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    DRAFT 5/5/04 PREDECISIONAL DOCUMENT

MEMORANDUM FOR SECRETARY OF THE ARMY

     SECRETARY OF THE NAVY

     SECRETARY OF THE AIR FORCE

     DIRECTOR DEFENSE LOGISTICS AGENCY

SUBJECT:

    GUIDANCE ON UTILITY METERING

Executive Summary:

     Military installations have historically used utility meters to allocate utility usage to tenants and to manage energy usage. Military installations are unique within the federal government in that they normally consist of numerous industrial, administrative, housing and support buildings arrayed in a campus type environment. These campuses are served by one or more master meters equipped with time of use demand, energy consumption and power factor meters. Due to the large size of these military complexes, often in excess of a thousand buildings, it is not cost effective to meter every building. Instead, defense components may apply meters at sub-meter points, large utility users, or upon the request of tenant commands. Energy use for buildings not equipped with meters is estimated, when necessary, based upon engineering calculations. In comparison, most other federal agencies’ buildings are within small complexes, often housing multiple federal agencies or individual structures. These structures can easily be metered individually but face the problem of allocating usage across the tenants within the building.

     The Energy Policy Act of 2003, H.R. 6, still pending final vote by the Senate, directs the Department of Energy to draft a federal metering policy in consultation with the other agencies within 6 months of the passing of the legislation. Furthermore, it directs all Federal agencies to submit a compliance plan within 6 months of the Federal policy being published. Congressional intent of these metering requirements is to use the increased awareness of real time energy consumption to effect management actions that promote energy conservation. It appears inevitable that sub-metering of all Federal facilities to some extent will be mandated.

     The Department of Defense fully supports the use of meters to manage energy usage where it is cost effective to do so. Energy or cost savings will not result from meters alone, but rather the management of the information provided by meters. Meters should be installed at locations where the energy use being monitored justifies the cost of

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    installing, maintaining and reading the meter. This cost benefit analysis can be tempered by specific needs of the host, such as metering a specific tenant, operational requirements, etc. Where the serving utility company has established interval (time of use) tariffs, Defense components should monitor electrical demand on a continuous basis. This management can normally be accomplished through software resident on an Automated Meter Reading System (AMR), Supervisory Control and Data Acquisition (SCADA) system or Energy Monitoring and Control System (EMCS). In all cases, technology improvements and personnel constraints dictate maximum use of remote meter reading.

     Of additional interest to the Department of Defense is the ability to benchmark energy consumption. Reducing energy consumption compared to a baseline year is required by Executive Order 13123; however, a better performance metric is needed to help measure progress and find opportunities. Metering facilities to some extent will help establish these desired performance metrics.

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    INSTALLATION OF UTILITY METERS

I. PURPOSE

    To establish an effective metering policy and program as tools to better manage facility energy consumption and enhance energy reduction opportunities. Proposed legislation, HR6, require all federal buildings to be metered to the maximum extent practicable. The DOD Metering Plan would meter facilities upon evaluation of the cost required to install meters as well as to read, analyze and act upon the subsequent meter data that results.

II. AUTHORITY

    The final version of the proposed Energy Act Policy of 2003 (HR6) bill emerged from conference and is pending vote by the Senate. The pertinent language is provided at Attachment I.

III. DEFINITIONS

Key terms used in this guidance are defined in Attachment II.

IV. DISCUSSION

    HR6 proposes metering of all federal buildings, to the maximum extent practical, as a tool for managing energy usage. The proposed legislation recognizes that metering all buildings is uneconomical and requires the Secretary of Energy to lead the establishment of a meter implementation policy in consultation with the Department of Defense, other Federal agencies, and the commercial sector. The following policy will guide Defense components in their application of meters and will serve as the DOD contribution to this interagency policy development effort. While HR 6 is specific to electricity metering only, metering all utilities where economical and practical is prudent and will be encouraged.

    Military installations individually meter (including time of use or interval meters) and sub meter in most situations where it is economical to do so. Interval meters do not provide additional benefit when the market does not offer time of use pricing or where the activity to be metered has inelastic operating parameters.

    The Department of Defense fully supports the use of meters to aid in managing energy usage when cost effective and practical.

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V. DIRECTIVE

    The Under Secretary of Defense (Acquisition, Technology and Logistics)

    (USD(AT&L)) shall oversee the establishment of a common utility metering policy.

Defense Components shall work to achieve the following metering goal.

Provide utility meters equipped with remote metering capability or automatic meter

    reading (AMR) on all buildings where cost effective. Develop a plan to install a remotely

    readable meter data collection system and ensure that meters installed with new

    construction and renovation projects are capable of communicating with the installation’s

    planned or existing meter data collection system. Include safety switches with all new

    meter installations to facilitate meter replacement and maintenance.

Cost effectiveness can be achieved where the cost of the meter, installation, and ongoing

    maintenance, data collection, and data management does not exceed 20% of the yearly

    cost of the utility being metered. This assumes that the average meter installation will

    result in at least 2% annual savings in the utility being measured by that meter. Typical

    utility cost thresholds for cost-effective metering are given below as a guide. Actual

    conditions will vary. For example, updating an existing meter to have Automatic Meter

    Reading capability may result in a lower utility cost threshold.

The yearly cost of utilities at currently unmetered buildings may be estimated using

    Department of Energy’s Energy Information Administration Commercial Buildings

    Energy Consumption Survey Data, Department of Energy’s Facility Energy Decision

    System (FEDS) software, MIL-HDBK-1133 ―Estimating Energy and Water Consumption for Shore Facilities and Cold Iron Support for Ships,‖ tenant billing records, or an

    appropriate computer model.

    ? Electric and Natural Gas Meters shall be installed in accordance with the

    following criteria:

    o Meter type--Digital meters are preferred over analog meters. Electric meters

    should provide data at least daily and should record at least hourly consumption of

    electricity.

    o For all new construction projects regardless of programmed cost and

    renovation or energy projects with a significant electrical or natural gas

    component programmed cost over $200,000at a minimum, provide all

    buildings or facilities with electric and/or natural gas meters equipped with remote

    metering capability or Automatic Meter Reading (AMR).

    o For existing buildings or facilities--provide electric or natural gas meters

    equipped with remote metering capability or Automatic Meter Reading (AMR) on

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    all buildings that have an estimated or actual annual electric or natural gas bill of

    at least $75,000. It is estimated that the average meter installation will require

    some installation of a communications system and some labor effort to collect,

    analyze, interpret and act upon the measured data. It is estimated that the average

    meter application will cost approximately $5,000. It is also estimated that the

    average meter installation will result in at least 2% annual savings. $75,000 is the

    threshold at which the return on investment is predicted by engineering formula to

    be positive, and therefore economically beneficial for the average meter

    installation and subsequent effort associated with the collection, interpretation and

    management of data.

    o ExemptionsNo exemptions will be made for new construction projects and

    major renovations. Existing buildings or facilities may be exempted from this

    policy provided justification is provided that demonstrates impracticality or an

    uneconomical determination.

    o Interval metersUtility companies use interval meters at the service entrance to

    an installation for billing purposes. Defense components should establish a way to

    have access, on a real or near real time basis, to utility interval metered data to

    assist in energy management. Interval metering on buildings can be achieved by

    using digital meters in conjunction with a data collection/management system (e.g.

    AMR, EMCS or SCADA). Interval meters shall be used where ―time of use‖

    (interval) utility rate tariffs are in place or where building electric usage anomalies

    need to be reconciled.

    ? Water Meters shall be installed in accordance with the following criteria:

    o Meter type--Digital meters are preferred over analog meters. o For all new construction projects regardless of programmed cost and

    renovation or energy projects with a significant water component programmed

    cost over $200,000at a minimum, provide all buildings or facilities with water

    meters equipped with remote metering capability or Automatic Meter Reading

    (AMR).

    o For existing buildings or facilitiescomponents are encouraged to provide

    meters equipped with remote metering capability or Automatic Meter Reading

    (AMR) for the following applications:

     Master meters for all main water sources not metered by a utility company

     Central boiler or chilled water plants

     Barracks, if sub-metering as a group is practical

     Galleys/Kitchens

     Golf courses

     High water use mission infrastructure such as piers/dry docks and vehicle

    washing stations

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     Any building or facility with an estimated annual water and water-

    consumption-based sewer bill of at least $60,000.

    o ExemptionsNo exemptions will be made for new construction projects and

    major renovations. Existing buildings or facilities may be exempted from this

    policy provided justification is provided that demonstrates impracticality or an

    uneconomical determination.

    ? Steam meters shall be installed in accordance with the following criteria:

    o Meter type--Digital meters are preferred over analog meters. o