1 1 3 The Approach to Motor Management Demonstrate the Benefits of Proactive Motor Management to Your Customers Developed by The Motor Decisions Matter C ampaign sm VERSION 6.5
2 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n 6. 5 T a b l e o f C o n t e n t s Quick Start Guide 1 Overview 2 Requirements 4 Getting Started 6 1 Input 8 Gathering Data 2 Results 11 Understanding and Comparing Costs 3 Decision 13 Take Action Now or When the Motor Fails Additional Features of the Spreadsheet 14 Next steps 16 Appendices Appendix 1 Customer Questionnaire Appendix 2 Sample Spreadsheet Pages Appendix 3 Building a Motor Management Plan
3 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n Q U I C K S T A R T G U I D E Follow these simple steps to educate your customer about the many benefits of energy-saving NEMA Premium motors, best practice repair and proactive motor management. References are provided throughout this instruction manual for more information about each topic. Contact your customer (on the phone or in person) to discuss the company s current motor practices. The Getting Started section of this manual provides guidance for conducting these initial meetings. Review the customer s motor population and choose several for evaluation. The Getting Started section also provides guidance on identifying motors that are good candidates for The Approach. Follow the process for each of the representative motors. 1 Input Collect nameplate data on the representative motors and enter that data into the Spreadsheet. 2 RE SULTS Review the calculated results with your customer. The spreadsheet will automatically calculate the annual energy cost, capital investment, incremental investment cost, life-cycle cost, annual energy savings, net present value (NPV) and simple payback period for each of the following scenarios: Replace the motor immediately with a NEMA Premium motor. Wait for the motor to fail, then rewind it according to best-practice guidelines. Wait for the motor to fail, then replace it with an EPAct standard-efficiency motor. Wait for the motor to fail, then replace it with a NEMA Premium motor. NOTE: No one can predict how a motor will fail. In order to make a comparison based on this future event, the Spreadsheet assumes that the motor will require rewinding when it fails. 3 Decision Decide on the most cost-effective course of action for each motor, and click on the appropriate decision button. Once you click, the spreadsheet will automatically prepare labels for printing. These labels can be used to create tags that can be affixed to the motor and communicate your decision to others within the facility. You can print as many labels as necessary for tagging similar motors running similar applications. Clicking the decision button also carries the decision forward to other pages within the spreadsheet. Introduce the appropriate optional pages to your customer. The Additional Features of the Spreadsheet section of this instruction manual provides background and guidance on these additional features. Meet with your customer to determine the best approach for implementing these decisions and for assessing other appropriate motor management strategies. The Next Steps section provides a framework for reviewing and planning the optimal next steps. Building a Motor Management Plan, Appendix 3 of this instruction manual, provides specific strategies and resources that you might want to discuss with your customer.
4 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n 6. 5 O v e r v i e w Many managers do not realize that electricity costs account for approximately 95 percent of a motor s lifetime costs and that great savings can be achieved by increasing motor efficiency. Improving motor efficiency may also improve productivity, reduce operating and maintenance costs and help improve air quality by reducing greenhouse gas emissions. The Approach to Motor Management provides a simple and easy way to demonstrate these opportunities to your customers. It also provides a framework for educating your customers about the value of implementing other motor management strategies such as maintaining a spares inventory, proper motor sizing and best practice repairs. The Ba sic Ste ps The Approach is designed for you and your customer to work as a team. Together, you select a few representative motors for review, collect nameplate data from these motors and enter that data into the Spreadsheet. By reviewing these few motors, you can help clarify the opportunity with your customer. Based on the results, you can create an appropriate motor management plan. Plans often start with a more comprehensive motor survey. See the Next Steps section for details. Once the data has been entered, the spreadsheet will automatically perform a number of similar calculations for two possible courses of action: Replace the motor immediately with a NEMA Premium motor, or proactively decide on an appropriate, cost-effective course of action in preparation for future motor failure. Rewind the existing motor following best practice procedures. Replace the failed motor with an EPAct standard-efficiency motor. Replace the failed motor with a NEMA Premium motor. The spreadsheet calculates annual energy cost, capital investment, incremental investment cost, life-cycle cost, annual energy savings, net present value (NPV) and simple payback period for each course of action. After the spreadsheet has made the calculations, you and your customer will review the results and decide whether to replace each motor immediately or whether to repair or replace it upon failure. This process is designed to create an opportunity to discuss the benefits of comprehensive motor planning with your customer. The Approach provides guidelines for discussing and prioritizing appropriate strategies. The Instruction Manual The Approach can be completed quickly and easily, with a minimum amount of time required for data collection. This manual provides guidelines for each step of the process, from entering data to interpreting results. The Approach is also designed to help you educate your customer about other aspects of effective motor management. These educational opportunities are highlighted in the text boxes located throughout this manual. The issues are raised as suggested points for discussion. Feel free to include them or not as you feel appropriate. You may choose to introduce different issues, depending on the situation. These topics are included (in alphabetical order) as part of the Quick Start Guide of the Spreadsheet.
5 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n O v e r v i e w The Spreadsheet There are multiple pages in the spreadsheet. The Quick Start page, reproduced as the first page of this manual, divides the process into five simple steps. It also provides an overview of some additional topics you might want to discuss with your customer. Thereafter, pages are grouped for each representative motor. The Approach can accommodate up to five representative motors. The Motor page is the backbone of the Approach. After you enter the required data, this page automatically performs the calculations, presents the results and prompts you to make a decision. When you have evaluated the results and decided on a course of action, click the appropriate decision button on this page and the information is carried forward to the other pages of the spreadsheet. The Tag page enables you to print labels for creating motor tags that communicate your decision to others. Five Motor pages are provided to permit review of up to five representative motors. Remember the Approach is not intended to be used as a comprehensive survey tool. The Calculations page allows customers to look more closely at the financial calculations and to incorporate their company defaults into the formulas. This page also includes graphs and charts to help clarify the financial information provided. Note: If the default values are changed, be sure to return to the Motor page to review the recalculated results and reevaluate your decision. The Inventory page serves as a tool for demonstrating the value of creating a motor inventory. The Summary page provides cumulative financial information based on the decisions made and the number of similar motors in the facility. Other Supporting Documents The Appendices section contains a print version of the Spreadsheet and samples of all supporting documents. Supporting documents include the Customer Questionnaire, Motor Management Contact List and Building a Motor Management Plan. The last-named document provides a framework for moving beyond this initial demonstration. It will help you describe, choose and prioritize the motor management strategies that will best suit your customer s needs.
6 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n 6. 5 R e q u i r e m e n t s Software In order to run the Approach to Motor Management spreadsheet, you will need Microsoft Excel Version 97 or later. To open the Instruction Manual and the Sponsor Contact list, you will need to have Adobe Acrobat Reader installed. Registration All documents related to the Approach to Motor Management are subject to change without notice. In order to receive notification about updates and additions to the Approach, you must register electronically on the Motor Decisions Matter (MDM) Web site (www.motorsmatter.org). Only registered users will be notified of changes and additions to the Approach files. All registration information will be kept confidential and will not be shared with other outside organizations. E n a b l i n g M i cr o s o f t E xc e l Macr o s When you first open the Spreadsheet file, a message may be displayed about macro security. If the Enable Macros button is active, click on Enable Macros and the file will open. If the Enable Macros button is not active, you should see some information about a SelfCert. Click on Always trust this source. Then the Enable Macros button will be activated and you can click on it to open the file. You might also need to add the Approach s developer as a Trusted Source or revise your security level. For assistance with these functions, open Excel s Help feature and search on Macro Security. Customer Input Achieving a credible result with the Approach to Motor Management requires active participation from your customer. The amount of time required, however, is minimal. To participate in the process, your customer must provide two critical inputs: the annual operating hours of each sample motor and the company s total cost of electricity. In addition, the customer must provide informed consent to all cost information entered into the Spreadsheet. These include new motor costs, installation costs and best practice rewind costs. The customer must also understand and agree to the value used to estimate motor life. A ssumptions and Cl arific ations The results calculated in the Approach are based on several assumptions: The customer has provided the critical inputs. The customer is well informed and agrees that the motor life and motor costs used in the calculations are appropriate. A motor rewind will be required at failure. This assumption must be verified at the time the motor actually fails before any action is taken. Nameplate data, including full-load efficiency, is used in the calculations. Motor efficiency will be maintained during the rewind process. For Net Present Value (NPV), no borrowing has occurred.
7 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n 6. 5 R e q u i r e m e n t s For More Information The Approach was developed by a diverse group working together through the Motor Decisions Matter campaign. The group includes energy-efficiency program administrators, motor manufacturers, motor sales/service centers, trade associations, the U.S. EPA and U.S. DOE. Sponsoring organizations are available to answer questions about the Approach, motor management benefits and strategies, and the Motor Decisions Matter campaign. For a list of these sponsors and specific contact information, visit and click on the Sponsors tab.
8 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n 6. 5 G e t t i n g S t a r t e d Choosing a Target Company The following guidelines will help you to identify customers who are most likely to find significant savings opportunities from the process. Obviously, each organization offers unique opportunities. You may choose to review motors and/or approach companies that fall outside the guidelines. Remember, these guidelines are provided to help you identify possible opportunities. They are not intended to be restrictive. Choose a medium-sized facility (fewer than 500 motors). Often, larger facilities already maintain a motor inventory or have implemented motor management procedures. Smaller organizations may not have motor populations with many similar motors. The facility should operate at least two shifts per day. Efficiency savings increase with longer operating hours. Generally, look for motors that are running a minimum of two shifts per day, i.e., 4000 hours or more per year. Look for facilities with older motor populations. The greater the difference in efficiency between the current motor and a NEMA Premium motor, the greater the opportunity for savings. Pre-EPAct 1992 motors (before 1997) are likely to be significantly less efficient than newer models and therefore offer the greatest savings. Choose a facility with a large number of general-purpose motors of the same size and type, sized between 10 and 200 horsepower, running similar applications. NEMA Premium motors are readily available in this size range. Having many motors similar to the ones chosen for review effectively multiplies the outcome. Generally, custom motors do not make good candidates, as replacements are often expensive and/or not readily available. Make sure that the motors chosen are easily accessible. Accessibility is important for reading nameplate data. Accessibility also facilitates follow-up action on motors where indicates immediate replacement. Look for facilities in regions with high electricity costs. General information about electricity costs across the United States is available from the Energy Information Administration Web site (www.eia.doe.gov). Use this information to assist in understanding your region s energy cost. Once you begin the process, the actual cost of electricity must be supplied by the customer. Both energy and demand changes should be included. Pre paring for the Initial Meeting The initial meeting is a time to describe the Approach to Motor Management, identify the customer s goals and expectations and reach agreement on important assumptions. It can be approached in several ways. The Customer Questionnaire provides useful information for beginning the process and assessing the opportunity. For example, high energy costs and/or long operating hours indicate facilities with good savings opportunities. The questionnaire can also be used to gauge the customer s current understanding of motor management and learn if the company s current policies address motor efficiency, life-cycle costing, best practice repair or other relevant issues. The questionnaire can be used either prior to or during the initial visit, by phone or in person.
9 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n 6. 5 G e t t i n g S t a r t e d At this point, you may want to explore the opportunity for assembling a motor management team. Utilizing a team approach can help to solidify support for developing and implementing motor management strategies. While team composition varies from company to company, it often includes the purchasing agent, the facility manager, a process or design engineer, and a representative from upper management (participation by upper management is important for long-term success). You may want to include others outside the customer s organization, such as a utility representative or a motor service center or motor sales representative. The Motor Management Team Contact Sheet can help you assemble a motor management team. Forms are available in Appendix 2 of this manual and in the Spreadsheet. In some cases, it is easier to organize a team after having completed the process. The Approach s financial analysis coupled with the opportunity for additional productivity savings is a powerful tool for convincing reluctant upper-level managers of the potential benefits. Team building is discussed again later in this manual. Conducting an Initial Discussion During the early part of the process, it is helpful to gain an understanding of your customer s familiarity with various aspects of motor planning as well as the customer s motivations for participating in the Approach. You will want to review the company s current practices and discuss specific interests and concerns. Discuss any preconceptions the customer may have. Are there specific goals or expectations that the customer already has in mind? Are they reasonable? It is important to understand where the customer expects to find savings. Review the process with the customer and set appropriate expectations. Explain what the process does and does not accomplish. Explain the assumptions listed in the Requirements section of this manual. Discuss and clarify the deliverables: A Motor page for each sample motor that shows the data entered, annual energy cost, capital investment, incremental investment cost, life-cycle cost, annual energy savings, net present value (NPV) and simple payback period for each decision scenario. Optional: A plan for tagging the representative motors (Tags will clearly identify the selected proactive decision) Optional: A simple inventory form showing the motors reviewed Optional: An expanded view of the financial analysis defaults and calculations Optional: A summary page that provides cumulative cost and savings information about the decisions made During this discussion, you will also need to learn about the company s motor population. If possible, you might request a walk-through of the facility. Determine your customer s motor sample size (generally five motors or fewer) and identify which motors will be used for this Spreadsheet. Remember, the best candidates are general-purpose motors installed prior to 1997 (i.e., pre-epact 1992); operate more than 4000 hours per year (two shifts); are readily accessible; represent multiple motors of the same size and type running similar applications.
10 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n I n p u t Use the Input section of the Motor page to gather the necessary information. The Spreadsheet contains five Motor pages. The actual number of motors to review is a decision to be made with your customer. Note: While it is possible to review more than five motors by using the spreadsheet multiple times, it is not recommended. The Approach is a demonstration tool. It is not designed for creating and maintaining a complete motor inventory. Gathering Data Before you begin, please be aware that there are two distinct classes of data to be entered: critical and customer approved. Critical data must be supplied by the customer. There are two critical data inputs in this Spreadsheet: OPERATING HOURS and COST OF ELECTRICITY. Customer-approved data is information that the customer provides or agrees is applicable. All nameplate, cost and other data input must be customer approved. It is important to the process, and to your credibility, that the customer knows the source of all data and agrees that it is acceptable. The Input data is divided into four sections. Data fields marked with an asterisk are required. Name pl ate Data This section contains information available from the motor nameplate. This is an opportunity to discuss the common practice of oversizing motors for a given application and the benefits of proper sizing. The actual speed of a NEMA Premium motor may be higher than the actual speed of a same-speed standard-efficiency motor. Make certain that this will not be an issue in the motor being reviewed. For example, faster speed may significantly decrease anticipated energy savings in centrifugal applications, such as pumps and fans. MOTOR ID*: A unique identifier assigned for tracking and management purposes. MANUFACTURER: The motor manufacturer s name. MODEL: The manufacturer s model number. SIZE (hp)*: The horsepower rating. RPM (rpm)*: The synchronous speed of the motor. ENCLOSURE TYPE: The motor s enclosure type. NOMINAL EFFICIENCY (%)*: The nameplate nominal efficiency rated at 100 percent load. Some pre-epact motors do not list nominal efficiency on the nameplate. For these motors, you may refer to the pre-epact default efficiency table in the Spreadsheet. This table represents the default values used by the DOE s MotorMaster+ software for pre-epact standard-efficiency motors. NOTE: MotorMaster+ 4.0 was developed by the Washington State University Cooperative Extension Energy Program (the Energy Program) and is funded by the U.S. Department of Energy (U.S. DOE) via the Industrial Technologies BestPractices Program (formerly the Motor Challenge Program). It is available for download free of charge (http://www.eere.energy.gov/industry/bestpractices/software.html). FRAME SIZE AND TYPE: NEMA frame size and type. Nameplate efficiency assumes a 100 percent load. This is an opportunity to introduce load vs. efficiency curves and to discuss the relationship between the two. Also, discuss the implications of assuming 100 percent load, i.e., the actual load and efficiency are often below these assumptions.
11 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n I n p u t Motor loading has a significant effect on motor efficiency. Studies show that many motors in the U.S. typically run at 40 percent load or less. 1 Use this opportunity to discuss the benefits of actual load testing. Motor management is sometimes hard to justify since motor purchases are often capital budget items while motor repair and maintenance are often operating budget expenses and the cost of electricity is often an overhead cost. Obviously, it is important to look at the entire financial picture when making repair/replace decisions or developing motor management policies. VOLTAGE RATING (volts): Rated voltage. FULL-LOAD AMPS (amps): Rated amperage. Financial Information This section contains information necessary for the financial calculations. Motor Life (yrs)*: The estimated useful life of a motor. Common estimates range from 10 to 30 years. Enter the customer s estimate or accept the Approach default value of 18 years. 2 The value used must be understood and approved by the customer. COST OF ELECTRICITY ($)*: The aggregate cost of electricity. This can be calculated from the customer s electric bill by dividing the total energy cost by total kilowatt-hours consumed. 3 DESIRED PAYBACK PERIOD (yrs): The company s hurdle rate for capital expenditures. For most companies, payback period is generally between one and five years. Two years is a common value. If the company s payback period is unknown, the suggested value is two years, provided this meets customer approval. HORSEPOWER BREAKPOINT: Some companies have developed a simple guideline to replace all motors that fall below a particular horsepower upon failure. The motor size at which this occurs is called the Horsepower Breakpoint. The value will vary from one company to the next and should be based on life-cycle cost calculations. Applic ation Information This section contains information pertaining to motor usage. YEAR MOTOR INSTALLED: The year the motor was first installed. MOTOR LOCATION: Facility, production line or other description of the motor s location. You might discuss the possible negative effects of improper motor repair. ANSI/EASA AR100 coupled with EASA s Guidelines for Maintaining Motor Efficiency During Rebuilding describes commonly accepted best practice repair procedures. These are available on EASA s Web site (www.easa.com). You can also point out the benefits of working closely with a repair center and introduce the concept of developing a motor repair specification such as ANSI/EASA AR100. APPLICATION: Equipment powered or other description of motor s use. TOTAL YEARLY OPERATING HOURS (hrs)*: Operating hours per year. This value can be easily calculated by multiplying (the number of hours the motor operates each day) x (number of days the motor operates each week) x (the number of weeks the motor operates each year). 4 REPAIRS/REWINDS: This input serves as a flag for discussion about one or more important considerations regarding motor repair as stated on the nameplates. QUANTITY OF SIMILAR MOTORS*: Number of motors of the same size and type running similar applications. If the motor has previously suffered a catastrophic failure, it may be operating below nameplate efficiency. Some types of damage (such as damage to the iron core) may not be visible but may affect performance. Frequent motor failure is an indicator that further analysis is required. There may be other problems with the motor and/or motor system. 1. Greenberg, Incentives for Premium-Efficiency Motors: The Role of Prescriptive Rebates in the Post-EPAct Era, E-Source (ER-03-9 Tech May 2003). 2. Based on information from Nadel, Elliot, et al., Energy-Efficient Motor Systems: A Handbook on Technology, Program, and Policy Opportunities, Second Edition, (Washington, D.C., American Council for an Energy Efficient Economy, 2002), p. 206, Table Critical data: Cost of Electricity must be supplied by the customer to comply with the Approach. 4. Critical data: Operating Hours must be provided by the customer to comply with the Approach.
12 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n I n p u t Cost and efficienc y Information This section allows you to input applicable new motor efficiency, installation and repair costs. Remember, the customer must provide or give his informed consent to the costs entered. INSTALLATION COST*: The cost of installing a new motor. Installation cost is included in capital investment, life-cycle cost and net present value calculations. One common stumbling block for purchasing a NEMA Premium motor is the higher initial cost. Explain life-cycle costing as it applies to motors. Incentives for NEMA Premium motors can also help to overcome the initial cost differential. AVAILABLE INCENTIVE: In many areas, financial and/or technical assistance is available for NEMA Premium motors and other motor system improvements. Learn what opportunities are available in your area by asking your utility, state energy office or regional efficiency organization representative. CEE s National Summary of Energy-Efficiency Programs for Motors and Drives contains information about many incentive programs across the U.S. and Canada and can serve as a starting point (www.motorsmatter.org). NEMA PREMIUM MOTOR COST*: The cost of the specific NEMA Premium motor selected. This cost will vary by manufacturer, sales center, motor size and type. Motors are often discounted from list price. NEMA PREMIUM EFFICIENCY*: The nominal efficiency of the selected motor as stated on the nameplate. EPACT MOTOR COST*: The cost of the EPAct motor selected. This cost will vary by manufacturer, sales center, motor size and type. EPACT EFFICIENCY*: The nominal efficiency of the selected motor as stated on the nameplate. BEST PRACTICE REWIND COST*: The cost of rewinding the motor following EASA s best practice guidelines as described in ANSI/EASA AR100 and EASA s Guidelines for Maintaining Motor Efficiency During Rebuilding (Tech Note 16). Once the required data has been entered, the Approach will automatically perform the necessary calculations.
13 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n R e s u lt s Note: Please make sure all required fields marked with an asterisk are complete before continuing with the process. If cells in the RESULTS section are blank, it indicates that one or more of the required inputs have not been entered. The Approach to Motor Management identifies potential cost savings. It does not guarantee that these savings will be realized. For example, the actual operating load and/or motor efficiency may differ from the nameplate data, which will affect the savings actually achieved. This is an opportune time to discuss the benefits of proactive motor planning with your customer. Planning ahead for motor failure ensures that the right motor will be available when needed. Help move your customer from panic to planning by discussing the benefits of maintaining a spares inventory of critical motors. Understanding and Comparing Costs The Results section enables you to compare the operating costs and financial benefits of each potential course of action. Since most motor users are surprised to learn how much they spend each year to operate their electric motors, it is an opportune time to educate your customer about controlling energy costs through life-cycle costing and proactive planning. In addition to saving money on energy, planning ahead for motor failure and having the right motor available when it fails can also greatly reduce downtime and increase productivity. You can use the process to highlight these additional bottom-line benefits. Act Now The first question to answer is, Do the potential energy savings justify replacing this operating motor with a NEMA Premium motor? To evaluate this, review the first two columns of the Results section. CURRENT COSTS (BASE CASE): This column provides information about the operating costs for the currently installed motor. These values provide the base case for the Act Now comparison. REPLACE IMMEDIATELY WITH NEMA PREMIUM: This column provides information about the operating costs for a same-size-and-type NEMA Premium motor. Act Upon Motor Failure The second question to answer is, If the potential energy savings do not support immediate replacement, what course of action will be most cost-effective when the motor fails? If this motor seems to be a good candidate for replacement, reiterate the opportunity to measure actual load and, if warranted, resize the motor to achieve additional savings. Be certain you obtain a complete load profile before making any recommendations. In this course of action, the Approach assesses several different possibilities to make certain that the customer chooses the most cost-effective solution, given the facility s operating conditions and electricity rates. These actions are: rewind the current motor according to best practice repair guidelines, replace the failed motor with a standard-efficiency motor or replace the failed motor with a NEMA Premium motor. Columns three through five of the Results section display these calculations. The final column, Comparing Replacement Choices, provides a direct comparison of the replacement at failure with EPAct or NEMA Premium options. The Approach assumes that the motor will need to be rewound when it fails. It is important that the customer understand that if rewind is not the required repair when the motor actually does fail, this calculation may not be valid and the decision should be reassessed. REWIND USING BEST PRACTICE (BASE CASE): This column provides information about operating and rewind costs (following EASA s best practice repair guidelines) for the current motor. These values provide the base case for the Act Upon Failure comparison. REPLACE WITH EPACT: This column provides information about the costs associated with replacing the current motor at failure with a standard-efficiency EPAct motor.
14 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n R e s u lt s The Approach assumes that best practice procedures are followed and that nameplate efficiency will be maintained during the rewind process. This is a good opportunity to discuss the possibility that some motor repair practices will decrease efficiency. A motor repair specification can help define and standardize the repair service the customer receives. You might also stress the importance of working with the motor repair center to ensure best practice procedures are followed. Quality assurance programs such as Advanced Energy s Proven Excellence Verification Program, EASA Q and ISO certification provide indications that motor service center will deliver a quality repair. REPLACE WITH NEMA PREMIUM: This column provides information about the costs associated with replacing the current motor at failure with a NEMA Premium motor. Reviewing the calculated results with your customer will help determine the best course of action when the motor fails. All formulas used in these calculations are clearly displayed on the Formula page of the spreadsheet and as part of Appendix 2 of this instruction manual. C alcul ated Value s ANNUAL ENERGY COST: The calculated energy cost to operate the motor for the designated number of hours at the designated energy cost. CAPITAL INVESTMENT: The total cost for implementing a particular decision. Act Now Current Costs: The investment cost is zero. No investment is necessary to continue operating the current motor as is. Replace Immediately with NEMA Premium: The investment cost is the new motor cost plus the installation cost. Act Upon Motor Failure All actions require that the failed motor be removed and a working motor be reinstalled. The Approach assumes that the cost of reinstalling a rewound motor, installing a new EPAct motor and installing a new NEMA Premium motor are all equal. In addition, all calculations (annual energy savings, NPV and simple payback period) are based on the incremental cost between the decision being considered and the applicable base case. Rewind using Best Practice: The Capital Investment is the rewind cost plus the installation cost. Replace with EPAct: The Capital Investment is the cost of a new standard-efficiency motor plus the installation cost. Replace with NEMA Premium: The Capital Investment is the cost of a new NEMA Premium motor plus the installation cost. INCREMENTAL INVESTMENT COST: The calculated difference between the Capital Investment of the action being considered and the applicable base case. LIFE-CYCLE COST: The cost of operating the motor over its full lifetime, including initial purchase price (less available incentive), installation cost and (total) annual energy costs. ANNUAL ENERGY SAVINGS: The calculated difference between the annual energy cost of the applicable base case and the annual energy cost of the action being considered. NET PRESENT VALUE (NPV): Net Present Value is the sum of the investment made in the current period and the present value of future cash flows. The present value is calculated using a discount rate. If the net present value is zero or greater, then the project is generally considered to be viable. The NPV calculated by the Approach is based on the incremental investment cost and cash flows for the motor life entered using the assumptions shown. It utilizes Excel s standard formula. SIMPLE PAYBACK: Based on the annual savings calculated above, this is the length of time it will take to recoup the incremental investment cost.
15 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n D e c i s i o n Take Action Now or W hen the Motor Fails Take some time to review and discuss the results with your customer. In addition to the calculated savings and financial results, you will need to consider the company s internal hurdle rate (payback period, NPV, etc.), capital budget requirements and budgeting cycle. Sometimes there are other issues, such as the motor s operating environment, that will factor into the decision. Work together to decide on the appropriate course of action for each of the motors analyzed. Once this proactive decision has been made, press the appropriate button at the bottom of the spreadsheet. This will carry that decision forward to other pages within the spreadsheet. You have now completed the basic Spreadsheet. This is a good time to revisit the customer s initial expectations to make certain that the results and their implications are clearly understood. Review any issues that may have arisen during the process. Then assess your customer s interest in examining additional motors and/or pursuing additional strategies.
16 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n A d d i t i o n a l F e a t u r e s o f t h e S p r e a d s h e e t There are several additional forms in the Spreadsheet that might interest your customer. These are all optional, and their usage will not affect the reliability or credibility of the basic approach. Rather, they are provided to complement and enhance its capabilities. Various pages from the Approach can be combined with the Motor pages to form a compelling report that supports the use of NEMA Premium motors and other motor management strategies. This report might be presented to your customer s senior managers to garner their support for developing and implementing a motor management plan. Color coding the labels can simplify tag usage. For example, the customer might use red labels for the Replace Immediately tags, yellow for Rewind at Failure, green for Replace with NEMA Premium at Failure and blue for Replace with EPAct at Failure. L abels In order to help preserve and communicate these motor decisions to other facility personnel, the Approach offers a way to print labels. These labels can be used to create motor tags that indicate the appropriate future action. To print the labels, go to the Tags page of the spreadsheet. This allows you to create five sets of front and back labels. Print as many pages as needed to address the quantity of similar motors you want to tag. Labels can be printed on Avery 5163 or other comparable 2" x 4" labels. Standard labels are unlikely to stick directly to the motor. They will need to be affixed to a tag that can be tied or wired to the appropriate motor(s). Financial C alcul ations This page is divided into several sections. Please note that all results displayed on this page are for one motor only. Cumulative results, i.e., multiplied by the number of similar motors, are displayed on the Summary page. Navigation buttons are provided across the top and throughout this page to facilitate movement from one section to another. ASSUMPTIONS In some cases, a company s financial officer may want to change the defaults or perform financial calculations with varying inputs. The first section of the Financial Calculations page provides this flexibility. Simply enter your customer s company defaults into the table at the top of the form, and the Spreadsheet will recalculate based on these values. Please note the option to enter an energy inflation factor. The energy Inflation Factor provides an opportunity to incorporate projected changes in electricity costs over the life of the motor. The default rate is 0 percent, i.e., the electricity rate will remain constant over the life of the motor. As with all data entered into the Approach, the customer must understand and approve the value entered. Recalculating Financial performance If any default values have been changed, click on the navigation button provided to return to the Motor page to review the new results. This process can be repeated multiple times to satisfy questions raised by the company s financial managers. Should your customer choose to change the repair/replace decision based on these recalculated values, click the corresponding decision button on the Motor page to carry the decision to the other pages of the spreadsheet.
17 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n A d d i t i o n a l F e a t u r e s o f t h e S p r e a d s h e e t Calculation Results The final section of the Financial Calculations page provides graphs and tables to help illustrate the financial implications of various decisions. This inventory tool is rudimentary and cannot be used to maintain an effective inventory or motor tracking program. It does, however, provide an opportunity to introduce other more comprehensive programs like MotorMaster+ to interested customers. s a m p l e M oto r I n v e n to ry F o r m It is impossible to effectively manage an asset that you don t understand. Therefore, the Approach includes a spreadsheet that can be used to educate the customer about the many benefits of creating and maintaining a motor inventory. Like the financial form, it will be filled in automatically based on the previously entered data. This page is intended to demonstrate the value of maintaining an inventory. It is not intended as a comprehensive tool. If you and your customer are interested in learning more about developing a motor inventory, please refer to Motor Decisions Matter s Motor Planning Kit, which is available free of charge at Summary Re port The summary page views the results of the Approach as a project to be completed. It takes the results generated for each representative motor and calculates cumulative financial results based on the decisions made for each motor and the number of similar motors in the facility. Data for cumulative capital expenditure, cumulative annual energy cost, cumulative annual energy savings, etc., are combined to create a report that is easy to read and understand. Grand totals, i.e., summations of the cumulative totals for all representative motors, are also provided. If you choose to consider the financial implications of a different decision for any representative motor at any time, return to the Motor page and click on a different decision button. That will carry the new decision and the recalculated results throughout the spreadsheet. The second page of the summary sheet provides a sample letter encouraging companies to develop and implement a customized motor management plan. Use the letter as is, or customize it with your contact information in the spaces provided at the top and bottom of the page. Alternately, you may prefer to design your own summary page to clearly lay out the best next steps for your customer.
18 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n N e x t s t e p s D e v e l o p i n g a M o t o r M a n a g e m e n t P l a n a n d I m p l e m e n tat i o n S t r at e g y In addition to its use as a demonstration tool, the Approach is a way to help your customers understand and realize the many benefits of a comprehensive motor management plan. The next critical step is to develop a multifaceted plan and strategy for implementation. To begin, it is often helpful to sit down with your customer to review what you have seen, heard and learned so far. What payback period did you see? This will likely influence the scope and timing of future actions. What types of motors did you see in the facility? Did you notice motor usage patterns such as consistent oversizing? Did you observe a large population of older motors? Does your customer have a motor purchasing policy? These types of observations will help you structure a plan that best suits your customer s current needs. Building a Motor Management Plan, Appendix 3 of this instruction manual, divides a typical comprehensive motor management approach into manageable, independent steps. These steps can be included, prioritized, excluded and/or adapted to suit your customer s needs and budget. The appendix describes each of these activities and provides resources to support implementation. For additional support, please refer to MDM s Motor Planning Kit. Discuss with your customer which of these activities are likely to achieve the greatest benefit. You might also want to discuss which activities can be accomplished in the short term and which might take longer. Which activities can be accomplished with minimal resources and which might require some capital investment? Building a Motor Management Plan is provided as a worksheet to review and discuss each possible activity. The boxes are one method to mark and/or prioritize those activities appropriate for your customer. Convening the Motor Management Team Assembling a motor management team will help ensure successful results of any motor management plan. Ideally, this team includes a senior level manager, a purchasing agent, a facility manager, a maintenance manager and/or an engineer, as well as the customer s motor sales representative(s), motor sales/service center representative(s) and/or utility account representative. Including managerial, financial and facility representatives provides needed guidance and support for longterm motor management strategies. The Motor Management Team Contact List offers one way to organize the team s information. Forms are available in Appendix 2 of this manual and in the Spreadsheet. The financial pages of the Spreadsheet may help to justify the effort required to assemble a team to develop and implement a comprehensive motor management plan. Talk with your customer about the correct timing for bringing others into the process. The motor management team may be interested in pursuing energy management on a larger scale. Addressing motor systems or lighting, for example, often results in significant additional savings. If your customer is interested in learning more about tools for managing industrial processes, the DOE s Industrial Technologies Program Web site (www1.eere.energy.gov/industry) is an excellent resource. Some companies take an overarching approach to energy and environmental management at the corporate level. For more information, visit EPA s ENERGY STAR Web site (www.energystar.gov). MDM s Motor Planning Kit can direct you to these and other organizations that support both motor system optimization and corporate energy management.
19 T H E A P P R O A C H T O M O T O R M A N A G E M E N T V e r s i o n N e x t s t e p s Pre senting Your Re sults to Upper Management At some point in the process, it is often necessary to gain the involvement and support of upper management. The Approach is designed to help engage managers by providing clear, compelling financial reasons for implementing sound motor management and proactive motor planning strategies. First, consider the financial results: life-cycle cost, net present value and payback period. Please note that each of these calculations is carried out automatically as you input the customer s data into the Spreadsheet. There are certain defaults included in these calculations. For some customers, their financial managers may want to modify these defaults to reflect their company guidelines. In making the case for motor management, be sure to emphasize the non-energy benefits as well as the operational cost savings. For example, developing a spares inventory for critical motors can significantly reduce downtime when motor failure occurs. By talking with your customer, you may be able to quantify this benefit in terms of material waste, improved productivity, etc. Or your customer might greatly benefit from a predictive maintenance schedule that helps the customer to schedule and therefore plan for necessary downtime. While the ultimate plan of action will vary according to each customer s needs and constraints, the energy and non-energy benefits gained through proactive motor management based on life-cycle costing will provide value for years to come.
20 A P P E N D I X 1 C u s t o m e r Q u e s t i o n n a i r e Background Information 1. What business or industry are you in? 2. How did you hear about motor management? Company manager Motor vendor Motor sales/service provider Other Electric utility State or regional efficiency organization Newspaper, magazine, trade journal 3. Why are you interested in pursuing motor management as a business strategy? Reduce electric bills Reduce downtime General cost reduction Other 4. Does your company currently have any of the following motor-related policies? Please check all that apply. Motor Procurement Policy Motor Repair Policy Motor Management Policy Predictive and Preventive Motor Maintenance Schedule 5. Does your company currently do any of the following? Please check all that apply. Maintain a motor inventory Track motor maintenance and repair costs 6. How do you currently manage your spare motor inventory? Maintain in-house spares inventory Agreement with motor vendor 7. How many motors do you estimate are in your facility? < > R e q u i r ed I n f o r mat i o n Track motor repair history Track process downtime 8. How many hours does your plant typically operate? Hours per day: Days per week: Agreement with motor sales/service center Do not maintain a spares inventory 9. What are your electricity costs? In addition to the cost per kwh, be sure to include other appropriate costs such as demand charge, core charge, power factor penalty and any adjustments which might apply. 10. If available, please provide your company s hurdle rate for capital projects such as payback period. 11. If available, what is your new motor discount rate?
Increase Profitability through Motor Management Jenny Harvey, CEE Do you know how many motors operate in the facility? know how repair/replace decisions are made in the facility? know ways to reduce costs
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