Amanda Barber finds out how Rob Furlan reduced his company’s dependency on fossil fuels by focusing on operating costs.

Nearly 30 years ago, enWave Energy Corporation, an OMERS (Ontario Municipal Employees Retirement System) utility energy system based in Toronto, recognized the environmental and economic cooling benefits inherent in Lake Ontario’s deep-water temperatures. In 2004, Cadillac Fairview’s Toronto-Dominion (T-D) Centre became the first private entity not associated with OMERS to use enWave’s deep water-cooling system.

Peter Sharpe, president and CEO of commercial real estate company Cadillac Fairview, has always insisted on delivering the highest quality of service and value to the nearly 21,000 tenants of the T-D Centre, a six-tower, 4.3 million-square-foot property—Canada’s largest office complex.

Rob Furlan, director of operations for the complex, believed the execution of that vision must include stabilizing the center’s operating costs. “We addressed our utility costs by doing a major retrofit in 2000 and 2001,” said Furlan. “We reduced our fossil fuel consumption by retrofitting our lighting systems and modifying our elevators, but when looking at the cost structure, we realized utility rate fluctuation, particularly with electricity, was still a huge risk in our deregulated market.”

Rob Furlan

One of the ways Furlan believed these fluctuations could be controlled was by reducing T-D Centre’s dependency on fossil fuels. Unlike many in his industry, Furlan did not believe going green meant a more expensive operating budget. However, another cost-performance issue that needed to be addressed was an aging infrastructure.

“The center’s chilled-water system was 35 years old when we started looking into the enWave deep-water-cooling (DWC) system,” said Furlan. “We needed to address that, both from an age and compliance standpoint in regards to the type of refrigerants we used. When you combine those two items, enWave made a lot of sense for us.”

Executing a plan
EnWave’s deep-water-cooling system involves the city of Toronto’s intake pipe for drinking water penetrating deeper into Lake Ontario where the water temperature is 39 degrees Fahrenheit. Scott Rouse, managing partner for Energy at Work, explained the win-win-win rewards of enWave’s DWC energy-transfer process.

“The city of Toronto saves on chemical treatment costs because of the colder water temperature. T-D Centre stabilizes its utility costs, and the electric utilities realize lower demand on their systems during the critical summer period,” said Rouse. “The reduced strain on the electric infrastructure is more than 8 MW and translates to more than $30 million in savings of new supplies for generation, transmission, and distribution infrastructure.”

T-D Center’s conversion to enWave deep water cooling also frees up space and capital that can be applied to help address other tenant comfort issues, such as the recent BOMA (Building Owners and Managers Association) Go Green Plus Certification. Although a major shift in conventional thinking was required, Furlan realized that risk management on utility rates would increase tenant comfort and make the project worthwhile.

“Before implementing the system, I came to a clear understanding with enWave that I would not tolerate rates going up and down like a yo-yo,” said Furlan. “I knew exactly what my cooling price point and my price risk on water and electricity rates was and what my tenants would tolerate in terms of year-over-year operating cost changes.”

In terms of the market base in Toronto, all eyes were on Cadillac Fairview and what decision Furlan would make. The first two towers to sign with enWave were owned by OMERS, which is also a shareholder of enWave. “Toronto’s independent marketplace was waiting to see what Cadillac Fairview would do at the T-D Centre,” said Chris Asimakis, COO of enWave Energy Solutions. “Once Cadillac Fairview signed up the first three towers of the T-D Centre, the rest of the independent market followed suit.”

Furlan’s ability to execute the enWave plan stems from Cadillac Fairview’s organizational infrastructure. Although the decision was approved at the company’s executive level, the decision came from T-D Centre’s management.

“It’s common for executives to make a decision and push that down to the property management teams,” said Furlan. “The benefit of how Cadillac Fairview operates is the tremendous amount of creativity and innovation spurred from a bottom-up type of organizational structure. More people get involved in making substantive decisions, and major deals such as the one made with enWave are the result.”