Carnies, Circus Folk – Smell Like Cabbage

25 01 2011

Last week I attended the Association of Energy Services Professionals (AESP) national conference in Orlando at the Disney World Hilton.  Thankfully, it wasn’t actually in the park – hey, I don’t know man.  I would otherwise not go within 2-3 states of a crowded black hole for cash like that.

The conference expo hall “infrastructure”, including booth structure consisting of pipe framing and curtain dividers, chairs, tables, power and other things is outsourced to a company that travels from venue to venue like carnies.  For a couple thousand dollars or whatever, the exhibit space is all you get.  A $30 table rents for $275 for two days – that is correct.  A $30 table for the price you could rent a car for an entire week!  A $10 chair rented for $90 for two days.  Power to run our 30 Watt LED display lights for a couple days: $95.  Ninety five dollars for not even one kWh!  I wonder if the carnies reimburse the hotel for energy used?

Once we unpacked our stuff and set it up in the exhibit hall, a few shards of paper were scattered on the gaudy carpet of the conference center in our booth space.  Having remembered a vacuum cleaner going past a while before to clean up a neighboring booth, I asked the Hilton folks for a vacuum, if it wouldn’t be too much trouble – like if one is in the area anyway, I would like to use it for a minute.  Soon after, a woman with one of those IDs on a lanyard like those of the stage crew at a concert use, stops by.  “You asked for a vacuum?”  “Yes.  If there is one nearby and it isn’t much trouble it would be great to use it for a minute.”  “There is a charge for using a vacuum cleaner.”  “WHAT?”  Good God.  I said I would pick up the dozen shards with my fingers or just spit on it and grind it into the carpet.

When it comes to lodging, more is less.  Internet access in “expensive” hotels costs money.  No “free” coffee or breakfast.  Everything costs extra, right down to the $7 liter of Evian next to the TV.

None of this was new to me, except the vacuum thing was a bit of a “you’ve got to be kidding me” moment.

When you stay at a Holiday Inn Express, do you think the biscuits, gravy, cinnamon rolls, coffee and juice are free out of the goodness of their hearts?  HELL NO!  I happen to like Holiday Inn Express over Hilton for normal business stays because they have the “free” breakfast ready instantly in the morning and I don’t have to wait for anything.  Remember, Raisin Bran and Cool Milk and I’m Fine.

These exploits remind me of the energy efficiency and engineering business.  People who think they are getting free services from their contractors are naïve fools.  They either don’t get the “services” at all; or they get the services that completely favor the contractor (themselves), and one way or another you pay for everything they do.  They may say, “It’s absolutely free.  We don’t charge anything for our time.”  BULL.  If it isn’t charged directly, it’s built into their overhead cost which is built into their material and labor costs.

As I discussed the cost of $35 tables and $10 chairs above, you may have been thinking, “You idiot.  Why don’t you just get your own and ship it or go out and buy your own locally.”  Because there is a lot of cost and hassle built into that.  Our time is worth a lot of money.  I can chase around town to save $250 while it costs me $450 in my time to do so.  What about little issues like arriving at midnight the night before the start of the conference?  Take the day off so I can find cheap furniture?  Not.  Shipping isn’t cheap either.  Shipping our display, which is compact, but a bit heavy, runs $200.  And will the hotel just hold it for you?  Sure, for a tidy fee of $82.50.  The carnies have this all figured out.  They know exactly how much it costs to buy, ship, or go buy your own stuff locally for the show.  They price their crap just below that, so a $10 chair costs $90 to rent for a couple days.

The carnie business model is used, typically ruthlessly by “design builders”.  There is design, bid, build which may take a little extra time, but every step is competitive (e.g., “bid”) keeping cost down and quality up.  And there is design build, where you essentially agree to a floor plan, sign a blank check and put a blindfold on for a few months.  I’m no expert on the dastardly design build business, but the sales pitch goes something like this: you don’t have to waste money on expensive architects and engineers and then hassle with contractors.  You don’t have to wait for competitive bids.  Just sign this check.  We’ll fill in the numbers and take care of everything for you.  It will be wonderful, fast, and easy.  Translation: once you sign on the dotted line, the carnies will move in and provide you with the cheapest crap imaginable.  You will be a captive, ignorant sucker and we will take what we can get and you will be boxed in with no one looking out for your interests.  Everything is extra.  A LOT extra.

You get screwed for what you don’t pay for.

Design build is polluting the country with cheap and crappy buildings – energy hogs that are going to be crumbling in 30 years.  Austin Powers, as you may recall, fears only two things.  Nuclear war and… carnies – circus folk, nomads, smell like cabbage, small hands.

Tidbits

The ladies at AESP know how to put on a smooth, high-quality conference, and they deliver.  It’s a fast growing organization for a reason.  Kudos to a fine organization and event.

A couple weeks ago in Goodfellas Take California I explained, or attempted to explain at least, how mandating CFLs was bad policy.  As it turns out, the impacts are far below than anticipated.  In the 2006-2008 program years, PG&E (Pacific Gas and Electric) aimed, er I mean shot for, er I mean strived for incentivizing the purchase of 53 million compact fluorescent lamps (CFLs).  At nearly a $2 subsidy per lamp, the program did not meet participation targets, er I mean goals.  Not only that, evaluators concluded savings due to the program were 73% lower than anticipated.  Whoa!  That is God-awful.  We just finished a bunch of residential verification work all over California for comprehensive programs as well.  Per my involvement with that project, I don’t think the utilities will be singing a joyful song once they see those results either.

BTW, per the article, lighting is responsible for 8% of greenhouse gases.  California may have 2% of the world’s lighting (a SWAG) and residential lighting may be about 15% of the total.  Switching this lighting to CFLs would reduce GHG emissions by maybe 0.008% at the very most.  It’s probably closer to half that.  I feel cold already just thinking about it.

In a recent Milwaukee Journal Sentinel piece, Joel Rogers, head of the Center on Wisconsin Strategy and a leader in the national Emerald Cities initiative, states, “The first major barrier [to energy savings] is that most people don’t know much about what they can save.”  Hmmm.  Sounds an awful lot like my rant, Horse and Buggy EE Programs, where I said the powers in WI, in their infinite wisdom declared the feasibility study, the answer to Mr. Rogers’ “first major barrier” problem is actually not a problem.  The solution to Mr. Rogers’ “first major barrier” was declared a waste of money.  Mr. Rogers, please see your “Energy Advisor” with Focus on Energy, but wear a helmet.  The brick wall is hard, and stout.

written by Jeffrey L. Ihnen, P.E., LEED AP

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Green Jacket, Cigar, Gold Rings, and Disneyland

18 01 2011

I attended the Midwest Energy Efficiency Alliance last week and it was an interesting environment, to say the least.  This was the 4th or 5th MEEA conference I have attended. 

Behavioral stuff is an up and coming topic/issue in the EE industry.  I am planning to do a rant that to save energy, people have to give a crap.  I just need something to push me over the edge.  After all, just about all lasting energy efficiency requires behavioral changes.  Only inanimate, stationary, non-energy consuming stuff, e.g., insulation, doesn’t require behavior change.  Everything else has a behavioral component for maintenance, avoiding rebound and things like that.

What was probably most interesting to me was the political environment addressed by speakers at the conference.  For whatever reason, MEEA likes to attract people from Washington DC to discuss current events.  Essentially, people from the Department of Energy, Alliance to Save Energy, and Center for American Progress, to name a few, are on the defensive with the congressional wipeout last fall.  The theme I absorbed was one of playing defense and riding out this storm.  The mood for some was as though their dog had just left them and passed on to k9 heaven. 

One speaker was afraid of the jobs that were going to be lost but also threw wild numbers around – like the energy efficiency portion of the stimulus produced $50 billion in economic activity and that the regulation put in place and on auto pilot will produce billions of baskets of bread from the heavens in the next couple years. 

Energy efficiency is not like giving a child an immunization.  I’m a member of Rotary International and one of Rotary’s missions is to end polio worldwide.  We were down to just a few very poor and politically repressed countries like Afghanistan and Sudan, but like anything, completely eliminating something is very difficult.  Anyway, I’ve seen many photos of children bawling their eyes out as volunteers dripped immunization in their mouth.  This may seem unpleasant to the tikes but it is obviously in their favor and has a practically infinite benefit/cost ratio. 

Conversely, we can’t ram energy efficiency down peoples’ throats.  How many times do I have to say it?  The price of ramming things down American’s throats: 63 house seats, 6 senate seats, 5 net governorships with a near sweep in the Midwest, and a tidal wave of state house flips.  Here’s how regulations work: increase the cost of doing business and businesses move out of the state or overseas and then they get blasted for being Benedict Arnolds by the very folks who impose the regulations. 

Like light bulbs I discussed last week, energy efficiency is gathering really positive momentum, not because of top down regulation, but because it’s good for business.  See Save Energy – Get Out of Jail where Wal-Mart used “green” to get thousands of critics off its back.  They in turn are requiring energy efficiency standards for their suppliers.  I just red about Holcim cement getting ENERGY STAR® ratings on five of their plants.  I can’t speak with certainty but I don’t think they are taking the time and expense to get ENERGY STAR to pump up their four-wheel-driven employees.  They are obviously doing it for marketing.

And the DOE person was concerned about the jobs that will be lost once the stimulus is gone.  What jobs?  I’ve never lived through such a bizarre two years in my life and I’ve been in business for 20 years – eewe, old codger, I am.  It’s been crazy.  Talk about modifying behavior.  Millions of people purchasing vehicles a few months before they otherwise would, leaving in its wake a predictable buying vacuum – how many jobs did that create?  I don’t know, but I just read that Ford is planning to bring on 7,000 workers about 17 months after the cash for clunkers fiasco.  The $8,000 first-time home buyer credit – same thing.  The housing market is still searching for a bottom.  Just let it bomb and let’s get on with the recovery.  With regard to EE, probably hundreds of millions of dollars have been spent pursuing federal grants.  Enormous efforts have been expended trying to get free money.  This, my friends, is not stimulative.  It’s fighting over other people’s money to be repaid sometime in the future by said people.  This too as with my rant last week was a bipartisan bad idea started by Bush. 

Meanwhile, our industry is booming but the DOE speaker doesn’t know this because she lives in the beltway bubble.  The downturn only hit our new construction and LEED services.  Our other EE services have more than made up for it and we have four engineering spots to fill but we can’t find qualified people.  How bizarre is this?!  I think I mentioned we had an outstanding candidate we spent no time giving an offer to but she already had two other offers and took one closer to the spouse’s job.  Our usual evaluation teams have had to sit out requests for proposals because some couldn’t handle the work they already had in the tank.  We’re passing on RFPs as well.  So jeezo woman, when the stimulus goes away we’ll still be working hard to find people – as will be many others in this industry.

Back to the MEEA conference:  After a series of “Oh woe is me” talks, one guy in the crowd walked up to the mic to make a suggestion.  Rather than duking it out over regulation and climate change policy, why don’t we focus on the irrefutable common benefits that everyone can buy into – that EE is cost effective and is good for business.  Give that man a standing O, a green jacket, cigar, bottle of milk, gold rings, a trophy and a trip to Disneyland.  THIS is what we ought to be doing, not battling it out over something people rank 19th out of the most critical issues of the day and something half the population opposes. 

Tidbits

Speaking of jobs… Note to wonks trying to “create” or “focus on” jobs:  People invest and are in business to make money; period.  They are not in business to hire people.  People are hired as necessary to make more money.  Think about that.  If the bureaucrats want more jobs, let people and companies make more money. 

And speaking of sole purpose of business is making money…  In New Years Collage I chronicled a three way fight The Wall Street Journal, several utility CEOs and the EPA were having.  Among the CEOs cheering the EPA’s increase in emissions regulation was Exelon Corporation’s John Rowe.  I was eating lunch at MEEA next to a long-time Chicagoan familiar with Mr. Rowe’s strategy for Exelon (parent of ComEd, which serves Chicago).  The gentleman said Mr. Rowe sold off all of Exelon’s coal generation, leaving it with only nuclear plants.  He said the nuclear plants had among the highest operating costs in the country, which left Exelon with a high operating cost, which had to be made up by higher rates.  The gentleman explained how Mr. Rowe brought on a former Naval Nuclear engineer (Yeah!  Go Navy!) to improve the “efficiency” of the nuclear fleet.  And so he turned them around overnight.  As a result Exelon has virtually no coal generation, very efficient nuclear plants, and the highest return on capital of any utility in the business.  As I mentioned above and in several other rants, CEOs report to shareholders.  Shareholders rule.  Profit is king.  I have no problem with any of this except, I think lobbying for government to regulate a competitive advantage for yourself is not something I would do.  Preparing for and reacting to policy, good or bad policy, is fine, and indeed smart business to me.  Otherwise you might find yourself on a street corner with a tin cup. 

BTW, this was not a wild eyed ideologue I was enjoying lunch with, but I did check the facts and what he told me was pretty well right in line with an article by Forbes magazine

written by Jeffrey L. Ihnen, P.E., LEED AP





Goodfellas Take California

11 01 2011

As I discussed in The Delectable Light Bulb back in October, I think it is bad policy to force things onto people, or similarly banning a product that is essentially harmless.  Ratcheting up the minimum energy efficiency ratio, perhaps better known as the EER or SEER of air conditioning units is one thing.  The deliverable (cold air) is the same.  Not so with compact fluorescent light bulbs and incandescent bulbs.

The do-gooders of California lead by the Governator are “leading the nation” with the ban on incandescent light bulbs, starting this year.  You can say it isn’t a ban like a hurricane isn’t a tornado – what’s the difference?  They both can flatten whole cities.

California is a great state with unbelievable resources and diversity, but they just keep imposing self-inflicted head shots on themselves.  Talk to just about any business owner and many citizens and you will hear the tax and regulatory burdens are absolutely crushing.

My grandma helped manufacture commercial jetliners at McDonnell Douglas in Long Beach into the 1970s at least.  Commercial airliners are no longer manufactured in California.  Other manufacturing has been fleeing as well.  Semiconductors, which replaced aerospace is being chased out of the state but don’t take my word for it.  See what T.J. Rodgers and Paul Otellini, CEOs of Cypress Semiconductor, and Intel, respectively, have to say.   Essentially, California is becoming a place to develop ideas, products, and services into the embryonic or maybe infant stages and then full scale production or manufacturing is exported out of the state or country.

What does this have to do with the banning of the incandescent light bulb?  It’s all tied together with top down in-your-face regulation.  California is also single-handedly saving us from carbon dioxide with its AB32 carbon regulation, which the state had a chance to suspend in November, but it did not.  Over the years, Texas has been more than welcoming California’s businesses (and of course Texas is the first to come under assault by the EPA for CO2).  California has been losing 3,200 residents, net per week while Texas has been gaining 1,200 residents net per week; from residents moving in and out of other states.  This is sure to continue with a retread governor who first took the helm back when my grandma was retiring from McDonnell Douglas.  What an irony.  BTW, it’s been a bipartisan wrecking ball over the years.  These latest I-know-better-than-you graces were championed by the Governator, who just proclaimed on television that he is proud of his accomplishments.  Huh?  What?  The state fisc is a complete disaster.  Your approval rating was just a bit higher than my shoe size.

California: Pot, ok.  Incandescent light bulb, you’re under arrest.  LOL

Meanwhile, UPI,  which I thought was long ago dead, reports that per-capita energy use in California has been flat for the past 32 years.  Ironically once again, this is the period since my grandma was retiring, while the rest of the country has seen an increase of 40%.  Well heeeyah!  Manufacturing stuff takes a lot of energy and it’s been fleeing CA for the past 35 years.  The 40% gain over 32 years by the way is a whopping 1.01% per year.  The incredible irony is as T.J. Rogers from Cypress Semiconductor noted above says, 4,000 of their jobs for manufacturing solar cells have been established in the Philippines, NOT California, where they are based and I’m sure many cells will be imported by mandated CA renewable energy standards.  It would otherwise be impossible to make this stuff up!

Ok, enough lamenting over one of my favorite states and one that I really want to see pull out of its nosedive.  The Mercury News article says the incandescent light bulb and equivalent halogen bulb cost the same, while the CFL is more than double these at about $5.50 apiece, at Lowes.  I haven’t a clue where they got these prices (within Lowes).  At amazon.com where I shop all the time, you can get two dozen 100W Sylvania incandescent bulbs for $18.  A six pack of equivalent CFLs goes for $14.  A dozen equivalent halogen bulbs go for $35.

We have to have incandescent bulbs at this point for instant on/off applications like refrigerators, freezers, closets, pantries, and even bathrooms.  Otherwise it takes a minute for a CFL to come up to brightness and they get left on.  And the colder the environment (outdoors, freezers) the worse they perform.

So the stupidity of these options may include:

  • 75W incandescent for 67 cent purchase cost operating for maybe a dozen hours per year
  • 52W halogen for $3, same hours
  • 23W CFL operating a several hundred hours

I can see it now.  Goodfellas II.  Robert De Niro and Ray Liotta with incandescent bulb smuggling rings into LAX and SFO, interstate highways 5, 8, 10, 15, 40, and 80, Union Pacific, and major ports in San Diego, Long Beach, and San Francisco.  Cases of bulbs will be peddled in back alleys, warehouses and mob-owned Italian restaurants and delis.  The union bosses will be on the dole and threaten government worker strikes if anyone messes with the mob, or they just get pistol whipped, chopped up and composted for the mob’s organic fruit, nut, and vegetable operations in the San Joaquin valley.

Why don’t we need a mandate?  Because CFLs have made tremendous gains in the market in recent years because of massive competition and dropping prices in a maturing market.  As I said in The Delectable Light Bulb, prices of CFLs have dropped from $15 to barely $2 apiece in the past 10-15 years.  Moreover, if you think, “ah who cares – there’s no harm in this”.  Just wait till they come gunning for your vices to save you from yourself: popcorn at the movies, lawnmowers, cars, soda, booze, cheetos, nachos, oreos, big 10 burgers, ice cream, ramen noodles, deep fried candy bars, cheese curds, table salt, plastic in any form, bullets, leaving your pet at home alone, soap, shampoo, razors, deodorant, fluoride, pharmaceuticals, microwave ovens, and watering your lawn.

My family other than me includes typical energy users with little if any passion for conserving energy unless benefits are substantial.  My mother has CFLs in nearly all of her home fixtures that will take them.  She uses LED Christmas lights because she thinks they’re the greatest thing since parallel strings of lights.  Why?  Because she likes how they look.  My brothers, who have never owned anything but gas guzzlers use CFLs almost exclusively in their farming operations – dozens of dozens of CFLs from barns and the shop with those 80W or whatever whompers about the size of a five gallon bucket.  Why?  Because they last forever compared to incandescent.

There is going to be significant rebound with the incandescent ban as well.  Since CFLs take a minute to come to full brightness, they are going to be left on for hours rather than a minute or two for an incandescent in many applications.  CFLs are sure to be burn more hours too because, hey, they use no energy right?  Should I buy a $3 halogen light that turns on/off instantly but uses 3x the energy as a CFL that costs $2 and just leave that burn?  I’ll probably take the halogen because I’m hard wired to turn lights off asap, pun intended.

written by Jeffrey L. Ihnen, P.E., LEED AP





Porcupine or Super Bowl, I Doubt It

4 01 2011

Although it’s a bit like the chicken and egg, my most important task is recruiting and retaining top talent.  We have a machine in place to land top talent from college campuses.  I’m quite convinced of that.  But with the sort of growth we are undergoing, we also need to recruit staff, primarily engineers at this point, with substantial experience and expertise in energy-using systems.  This would be easy if there were engineers in the market with 5-10 years experience like guys we have in that range.  It isn’t the case.

I work extensively with a recruiter and I provide constant feedback on candidates she forwards to help her better understand what we are looking for.  I’ve also written rambling explanations of what we are looking for.  Sometimes I get concerned that she thinks we are impossible to satisfy.  Well, we are almost impossible to satisfy.

First, a mini rant on recruiters.  I’ve been told by probably three recruiters that they, unlike their competition, will thoroughly vet candidates, ensure they meet our every qualification and then after a few weeks they will present a miracle list of 4-5 candidates all of whom we would just love to have on staff.  They would be so good, we might take two – even if we only need one and then we would be crying because we’d have to turn the other three down.  Fuggedabahdit!  The recruiter’s selling point is that they are supposed to save me time by not having to wade through a few dozen candidates.  Bull.  All this miracle recruiting service does is delay the process because the dream team they present to me has no more usable talent on average than 50 people a neophyte recruiter fresh out of college could find for us.  Give me the 50.

Back to my recruiting exploits; last week I was writing up a two column table for our recruiter, with one column describing what we want and the other what we want to avoid.  In the “don’t bother” column I essentially concluded we don’t want anyone from the competition, which generally speaking is where one should first look.  I’m talking about competition in the energy efficiency program business.

Why is this?  Quite frankly, because the engineering on average in this industry is poor, but it is also poor to a large extent in the systems design industry.  On the other hand, at least in the design industry, things have to be made to somehow work.  They may work like crap and waste energy up the wazoo but at least there is a required problem “solving” element.  In the EE sector, engineers can operate in a parallel universe their entire career – which brings to mind the myth of experience, a topic of another rant.

How do I know the engineering in the EE industry is poor?  Because we do a lot of program evaluation across the country, from east coast to great lakes to the west coast and beyond  – close to 20 utilities in about a dozen states.  Even stuff that a sociologist should be able to pull off is screwed up – like verifying a variable freq drive has auto controls installed, or knowing the difference between a heat recovery wheel for fresh air and a heat recovery wheel for dehumidification unit installed (unit is a god-awful pick for a northern climate anyway – design engineer should be fined, maybe spend a couple nights in jail too).  The latter resulted in a massive incentive for gas savings in a new construction program.  Uh, ouch!

So what sort of experienced people are we looking for?  Smart engineers with high GPAs but not too much experience; generally engineers who understand how systems work, how they use energy, and how they should be controlled – really understand it.  In general, best candidates come from smaller firms where they have interaction with the guy at the top and mentoring by people who know what they are doing.  On the flip side, competition sets up offices in states where they start running programs and they hire “experienced” engineers to work in those branch offices.  All I’ll say is it’s not worth looking at these candidates.  It’s probably as hard as finding a porcupine in my woods – I did experience a real live (and real big!) porcupine in the wild here in cheesehead land so although not impossible I’m not sure whether I’ll see another one or see the ViQueenies win a super bowl in my lifetime.

Why not too experienced?  Because engineers are either good or crappy and if they are good, they care about what their clients think and after being taken to the woodshed a few times for things the client doesn’t like they become calloused cynical curmudgeons unwilling to bend or change.  They play it safe.  This is typically not conducive to saving energy.  Let me know if you need an explanation as to why experienced but crappy engineers are no good.

To be sure, there are definitely excellent engineers in the industry.  We work for some of them as subs.  Others have reviewed our work for program QC and they are very good.  After throwing stones in my glass house I must break a few windows.  Admittedly, we’ve gotten comments back from outside engineering firms that make me think the guy on the other end must think we’re idiots.  However, rather than whining, crying, and denying, we get the things resolved and take long term corrective action.

written by Jeffrey L. Ihnen, P.E., LEED AP