSI/ASHRAE/ACCA Standards

Customer – Contractor relationship is central to all HVAC decisions

ASHRAE/ACCA/SMACNA Standards

Equipment and systems designed and working

correctly from the start

Upstream Equipment

CA Utilities HVAC Program: An Integrated, Comprehensive Solution

Promoting High Efficiency Equipment

Leveraging marketdelivery channels

Western HVAC Performance Alliance (WHPA)stakeholder collaboration

execution of CA HVAC Action Plan

www.performancealliance.org

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• Certifying Body

• Codes & Standards Official

• Contractor – Nonres

• Contractor – Res

• Contractor Association

• Controls Mfg or Distributor

• Distributor

• Distributor Association

• Educator/Trainer

• Government (CPUC, CEC)

• HVAC Manufacturer

• HVAC Manufacturer Association

• Investor Owned Utilities (IOUs)

• Organized Labor

• Other Stakeholder

• Owner/Facility/Prop Mgr

• Owner/Facility/Prop Mgr Association

• Publicly Owned Utility

• 3rd Party Quality Assurance

Western HVAC Performance Alliance:Broad & Growing Stakeholder Collaboration

www.performancealliance.org

Formed during 2009 with 24 charter member organizations40% growth in 2011 bringing membership to 70members in all but one of 19 “membership categories”

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HVAC QM ProgramsBackground

Mel Johnson, SCE

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Looking Back on Previous California Utility HVAC Programs

Delivered energy savings while focusing on a few tune-up measures. One-size-fits-all approach.

REFRIGERANT

CHARGE ADJUSTMENT

•Check refrigerant level

•Add or remove charge

CONDENSER

COIL CLEANING

•Clean finned surfaces

Residential

Commercial

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REFRIGERANT AND

REFRIGERATION COMPRESSOR

•Check crankcase heater operations,

refrigerant and oil leaks, refrigerant

charge and oil level and condition

•Perform acid test

•Observe bearing and operating

surface temps

•Measure vibration

CONDENSERCOIL

•Clean finned

surfaces

REFRIGERATION

CONTROL PANEL

•Sequence test all

controls

•Calibrate and clean

controllers and safety

controls

•Check setpoint of controls

and limits

CONDENSER FAN/MOTOR

•Perform vibration test

•Lubricate bearings

•Examine motor mount resiliency

•Check motor insulation resistance

COOLING COIL

• Inspect and clean as required

• Check condition of finned

surfaces and straighten if bent

• Check for corrosion and leaks

FILTER

SECTION

• Replace media

as required

FRESH AIR, RETURN, AND

EXHAUST AIR

DAMPERS (Commercial only)

•Check for unrestricted and

proper operation and close-off

•Lubricate bearings as required

RETURN AIR FAN/MOTOR &

SUPPLY FAN/MOTOR•Perform vibration test

•Lubricate more bearings

•Check motor insulation resistance

•Examine motor mount resiliency.

•Lubricate bearings and check for

end play, excessive bearing temp

and wear

•Check blower and clean dirt

accumulation

•Check condition of drive couplings

and belts

•Check for alignment, balance,

security to shaft

•Check rotation

BURNER

SECTION

•Perform combustion and draft

tests

•Inspect and clean nozzles

•Inspect, clean and lube burner

fan (gun type burners)

•Test safety controls

ELECTRICAL

DISCONNECT

•Inspect

contacts

•loose

connections

•Check for

proper

operation

Looking ForwardANSI Standards-Based. Comprehensive and

Sequenced. Opportunities maximized.

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Collaborating to Transform the HVAC Industry

WHPA Stakeholder Partnership

Industry LeadershipStandard 180, Standard 4

Enabling Environment for QM

Government

Utility Regulation

Utilities

HVAC programs

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Residential QM & Commercial QM Plan

Key Activities

• Quantify energy savings benefits of “quality” and “premium” maintenance services in residential and commercial

• Evaluate feasibility of measures and upgrades that improve system performance

• Demonstrate the value to consumers of A) properly maintained systems (per industry standards) and of B) new, but proven “premium” maintenance practice

• Demonstrate the value to contractors of a sustainable business model based on quality and premium maintenance

In partnership with HVAC industry, deploy two comprehensive operations & maintenance programs that improve system performance, capture savings, and provide a high ROI to the end-user customers

Quality maintenance becomes the industry and market norm

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New HVAC QM Programs:Putting The Industry

Standards to Work – Part I

Mel Johnson, SCEBob Baker, FASHRAE, OPMP

Wes Davis, ACCA

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Building the Foundation for HVAC Efficiency in Existing Buildings

Industry standards are the basis for HVAC market transformation

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Building the Foundation for HVAC Efficiency in Existing Buildings

The standards are in early stages of adoption, but are not new!

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ASHRAE/ACCA/ANSI S-180

• Title of Standard…

– Standard Practice for Inspection and Maintenance of Commercial Building HVAC Systems

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What is ASHRAE?

• International Academic/Professional Society

• Curator of HVAC science & practices

• Founded 1894

• ~55,000 members worldwide

• ~220 Published Standards and Guidelines

• Extensive Technical Library

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Std 180 - Why Developed?

• Research reveals majority of what is called “maintenance” is reactive and more akin to “Run to Failure.”

• Not only is this the most expensive way to manage a building, it leads to a bunch of added risks –

– Energy waste

– Occupant discomfort

– Health effects

– …26

Standard 180

Purpose

The purpose of this standard is to establish minimum HVAC inspection and maintenance requirements that preserve a system’s ability to achieve acceptable thermal comfort, energy efficiency, and indoor air quality in commercial buildings.

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Before the Standard -

• A lot of research

• Presentations to committee

• Technical forums and seminars

• Interface with other development

– Federal Energy Management Program

– EPA

– Hong Kong BEAM

– NASA

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Maintenance Approaches (US DOE)Excess costs over projected normal life cycle cost

• Reactive - $18/hp/year more than projected

• Preventative - $13/hp/year more than projected

• Predictive - $9/hp/year more than projected

• RCM* (Predictive-Preventative) - $6/hp/year more than projected

*Reliability Centered Maintenance

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Objective for 180

• The objective established for 180 was to identify conditions that would anticipate and act to forestall failure (predictive/preventative)

• Realize maintenance cost ~$6-9/hp/year* more than projected life cycle cost

*Calculated as excess costs over projected normal life cycle cost.

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Content of the Standard

• Definitions

• Dialogue with the owner

– Philosophy of the operation

– Understanding (inventory)

• Performance – Appendix A

• Failure Points – Appendix B

– Implementation (inside/outside)

– Timing (now or at failure)

• Task listings

• Adjustment of inspection frequencies

• Documentation

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SPC 180 Committee

• 24 Voting

– Manufacturers

– Users

– Suppliers

– General Interest

• 23 Non-voting

• ~50 Consultants

• 5 Subcommittees

Subcommittees:Air Cleaning

Air MovementControls; Heat

GenerationHeat Distribution

Refrigeration

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Acceptance of the Standard

• ANSI• LEED EB (Existing Buildings)• ICC – 2009 International Mechanical Code• IAMPO – 2009 Uniform Mechanical Code• Various International

– China– Hong Kong– Singapore– Thailand– Brazil

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ACCA 4 QM 2007

• Purpose:

Establish minimum inspection requirements in the maintenance of HVAC equipment found in one-family and two-family dwellings of three stories or less three stories or less

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ACCA 4 QM 2007

• Scope:– (Performed) by appropriately licensed contractors

Checklist tasks of inspection items and recommended corrective

– Presumes that the HVAC system was designed, installed, and tested

– This standard shall not be used to circumvent safety, health, environmental, or the equipment manufacturer’s requirements.

– This standard excludes steam distribution heating systems.

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ACCA 4 QM 2007

• Development:

– HVAC Contractors

– OEM

– Utilities

– Other Associations

– Specialists

• Supporting Contributors

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ACCA 4 QM 2007

• Maintenance Contractor’s Responsibilities:

– Inspect

– Inform

• Homeowner’s Responsibilities:

– Maintain the equipment

– Use professionals

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ACCA 4 QM 2007

Overview

• Homeowner interview

• Inventory

• Equipment checklists

• Code requirements

• Performance objectives

• Maintenance

– Inspection tasks

– Recommended corrective actions

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ACCA 4 QM 2007Checklist 7.1 Air Distribution System

Inspection Task *Recommended Corrective Actions

Shall inspect for particulateaccumulation on filters.

Clean or replace filters if accumulation results in PD higher thandesign or if airflow is outside of established operating limits.

Shall inspect air filter housingintegrity and air seal.

Correct as needed.

Shall inspect grilles, registers anddiffusers for dirt accumulation.

Clean as needed.

Shall inspect all accessibleductwork for areas of moistureaccumulation or biologicalgrowth.

Install access doors as needed. Clean or replace as needed.

Shall inspect integrity of allaccessible ductwork insulation.

Observe for proper alterations, rips, tears, or improper ductadhesives. Repair, seal, replace as necessary. Install access doorsas needed.

Shall inspect the integrity of allaccessible ductwork including:duct strapping, hangers, sections,joints, and seams.

Note improper alterations, straps, air leaks, and improper duct adhesives. Repair, seal, replace as necessary.

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ACCA 4 QM 2007

• Documentation:

– Inventory

– Checklists

– Code violations

– Performance objectives

– External Conditions (OBTW…)

– Inaccessible items

– Recommended corrective actions

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Break

Starting Again@10:40am

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New HVAC QM Programs:Putting The Industry

Standards to Work – Part II

Mel Johnson, SCEMarshall Hunt, PG&E

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Collaboration to Operationalize Standards Broad cross section of contributors and participants

1Program feasibility based on ANSI Standards was the recommendation of WHPA subcommittee, which was further refined with individual contractors and customers through an in depth process to “operationalize” the standards. 2Program design team consisted of a series of focus groups, workshops and working sessions conducted over 10 months and included 4 contractors (including service leads, technicians and operations staff) 13 customers (including facility and energymanagers), and 3 energy efficiency consultants.3A series of information sessions were held with contractor organizations and included over 40 association executives, union officials, contractor members and training center personnel.

Feasibility Team1

• WHPA• Nonresidential & Residential Committee

• Nonres and Res Tasking Subcommittees

• IOUs

• Consultants

• Customers

• Contractors

Program Design Team2

• IOUs

• ASHRAE

• ACCA

• Consultants

• Additional Customers

• Additional Contractors• Upper Managers

• Service Managers

• Sales Managers

• Technicians

Program Review3

• IHACI

• ARCA/MCA

• UA

• SMACNA

• SMWIA

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Focusing on Three Vital, Customer-Centric Components of Success

Three interdependent customer-centric components for success:

– Thermal Comfort» The customer is not too

hot or too cold

– Indoor Air Quality» Smells, allergies and air

particles are minimized

– Energy Efficiency» Lower monthly energy bills

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Introducing the New Commercial QM Program

• Standard 180-based 3-year QM Service Agreements

• Treatments are presented in a composite package

• Initially targets commercial rooftop units (RTUs)

• Includes a comprehensive (yet fairly standard) suite of program elements to address market barriers (marketing, IT tools, training, incentives, etc.).46

Introducing the New Residential QM Program

• Standard 4-based QM Service Agreements

• Treatments are presented in a composite package

• Initially targets single-family detached and duplex homes

• Includes a comprehensive suite of program elements to address market barriers(marketing, IT tools, training, incentives, etc.).

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Long term relationships

Contractor-Customer

Data & Information

Building, RTU, QC

Innovation

‘Premium’ measures

Retrofits

Industry

transformation

Foundation for A Quality Focused HVAC Sector

Standard 180-based andStandard 4-based Service Agreements set the stage for future HVAC upgrades

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Step 1: Service Agreement

Step 2: Baseline

Step 3: Ongoing Maintenance

Define QM Policies/ Customer Interests

Customer concernsPerformance objectives Condition indicators

Record Inventory of Customer’s Equipment

Assess Equipment

Perform Baseline Analysis

Identify Required Repairs and Communicate with Customer

Perform Maintenance

Document HVAC System Condition Indicators

Provide Customer Before/After Benefits Reports

Improves thermal comfort, indoor air quality and energy efficiency

Service agreement. Fix deferred maintenance. Maintain equipment.

Commercial QM & Residential QM

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Customer• HVAC operating costs are largely

“invisible”

• Economic pressure has lead to a

short-term focus (“run to fail”)

• Lack trust of contractor

• Difficult to compare contractors

offers and quality of work

• Benefits of QM not yet

quantified

Overcoming Market Barriers

Demand-side

Industry• Lack of knowledge and tools to

comply with Standards 180, 4 • Standards 180, 4 viewed as only

task “check-lists” • Some tasks require additional

detail to “operationalize” • Lack of industry consensus on

protocols for RCA and instrumentation

• Unclear career path for technicians• Benefits of QM not yet quantified

Supply-side

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Commercial QM – Customer View

3-year QM Service Agreement

• Incentive is based on incremental cost of Standard 180-based QM over typical service

• Service Agreement is transferable to other Program-qualified contractors

Benefits:

• Engages customers in long-term relationship with contractors

• Provides sufficient time for QM benefits to be demonstrated

• Installments provide leverage to discourage deferred maintenance

• Transferability protects the Customer and Program

Customer Incentives

3-year QM Service Agreement

•20% upon signing

•25% at the end of year one

•35% at the end of year two

•20% at the end of year three

All units must be maintained to receive the full incentive amount

Customer Incentives

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Commercial QM – Contractor View

One-time service to ‘normalize’equipment in a state of deferred maintenance

• Incentive is based on pre-qualified baseline condition

Benefits:

•Protects the Contractor: ensures subsequent maintenance conducted is effective

•Creates “fresh start” and an opportunity to discuss the hidden costs of deferred maintenance

Contractor Incentives

Task & Incentives1-5

Tons6-25 Tons

+25 Tons

Coil Cleaning $110 $130 $150

Adjust Airflow $25 $35 $45

Refrigerant System Test $25 $35 $45

Refrigerant System Service $120 $200 $260

Economizer Functional Test $25 $35 $45Integrate economizer wiring $165 $175 $185

Replace damper motor $460 $510 $575

Replace controller/sensor $320 $370 $415Renovate linkage & other components $180 $245 $310

Decommission Economizer $100 $130 $170

Replace T-Stat $200 $200 $200

Adjust T-Stat Schedule $25 $25 $25

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Residential QM - Customer and Contractor Views

1-year QM Service Agreement

• Incentive is based on incremental cost of Standard 4-based QM over typical service

• Service Agreement is transferable to other Program-qualified contractors

Benefits:

• Engages customers beyond one-time relationship with contractors

• Provides opportunity for more than one call to address both heating and cooling

• Transferability protects the Customer and Program

Customer Incentive

One-time service to ‘normalize’equipment in a state of deferred maintenance

• 1-year Service Agreement recommended to be in place.

• Incentive is based on baseline condition

Benefits:

•Protects the Contractor: ensures subsequent maintenance conducted is effective

•Creates “fresh start” and an opportunity to discuss the hidden costs of deferred maintenance

Contractor Incentive

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Residential QM Service and Retrofit Treatments

• Air Flow at OEM Minimum cfm/ton

• Duct Repair

• Condenser & Evaporator Coil Cleaning

• Refrigerant System Test & Service

• Retrofit of High Efficiency Blower and Condenser Fan Motors

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Meeting Contractor Enrollment Criteria

• Company financials

• Years in business

• HVAC technician requirements (trade school, 2-years experience, and/or industry certification)

• Local customer references

• Employ full-time professional with years of specific HVAC experience

• Job-scheduling software for visits

• Emergency service capabilities Knowledgeable, experienced contractors and techs who will

deliver for the long haul55

Planning for Success via Contractor Training and Customer Communications

• Sales – Background and Customer Value Proposition

• Program Operations Workflow

• Technical Field Operations

• Program Guiding Document

• Customer Leave-Behinds

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QM Programs Built on Continuous Improvement

• Phase 1: Setting the Foundation

• QM based on Industry Standards

• Phase 2: Maximizing Energy Savings

• Retrofit opportunities (e.g. efficient motors, variable frequency drives, demand control ventilation etc.)

• Phase 3: Efficiency Upgrades

• Improve system performance through new technologies, such next generation economizers, fault detection and diagnostics, etc.

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QuestionsFeedback

Input

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Worth A Thousand Words

Look Mom:

QM!

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