The Greening of Corporate America

May 14, 2007

Ken Silverstein, EnergyBiz Insider

Exelon Corp.'s environmental positions are paying off. The Chicago-based utility has retrofitted its headquarters so as to comply with green standards for commercial office buildings -- a move that is winning accolades from all corners.

While the strategy requires an upfront premium, it will eventually reap returns while also cutting the level of harmful emissions. Commercial and industrial sites are often some of the most voracious users of energy. Because lots of those facilities are old, for example, they may be using antiquated equipment that is not energy efficient. But, many businesses are realizing that they can save big bucks if they implement some sensible conservation features.

In Exelon's case, it consolidated its downtown Chicago locations into one suburban location. It chose to modernize existing space and to conform to U.S. Green Building Council standards. Altogether, the renovation that covers more than 220,000 square feet and 10 floors came at a 5 percent premium, the utility says. But, that will pay for itself within five years in the form of increased energy savings. This is the largest office space ever to be given the highest environmental rating awarded by the green building council.

"Our headquarters is a demonstration that other businesses can achieve attractive and functional results by renovating existing offices to meet the standards of the Green Building Council," says Helen Howes, vice president environment, health and safety for Exelon in Philadelphia. "They can do this by using commercially available products that come with a modest premium."

Controlling demand at large plants and commercial buildings has been an overlooked process. Experts can study a facility's technologies and operating protocols and determine where the pitfalls lie. They can then provide a good range of retrofits and the potential savings that those innovations will produce. The costly part would be any detailed engineering that is necessary to execute the plan.

In terms of resource management, Exelon purchased more than 60 percent of the project and construction materials from manufacturers located within 500 miles to reduce emissions associated with transportation. Three-quarters of construction waste was recycled or salvaged, and almost one-third of furniture and other materials were reused to reduce waste. Exelon is also buying renewable energy certificates to offset 100 percent of electricity usage for the office space from regional wind power facilities.

And as far as energy conservation goes, Howes says that 96 percent of the products that the utility is now using are Energy Star certified, meaning their efficiency levels have been recognized by third parties. That includes everything from copy machines to appliances. The building, furthermore, uses advanced lighting as well as sophisticated heating and cooling systems. It all works with sensors that make automatic adjustments.

"Energy efficiency and sustainability have become two of the most important factors in building design," says Donna Robertson, dean of the Illinois Institute of Technology's College of Architecture. "I'm optimistic that Exelon's leadership in building green will inspire other similar projects."

Setting the Example

The eventual goal is to create forward momentum and to encourage all businesses to participate in the green culture. According to the Green Building Council, offices consume 70 percent of the electricity load in the United States. They account for roughly 38 percent of all greenhouse gas emissions here and over the next 25 years, carbon dioxide emissions from those structures are projected to grow faster than any other sector, at 1.8 percent a year.

That's why the Green Building Council, in conjunction with like-minded organizations, has issued a memorandum asking building owners to make their properties carbon-neutral by 2030. Those buildings would use no energy from external power grids and could be built and operated at fair market values, it says, adding that the average building that is certified under the Council's standards uses 32 percent less energy.

Exelon's project may likely be trend setting. Compared to its previous space, the company has reduced electricity consumption by more than 43 percent and water consumption by 30 percent. It has also created a healthier and more productive work environment. From workstations, offices and conference rooms, all employees have outside views so they can benefit from natural light. In addition, air quality was improved through the use of low-emitting materials, paints, carpeting, furniture and finishes, and the installation of high-density air filters.

That efficiency initiative is all part of the company's vision to voluntarily reduce greenhouse gases by 8 percent from 2001 levels by the end of 2008. "We believe climate change is real," says Exelon's Howes. "We believe there should be federal legislation. I'd say to those who are doubters that they are now being overwhelmed with science and the evidence of global warming that we are already seeing."

An increasing number of businesses are getting greener. North Carolina-based Bank of America, for example, is cutting its energy use by at least 3 percent annually by enhancing building operations and educating employees. Since 2004, the bank says that it has saved at least $8 million. At the same time, it has a goal of reducing its own greenhouse gas emissions by 7 percent by 2008.

Xcel Energy, meantime, is spending $75 million to encourage energy conservation among its customers. Take Kaiser Permanente, which built a new $70 million medical office building and is working with Xcel to install modern transformers, heating and cooling equipment and lighting systems. The $200,000 investment is expected to yield an annual energy savings of $90,000 a year, says Kaiser.

"There is a groundswell, says Howes. "We are starting to see momentum build for energy conservation. We will see more and more renovations that incorporate green elements."

The greening of corporate America speaks volumes about the movement's credibility. It's not just about clean air and healthy living. It's also about saving money and setting the right example. Exelon has given the cause a giant thrust forward. And it's a near certainty that other mega-businesses will follow suit.

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Ken Silverstein
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