Best Practice Guide

Food and Beverage Growers and Processors

Planning an Energy Program

Energy Policy

Photo courtesy of Fetzer Vineyard.View Details.

Adopting an energy policy ensures that energy management becomes part of a company's broader business plan. Because it clearly defines goals and objectives as well as executive expectations in terms of financial investment and bottom-line results, an energy policy is critical for guiding energy management planning and action.

Goals describe the broad intentions of an energy policy. Energy-specific goals usually include commitments to improve the energy efficiency of facility operations and equipment, reduce peak energy demand, and lower energy costs. Beyond these, businesses can also include non-energy related goals as part of the energy policy. These secondary goals might include:

  • Reduce noise from lighting and heating, ventilation, and air conditioning (HVAC).
  • Improve indoor air quality and occupant comfort.
  • Increase productivity through improvements to the indoor environment.
  • Reduce health and safety risks.
  • Increase property value by upgrading building systems.
  • Gain flexibility in operating funds by reducing controllable costs.

Objectives flow from the goals, setting quantitative, measurable tasks. Objectives are especially useful to verify the results of an energy program. Write objectives into contractual agreements so that contractors and vendors are clear about company energy goals and are held accountable for their work. Objectives can also serve as the basis for a more detailed measurement and verification (M&V) plan. The following is a list of areas addressable by energy policy objectives and an example of each:

  • Energy Consumption - reduce total energy use by 20 percent by 2015, compared to baseyear.
  • Peak Demand - consumption will be voluntarily reduced whenever a Stage One emergency is called.
  • Energy Costs - energy will be purchased using the most cost-effective rate structure.
  • Energy Source - 10 percent of energy will be from renewable sources, either onsite or purchased through renewable energy credits.
  • Implementation Priorities - all proposed energy projects where investment payback is less than one year will be automatically approved; other projects will be prioritized based on life-cycle cost analysis.
  • Revenue Savings - 25 percent of energy cost savings stemming from projects will be reinvested in additional energy efficiency and conservation measures.
  • Provision of Finance - An amount equal to 10 percent of a company's annual energy expenditure will be invested in energy efficiency each year.
  • Measurement and Verification - an energy accounting system will be installed to continuously track the facility's energy use profile; the facility will be benchmarked annually.
  • Operations and Maintenance - all company units will seek reductions in energy consumption; all energy wasting repairs will be addressed within two days of notification.
  • Employee Awareness - energy efficiency and energy conservation measures suggested by employees that are approved and adopted will result in a reward equal to 10 percent of the subsequent energy cost savings.
  • Air Emissions - cut GHG emissions 20 percent by 2010 over baseyear.
  • Water and Wastewater - whenever feasible, energy projects will seek ways to reduce consumption of potable water and disposal of wastewater.

In December 2004, Governor Schwarzenegger set clear energy efficiency goals for state and commercial buildings in the Green Buildings Executive Order S-20-04. These goals include a mandate to improve energy efficiency in existing state buildings by 10 percent per square foot by 2010 and by 20 percent by 2015 as compared to a 2003 baseline. Commercial building owners are encouraged to align company energy policy with the Green Building Initiative, as EO S-20-04 is commonly called. Appendix 3 contains a sample energy policy based on the Governor's green building goals.

Goals, Objectives, and M&V

Goals, Objectives, and M&V
A goal describes an ideal situation, e.g., energy-efficient operations.

A objective is an action undertaken in pursuit of a goal, e.g., retrofit lighting to improve energy efficiency by 20 percent.

Measurement and verification establishes the parameters and metrics used to contain and verify objectives, e.g., a load profile and lumen measurement of the existing indoor lighting system will be compared to post-retrofit results, with adjustments made for any changes in operations.

Business Examples

Fetzer Vineyard adopted sustainable business practices as early as the mid-1980s. By 1998, Fetzer had firmly established a triple bottom line: economic vitality, environmental responsibility, and social equity. More recently, Fetzer announced that by 2010 it would only purchase organic grapes (Fetzer's own acreage is already organic). From 1999 to 2004, Fetzer's efforts have saved roughly 1 million kilowatt-hours (kWh) of electricity. Fetzer has also reduced water consumption over the same time period by 24 percent or 6.6 million gallons, and has reduced waste to landfills by 95 percent.

At S. Martinelli and Company, key company leaders, like fourth generation Vice President John Martinelli, make a priority of sustainable practices and environmentally sensitive production. Energy efficiency plays a large role in Martinelli's sustainable practices, as well as impacting bottom-line results - with looming energy costs of 7 to 8 percent of operating expenditures, the company continually analyzes how much electricity and natural gas it takes to produce a gallon of apple juice.


According to Greg Galvin, Martinelli's Maintenance Supervisor who spearheads energy efficiency efforts, the company has realized that, "Energy is no longer a facet to be ignored in budgeting for the cost of goods. The most viable tool the (utility) consumer has at their disposal is demand-side management." As a result the company has kept its energy cost from increasing, even though the cost of energy has gone up


Resources

Energy Design Resources Charette is an online tool that allows you to quickly investigate the energy impacts of various design scenarios on a typical building, and then review the analysis graphically in a web-based format.

Scottish Energy Efficiency Office. Energy Policy webpage.

U.S. Environmental Protection Agency, ENERGY STAR, Guidelines for Energy Management.

BPG Appendix 3: Sample Company Energy Policy (PDF download, 60KB)