Feature
Story
Legacy Systems
Present Challenges,
Opportunities:
TV II saw both in Detroit
Vic Koppang, President, Detroit Thermal

hey just don’t make ‘em
like they used to” goes the
old saying – but this time
it’s not the lament of an old-timer but
rather the enthusiastic motto of those
who see opportunity in legacy district
energy systems.

It was certainly part of the complex evaluation conducted by Thermal Ventures II LP (TV II) when the Youngstown, Ohio-based company was considering taking over Detroit’s century-old steam system.

The Detroit system, one of the oldest and largest in North America, got its start as the Central Heating Company in 1903 – long before the city developed its manufacturing muscle, long before its growth into a major urban center and the auto capital of the world. As the city grew, so did the steam system. The primary boiler facility, known as the Beacon Street Plant, commissioned in 1926, is a National Historic Mechanical Engineering Landmark.

Today the system serves 144 build-
ings. It includes Beacon and two small
boiler plants as well as 39 miles of dis-
tribution system, comprising 35 miles
“T
of buried steam mains and four miles
of tunnels below the downtown streets.
The system has two operating pres-
sures – 120 psig and 45 psig. It does
not have a condensate return line.

History a Two-Edged Sword

“History is both a positive and a
negative,” said Jeffrey Bees, chief exec-
utive officer of TV II, which bought
the Detroit system from DTE Energy
(formerly Detroit Edison) in 2003. “For
example, on the positive side there’s
an infrastructure and a customer base
already in place. Equipment and infra-
structure can be studied to determine
if they offer opportunities for improv-
ing efficiency, and so can the custom-
er base.”
Parts of Detroit’s infrastructure,
such as the brick tunnels, are as struc-
turally sound now as they were more
than 100 years ago. They could not be
installed at any price today.

“Old equipment, however, may not be as efficient as more modern versions, sometimes requiring extensive modification to benefit from today’s technology. The customer base is highly diverse in size, function and finan-

cial capabilities. And protocols and procedures may have become inflexible over time,” Bees continued.

TV II’s Unique Focus

Typically, legacy district energy systems were built in the early 1900s. The low-pressure exhaust steam created by electric generation was piped to district energy customers. Over the years the utilities developed business practices – operating protocols as well as ways of interacting with employees, customers, vendors, regulators and communities – that became ‘legacy practices.’

However, in contrast to electric utilities, TV II is entirely focused on acquiring, upgrading and operating district energy systems. The company, founded in 2000, purchased and operates the Youngstown, Ohio, system. It also operates private industrial steam plants at three General Motors facilities. TV II established a Michigan-based company, Detroit Thermal LLC, to own and operate the Detroit system.