Con Edison steam has provided reliable service to its customers for over 100 years, with over 1,800 steam customers south of 96th street Con Edison has capacity close to 13,000 Mlbs.
More importantly, the steam system provides close to 625,000 tons of cooling, relieving the Con Edison electric grid of close to 375 MW of electricity that it does not need to carry or a supplier produce in the peak of summer.
Each year with the summer peak cooling season about to commence, various energy consultants (Curtailment Service Providers or “CSP’s) begin to offer enrollment incentives to sign up for NYISO sponsored Emergency Demand Response Programs (EDRP) which offers a higher incentive but is mandatory and for a longer duration or Day Ahead Emergency Demand Response Programs (DADRP) which is voluntary but offers less of an incentive for demand side peak load reduction when called upon in order to relieve this strain on the grid. NYSERDA also offers under their Existing Building Program 0.55/kw/ton avoided for replacement of a steam driven chiller with another steam chiller and not to install electric. Con Edison also offers $2/Mlb to steam cooling customers (for only two years) as an incentive to stay with steam cooling and not consider electric. All sounds like found money for those whose steam chillers are coming to the end of their useful life.
Leaving loyalty to steam aside, one has a fiduciary responsibility to explore all options when a steam chiller comes to the end of its useful life. Cassidy Turley, managing agent for 12M square feet of commercial space in the tri state area, recently performed a study to replace two 330-ton low pressure steam absorption chillers serving a Class A office building in Midtown Manhattan. Using actual data such as steam costs which ranged from $20 to $25 per Mlb, with Single stage (low pressure) absorbers consuming about 17 lbs/ton and Double stage (high pressure) absorbers consuming about 8 lbs/ton. To obtain an apples to apples comparison of steam driven versus electric driven cooling chillers, 1100 full load hours per year was applied against a peak load of 650 tons. Inputting the above resulted in a first year cost of $300,000 to operate single stage steam chillers and $150,000 a year to operate two stage steam chillers. In comparison, electric drive machines whose efficiencies range from $.55/kw/ton to $.60/kw/ton; the annual electric cost was calculated to be approximately $125,000 per annum. Additionally, the first cost of a single stage absorber is approximately 25% greater than a comparable electric drive chiller; with a two stage high pressure chiller almost double the cost. Taking the above into account and even with the inclusion of an electrical upgrade tips the balance of going with an electric drive chiller with a break even of around 10 years. Cassidy Turley therefore recommended, and ownership accepted our recommendation with validation from an independent consultant.
In summary, I find it very disconcerting that these two business units operate independently, with the end user in the end paying higher costs even as they continue to implement energy conservation measures year after year.
What are your thoughts?
Jack Terranova, PE, LEED AP
Senior Vice President
Cassidy Turley, New York
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Very thoughtful analysis of an issue that continues to generate a great deal of interest.
Clearly one of the recurring challenges with using Con Edison Steam is its cost. The cost of steam is driven by many factors in addition to the cost of the natural gas and fuel oil used to generate the steam. Other costs include the cost of the steam system’s massive infrastructure, the cost of utility taxes imposed through City property taxes and a broad range of state and federal taxes, and the labor necessary to convert fossil fuels into end-use steam. The steam system’s load factor adds another dimension to cost, as most of the time the system is under utilized. The system must maintain adequate capacity to meet a peak demand that it may experience only once in a decade, and it must have adequate capacity to meet that load even if the largest steam source is unavailable at that time. As a result of this annual load shape, summer steam rates are already significantly less than winter steam rates
Rates must be designed to ensure equitable allocation of the costs of meeting peak demands as well as the costs of total fuel requirements. Higher demand rates shift emphasis toward recovery from infrastructure investment. Higher energy rates shift emphasis toward recovery from overall consumption. Cost allocation is further complicated by system elements, such as the relatively new plant on the East River near 14th Street, that produce both steam and electricity. Allocating costs from that plant to steam customers drives steam prices skyward. Allocating costs toward electric customers drives electric prices skyward.
No one wants to bear responsibility for subsidizing another’s energy consumption. There is naturally strong opposition to steam rates that would require electric customers who don’t use steam to subsidize the cost of steam production.
David F. Bomke
Executive Director
New York Energy Consumers Council, Inc. (NYECC)