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Power Up

The industry plugs in to save energy costs.

​By John Morell

Energy bills are a critical part of any convenience store’s bottom line, and the cost of utilities is only going to grow. Record heat waves and icier-than-ever winters have become the norm for many parts of the country, and the U.S. Department of Energy estimates that electricity costs will bump up 2.3% by 2017, with higher increases beyond.

According to NACS State of the Industry data for 2014, utilities (including electricity, lighting and others) comprised 7.2% of a store’s operating expenses each month, or $39,180 over the course of a year. This was a 6.8% increase over 2013 expenses, which were only $36,672 per year ($3,056 per month). Numbers from 2015 were released at the NACS State of the Industry Summit held in April.

Complicating matters are more state and federal regulations regarding energy use. “With more government oversight moving into the picture, many c-stores are looking to get proactive about energy costs now,” said John Atchley, national account executive for Emerson Climate Technologies in Sidney, Ohio. “There’s a sense that it’s better to make this a priority today than be compelled to act later.”

Getting Connected
The emphasis on saving energy has put additional pressure on facility managers to find ways to cut costs. And to do that, many c-store chains, both large and small, have turned to sophisticated cloud-based energy management systems to run their power.

Wireless remote sensors on the equipment monitor its energy use or temperature (if it’s supposed to heat or refrigerate), and send that information on to the centralized energy program. In many cases, the facility manager can make adjustments to the equipment from his or her desk or mobile device.

“It can seem overwhelming, but it’s a relatively simple task of connecting coolers, freezers, HVAC units and other power-using equipment to a centralized program through the Internet,” said Dean Landeche, vice president of marketing for Emerson. “This gives the facility manager a quick picture of what’s happening at a store, in a region or across an entire chain.”

“All of that data is processed by the program and it creates a very clear study of how energy is used,” said John Spirtos, executive director, new business creation at GE Ventures in Washington, D.C. “I can determine if a particular store’s HVAC is operating at the same capacity as other stores in the area or if a refrigerator unit isn’t performing as planned.”

Another advantage to these systems is their impact on preventative maintenance. “They can point out a small issue with say, one store’s HVAC unit,” Landeche said. “It may not be noticeable in the store, but a technician can be dispatched to inspect and correct it before it becomes a costly repair.”

Savings from a centralized energy management system generally range from 10% to 20%, with the biggest savings coming from reduced refrigeration costs. “Keeping products cool or frozen is a major concern for our stores,” said Steve Potts, energy manager for Rutter’s in York, Pennsylvania. “With an energy management system, even if it’s connected to older equipment, we’ll still see some savings since it’s showing us how to be more efficient.”

Another plus for c-stores is that most systems can be programmed to meet food safety compliance. “Since it’s constantly measuring the cooler temperature, if there’s a significant rise, an alarm goes off in the manager’s office notifying them of a possible problem with the unit,” Potts said.

Cool and Under Budget
Managing HVAC use is a critical factor for most c-stores, with doors opening and closing regularly at the entrance, and coolers and freezers also affecting the ambient air inside. “In the old days, store managers were just told to keep an eye on how cold or warm it was inside, but now that can be eyeballed by the facility manager through a management system,” said Jay Fiske, vice president of business development for Powerhouse Dynamics in Boston, which markets the SiteSage energy management system. “This frees up store management and staff to work on sales and operations.”

HVAC inefficiencies have always created headaches for c-store facility managers, often because store staff aren’t trained on how to operate the thermostat. “Something like 80% of people with programmable thermostats in their homes don’t use the programming feature,” Fiske said.

“Then they come to work and they’re not using the programming feature in their stores either.”

An additional, hidden problem may be adding to your power bill: economizers. “A study by U.C. Davis recently of about 2,000 commercial HVAC units found that many of them came with economizers,” Fiske said. Economizers use a sensor that measures outside air temperature and humidity. If it’s warm outside the unit operates as normal. However, if the outside air is cool and dry, the compressor stops and the fan blows the cool air inside.

“The survey found two-thirds of the economizers broken,” Fiske said. “That’s not surprising since the compressor still runs fine, it’s just running all the time. No one really notices unless they know about the economizer and see how much power the HVAC is using.”

Lighting the Way
Besides the HVAC and refrigeration taking up power costs, lighting is another concern. “Technology is making this less of a factor, but it’s still a cost center,” said Cliff Timko, a registered professional engineer and former energy manager for Giant Eagle. “You see this especially at c-stores with fuel stations. Those require canopy lighting, which can really add to your bill.”

Switching old sodium and even some fluorescent lighting for LED systems can save upwards of 50% on lighting costs. “The other advantage of new LEDs is their life. They last much longer and you also save on maintenance time having to constantly change bulbs,” Potts said.

Reducing lighting is also a way to trim costs, with some systems available that dim the indoor lighting slightly when it’s bright outside, and reverse that as it darkens. Lighting decisions can’t be seen solely from an energy management perspective however. “For marketing purposes, you want outdoor lighting bright enough to stand out, and enough indoor lighting for the products to be seen, so dimming may not work in every case,” Timko said. “The other issue is security. Lighting is part of that and has to be figured into the equation.”

In the LEED?
LEED certifications, which are given by the U.S. Green Building Council, stand for Leadership in Energy and Environmental Design. Many businesses have pursued LEED certification, since doing so generally reduces water and energy costs. Certification involves either new construction or remodels, and consists of using energy-efficient equipment and materials to achieve a particular score during a LEED inspection.

Among the c-store chains, West Des Moines, Iowa-based Kum & Go has probably done the most in the LEED arena, with 108 certified stores. “We began pursuing LEED certification in 2009 with our new builds,” said Kristie Bell, communications director. “We recently debuted a new Marketplace store prototype for all new builds, and they have also been designed to be LEED certified.”

While certifications are relatively popular with new construction, there aren’t as many LEED remodeled c-stores. “One of the things that management has to consider is, is it worth the cost of certification?” Timko said. “Do my customers shop here because it’s LEED-certified or because it’s convenient? In most cases, you may find that you’re better off with energy management systems and new equipment rather than going down the whole road of redoing a store to meet certification.”

Overall, it’s evident that while power costs are likely to rise, so will the industry’s work toward reducing power needs. “We’ve come a long way in 20 years, and we’re just going to get more efficient as we move forward,” Potts said. “A new HVAC unit can be around 50% more efficient than an old one, so over time, as older equipment gets replaced, our numbers are going to improve.”

John Morell is a Los Angeles-based business writer who specializes in the retail and tech industries.