District Energy - 2006 First Quarter

replaced, as well as 7. 5 times cleaner for nitrogen oxides and 2. 1 times cleaner for carbon monoxide.

Increased cogeneration capacity will allow UNM to generate 80 percent of its electrical consumption, up from about 20 percent, at less than the cost of utility-purchased electricity.

Upgraded lighting generated annual energy savings of nearly 23 million k Wh with a reduction of nearly 4. 7 MW of electrical demand and cost savings of nearly $1.4 million per year. This also represents a reduction in peak cooling demand, and thus capacity not purchased, of 1,337 tons.

UNM also is now also paying less for electricity and gas from outside utilities. During the infrastructure project planning period, the university appeared before the New Mexico Public Regulatory Commission as a participant in several rate cases. As a result of UNM’s testimony, a special district energy system rate was created for electricity, recognizing that the university receives power directly off the local utility’s transmission lines and reduces voltage through its own substations.

A special reduced natural gas rate was

also established taking into account that natural gas suppliers and transporters can count on UNM to consume a consistent amount of natural gas month to month. UNM further lowered its natural gas costs by adopting a more strategic purchasing approach, actively analyzing the market and managing a portfolio of natural gas contracts.

These rate changes proved to be particularly timely and critical in light of the recent spike in natural gas prices. Although the price hike has painted a less rosy picture for UNM’s funding plan, limiting UNM’s ability to make payments on the bonds and possibly extending the payment period, the plan and subsequent project has still protected the university from an even more severe impact. Establishing Lobo Energy proved to be a creative move with spectacularly successful results. It may not be the right one for other campuses, however. There is no 'cookbook approach' to energy infrastructure renewal. Every university must take into consideration its unique institutional, political and regulatory circumstances in developing the plan that will best meet its needs.

As the utility upgrade wraps up, UNM is considering the future mission of the corpo-

ration. The campus could still benefit from a number of additional energy system improvements – such as further control system modifications or customer building improvements. Whatever tasks Lobo Energy may be assigned, however, it is clear that the work it has already done will enable UNM to fulfill its master plan and mission for the next 20 years.

Larry Schuster, P.E., is the utilities engineer for the University of New Mexico (UNM). With UNM for more than 25 years in various capacities, he was assigned to assist the Lobo Energy subsidiary’s chief executive officer during execution of the utility infrastructure renewal business plan. Schuster served as the project manager for all project chilled-water system improvements and as director of the utility project team responsible for day-to-day management of the entire renovation. Schuster teaches in the UNM School of Architecture and Planning. A certified energy manager and registered professional engineer, he earned bachelor and master of science degrees in mechanical engineering from UNM.

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