Retrofitting for Ecology: Diplomacy Helps ‘Green’ D.C. Firms

Originally posted in The Washington Times on Wednesday, July 16, 2008
Written by Ann Geracimos

Laurel Colless has energy to burn, and all she really wants to do with it is save energy for others while reducing the Washington region’s carbon footprint.

It’s not surprising these days for someone to embrace eco-friendly living, but it is unusual even in globally conscious times for a socially active diplomat’s wife – Ms. Colless is married to Pekka Lintu, Finland’s ambassador to the United States – to be a social activist in the field on behalf of a city and country that is not her own.

A former high-level employee of Nokia Corp., the Finnish telecommunications giant, she was recruited a year ago by Virginia Tech to be head of its Research Development Sustainable Technologies group in Alexandria. Nine months ago, the group announced an ambitious plan – duly reported in the press – to reduce greenhouse gas emissions in the area’s existing buildings by between 20 and 50 percent.

The project, called the Energy Efficiency Partnership of Greater Washington (EEP), aims to be a match of convenience and good conscience since the three sides involved – private, public and nonprofit institutions – are meant to benefit equally. The core partners are Hannon Armstrong and Co. of Annapolis, investors for financing ($500 million as needed for building retrofits over the first five years); Pepco Energy Services Inc., primarily for energy audits; and Virginia Tech for leadership, research and education.

A great deal of encouragement to proceed, Ms. Colless notes, came from the nonprofit sector “and how they were willing to give of their own time and money,” a fact she says she found “very surprising” in contrast to Europe, where countries rely more heavily on government action. Calvin Cafritz, chairman and CEO of the Morris & Gwendolyn Cafritz Foundation, gave EEP a grant of $50,000 so she could hire an assistant.

One aspect of the story not published in October was how this began, coincidentally, at a gala fundraiser on behalf of child trafficking that took place in a downtown hotel. Ms. Colless, wearing what she calls “my Finnish ambassador’s wife hat,” found herself seated beside a managing partner of JGB Co., a large Washington-area developer.

“I’d been thinking about energy reduction in buildings as a way of really attacking climate change,” she says. “I was convinced that there was a business case and a lot of easy wins out there.”

Indeed, JBG Co., she learned, recently had commissioned an internal audit of this kind. They arranged to meet the following week. Her idea, she says, “was to get building owners to do retrofitting on their own terms – this is sometimes misunderstood – and get a long-term payback.”

Ms. Colless’ life since then has seemed like one long meeting as operations got into high gear. Her handbag routinely is stuffed with briefing materials, social notes – and diapers. The tall, linguistically adept, Australian-born brunette met her husband while working as a journalist in Tokyo where he then was posted. They are parents of two young girls, one born in July 2006 in Sibley Memorial Hospital.

Through Nokia, she was active with the International Youth Foundation. She currently is on the board of the nonprofit Institute for Sustainable Communities. Her association with Virginia Tech is her first connection to academia, apart from growing up in New Zealand as the daughter of a university professor.

“I call her pleasantly pushy,” says James Bohland, vice president and executive director of Virginia Tech’s National Capital Region (NCR) operations and Ms. Colless’ boss. “She has contacts, but equally important she has that gift – she can get results.”

Buildings that have signed on to date include Western Development Corp.’s Georgetown Park mall, Meridian House International, the Brookings Institution and L’Enfant Plaza. Pledges to retrofit some 600 government, commercial and nonprofit-owned buildings – or a total of 74 million square feet – represent the estimated carbon equivalent “of 45,000 cars being taken off the road,” Ms. Colless says. (Some of these pledging entities will be monitored by EEP, but not necessarily make use of the partners’ expertise.)

Problems arise over the fact that, in her view, “middle management has trouble getting their act together.” An eight- to 10-year payback is not conventional in a business that “has a tendency to think in two- to three-year cycles.”

Forty percent of the carbon emissions in most American cities come from buildings, and project officials hope to tackle 100 buildings in the next five years. An average retrofit costs between $1 million and $5 million, although it can go much higher depending on the challenges a building presents.

A retrofit, which generally includes an audit preliminary to any physical changes, “is very much an engineering process, a multistep matter. It means you analyze and upgrade the energy infrastructure – electricity, gas, water, etc. – and look at those systems to see if they can be made more efficient,” says Pat Sweeney, vice president of business development for Pepco Energy Services, one of EEP’s partners.

Ms. Colless is counting on the image factor to kick in as well.

“Building tenants will eventually wake up and not want to be in a brown building,” she says.

John Christmas, CFO of Hannon Armstrong, is the one “with whom I often now walk the streets regularly looking for disciples,” proselytizing how green technology is the financially smart option and how “the Financial Times recently cited retrofitted buildings as a new asset class for institutional investment.”

“We’re bouncing around the Beltway talking to anyone who will listen,” says Mr. Christmas.

The advantage of a partnership, he says, is having so many resources – “equipment, procurement, contracting and so on” – available. The challenge on the commercial side, he notes, is that “you have to do building to building” and, to date, emissions from “trucks or cars have been the target of public attention, but not buildings.” To date, he says, his firm has “about 20 entities locally and across the country in some stage of auditing or retrofitting.”