The Wave – September 2015

President’s Letter
Ken Smith
The importance of leadership has been a regular theme in my president’s letter and is one of the constants in our work with District Energy St. Paul. Our board, our staff, our customers, and so many people in this community exhibit the vision, initiative, and character necessary to take on important challenges and accomplish what seems unlikely or even impossible. When I reflect on each important milestone of our company, it is inherently attached to great leaders who stepped up and made things happen through partnership, through teamwork, and through perseverance. Even the less celebrated, day-to-day efforts to provide reliable and affordable services are a product of leadership, dedication, and hard work. Each contribution helps us improve our service to our customers, create stronger civic partnerships, and advance a sustainable community energy model.

Although their work is often unheralded, our board of directors includes talented and dedicated people, who are committed to excellence. Jim Pederson has contributed 13 years of service to the District Energy board. He is retiring from the board this year. We will miss his insights, wisdom, and thoughtful guidance. Over the years, Jim and the other members of the board have offered a breadth of expertise and experience that help to guide our business to strive to be the best. This leadership has helped us build a trusted operation and business model that is emulated in communities around the world. Our boards are made up of customer-elected and city-appointed representatives. In our 32-year history, this representation has included some of the most renowned civic and business leaders and has maintained a consistent voice for our customers in the development of our business. The board has contributed to all of the great accomplishments of the organization, most recently the realignment of our business structure through the merger of District Energy and District Cooling. The board has been essential in guiding us through this important decision and preparing our organization for continued growth.

This summer we had three long-term employees retire, Steve Wachter, Paul Hazelip, and Ronda Lujan. Together they served District Energy for a total of 52 years. As I reflect on their transitions, I am reminded that on a day-to-day basis, the teams at District Energy lead our way to service excellence. From the distribution teams that work through the night to minimize the customer impact of a system expansion or repair, to the customer service staff that helps customers to optimize their systems, the dedication of these individuals directly benefits our customers every day. We have a track record of attracting team members committed to excellence and hard work. We are fortunate to have strong leadership throughout the organization. Many of these leaders contribute their intelligence and creative problem solving to making consistent improvements to our systems and services to ensure value to the community. Even as some of our talented, long-standing contributors start new chapters of their lives, we are fortunate to have individuals with great capabilities and training to step into these responsibilities.

I am proud of the hard work and dedication of the teams at District Energy. Together we have built a strong and growing system that benefits our customers and the community, while serving as an example for other cities. Next June we will have the opportunity to showcase our system and our great city to hundreds of district energy experts from around the world at the International District Energy Association conference. Saint Paul’s selection as the host city is a testament to the great district energy systems that serve communities and campuses throughout our region. We look forward to demonstrating how strong leadership can help any community to build a modern community energy system that is reliable and affordable for customers while supporting the local economy and benefiting the environment.

Wealth of Local Leadership

Saint Paul is booming. In 2014 the city issued twice as many building permits as they issued in 2009. The city’s population has reached 300,000 residents, higher than it has been since 1970. Throughout the city, but especially in downtown, there are new restaurants, more housing, expanded entertainment offerings, and construction and redevelopment everywhere you look. A transformation like this does not happen overnight or by chance. The revitalization of Saint Paul has come to fruition through years of strong leadership from investors, businesses, city government, and the community.

As a utility and local business, it is exciting to be a partner to the changes in downtown. Parallel to the growth in Saint Paul, we have expanded our system in recent years to accommodate new buildings and renovation projects. Our services support Saint Paul growth by offering downtown developers with a real choice in energy solutions that they would not get in most other cities. Saint Paul businesses and developers can rest assured that our services are reliable, easy to maintain, reduce mechanical space requirements, and keep energy dollars in the local economy. As we expand our service network, customers benefit by gains in economic and operational efficiencies, as well as opportunities to add system redundancies.

As we have seen in our industry, leadership is essential to large-scale growth, and leaders must rely on networks of support. As a community, we are very fortunate to have a vast network of leaders who are invested in the vitality of Saint Paul. There are many champions that have helped to encourage growth and reached out to nudge specific projects forward. Many of our customers and business partners have been instrumental to the recent developments. We are grateful to the business leaders in Fortune 500 companies and small businesses that call Saint Paul home. The sustained commitments made by these organizations not only shape downtown through their employees and philanthropic generosity, but leaders have helped to advocate for projects that support growth and development.

Additionally, leaders in all levels of local government and organizations like the Saint Paul Port Authority, Saint Paul Riverfront Corporation, Greater Saint Paul BOMA, Saint Paul Area Chamber of Commerce, Metropolitan Council, and Greater MSP have encouraged growth through collaboration, deliberate investments, and thoughtful planning. Their support has helped to spur significant growth while providing a framework that has helped the city to grow while keeping its identity.

We will continue to do our part to support businesses, leaders, and individuals that are committed to Saint Paul. This is a great city to call home, and we are proud to be an integral part of everyday life here.

UNEP Features Saint Paul as Champion City and District Energy as Mentor

Courtesy of International District Energy Association
Stakeholders commit to UNEP district energy initiatives. Photo courtesy of International District Energy Association

Cities account for between 60 % – 70% of global energy consumption. The United Nations Environment Programme (UNEP) has identified district energy technology as a key solution for cities to improve energy efficiency, increase energy access, reduce greenhouse gas emissions and air pollution, increase local and renewable energy, and grow the green economy. In their new report District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy, UNEP suggests that developing modern district systems is the least cost and most efficient path to meet carbon reduction goals.

The UNEP report aims to provide a clear argument for scaling-up district energy technology around the world as well as practical guidelines for system development. In addition to 45 case studies, the report addresses budgeting, business models, energy standards, and energy planning while featuring specific ways that decision makers can set the foundation for system development. While the report will be useful to any city, the UNEP initiative is geared toward cities in developing countries and emerging economies. Modern district energy technology has proven that it can provide these markets with affordable, reliable, and renewable energy.

District Energy St. Paul is honored to be one of only three U.S. systems featured in the 45 report case studies. Saint Paul joins Arlington County and Seattle as the U.S. municipalities that rank among the champion cities for district energy world-wide. Beyond the report, District Energy is committed to serving as a system mentor. Through UNEP coordination, we will be matched with a city that is building or expanding a district energy system to help them through the process and to share our lessons learned, technical assistance, and best practices. At the International District Energy Association conference in June, District Energy joined other systems, governments, and corporate stakeholders to demonstrate our commitment to the accelerator initiatives.

District Cooling will Merge with District Energy

At the June Board meetings, the District Energy and District Cooling Boards of Directors unanimously approved the merger of the two companies, effective October 1, 2015. When District Energy decided to start providing district cooling services over 20 years ago, a separate non-profit company was formed in District Cooling St. Paul. This corporate separation was established to protect District Energy and its heating customers in the event that the new cooling service was not successful. Today District Cooling provides service to 110 customers totaling over 19 million square feet in downtown Saint Paul and has a Standard & Poor A- Stable rating, clearly establishing its successful operating model and viability.

Our district cooling services will continue to provide customers with year-round chilled water service for air conditioning offices, homes, laboratories, and computer server storage. By aggregating the cooling needs of our customers, we can offer an efficient and flexible energy alternative to traditional on-site systems. Our approach also keeps rates stable through the use of off-peak electricity, thermal storage, and by working with customers to educate them on how to lower their peak cooling demand. District cooling technology significantly reduces the use of ozone-depleting refrigerants and lowers potable water usage at the building. District Cooling has exceeded 99.99% reliability since service began, and we will continue to work to make our services reliable and efficient under the District Energy brand.

Ask the Engineer – Biological Care of Chilled Loops

This is the third article in the District Energy series on water quality and will focus on treating your building’s hydronic cooling loop for biological contaminants. Generally, the treatment of open cooling water systems gets much of the attention of the building owner and chemical consultants. While it is appropriate to give attention to open systems, often the chilled water systems get overlooked or receive minimal attention. Think of these systems as the heart (open system) and arteries (closed system), and you will see that they are equally important and dependent upon each other.

The good thing about closed chilled water loops is that they are closed. The bad thing about closed chilled water loops is that they are closed. This means that anything added to the system either intentionally or unintentionally stays in the system. Things that are intentionally added to the system include: biocides, inhibitors, and glycol. Glycol can be added either as part of a coil lay-up program or as a treatment plan. Things that are unintentionally added to the system include: corrosion by-products, glycol from poor rinsing of laid up coils, mill oils from new piping installation, chlorides and sulfates from city water, dirt and debris from system maintenance, and possibly others.

Bacteria require food and water to live. Food is in the form of organics or inorganics. Because bacteria grow quickly under ideal conditions and then die when the conditions are no longer ideal, dead bacteria can help to feed young bacteria. Bacteria are troublesome because they can cause:

  • Poor heat exchange capabilities.
  • Localized high corrosion rates.
  • Depressed pH and high general corrosion rates.
  • Plugging of small openings.

The dollar value of the destruction caused by microbes in the industry is staggering. Accounting for mechanical work and interruptions in business easily make this a significant and relatively silent problem.

There is no single solution to treat for microbes in closed loops. It generally involves a number of steps that need to be done to ensure that these systems are being protected. These steps include:

  • Remove any dead legs (areas with no flow) in the system as they are areas that are uncontrolled and generally will work as a site to constantly inoculate the system.
  • Pre-operationally clean and passivate new systems to remove mill oils and general debris, which helps to clean out exiting corrosion and prevents future corrosion.
  • Flush new and systems until the water is clean.
  • Treat with a suitable corrosion inhibitor to control corrosion rates.
  • Install a side stream filtration that is capable of constantly filtering 1-2% of the flow. Generally filters should start with 1-5 micron capability and be managed down to .5 micron as the larger particles are removed. Filtration cleaning takes a long time, but is required to remove food, dead bacteria, and corrosion byproducts.
  • Monitor aerobic bacteria levels using paddle testers and anaerobic bacteria using a sulfate reducing bacteria test kit on a routine basis. (Samples can also be sent to a lab for analysis.) If sulfate reducing bacteria are found and/or the aerobic populations exceed 1,000 cfu/ml, then it is time to treat the system.

A system will require less treatment for microbes if the operators can prevent foulants or remove foulants through filtration. However, if a system does need to be treated, it can be treated with either oxidizing biocides or non-oxidizing biocides. Some of the oxidizing chemistries that can be used to treat bacteria include: chlorine dioxide, hydrogen peroxide, bromine, chlorine, and ozone. Some of the non-oxidizing biocides that can be used include: isothiazolone, glutaraldehyde, and quaternary amines. All biocides have instructions for use on the labels that dictate dosing that need to be followed. The drawback of the oxidizing biocides is that they can accelerate corrosion. The drawback of the non-oxidizing biocides is that they break down to provide food for future generations of microbes. A qualified chemical consultant can help to administer the proper biocide program.

Despite all of the challenges that biologicals can cause, properly managed systems will last longer and save money and time. Now that’s good news!

If you have questions about your building’s water treatment program, please contact the customer service team.

Note from your District Energy Customer Service Team: We work with many different water quality and treatment experts to help keep our distribution system and your building systems operating effectively. This month’s article was developed in collaboration with one of our water treatment partners, ChemTreat, Inc. Thank you to Neil Swenson for helping with this article.

Article 1: Water Treatment for Your Cooling Loop

Article 2: Water Treatment for Your Heating System

IDEA Conference Participation and Looking Toward 2016

In June, District Energy staff joined energy experts from around the world at the International District Energy Association’s (IDEA) annual conference in Boston, MA. The conference was the largest in the organization’s history with more than 950 attendees representing 21 countries, 39 U.S. states, and 5 Canadian provinces. The robust conference offerings featured over 50 expert panels and 100 speakers. Members of our team made presentations and moderated discussions on topics ranging from talent development and EcoDistricts to new utility business models and energy planning for brownfield redevelopment. District Energy leaders also participated in special workshops for the UNEP initiatives and microgrid planning. The conference marked the completion of Ken Smith’s term as Chair of IDEA. Smith’s leadership role with IDEA has helped our organization gain greater access to industry best practices, global trends, and provided us an opportunity to shape the direction of future community energy systems. At the final conference event, Smith was honored by the association for his dedication and leadership to the organization.

Next year the conference will be hosted at the Saint Paul RiverCentre. Our region is particularly well-positioned to showcase the breadth of district energy technology from energy planning projects to successful systems that have been online for decades. Within the Twin Cities’ Interstate 494 and Interstate 694 loop, there are 24 district energy systems. The largest of these are District Energy St. Paul and the two steam systems in Minneapolis: NRG Thermal and the University of Minnesota (which also uses district energy on its Saint Paul campus). In addition to these existing systems, there are several redevelopment projects in the area that are considering district energy or microgrid technology in their energy planning. With the range of technology and expertise in the area, Saint Paul will be a great host city for this event. District Energy is well known by many people in the industry, and our experts are often asked to assist other municipalities and systems that are looking to emulate our model and best practices. The conference will be a great opportunity to reconnect with familiar industry cohorts and share the advancements we have made in recent years, as well as introducing our system to a broader, international audience of energy experts and community energy planners.

Gerry Gubash Leads Distribution Services

GubashJust in time for the busy summer maintenance season, Gerry Gubash assumed the role of Distribution Services Manager in May as Steve Wachter prepared for his retirement in June. Gubash is a specialist in leak detection technology and system repairs. He has been instrumental in advancing District Energy’s leak notification system, which can detect moisture in service pipe insulation. Early detection allows the distribution team to troubleshoot issues and schedule repairs to avoid unplanned maintenance work that could interfere with customer’s service.

In addition to leak detection, Gubash has served as project manager on repair jobs, field constructed high-density polyethylene pipe jackets, and coordinated temporary mobile boilers and remote chillers to maintain service during repairs. Prior to joining District Energy, he worked as a building engineer with responsibility to heating, air conditioning, and electrical services, so he has an in-depth understanding of how energy is used within buildings and the importance of the interface with District Energy.

The distribution team has been especially busy this year with 17 projects that include maintenance and repair, as well as connecting new customer buildings to the system. Gubash is looking forward to learning more about system development and various aspects of pipe construction while maintaining the high standards of quality that Wachter put in place. Gubash said, “I am grateful to be able to supervise a great team that does really good work for our system and the community.” Gubash is looking forward to his team’s contribution to the growth of our system in Saint Paul as well as exploring the ways that they can assist with our organization’s efforts to help systems develop in other communities.

Wachter led the distribution team for 13 years before retirement. Paul Hazelip also retired in June 2015, having served the distribution team for 30 years. Hazelip played a role in the original steam to hot water transition and the introduction of district cooling. Gubash worked alongside both veterans for 9 years, as the team worked through the major infrastructure upgrades associated with the light rail utility relocation. Together they have set high standards for the District Energy distribution system, which Gubash is now responsible for maintaining and instituting his own best practices to keep our services reliable.

James Pederson’s 13 Years of Board Service

PedersonJames Pederson will be leaving the District Energy Board of Directors after 13 years of service. Pederson joined the board in 1987, just four years after District Energy started hot water service. He left the board in 1993, and then he rejoined in March 2008 as a mayoral appointee by the City of Saint Paul.

Pederson worked in various capacities for the State of Minnesota and the Minnesota Historical Society for more than 31 years, serving in the Governor’s office and as the Deputy Commissioner of Administration. Pederson was working at the state in the 1970s when they were preparing to deal with the ramifications of the energy crisis. He feels that district energy technology was a great solution for Saint Paul, and that today it can help communities meet their energy needs in a manner that is efficient and reliable. Pederson shared, “Establishing the district energy system was a great step for Saint Paul. For decades the system has provided dependable energy for the city while leading the way for other communities as they work to reach their goals of energy security and conservation.”

Pederson’s long-term service to the board has provided valuable institutional memory for the organization. Most recently serving as vice chair, Pederson’s extensive leadership experience gained as the former Assistant Commissioner in the State of Minnesota’s Department of Administration helped guide District Energy and District Cooling as it considered organizational changes for the benefit of its customers.

Pederson is retired from the state and serves as a consultant to the Minnesota Historical Society, specializing in legislative and government relations. In his leisure time, Pederson likes to read, search for antiques (especially antique cars), research genealogy, and visit the Wisconsin family farm settled by his Norwegian ancestors in the 1870s.

District Energy President Ken Smith said, “Jim is a thoughtful individual with wisdom and practical insights gained from years of leadership experiences that have helped guide our organization through his tenure. His contributions to our company, our customers, and to me personally are immeasurable.”

Saint Paul EcoDistrict

Saint Paul EcoDistrictKare 11 featured the development of the Saint Paul EcoDistrict.