1. UP HILL OR DOWN HILL:
How Shall the Rock of Energy Efficiency Roll?
Christopher Russell,
Principal
Energy PathFINDER .com
(443) 636-7746

2. About Christopher Russell, C.E.M., C.R.M.
n Independent consul?ng since 2006
Principal, Energy Pathfinder
n Visi?ng Fellow, American Council for an
Energy Efficient Economy, 2012+
n Energy Manager, Howard County, MD,
2010-2012
n Director of Industrial Programs, Alliance to
Save Energy, 1999-2006
n Comm. & Indus. Program Manager, American
Gas Associa?on, 1995-1999
n MBA, M.A., University of MD;
B.A., McGill University
2 ©2013 Energy PathFINDER.com
About Christopher Russell

3. TODAY’S PURPOSE:
Evolve the
STRATEGY
ORGANIZATION
COMMUNICATION
& PHILOSOPHY
…of industrial energy management
into the 21st century.
3 ©2013 Energy PathFINDER.com

4. STRATEGY
UP HILL:
Proclaim “reduced
u?lity bills” as your
purpose.
DOWN HILL:
Proclaim a vision for suppor?ng core
business goals through strategic
energy management.
4 ©2013 Energy PathFINDER.com

5. STRATEGY
UP HILL:
Approach energy
management as a
project.
DOWN HILL:
Approach energy
solu?ons as an
investment.
5 ©2013 Energy PathFINDER.com

6. STRATEGY
UP HILL:
Use an ENERGY AUDIT
to determine a list of
projects.
DOWN HILL:
Develop BUSINESS PLAN that
provides a roadmap to business
results.
6 ©2013 Energy PathFINDER.com

7. STRATEGY
UP HILL:
Evaluate proposed
efforts for their
cost to do.
DOWN HILL:
Evaluate proposals…
• for impact on overall invested capital performance
• in comparison to the cost of doing nothing
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8. EXPENSES,
INTEREST,
OR
INFLATION
CAPITAL IS ALWAYS IN MOTION
ECONOMY
(opportunity)
PLACE
OF LOW
RETURNS
PLACE
OF HIGH
RETURNS
CAPITAL IS NEVER AT REST
8 ©2013 Energy PathFINDER.com

9. THE INDUSTRIAL FACILITY
IS A MICRO ECONOMY
FACILITY
(opportunity)
WEALTH
INPUTS
WEALTH
CREATED
EXPENSES,
INTEREST,
OR
INFLATION
Who will get superior returns from your facility assets?
YOUR BUSINESS or the UTILITY COMPANY?
9 ©2013 Energy PathFINDER.com

10. PURSUING ECONOMIC OPPORTUNITY
1. Benchmark current capital performance
2. Perceive opportuni?es for superior performance
3. Es?mate investment risk/return
4. Reinvest capital
5. Con?nuous improvement. See Step 1.
For the ECONOMY…
For the FACILITY…
DYNAMICS ARE THE SAME
10 ©2013 Energy PathFINDER.com

11. ORGANIZATION UP HILL:
Delegate all energy
mahers to a single
department (silo).
DOWN HILL:
Organize leadership
and skills in cross-
departmental teams.
11 ©2013 Energy PathFINDER.com

12. ORGANIZATION
UP HILL:
Allocate budget, skills, and
?me commensurate with
energy’s propor?on to
total expenses.
DOWN HILL:
Fund efficiency efforts
propor?onately to the
magnitude and speed of
cash flow that it creates.
12 ©2013 Energy PathFINDER.com

13. COMMUNICATIONS
UP HILL:
Assume everyone
already knows what
you’re talking about.
DOWN HILL:
Manage expecta?ons
through educa?on.
13 ©2013 Energy PathFINDER.com

14. 1-2
YEARS
2-5
YEARS
5+
YEARS
PRICE/PROCUREMENT
AWARENESS & BEHAVIOR
O&M/PROCEDURAL
CAPITAL INVESTMENT
SAVINGS POTENTIAL OVER TIME*
*Author’s Summary of Industry Knowledge
14 ©2013 Energy PathFINDER.com

15. COMMUNICATIONS
UP HILL:
Address mechanical
performance. Explain
everything in techno-
speak. Describe results
as energy saved.
DOWN HILL:
Address capital
performance. Ar?culate
outcomes and rewards as
they accrue to the agendas
of other departments.
15 ©2013 Energy PathFINDER.com

16. Ask not how much energy
management shall take from
current resources.
16 ©2013 Energy PathFINDER.com
Ask how much (and at what rate) energy
management shall create new wealth.

17. COMMUNICATIONS
UP HILL:
Execute without
informing, persuading
or collabora?ng.
DOWN HILL:
Declare amnesty for
past prac?ces; seek,
encourage, and
reward compliance.
17 ©2013 Energy PathFINDER.com

18. COMMUNICATIONS
UP HILL:
Perceive energy
management as a
distrac?on from
standard opera?ng
procedures
DOWN HILL:
Fold energy
performance criteria
into exis?ng business
metrics and
accountabili?es
18 ©2013 Energy PathFINDER.com

19. COMMUNICATIONS
UP HILL:
Use simple payback.
Results describe HOW
LONG it takes for a
budget to replenish
itself.
DOWN HILL:
Use rates of return.
Describe the RATE
and MAGNITUDE of
capital:
(1) Created via your
agenda , or
(2) Destroyed through
inac?on
19 ©2013 Energy PathFINDER.com

20. You should not have to defend
superior rates and magnitudes of
investment returns.
20 ©2013 Energy PathFINDER.com
Detractors need to defend the rate and
magnitude of capital destruc?on caused
by DOING NOTHING.
DEFENDING ENERGY
MANAGEMENT?

21. PHILOSOPHY UP HILL:
Confuse energy
efficiency with
environmentalism.
DOWN HILL:
Perceive energy
improvements as
business
opportuni?es.
21 ©2013 Energy PathFINDER.com

22. PHILOSOPHY
UP HILL:
Perceive energy
management as a cost
center. Facility assets
are a cost to be
minimized..
Success = no unusual
expenses; don’t get
no?ced.
DOWN HILL:
Energy management
= profit center.
Success = crea?ng
cash, improving
return on invested
capital, get no?ced
for suppor?ng other
departmental
agendas
22 ©2013 Energy PathFINDER.com

23. “Yeah, but…”
UP HILL:
Keep pushing the
same buhons… and
keep geqng the same
results.
DOWN HILL:
Apply some of the ideas from
this presenta?on.
23 ©2013 Energy PathFINDER.com

24. YOUR FACILITY…
CAN BE AN ATM MACHINE.
24 ©2013 Energy PathFINDER.com

25. CONCLUSIONS
• Demys?fy
• Don’t save… CREATE!
• Mone?ze
• Collaborate
• Document and celebrate
25 ©2013 Energy PathFINDER.com

26. YOU-TUBE: search “Energy Pathfinder Investment Calculator”
Energy PathFINDER .com
Christopher Russell
@ENERGYpathfndr
Feb 2008 June 2010
THANK
YOU!