Case Studies

WATER CONSERVATION CASE STUDY

Co-op City

Overview

Water rates have been rising   consistently throughout the United States.  In New York City, for example, over the past 3 years rates have increased over $1.00 per hundred cubic feet (“HCF”) of water usage for an average annual increase of 4%.  Owners and Property Managers now have an opportunity to “stop flushing water down the drain” and to offset these price increases with the Barrett Green Smart Water Valve™, a proprietary water conservation device that saves water usage and reduces your water bill.  Typically, the owner pays for the building’s water bills, rather than passing on the costs to residents.  Without that financial incentive, residents do not concern themselves with conserving water.  Because this technology is new, building managers generally are not aware of the untapped efficiency savings potential the Barrett Green Smart Water Valve™ offers.  And, building managers generally are forced to allocate their limited resources to higher value, more visible projects.

Co-op City, located in the Bronx, New York, is the world’s largest residential condominium development.  It houses some 55,000 people in 35 high rise buildings.  To demonstrate the effectiveness of the Barrett Green Smart Water Valve™, we installed one Valve in one of Co-op City’s 33 floor “Tower” buildings, a photo of which appears above.  In fact, the water main pipe serving this building, also serves 2 identical buildings, for a total of three 33 story residential buildings.

The result from one successfully installed Barrett Green Smart Water Valve™ has been savings totaling $350,000 – since the Valve was installed in late November, 2012.  For the 3 fiscal years’ July 2012 through June 2015, water usage decreased on average about 140,000 HCF per year, and annual savings averaged approximately $140,000 per year, in each instance a savings of approximately 10%.

The best part for Co-op City was that it didn’t have to lay out one penny.  The contract was structured as a “shared savings agreement” in which Co-op City shares the savings each month with Barrett Green Management, LLC.

How Did Barrett Green Achieve These Savings?

The Barrett Green Smart Water Valve™ functions as a “check valve”, utilizing our proprietary technology to:

  1. Remove air from the water, and
  2. Better control its flow

Water – H2O – contains 10%-20% air depending on its temperature and pressure.  Eliminating air reduces the amount of water used and thus reduces your water bill.  Eliminating air and managing the flow of water has the benefit of reducing the detrimental “air hammer” effect on pipes and its sound which occurs when air gushes through a water pipe.

In a hydraulic system, which describes water coming from the water company’s (utility’s) system into a building, the Barrett Green Smart Water Valve™ functions similar to a check valve so the water only can flow in one direction.  The local water utility maintains a constant water pressure (pounds per square inch, or psi) for the incoming water entering the building.  In order for the water to continue flowing through the Valve, into the building, the water (fluid) is pressurized to the point that the pressure forces the piston, (visible with the “Y” stabilizer on the right side of photo below), which is retained by a spring (visible in the second photo below) in the Barrett Green Smart Water Valve™, to open and allow the water to pass through further “downstream”. The pressure exerted on the air in the water causes the air bubbles to be reduced in size.  Rather than continue forward, the air bubbles can float back to the storage tank, where there is space at the top for the air to escape.  The Valve is placed downstream from the meter and does not affect the utility water meter measuring capabilities.

Safe and Maintenance Free

The Barrett Smart Water Valve™ has been constructed from 100% Food Grade (level 316) stainless steel and therefore is a safe material for contact with potable water.  Based on our own proprietary design/technology and manufactured in the United States, the Barrett Green Smart Water Valve™ is machined to aircraft level tolerances for a smooth and maintenance free operation.

The Barrett Green Smart Water Valve™ was installed within the Tower Building inside the main water pipe that serves the building.  Its placement is not near the local utility’s water meter so it has no adverse effect on the utility’s meter readings.  As the photo below shows, the Valve was installed in the basement, with no negative impact to the residents’ apartments, nor the need to enter any resident apartment.

No Upfront Cost  –  Immediate Savings

The Barrett Green Smart Water Valve™ did not cost Co-op City one penny.  Barrett Green Management absorbed the cost of custom manufacturing the Valve specifically sized to fit the water pipes serving Co-op City, as well as the cost of installing the Valve inside the main water pipe.  And, Barrett Green Management installed its Valve on a RISK FREE BASIS!  A Shared Savings Agreement was structured, through which Co-op City shares the savings for an agreed upon term, after which 100% of the savings accrue to Co-op City.  As a result, Co-op City started saving money from day one.

So, allow the Barrett Green Smart Water Valve™ to plug up the holes to prevent substantial amounts of money and water from going down the drain and to SAVE YOU MONEY!

LIGHTING RETROFIT CASE STUDY

Co-op City

Challenges

In 2011, Co-op City, located in the Bronx, and the largest cooperative housing development in the world with over 15,000 units and a population of 55,000, had the opportunity to save a significant amount of money on its electric bill as well as to reduce energy usage in its “city within a city” by replacing its existing light fixtures with energy efficient lighting in its 8 garages. The cost of the project was approximately $3 million.

Co-op City’s challenge was to locate a contractor that could undertake the project without requiring any capital contribution from Co-Op City. In order to provide for the energy efficient lighting at no up-front cost to Co-op City, Green Energy Management Services, Inc. (GEM), an energy management company, structured a shared savings contract in which the savings from the energy efficiency project itself covered the cost.

The challenge to GEM, which arranged for the replacement of the 6,100 light fixtures at Co-op City’s 8 parking garages, was how it could be paid up front, instead of having to receive payment over the 10 year term of the contract. Thus, a creative financing solution was needed to fund GEM, given the shared savings arrangement and variables within the garages. The process was complex and time consuming, but by selecting Barrett Capital to handle the financing, GEM secured a commitment to provide it with up front financing.

Process & Approach

Barrett Capital developed and executed a financing plan, in line with its business model, which involved working closely with Co-op City, its excellent management team and advisors, and GEM to:

  • Verify that the energy savings the originating energy services company projected would be realized despite the uncertainties at the Co-op City garages;
  • Provide Co-op City with a meaningful financial incentive to achieve Co-op City board approval of the assignment of the contract to Barrett Capital;
  • Arrange for the appropriate legal documentation that would be approved by New York State’s Division of Housing and Community Renewal (“DHCR”); and,
  • Create a payment plan that would be simple and require minimal administration by Co-op City.

Solution

Barrett Capital devised an innovative structure to finance the Shared Savings Plan, providing funding for almost $2 million, or 65% of the $2.9 million cost of the project. The New York State Energy Research and Development Authority (NYSERDA) provided a $1 million grant to fund the other 35% of the cost. Barrett Capital entered into an Assignment, Assumption & Indemnity Agreement with GEM taking an assignment of the Co-op/GEM Energy Shared Savings Contract. Upon receipt of fully executed documents from the Co-op, Barrett Capital paid GEM its $993,000 upfront payment.

To induce Co-op City to acknowledge the assignment from GEM to Barrett Capital and consent to an agreed upon payment schedule, Barrett Capital provided a financial incentive for Co-op City. In accordance with the Assignment Agreement, all representations and warranties stayed with GEM. Barrett Capital assumed the credit risk of the repayment from the savings.

Barrett Capital’s business model calls for bringing in an independent engineer to verify the projected savings. Since Barrett Capital is being paid back from the savings, its interests are aligned with the client, Co-op City.

On its site visit, Barrett Capital’s engineer learned that there was a maintenance facility being operated in one of the garages and a radio tower being operated from another. Both generating substantial additional electricity. Despite not knowing of these variables at the time, Barrett Capital’s structure was able to deal with them to everyone’s satisfaction.

Results

Barrett Capital’s financing of the Shared Savings Plan resulted in a rare WIN-WIN-WIN.

WIN for Co-op City: A massive energy efficiency upgrade at no out-of-pocket cost, an incremental financial windfall and with substantial immediate savings on its garage energy costs on the order of $300,000 per year.

WIN for GEM: An infusion of nearly $1 million in cash, allowing the company to pursue and fund additional energy efficiency projects, as well as a validation of its business model.

WIN for the Environment: The projected energy savings, over the 10 year period, are expected to be on the order of 2,300,000 MWh which is the equivalent of taking 338,000 cars off of the road.

Barry P. Korn
Managing Director
bkorn@barrettcapital.com