ASSIGNMENT # 4: Lighting Upgrades

Grade Allocation: 12%

Due: 12 o’clock noon of SATURDAY JULY 30

Deliverable: Memo to executive team, no more than 800 words, plus spread sheet-based appendix for financial analysis.

Background:

Home work #3 presented a scenario in which your real estate development firm used the Target Finder tool to identify an energy efficiency score based on the proposed design of an office property.  In this assignment, assume that rather than developing a new building, your firm is planning to purchase an existing asset; the asset that was the subject of HW #3.

Overview of Your Company’s Current Work Related to the Asset:

Your firm is conducting due diligence on the asset prior to formalizing its purchase commitment. Per standard practice, the due diligence process is a thorough investigation of all physical, legal, and contractual aspects of the property. As a result of a walk-thru of the property and review of current leases, you know the building’s ENERGY STAR score, the hours of operation, and occupancy (people and computer densities). In addition, your firm’s consultants conducted an audit of the building’s mechanical, electrical and plumbing systems. Relevant findings from the building audit include:

·         Building completed construction in 1998. Many of the systems that contribute to energy and water consumption are original to the circa 1996 – 97 design and are therefore less efficient than similar newer equipment.

·         The building’s current ENERGY STAR score is 68.

·         There are 1,150 48” linear fluorescent lamps in the building. The lamps are all the same and have the characteristics cited in the specification sheet below (not the list price is per case):

·         In addition to the above technical specifications, each lamp contains 6mg of mercury, something that was not uncommon in older generations of fluorescent lighting technology. 

Next Steps Related to the Asset:

Your boss has asked you to develop a report that could guide decisions to replace the existing linear fluorescent lamps throughout the building, if your company purchases the property. You have proposed modeling the predicted changes in the building’s energy consumption from a lighting upgrade, and you recognize that projected changes in energy consumption can be input into Target Finder to predict a change in the buildings Energy Star Score and annual emissions.

In your compare and contrast exercise, you are to review three different lamps and their impacts. Each lamp has different operating characteristics. Below are considerations that should be taken in to account when reviewing these lamps.

1.        Color temperature between 2,500 and 3,500K.

2.        Lumen output similar to (but no less than) the existing lamps.

3.        Cost savings, including

a.        First cost to purchase new lamps,

b.       Operating cost over a ten year period of property ownership

                                                               i.    Include replacement costs for lamps (materials and labor) if the lamps’ predicted hours of useful life would require additional re-lamping before the sale of the property by month six of year ten.

4.        Reduction in emissions of greenhouse gases.

5.        Total difference in amounts of mercury.

Additional Assumptions, Information, & Guidance:

·         Product selection

o    Your analysis should be based on the three models of lamps listed below:

§ USHIO 3000099 F32T8/830

§ Sylvania 21777 FO32/830/ECO3

§ Philips 281220 F32T8/ADV XLL Alto 25W

·         Students may find detailed information including pricing and performance characteristics on line through key word searches on the text descriptors above, or may review the on-line catalogues of firms such as:

§ http://www.grainger.com

§ http://www.1000bulbs.com

§ http://www.bulbs.com

·         When research the lamps and their performance characteristics, and when calculating outcomes for the assignment, students do not need to concern themselves with the following:

§ Pin configuration,

§ Ballast compatibility, upgrade or replacement,

§ Fixture compatibility, upgrade or replacement.

·         Assumptions

o    Average kWh rate of $0.13 over the projected period of ownership.

o    Average maintenance staff labor rate (loaded) of $40 per hour.

o    Labor lamp replacement at a rate of 8 per hour.

o    Full service gross leases. 

o    Your firm intends to hold the property for ten years.

·         Terminology in product literature

o    Depending on manufacturer, some criteria are described with different terms.

§ Lumens per watt (lm/W)

§ Watts (W)

§ Color rending index (1 to 100 scale)

§ Color temperature, (reported in kelvins, (k), &/or cct)

§ Rated useful life (hours), use 12 hour starts, not 3.

o    For all the above criteria, some variations in terminology may be encountered, and some criteria are reported in greater detail, which requires additional variations of terms. For this assignment, use the highest rating provided for any criteria.