FEMP Investigates Cutting Energy Demand at GSA's Philadelphia Custom House

August 31, 2005

  Photo of the General Service Administration's Custom House in Philadelphia
  General Service Administration's Custom House, Philadelphia, Pennsylvania.

The General Service Administration's Custom House in center city Philadelphia is a stately art deco edifice that exemplifies the classic federal building. Seventeen floors and half a million square feet, the 1934 building is inhabited by several federal agencies ranging from the Food and Drug Administration to the National Park Service.

Though the Custom House has many energy system features typical of older office buildings—such as single-pane glass, constant volume air supply, and perimeter induction units for heating and cooling—GSA has consistently been attentive to its energy efficiency performance, both in the retrofits installed over the years and the tight operations regimen maintained by the building's staff. The ENERGY STAR® designation the Custom House received in 1999 represented not only the first structure in Pennsylvania to achieve the award, but also the first historical building in the United States to meet that prestigious benchmark.

Given this stellar energy performance, one might expect that the facility would have little opportunity for additional cost-effective utility savings. However, a 2004 investigation by FEMP into the facility's electric bills and rate structure revealed that the building was paying very large demand "ratchets" each year. A ratchet is a demand charge imposed by electric utilities that takes a facility's peak kilowatt draw during the year (often reached on a hot summer day), and imposes a charge based on this high-water mark during succeeding months. The rationale is to assess to the customer the full cost of having to build enough electric capacity to serve the facility, and then to spread that cost over the year (instead of applying it only to the one month in which the peak was reached).

The Custom House's utility, PECO Energy, bases its ratchet charges on a facility's June-September peak; if 80 percent of this peak is not reached during any of the subsequent eight months (October-May), this figure (80 percent multiplied by the summer peak kW) is set as the demand charge for that month. Since PECO charges more than $25 per peak kW for demand each month (roughly two to three times the national average for large facilities), the financial implications of the summer peak can be enormous. FEMP's analysis revealed that GSA pays on the order of $50,000 - $70,000 in ratchet charges each year for the Custom House.

With this in mind, GSA commissioned FEMP to conduct a study on the potential to cost-effectively reduce its peak demand. FEMP focused on two types of strategies. The first would suppress the building's energy demand throughout the summer months, and thus directly address the ratchet charges. The second was approaches that would allow the Custom House to participate in "demand response" programs offered by PECO or by the mid-Atlantic's regional transmission operator, PJM. Demand response programs permit large end-use customers like the Custom House to respond to either emergency system conditions on the grid, or high prices in the local electricity market, by shedding some of their electric load. The customer is then remunerated for its curtailed load by either a pre-determined floor price (e.g., $0.50/kWh for PJM's emergency demand response program) or one based on the market price of electricity during the reduction. Load shed can be accomplished through curtailment strategies such as adjusting HVAC system operations, letting space temperatures rise slightly, or shutting down lighting circuits. Alternatively, load can be reduced by turning on a distributed generation option, such as the 450-kW diesel generator the Custom House possesses.

FEMP's preliminary recommendation to GSA involves a two-part strategy:

  • Pre-cool the building on hot summer days by turning on the chilled water system earlier in the morning (typically the start time is about 6 A.M.). This will serve to de-humidify the building more thoroughly, yielding greater occupant comfort. But more importantly, it will allow the massive structure's thermal mass to act as an energy storage medium, which can then serve as a heat sink and emit cooling radiation throughout the day, lowering the need for further air conditioning. The expectation is that this will avoid or at least delay the high peak electric draws the building usually experiences; these generally occur in the early afternoon.

  • Turn on the diesel generator whenever a certain demand threshold is reached (expected to be about 1,500 kW; the Custom House's summer monthly peaks tend to reach about 2,000 kW). Although this strategy would have resulted in around 600 hours of generator operation in recent summers, the expectation is that the pre-cooling strategy will considerably lessen this since the high kW draws will be avoided or delayed. FEMP has also advised two possible emissions control strategies, bi-fuel conversion and selective catalytic reduction, to reduce emissions to acceptable limits for the increased hours of operation entailed in peak shaving (currently the generator is only used for emergency back-up).

FEMP estimates that these two measures can jointly net GSA about $70,000 annually in reduced summer demand and winter ratchet charges. However, not only is there a one-time capital investment to hook up the generator in parallel with the electric grid and the facility's energy management control system, there is also the fine-tuning of the pre-cooling strategy and the programming of the control system that need to occur.

GSA evaluated the plan this spring and decided to move forward initially with the pre-cooling approach (#1 above). There was insufficient time for installation of the necessary generator modifications (for emissions reduction and parallel grid connection) to allow for any peak-shaving by that means during this summer. However, moving forward with the pre-cooling alone will allow GSA to more accurately assess both the precooling's effectiveness and the value of incorporating the generator into the demand reduction plan in the future.

For more information, please contact Phil Coleman, Lawrence Berkeley National Laboratory, 610-604-0170.