Shrinking the Kilowatt Bill

The residents of Trump Tower at City Center enjoy many outsized amenities like an Olympic-sized swimming pool, tennis courts, sub-zero freezers, and a marble atrium. But one particularly enormous feature did not make the list of enviable perks: the $1.4 million energy bill.

When the 37-story luxury White Plains condominium was built in 2006, developer Louis Cappelli estimated that the building’s annual energy bill would be $700,000. Instead, the first year’s costs were double that. Condo board members were shocked. They negotiated a one-time credit from Cappelli to pay for the unexpected charges. But as part of the agreement, Cappelli would not be responsible for any future bills.

The reality was stark: this brand-new luxury tower was an energy hog and residents were on the hook for it.

In January 2007, the board hired Larry Gomez of Trump Management to manage their property. The first order of business: cut the energy bill down to size. “The first thing the board said is: ‘We’ve got to wrap our hands around these energy costs,’” recalls Gomez, who once worked for the New York Power Authority and was familiar with state energy-saving programs.

Ultimately, the building would invest nearly $930,000 in energy-saving improvements and bring its usage down by 21 percent. The building qualified for nearly $300,000 in rebates from the New York State Energy Research and Development Authority, known as NYSERDA. Because of the changes, the building has not had to raise common charges in five years, despite the struggling economy.

The Long Road

But the road to a greener building was paved with hard work and unexpected capital improvements on a brand-new building.

The first thing Gomez did was visit the NYSERDA website to see what tax incentives the building might qualify for and who to hire for the job. He reached out to four NYSERDA-approved energy consultants. Three showed up for interviews and, of them, Frank Lauricella, director of business development for Daylight Savings Company, was the most impressive. “Frank took the most time going through what it would be like,” says Gomez. “Other folks didn’t seem to be as thorough.”

In April 2007, Lauricella made an initial presentation to the board. He told them his plan for the building: he would begin with an energy audit, a review of the building’s entire energy usage to find the root of the energy problem.

Units in the building sell for well over $1 million. Residents include corporate CFOs, lawyers, mortgage brokers, real estate investors, and business owners. At the meeting, board members pounded Lauricella with questions. “It was a very drilling environment to go through. They wanted to know: what are the incentives? How are you going to fund it?” says Lauricella.

The board was skeptical. What if the investment didn’t ultimately reduce the energy usage? “Not all the board was convinced,” say Gomez. “We wanted to make sure we weren’t throwing good money after bad.” By the end of the meeting, however, the board gave Lauricella the green light to evaluate the building.

A Baffling Problem

Lauricella lives in Rockland County. He watched the building go up. When he began the audit in early 2008, he was baffled by the problem the tower faced. “What are we going to do? It’s only a two-year-old building,” he says of his initial visit.

It is not uncommon for new buildings to drain energy. Although older buildings generally are considered the culprits with drafty windows and aging equipment, new buildings have problems of their own. Many are often built quickly. And if a developer is building a property he doesn’t intend to operate – as was the case at Trump Tower – he has little incentive to spend extra money on energy-efficient materials. Newer buildings often have problems with ventilation and oversized equipment.

“It’s a common misconception that the newer the building the more efficient it must be,” says Cameron Bard, the Trump Tower project manager at NYSERDA. “Every single building is unique and brings to the table its own problems.”

It didn’t take long for Lauricella to begin to see those problems. The most noticeable one was literally overhead: common areas were massively over-lit. Excessive lighting filled the corridors, stairwells, and parking garage. “I thought, ‘There may be an opportunity here,’” recalls Lauricella.

Lauricella did a complete energy audit of the building, checking the entire building envelope – windows, doors, ventilation, mechanicals, heating, and the inside of individual apartments.

In order to qualify for the NYSERDA funding, the building has to reduce its usage by 20 percent. So, as part of the process, Lauricella input his findings into a computer program that provided various solutions. If the building added energy-saving covers to the pools, how much would that save? If it replaced lighting in the garage, what would that save? He played with variables to come up with a proposal that would cut down the usage enough without costing the building more than the savings.

Lauricella delivered to Gomez a list of recommendations, suggesting the building change its lighting and install a cogeneration plant (called “combined heat and power,” or CHP). With CHP, the building could generate some of its own electricity and use the excess heat for the building.

Several skeptical board members visited three residential buildings in the area with CHP plants to see how they worked. Ultimately, Gomez and the board agreed to many of the measures, including the CHP and the common lighting changes. Other measures, like solar panels, were rejected because the payback wasn’t worth the investment.

“We looked at things that worked,” says Gomez. “Where were we going to get the biggest bang for our buck?” Adds Bard: “They invested in low-hanging fruit.”

Lauricella also looked at individual apartments and found that if residents added features like low-flow showerheads and energy-efficient light fixtures, they could further reduce energy usage. But that measure was ultimately abandoned as residents were reluctant to make changes to their luxury apartments.

Big Project

The biggest project was installing the CHP co-gen, which cost $479,000 – 52 percent of the entire project cost. Lauricella, who acted as a consultant overseeing the work, chose a contractor for the CHP. A CHP burns natural gas to produce its own electricity for the building. The excess heat that is created in the process is then captured and used to heat domestic hot water and heat the building. Throughout the year, the system generates 10 percent of the building’s energy usage. In the summer, it often produces all the hot water for the building.

The next step was to update the lighting in the common areas, which were drastically over-lit.

“When you come out of the elevators, you think you’re on a runway,” says Lauricella.

But removing the excess lights would be a major expense and renovation. So, rather than getting rid of them, half of the lights were put on motion sensors that shut off when no motion is detected. Lights in the stairwells were placed on timers. Usage dropped by 50 percent. After the changes, the electricity bill in the garage alone dropped from $3,000 a month to $1,400.

“You can very easily reduce your energy usage in corridors by over 90 percent. Corridors will be just as safe and just as bright,” says Ian Shapiro, owner of Taitem Engineering, a lighting expert who reviewed the Trump Tower project for NYSERDA.

The building took other energy-saving steps as well: it added solar thermal covers to the swimming pools; installed exhaust fan timers; adjusted boiler and temperature controls; and made improvements to the ventilation system. “You start to see a really diverse list of improvements,” says Bard.

The project took a year to complete and was finished by the end of 2009. Residents and board members were updated periodically with memos and notices about the changes. In all, the improvements cost the building $928,000. They funded most of it with a low-interest $700,000 loan from NYSERDA. Because the loan had an interest rate of 3.4 percent, the board decided to spread payments out over seven years.

The payback on the project, however, was less than four years. Trump Tower received $287,160 in NYSERDA rebates after the work was finished, and Lauricella received 22 percent of the rebate as his commission. The building now saves more than $400,000 a year. Says Gomez: “It turned out great for us. It really worked out.”