Designed for maximum energy cost savings, system expected to deliver 86% of 300,000-square foot building's total electrical power requirement
WAITSFIELD, Vt., Jun 17, 2004 /PRNewswire-FirstCall via COMTEX/ -- SHM Partners has
contracted with Northern Power Systems, a subsidiary of Distributed Energy
Systems Corp. (Nasdaq: DESC) for the engineering, construction and
installation of a custom designed, on-site combined heat and power (CHP)
system to be located at 550 North Brand Boulevard in Glendale, California. The
$1.9 million turnkey system is expected to produce 86% of the total
electricity currently used at the 300,000-square foot facility, which is one
of the premier, Class A commercial office buildings in this Los Angeles
suburb.
At the heart of the new CHP system are two Waukesha 375 kW natural
gas-fired engine generator sets with fully integrated heat recovery systems.
Operating in parallel with the local utility electric grid, the generators
will supply the building's base electrical load on a 24/7 basis. Heat from
the engines and exhaust systems will be used to produce hot water that will
drive a 240-ton absorption chiller connected to the current chilled water loop
within the building. Northern's proprietary microprocessor-based power
electronics and supervisory control system will operate the system to maximize
energy efficiency and cost savings. The system is expected to reduce the
facility's annual energy costs by up to 50% when it is commissioned in early
2005.
Economic analysis drove vendor selection
SHM Partners chose Northern's turnkey system design over several other
competing proposals based on Northern's proven technical expertise and its
detailed economic analysis of the system's net cost savings after capital
costs. SHM Partners arranged for 100% financing of the capital cost of the
system with a seven- year capital equipment lease. Because the expected
annual energy cost savings will exceed the annual lease payments, the system
is anticipated to deliver positive cash flow and reduced operating expense
over the life of the lease. As a result of the net reduction in operating
expenses, the system could substantially increase the property's asset value.
Cogen system further improves efficiency of this "Energy Star" rated
building
Installation of Northern's cogeneration system is the fourth phase of an
energy efficiency program pioneered by SHM Partners on behalf of the
building's ownership, 550 North Brand Owner's Corporation. Earlier projects
included installation of energy efficient lighting and motion sensors;
variable frequency drives on all pumps, fans and motors (including a custom
engineered drive for its chiller plant); and a state of the art automated
energy management system executing hundreds of pages of operating sequence
program code for the optimization of each of the building's electro-mechanical
systems. These projects yielded significant improvements in energy efficiency
and, as a result, the building is one of the few buildings in the Los Angeles
area to earn the EPA's prestigious Energy Star(TM) award.
"Installation of the cogen system is the next step of our energy
efficiency program for the 550 North Brand property," noted Weston Munselle, a
managing partner of SHM Partners, the property manager for the building's
owner, 550 North Brand Blvd Owner's Corporation and formerly, the building
developer. "First we reduced the property's demand for electricity by
upgrading to high efficiency operating systems. Now, with this cogen system,
we will reduce the cost of our energy supply and simultaneously reduce another
500,000 kWh in building electrical demand by using the cogen system's waste
heat to produce chilled water. This system will be our largest investment to
date, but, similar to our other energy efficiency projects, it too will yield
positive cash flow and high returns. Furthermore, and in addition to the
environmental benefit of reduced greenhouse gas emissions, we will be doing
our part in relieving strain on the beleaguered California electricity supply
and distribution market. Lastly, without the full support and commitment of
the building owner, 550 North Brand Owner's Corporation, these important and
innovative strategies to reduce energy demand and operating costs while
benefiting the environment would never have been achievable."
System to qualify for state incentive payment and other benefits
Northern has designed the cogeneration system to meet the combined
electrical and thermal efficiency standards of the California Public Utilities
Commission (CPUC) Self-Generation Incentive Program, which was enacted to
encourage onsite generation in response to the state's energy crisis in
2000/2001. As a result, the system has qualified for a 30% rebate of its
capital cost from the State of California. The system will also qualify for a
reduced natural gas transmission and distribution rate from SoCal Gas and be
exempt from stand-by electric tariffs from the local utility due to its low
emissions of greenhouse gases and other smog-forming particulates.
Finally, the new cogen system at 550 North Brand Boulevard will comply
with the State of California's Rule 21 Interconnection requirements, thereby
allowing the two 375 kW synchronous generators to run in parallel with the
local utility electric grid. Northern's proprietary protective relay design
has met the stringent Rule 21 requirements on other California projects by
providing anti-islanding, reverse power flow, primary fault detection and
other protection capabilities.
About SHM Partners
Founded in 1985, Smith, Hricik and Munselle Management Company (dba SHM
Partners) is a multi-faceted real estate development and management company
based in Downtown Los Angeles. The firm has expertise in property acquisition
and disposition, finance and planning, entitlements and governmental
relations, construction management, marketing and leasing, property management
and energy management. Utilizing this expertise, the firm has acquired,
planned, developed and/or operated over 6 million square feet of office, mixed
use, residential and film production space.
About Northern Power Systems, Inc.
Northern Power Systems designs, builds and installs ultra-reliable power
solutions for commercial, industrial, government, and military customers. The
company also conducts path-breaking research and development in the areas of
renewable energy, distributed generation and hydrogen technology. Since its
founding in 1974, Northern has installed over 800 systems in 45 countries on
all seven continents. Northern Power Systems, Inc. is headquartered in
Waitsfield, Vermont and employs 100 people with engineering, fulfillment, and
customer-support capabilities. The company is a wholly owned operating unit of
Distributed Energy Systems Corp.
About Distributed Energy Systems Corp.
Distributed Energy Systems Corp. (Nasdaq: DESC) creates and delivers
products and solutions to the emerging decentralized energy marketplace,
giving users greater control over their energy cost, quality, and reliability.
As the parent company of Proton Energy Systems, Inc.
(http://www.protonenergy.com) and Northern Power Systems, Inc., Distributed
Energy Systems delivers a combination of practical, ready-today energy
solutions and the solid business platforms for capitalizing on the changing
energy landscape. For more information, visit
http://www.distributed-energy.com.
This press release contains forward-looking statements for purposes of the
safe harbor provisions under The Private Securities Litigation Reform Act of
1995. Statements contained herein concerning Northern Power System's and
Distributed Energy's goals, projections and other statements that are not
statements of historical fact, including statements concerning completion and
performance of the CHP system may be deemed to be forward-looking information.
Without limiting the foregoing, words such as "anticipates," "believes,"
"could," "estimate," "expect," "intend," "may," "might," "should," "will," and
"would" and other forms of these words or similar words are intended to
identify forward-looking information. Northern Power System's and Distributed
Energy's actual results may differ materially from those indicated by these
forward-looking statements as a result of various important factors. Northern
Power Systems and Distributed Energy each disclaims any obligation to update
these forward-looking statements. Factors that could cause results to differ
materially from those contained in Northern Power Systems' and Distributed
Energy's forward-looking statements include, Northern Power Systems' failure
to complete construction of its systems, the impact of competitive systems and
products and other factors detailed in Distributed Energy's Form 10-Q for
quarter ended March 31, 2004, and other filings Distributed Energy may make
from time to time with the SEC.
Distributed Energy Systems Corp.
Investor Relations
203-678-2355
Marilynn Meek
General Info
The Financial Relations
Board for Distributed Energy Systems Corp
212-445-8451
Weston
Munselle
SHM Partners
213-430-3903
wmunselle@shmpartners.com
