Marycrest Assisted Living Case Study
Making Assisted Living Green
What does your building cost you in electric, natural gas and water every month/year?
Have you had complaints about uncomfortable areas?
Do you have maintenance issues beyond your expectations related to lighting, heating and cooling?
The ownership at Marycrest Assisted Living, located in Denver, Colorado, was repeatedly answering yes to these last two questions. They also had high electric and natural gas utility bills for their 2 buildings: in 2011, they spent nearly $145,000 combined between one that is 55,000 ft² and the second that is 28,000 ft².
With 161 residents this works out to ~$900 per resident. With a typical family of four living in a single family house in the metro Denver area paying an average of $1,900/year in 2011, or a cost of $475 per resident, they knew their buildings were operationally sick; too much cost for them and too much impact on the environment. The question was: how to find, prioritize, and fix the problems to get the most improvement for their allotted improvement budget.
Marycrest Assisted Living was founded and operated by the Sisters of St. Francis when these buildings were constructed in 1989. These women had a mission which focused on physical and spiritual caring, both for the residents and the larger community in which their housing was located. Marycrest Assisted Living is currently owned and operated by the Health Dimensions Group.
The Sisters of St. Francis’ mission of caring had carried over to a desire to be good stewards of the environment when they were having the facility built. Unfortunately, there was no one there to guide them or their general contractor on how important it is to construct the building as an integrated system of components to ensure good performance. Someone should have been there who was experienced with best-practices in construction as well as heating & cooling system design and installation.
This consultant would have focused on the sustainability of the building; indoor air-quality, low-embodied energy and low-maintenance materials along with energy-efficiency Instead the construction practices prioritized reducing upfront cost to the builder at the expense of ongoing utility bills, indoor air quality, occupant comfort, and environmental impact.
By late 2011, the Health Dimensions Group was fed-up with the comfort complaints and high energy bills. They found Lightly Treading, Inc., (www,lightlytreading.com) a Denver-based building performance consulting firm that has been delivering sustainability and building-as-a-system services since 1997. Marycrest hired them to perform a Building Performance Analysis (BPA) of their buildings along with Project Management of their energy efficiency improvements. The BPA was performed in the spring of 2012 and numerous opportunities for improvement were found:
- Insulation and air-leakage issues that should not have even passed Code standards in 1989 were clearly contributing to high energy bills and comfort complaints.
- Heating and cooling systems that were often operating in competition with each other, increasing comfort problems while sending energy bills through the roof.
- Ductwork from the rooftop units that was leaking enough air-conditioned air into the atticsthat they were unintentionally being cooled by more than 30 degrees. The result was that much of the air conditioned air never got where it needed to go. The residents were uncomfortable and an astonishing amount of energy was being wasted.
- Windows which were allowing too much heat in during the summer and too much out during the winter.
- Lighting which was overused and less efficient than current LED lighting. Also they needed controls to turn off lights in unoccupied over-lit spaces.
The staff at Marycrest used the solutions from Lightly Treading’s BPA report, as well as estimated savings from these improvements to apply for a grant from the Colorado Division of Housing. This grant, comprised of dollars from the Federal Government’s ARRA program, was designed to assist non-profit housing and care facilities to cut their energy consumption. They were ultimately awarded the grant, which defrayed much of the cost of the improvement projects.
For building owners, as well as homeowners, who are not able to qualify for grant dollars to move forward with the energy saving and performance enhancing improvements, there are financial institutions that want to offer you financing. This financing rewards you for making improvements which improve your bottom line while offering aggressive interest rates and ease of qualifying. The benefits for future generations are also important.
Contact these institutions to find out more about interest rates, application process, etc.:
- Elevations Credit Union -Elizabeth Million (firstname.lastname@example.org)
- Bank of Colorado -Stephen Ponce-Pore (email@example.com)
- Wells Fargo Bank -Peter Pittman (firstname.lastname@example.org
Rebates are also available to improve your Return on Investment (ROI) from making improvements. Utility companies such as Xcel Energy, Platte River Power Authority( including Ft. Collins Utility, Loveland Power & Water, Longmont Power and Estes Park Power), and Black Hills Energy are offering rebates which often pay you back on 25% to 35% of the costs of your energy-efficiency improvements. Insulation & air-sealing, lighting, heating & cooling equipment as well as controls, water heating and even windowimprovements are what they want you to invest in, based on what is identified through your Building Performance Analysis.
Of course, there is no such thing as a free-lunch. To earn rebates someone will have to negotiate the utility program’s rebate program structure, fillout paperwork and submit proof of the improvements to receive the money. In the case of Marycrest, Lightly Treading took care of all this. Lightly Treading’s 15+ years of experience in working in the program and policy world of utilities was beneficial in ensuring Marycrest received the maximum rebate dollars available. The investment in time paid off; Marycrest was awarded just under $45,000 on their investment of $234,000 of energy-saving improvements.
Finally, there is yet one more way to increase your ROI on improving commercial and residential buildings: federal tax credits and deductions. Specifically, in the commercial sector, The Energy Efficient Commercial Buildings Deduction (CBTD), Federal Tax section 179 (d) is a special financial incentive created by the Energy Policy Act of 2005 and designed to reduce the initial cost of investing in energy-efficient improvements via an accelerated tax deduction. The tax deduction is based on an annual reduction in energy usage of at least 40%
The accelerated tax deduction allows building owners or tenants to write-off the complete cost of upgrading all 3 of the following areas: 1) the building’s envelope (insulation, air-sealing, windows), 2) HVAC (heating, cooling & domestic hot water), and 3) lighting. This write-off applies to the year in which the new equipment is placed into service, and is capped at $1.80/sq. ft. Alternatively, the owner (or tenant) could upgrade one of these three areas to earn CBTD capped at $0.60/sq.ft. In short, the cost of improving the energy-efficiency of 1 or more areas of your building can be claimed in a single tax year instead of being amortized over a period of years.
An example of this deduction is:
- Total conditioned square footage of your building = 100,000
- Capped amount for insulation and air-sealing improvement = $0.60/sq.ft.
- Total allowable CBTD Deduction = $60,000
- Assumed tax bracket: =33%
- Total value of the CBTD =$19,800
This tax deduction has been extended twice since 2005 and is currently set to expire on December 31, 2013.
To take advantage of this tax deduction it is a requirement to have an analysis and performance testing performed on your building followed by DOE2-based computer modeling of the current and future (after improvements) energy-efficiency of your building. For more information on this contact Lightly Treading at 303-733-3078 or www.lightlytreading.com
The work at Marycrest was completed in October of 2012 and the occupants are already talking about the comfort improvements. Estimated savings projections yield a conservative estimate of $32,000 annually. In the first two full months (November & December 2012) of actual utility bills, the savings, normalized for changed utility rates and weather, are averaging $3,126/month, a rate that’s on pace to equal $37,500 of savings for the year!
Additionally, in the case of Marycrest just the savings in electricity equals just under 400,000KWH/year of reduced consumption. This is credited with the elimination of 171,996 pounds of CO2 being released into the atmosphere every year! This is equivalent to removing the pollution from 15.5 cars every year!
If you knew investing $234,000 in making your building more comfortable would result in rebates from Xcel Energy of $44,900 AND $32,000 to $45,000 in reduced energy bills EVERY year – a return on investment of 17% to 24% would you make the investment?
Contact Paul Kriescher at Lightly Treading, 303-733-3078 x301 or email@example.com for more information.