Pennzoil Place Cuts Energy Costs by $2.2 Million

10/01/2014 |

Retrofits replaced outdated mechanical and electrical systems

Pennzoil place cut energy costs by 50% with a number of retrofits that replaced outdated mechanical and electrical systems. The buildings also participate in a demand response program. PHOTO COURTESY OF TRANSWESTERN

Houston’s Pennzoil Place, originally constructed in 1975, has implemented a number of strategies to cut energy costs by $2.2 million since 2008. Consisting of two 36-story, glass-walled buildings with a combined 1.8 million square feet, the complex received a multi-million dollar capital investment by its owner Metropolis Investment Holdings.

Metropolis has been able to cut its electrical costs by 50% and pass the savings along to its tenants. In 2008, when Pennzoil Place was approximately 98% occupied, electrical cost totaled $4.3 million. In 2013, when the occupancy rate was the same and capital improvements had been completed, electrical cost dropped to $2.1 million.

Roger Vasquez, director of engineering at Pennzoil Place, outlines programs used to cut energy consumption and increase financial return. The improvement plan includes measures that any existing building can leverage to increase energy efficiency.

1) System Upgrades
The mechanical, electrical, plumbing, heating, air conditioning, and ventilation systems all went through a major overhaul. Fiber optic backbone, which provides Internet of Things connectivity, was also installed. It allows all of the existing and future technologies in the buildings to be tied together and controlled remotely from a tablet or smartphone. This IP technology also ensures occupant and building issues are addressed quickly to save time, improve service quality, and increase tenant satisfaction.

2) In-House Services
Transwestern, which manages the property, was able to provide services in-house that were previously outsourced due to the new technology and improvements. For example, the fiber optic backbone allowed security to be moved in-house and away from an external monitoring service, which saves Metropolis $80,000 a year. Tenants are also saving resources by tapping into the backbone for Internet service, which created a new revenue stream for the building owner.

3) Rebate Programs
Metropolis secured a number of rebate incentives to save money on the improvements and shorten payback periods. A rebate of approximately $650,000 was used on a $5 million multi-chiller replacement, which reduced the payback period from nine to seven years. Another rebate of approximately $170,000 cut the payback on an $800,000 lighting project to 2.6 years.

4) Demand Response
Demand response is a program that pays buildings to reduce energy consumption and share their capacity with the nation’s three power grids during peak usage times to prevent blackouts. Pennzoil Place has found innovative ways to achieve significant power reductions without turning off equipment.

Metropolis realized three financial benefits from participating in demand response: energy costs are lower when capacity is diverted, ownership was paid $40,000 during the first year of participation, and the lower anticipated demand capacity resulted in reduced fees from the energy provider.

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