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Convincing Your Board to Switch to Cogen: How One Board President Did It

Ronda Kaysen in Board Operations on August 6, 2013

201 E. 66th Street, Upper East Side, Manhattan

Aug. 6, 2013

Jon Shechter, resident manager of the self-managed co-op, first began thinking about options five years ago when a Massachusetts energy company cold-called him on the idea of cogeneration. Cogeneration is a method of generating electricity with a motor and then capturing the steam that is produced during the process and reusing it to heat the building or the water.

For the 21-story building, it would mean installing a natural gas-fueled cogeneration system and converting the building to natural gas. Shechter suggested the idea to the co-op board. The board at the time rejected it out of hand, largely because few other residential buildings in the city had gone cogen. There are currently fewer than 200 cogen plants citywide, according to Con Ed.

Cogent

When Burt Spiegel was elected board president, he, too, was intrigued by cogeneration. After doing his own research, he brought the idea up to the board. The members rejected it. He set out to woo them, presenting them with information, examples of successful models, and data on how much the building could save. Still, the matter was repeatedly tabled. For two years, the board punted. Finally, Spiegel moved in for the hard sell.

They wanted to understand

why it saves so much money.

That was the largest

time-chunk in educating them.

"Burt said, 'I've been killing myself on this, and I'm about to pull the plug,'" recalls Shechter. "'Are you people ready to pull the trigger or not? If it's something you want to do, let's do it.'"

Finally, the board relented. The potential savings were hard to ignore. Shechter estimates the building will save $315,000 a year in energy costs, with a five-year payback on the $1.7 million project. Just the savings made by converting from steam heat to natural gas is extraordinary. Steam costs about $2.90 per unit compared to $1 for the equivalent amount of natural gas, according to Joe Weinschreider, an associate at Energy Concepts, the Rochester-based consultant designing the co-op's new system.

"Cogeneration is something different. It's not like a boiler that buildings are used to," says Weinschreider. "There were a lot of questions. They wanted to understand why it saves so much money. That was the largest time-chunk in educating them."

Talkin' 'bout Cogeneration

The new system will include a new chiller, four new boilers and a cogeneration system. Weinschreider anticipates that the cogen will generate about 70 percent of the electricity for the building's common areas.

Although the board did not need the support of the shareholders to move forward with the work, it wanted to keep them informed. The board called a shareholder meeting in early April to present them with the idea. This time, unlike with the façade work, the cogen project was an easy sell. The shareholders were overwhelmingly supportive of the measure. The board hopes to begin work before the end of the year. 

"Here's where the beauty of it comes in," says Shechter. "When you say, 'Ladies and gentlemen, we are going to do this infrastructure work that won't cost you anything and it will save the building money,' how can you say no?" 

 

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