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Volume 6, No. 2
April 2010


Michigan Service Tax Proves (Groucho) Marx Correct

U.S. Economy Will Continue Slow Road To Recovery

Small Business
and the Internet

“High In Fiber”
By Mike Gould

May Feature:
Small Business Month

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Ann Arbor Area BUSINESS MONTHLY magazine brings the reader the latest business news and information important to the businesspeople in Washtenaw County. Each month articles cover real estate, legal, Internet, employee concerns and the climate of business in the greater Ann Arbor area. There is news about company employees and feature articles on local businesses. We cover business news from Ann Arbor, Chelsea, Dexter, Manchester, Milan, Saline, Whitmore Lake, and Ypsilanti.

Green Buildings And
Energy Efficiency = $$

Ron Fuller, Director of Business Development, K & F Electric Company

Ron Fuller, Director of Business Development
K & F Electric Company

By David A. Baker

Tax season is upon us. Schedule C business owners across Michigan are finalizing their taxes while corporations, who filed in March, are looking ahead to their next fiscal year. Each year April brings to mind the flurry of activity directed toward minimizing taxes paid to cities, states, and the federal government.

Few businesses owners enjoy paying more tax than necessary and often go through a great deal of effort to make the most efficient use of tax credits and deductions. But there is another kind of tax on a business that many businesses could greatly reduce. And while city, state, and federal taxes keep our government running, there is no beneficiary of this tax. This tax is energy inefficiency.

The United States leads the world in overall energy use with over 100 quadrillion BTUs (a measure of energy usage) per year. This is natural, since the U.S. is the also largest economy in the world and buildings, manufacturing plants, warehouses, and other locations require sufficient energy to drive this economy. However, there is a strong—and at times even somewhat religious—“green” movement calling for better stewardship of our resources.

Larry Kaufman
Larry Kaufman, DTE Energy

Being green is sometimes associated with a particular world view perspective: concern for climate change, disdain for globalization, and resistance to broad economic development. But being green does not necessarily conflict with economic growth, global business, or controversial climate change data. All things being equal, everyone prefers good stewardship of resources and reduction of waste. In fact, there are a variety of actions you can take to make your company operations green both environmentally and financially.

Larry Kaufman is an Energy Efficiency Expert with DTE Energy. Kaufman sees being green with energy as something that fits all businesses. “If you want to reduce your energy bill because you think it’s the right thing to do for the earth and for reducing your carbon footprint, that’s great. Or, if you want to do it because you need to survive in today’s economy by having a lower energy bill, I’m fine with that too. Or, it might be a little bit of both. But I think it works for everyone; it’s reasonable, practical, and has a beneficial payback to make it worthwhile.”

The first place to look is lighting. Ron Fuller is Director of Business Development at K & F Electric Company. Fuller sees a large opportunity for businesses to make simple changes to their lighting to reduce energy consumption and lower operating costs.

According to Fuller, “We see a lot of opportunities. There is a solid business case for redoing your lighting and taking some green actions. Right now we’re seeing a lot of opportunities with T12 fluorescent fixtures. T12s are the standard, long, fluorescent 1 ½” diameter tubes in office buildings and facilities all over the Ann Arbor area.”

Fuller explains that these tubes are highly inefficient. If you have T12s, you would do well to replace them with fixtures that utilize the newer, more efficient T8 (1”) and T5 (5/8”) bulbs. “If you have T12s,” says Fuller, “the savings you get will more than offset your cash outlay.” Fuller likes to talk about the “cost of waiting.” You may think you’re smart to wait and replace your T12s with T8s or T5 once they burn out, but you’re actually losing money the longer you keep the T12s. “To go from a T12 to a T8 fixture,” he says, “you can cut your lighting consumption anywhere from 20% to 40% with a straight one-for-one swap.” The savings can be even greater when using T5 or T8 fixtures to replace metal halide or high-pressure sodium fixtures in manufacturing or warehouse facilities.

Lighting can make up roughly 30% of a business’s annual energy bill. If replacing T12 lighting can save 20% of lighting costs that would be a 7% reduction of your total energy bill just from swapping out the T12 bulbs and fixtures. Add to that the use of tools such as occupancy sensors and daylight controls and you could cut almost 20% of your total office energy bill.

Even simpler, says Kaufman, is the savings that are to be reaped by the replacement of standard incandescent bulbs with the newer CFL’s (compact fluorescent bulbs), that can be purchased for $0.99 at local stores because of DTE’s subsidies. According to Kaufman, “If you use a CFL bulb 4 hours a day instead of the incandescent bulb, you will save about $1.00 a month per bulb. So, your payback for that bulb purchase is one month. And since CFLs last 7 years, that’s $1.00 per month for 7 years, or $84 [per bulb].”

DTE FREE RESOURCES One might think that DTE Energy would not appreciate energy efficient businesses. After all, a reduction in energy use translates into less revenue for DTE Energy. But DTEEnergy has a vested interest in businesses cutting down on energy consumption. “As a public utility, we consider it part of our social mission to help businesses effectively manage their energy usage.” says Kaufman. “But, in addition, we would really prefer not to have to build another power plant; it’s expensive, and we don’t see the need for it, especially in today’s economy.”

All of this information is available at DTE’s website ( The site also provides a variety of free online resources that can help your business think through energy efficiency:

Michael Klement
Michael Klement
Architectural Resource, LLC

One terrific example of green in action in the Ann Arbor area is Architectural Resource, LLC ( As Principal, Michael R. Klement AIA, is taking his green energy design approach that he offers to his residential clients and is applying them to his the new office location that will be holding its grand opening this Spring.

Klement’s designs flow out of the Not so Big® approach developed by architectural colleague Sarah Susanka. “The idea,” Klement explains, “is to minimize your environmental impact or footprint by building and using the smallest space that you can possibly make work. A smaller space will take less resources to construct, less resources to heat and maintain, and less resources to decommission at the end of its useful lifespan. So all things being equal, the greenest thing we can do right out of the gate is build Not So Big®.”

Klement and his team have put much thought into a green energy office. An ERV (energy recovery ventilator), for example, is being installed that will ventilate inside air with outside air, extract up to 70% of the heat of that outgoing air, and allow the rest of the building to be tightly sealed due to the effective ventilation from the ERV. An energy efficient furnace is being installed, as well as automatic lighting level controls that will have sensors to dim the interior lights as exterior light is available through the windows. American clay plaster finish walls will emit negatives ions that will help clean the air. Green-certified Yolo paint will be used on the walls, with cork tile and 100% recyclable carpeting us to be used on the floor.

There are a myriad of other green steps taken can be seen when Architectural Resource, LLC has its grand opening. But it takes time to reach such an encompassing approach to business green. More likely, you are looking to take initial steps in devising a green approach.

Before you do anything, you have to decide on your goals. Any changes or adjustments you make must be made to accomplish your goals. “You need to decide what you want,” says Fuller. Without knowing what your goals are, its difficult to know how to apply the myriad of options available to you. Once you’ve set your goals, you can then take the following five steps to be SMART with your approach to energy efficiency.

1. System
First, remember that, as Klement puts it, “Green is an integrated system. It’s not about looking at one piece; it’s about looking at the entire ensemble. You can actually do some things that are ‘green’ in one area that could be negating another area.”

Klement refers to a residential example that involved harvesting water from the roof to irrigate the vegetable garden. The homeowner chose to use locally harvested wood shakes (split log shingles) for the roof, trying to follow a “local” green strategy. The problem was that the preservatives used to treat the shakes contaminated the vegetable garden. Independently, the strategies are great. But remember that your business building is a small ecosystem, so your approach must take a systematic approach to greening and energy efficiency.

2. Measure
Next, take an audit of your current system of energy usage. An energy audit measures across your system of energy usage and gives you a complete picture of where you’re using the most energy and where the opportunities for improvement might be.

“The first thing we do is conduct an audit,” notes Fuller. “You really need that to get a good picture of where you stand with your energy usage.” Kaufman agrees, though he suggests some upfront work on your own first. “My position is start with a free audit,” says Kaufman. “Before you engage an outside contractor, do the free stuff first to see what you can learn. That’s a good place to start. Then if you want more information, you can hire a professional who will be able to provide services you can’t do yourself, such as a blower door tester or red thermography.”

3. Analyze
Now use your audit results to analyze options you have to make changes to meet your stated goals. Upgrading to T5 fluorescent bulbs, for example, are more energy efficient, but the longer payback period may not suit your business goals. On the other hand, you may feel that purchasing T8 bulbs is too short-sighted and is insufficient for your energy efficiency needs. Be sure to consult an expert in this process; an experienced resource, such as a contractor, architect, or DTE representative can help guide you through this step.

4. Respond
Once you have a plan, don’t let it sit and collect dust. Respond to the plan and take immediate steps to get started. You will want to take the easiest steps first. Start with your company work habits. Turn off lights and computers when you’re not in the room or when you’ve left for the day. As Klement reminds us, “You want to identify where the low-hanging fruit is; in many cases energy efficiency can be as simple as caulk and sealant applied to the building exterior.”

5. Transform
As you continue to emphasize smarter use of energy, you can transform your company to become a lower-waste, lower-cost operation. You can begin tackle more sophisticated methods for being smart about energy usage.

Following this SMART approach can get you a good distance toward energy efficiency. Going forward, Kaufman suggests using the acronym FLOSS to guide your daily green decisions: Fresh, Local, Organic, Seasonal, and Sustainable. And we may want to add to that a second FLOSS for financial green: Feasible, Loss-sensitive, Operational, Sensible, and Stakeholder-supported. In the end, if you’re smart, you can be green twice over. And to top it off, this “business tax reduction” is a cut that can make everyone happy.

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