Financial foibles facilitate faulty facilities

Back when Frau R. and I made the move from renting to owning our living space, we purchased a townhouse in a newly built community. It was in a metropolitan area well to the south of Backboro, and the air conditioning season was pretty much the same length as the heating season. (Up here in Backboro, I'm not convinced we even have an air conditioning season. I'm probably in the minority, but still . . .) The townhouse came equipped with an electric heat pump -- a combination of central air conditioner and air-conditioner-in-reverse-to-provide-warmth, with "emergency" heating provided by electrical resistance coils. The sales pitch to the homeowner was that it used less electricity than "regular" electric heating, and included the cooling function for no extra cost. The sales pitch to the construction company, of course, was that it was cheap to install and easy to sell.

"Cheap" seemed to be the operative term, because around the end of the second cooling season, the thing stopped working. It was still under warranty, so the repairs were free and I didn't worry about it very much. Around the middle of the fourth cooling season, it konked out again. Since the fool thing was now warrantied only for parts -- not labor -- and since i was starting to see a pattern, I got a friend of mine (and HVAC engineer, as things happened) to tear it down and tell me what was causing the problem. What he found was that when it was installed, the original mechanic had gone to some amount of trouble to reverse the wiring around the solenoid switch which controlled whether the thing was in heating or cooling mode. The original design was for the default mode to be cooling, and for the solenoid to be energized when heat was required; reversing the wiring caused the default to be heating and the solenoid to be energized in cooling mode. As a result, a component which was designed to heat up when the surrounding air was cool was, in fact, heating up when the surrounding air was hot and humid and still and sticky. Thus, the 2-dollar solenoid was burning out and creating the need for a 100-dollar service call.

Now, I never got a sworn deposition from the original installer, but it doesn't take a rocket scientist to figure out that five minutes worth of rewiring on a fixed-price installation job had the potential to result in years and years of easy profit from otherwise needless service calls. The installer expected to benefit from those service calls. His financial interest lined up pretty much opposite of my interest as a home owner. In a sense, I've got to admire his initiative, and his inventiveness.

This idea that how financial interests align affects what people do (and don't do) shapes a fair portion of my work at Greenback. Shortly after I started this blog, I mentioned the fact that having separate capital (construction) and operating (maintenance) budgets might benefit the financial folks, but created problems for those of us charged with operating efficiency. The interests of those charged with putting up buildings cheaply (one time) don't necessarily align with the interests of those charged with operating them cheaply (year after year, decade after decade). That's still true on a lot of campuses, although at Greenback we've made some progress in getting lifetime cost considerations factored into construction planning.

One area where we've been entirely unsuccessful, however, involves building modifications to improve energy efficiency. If, for instance, it makes sense that a rarely used space have its lighting controlled by motion sensor -- think of a nook or a bay where students sometimes study -- getting the sensor switch installed is a bigger problem than it reasonably should be. The problem is financing.

You'd think that the electricity saved by operating lights less often would offset the cost of upgrading the light switch after some period of years. How many years will vary based on lighting technology and space utilization patterns, but sooner or later the savings should add up to offset the one-time costs. At Greenback (and at a lot of other campuses) that's simply never going to happen.

See, the cost of the switch upgrade has to be borne by the academic or administrative unit which "owns" the space in question. Their space, their lighting, their switch, their upgrade costs. Simple.

But the savings from reduced electrical usage go to the department which pays the utility bills. And which then prorates utility costs among administrative and academic units on a per-square-foot basis. The act of proration means that the department that paid the up-front costs never sees the resulting savings. The payback period, from their perspective, is infinite.

A number of schools have attempted to address this sort of disconnect by establishing revolving loan funds to cover small sustainability-related improvements. The funds have special accounting rules so that the underlying disconnect can be finessed when it's logical to do so. The relief this sort of fund provides is strictly symptomatic, however. It's like sleeping on a lumpy mattress and thinking you don't have a problem because a couple of Tylenols dulls the back pain.

For the time being, we may have to settle for symptomatic relief. Addressing the underlying problem requires billing operating (administrative and academic) units based on actual energy utilization -- not prorated numbers. And establishing actual energy utilization requires a lot more electrical meters than exist on many campuses. But you can't measure without meters. And you can't manage what you don't (can't) measure.

Of course, even when the meters are in place, the university still needs to make the management decision to make operating units directly responsible (financially incented) for their own energy costs.