Fluorescent Magnetic T12 Ballast Phaseout: It's Time to Upgrade Existing Lighting and Control Systems
by Craig DiLouie, Lighting Controls Association
Posted August 2010
Last month, we covered regulations covering fluorescent ballasts that have essentially eliminated the magnetic T12 ballast with few exceptions, including F40T12, F96T12 and F96T12HO ballasts for both full-wattage and energy-saving versions of these lamps.
Two years later, in 2012, additional regulations will take effect, creating new energy standards for selected linear T5, T8 and T12 lamps. The net result, with few exceptions, is a majority of 4-ft. linear and 2-ft. U-shaped T12, many 8-ft. T12 and T12HO, and some low-color-rendering 4-ft. T8 lamps will be eliminated.
Based on these facts, one could make a simple argument that it is now time to upgrade existing lighting and control systems to improve energy efficiency and lighting quality.
Replace individually or in a planned upgrade?
A basic choice will be whether to replace the existing T12 lighting system all at once in a planned upgrade or replace individual components as they fail.
At first glance, replacing individual components as they fail appears to be the easiest path forward as it avoids the upfront cost of equipment and installation labor and potential disruption of a renovation.
However, a planned upgrade presents several major advantages:
• good lighting performance, uniformity and space appearance by switching from T12 to T8 all at once, avoiding confusion resulting from maintaining two incompatibility lamp and ballast types in inventory; and most importantly:
• higher energy savings and greater lighting quality resulting from reevaluating the existing lighting system and upgrading it to current best practices. Once a decision is made to upgrade the lighting system, the owner has taken control of the situation and can maximize the benefit of the new lighting.
The biggest energy-saving and lighting quality opportunities are in:
• older, overlighted buildings that use older technologies such as T12 systems
• where utility costs are very high; and
• where lighting is uncontrolled and left ON all night.
T12 systems, for example, can be upgraded to realize energy savings as high as 50% or more in offices, classrooms and other applications, according to the National Lighting Bureau.
Retrofit or redesign?
The next basic choice facing the facility manager is whether to retrofit or redesign. In a retrofit, new lamps and ballasts are installed in existing fixtures and existing controls replaced. In a redesign, the fixtures themselves may be replaced or moved.
Good lighting quality accounts for factors such as visual comfort, glare, uniformity, color rendering, lighting on walls and ceilings, and harsh patterns, shadows and flicker. If the building’s primary spaces have been retasked to new purposes for which the existing lighting system provides insufficient lighting conditions, or uniformity is poor, or there is little light on walls and ceilings, or there are obvious, unaddressed sources of glare, and if occupants are unhappy with their lighting, then the space may benefit from a redesign.
The owner may benefit prior to the upgrade by simply asking occupants—the people who use the lighting regularly—whether they are satisfied with their lighting, what their lighting problems are, and what they want.
Lamps and ballasts
Energy-efficient lighting technologies have had decades to develop and so many good, reliable solutions are now available from manufacturers.
Regarding lamps and ballasts, consider T8 systems. There are now 23W, 25W, 28W, 32W (normal output) and 32W (high output, or “Super T8”) T8 lamps available offering a choice of power and light output.
There are also electronic ballasts available with a range of efficiencies and ballast factors enabling further tuning of light output. The most efficient ballasts carry the NEMA Premium mark on the ballast label. Dimmable ballasts are becoming more efficient, versatile and affordable, making dimmable general lighting a reality.
Regarding fixtures, consider T5 systems, direct/indirect lighting and, if recessed, volumetric-distribution fixtures that place some light on walls to eliminate the “cave effect” common with some parabolic fixtures. LED lighting offers exciting opportunities to dramatically improve efficiency but as the overall technology is still relatively new, owners should proceed with caution, particularly when confronted by options such as LED T8 lamp replacements, which have not faired well in independent product testing at the Department of Energy.
Lighting controls
According to the New Buildings Institute, advanced lighting controls can generate up to 50% lighting energy savings in existing buildings. Effective strategies include automatic shutoff, light reduction control, daylight harvesting and demand response.
The biggest challenge to incorporating advanced control strategies to an existing building is adding low-voltage control wiring, generally limiting opportunities for installation of sophisticated control systems. As a result, the simplest upgrade options involve the least amount of rewiring or simply swapping out older ballasts and controls for new controls.
The first lighting control strategy to consider is automatic shutoff. It is considered the easiest, lowest-risk path to energy savings and is relatively simple to set up and commission. If LEED (for existing buildings) is used as a model path or actual requirement for the upgrade, this will be essential, as LEED requires that buildings meet the ASHRAE 90.1 energy standard as a prerequisite to gaining points for transcending it.
Start at the lighting panel. Are there large, open spaces in the building with predictable hours of operation? Are there public spaces where the lights must stay ON even when a space is unoccupied? If so, consider upgrading the existing lighting panelboard to an intelligent lighting control panel that offers programmable scheduling. Be sure to give local users override capability with a maximum 2- to 4-hour override.
Next, consider replacing the wall switch. Are there smaller, enclosed spaces in the building that are intermittently occupied during the day and are lighted with instant-ON light sources? If so, consider replacing toggle wall switches with occupancy sensors. If there is a clear line of sight between the switch and the primary task area, PIR sensors can present a cost-effective option. If greater sensitivity is needed for small levels of motion or if there are obstacles between the wall switch and the task, consider ultrasonic. For the ultimate in reliability, consider dual-technology sensors.
If the space is a private office already circuited for bilevel switching, consider replacing the manual switches with a manual-ON/auto-OFF occupancy sensor for the highest positive energy savings and some flexibility. If the space requires an occupancy sensor be installed in a location other than at the wall switch, consider wireless occupancy sensors that run on batteries or ambient light in the space harvested using an integral solar cell. These sensors install anywhere within range of the receiver switch, which replaces the wall switch, and present no wiring requirements, although wireless technology is presently a premium option. Similarly, wireless photosensors are also available.
If the upgrade involves replacing light fixtures, consider integral controls. In a workstation-specific open office lighting layout, for example, direct/indirect fixtures can be installed that include an integral occupancy sensor and/or, if placed in a daylight zone, a photosensor and dimmable ballast, with the control wiring located inside the fixture. If the space is a hibay lighting application where metal halide is being replaced by fluorescent fixtures, consider fixture-integrated or mounted line-voltage occupancy sensors, which can be an economical addition to a new fluorescent fixture or separate add-on that is field installed. Photosensors could be similarly added for control of fixtures mounted over spaces that receive ample daylight from skylights.
Light levels can be stepped using a single ballast called a step dimming or light level switching ballast. If the existing space is already circuited for bilevel switching, step-dimming ballasts can be installed to ensure light levels are reduced uniformly, without a checkerboard pattern. These ballasts can operate without low-voltage wiring. Most products are programmed-start T8 ballasts, which may experience a loss of efficacy during light level reduction; dimming to 50%, for example, may reduce wattage by 40%. Instant-start step-dimming ballasts are available that offer proportional reductions in light output and input watts, although instant-start operation is not recommended by some manufacturers for applications with five or more ON/OFF cycles per day. Other hi/lo switching opportunities include corridors that receive a lot of daylight (with a photosensor) and stairwells (with an occupancy sensor).
Continuous-dimming ballast costs have been falling for years, putting this control method within reach of many upgrade projects. Efficiency has also improved such that dimmable ballasts are available that are as efficacious as standard instant-start fixed-output ballasts. Look for the NEMA Premium label for the most efficient ballasts
The first lighting control strategy to consider is automatic shutoff. It is considered the easiest, lowest-risk path to energy savings and is relatively simple to set up and commission. If LEED (for existing buildings) is used as a model path or actual requirement for the upgrade, this will be essential, as LEED requires that buildings meet the ASHRAE 90.1 energy standard as a prerequisite to gaining points for transcending it.
Start at the lighting panel. Are there large, open spaces in the building with predictable hours of operation? Are there public spaces where the lights must stay ON even when a space is unoccupied? If so, consider upgrading the existing lighting panelboard to an intelligent lighting control panel that offers programmable scheduling. Be sure to give local users override capability with a maximum 2- to 4-hour override.
Next, consider replacing the wall switch. Are there smaller, enclosed spaces in the building that are intermittently occupied during the day and are lighted with instant-ON light sources? If so, consider replacing toggle wall switches with occupancy sensors. If there is a clear line of sight between the switch and the primary task area, PIR sensors can present a cost-effective option. If greater sensitivity is needed for small levels of motion or if there are obstacles between the wall switch and the task, consider ultrasonic. For the ultimate in reliability, consider dual-technology sensors.
If the space is a private office already circuited for bilevel switching, consider replacing the manual switches with a manual-ON/auto-OFF occupancy sensor for the highest positive energy savings and some flexibility. If the space requires an occupancy sensor be installed in a location other than at the wall switch, consider wireless occupancy sensors that run on batteries or ambient light in the space harvested using an integral solar cell. These sensors install anywhere within range of the receiver switch, which replaces the wall switch, and present no wiring requirements, although wireless technology is presently a premium option. Similarly, wireless photosensors are also available.
If the upgrade involves replacing light fixtures, consider integral controls. In a workstation-specific open office lighting layout, for example, direct/indirect fixtures can be installed that include an integral occupancy sensor and/or, if placed in a daylight zone, a photosensor and dimmable ballast, with the control wiring located inside the fixture. If the space is a hibay lighting application where metal halide is being replaced by fluorescent fixtures, consider fixture-integrated or mounted line-voltage occupancy sensors, which can be an economical addition to a new fluorescent fixture or separate add-on that is field installed. Photosensors could be similarly added for control of fixtures mounted over spaces that receive ample daylight from skylights.
Light levels can be stepped using a single ballast called a step dimming or light level switching ballast. If the existing space is already circuited for bilevel switching, step-dimming ballasts can be installed to ensure light levels are reduced uniformly, without a checkerboard pattern. These ballasts can operate without low-voltage wiring. Most products are programmed-start T8 ballasts, which may experience a loss of efficacy during light level reduction; dimming to 50%, for example, may reduce wattage by 40%. Instant-start step-dimming ballasts are available that offer proportional reductions in light output and input watts, although instant-start operation is not recommended by some manufacturers for applications with five or more ON/OFF cycles per day. Other hi/lo switching opportunities include corridors that receive a lot of daylight (with a photosensor) and stairwells (with an occupancy sensor).
Continuous-dimming ballast costs have been falling for years, putting this control method within reach of many upgrade projects. Efficiency has also improved such that dimmable ballasts are available that are as efficacious as standard instant-start fixed-output ballasts. Look for the NEMA Premium label for the most efficient ballasts.
The first lighting control strategy to consider is automatic shutoff. It is considered the easiest, lowest-risk path to energy savings and is relatively simple to set up and commission. If LEED (for existing buildings) is used as a model path or actual requirement for the upgrade, this will be essential, as LEED requires that buildings meet the ASHRAE 90.1 energy standard as a prerequisite to gaining points for transcending it.
Start at the lighting panel. Are there large, open spaces in the building with predictable hours of operation? Are there public spaces where the lights must stay ON even when a space is unoccupied? If so, consider upgrading the existing lighting panelboard to an intelligent lighting control panel that offers programmable scheduling. Be sure to give local users override capability with a maximum 2- to 4-hour override.
Next, consider replacing the wall switch. Are there smaller, enclosed spaces in the building that are intermittently occupied during the day and are lighted with instant-ON light sources? If so, consider replacing toggle wall switches with occupancy sensors. If there is a clear line of sight between the switch and the primary task area, PIR sensors can present a cost-effective option. If greater sensitivity is needed for small levels of motion or if there are obstacles between the wall switch and the task, consider ultrasonic. For the ultimate in reliability, consider dual-technology sensors.
If the space is a private office already circuited for bilevel switching, consider replacing the manual switches with a manual-ON/auto-OFF occupancy sensor for the highest positive energy savings and some flexibility. If the space requires an occupancy sensor be installed in a location other than at the wall switch, consider wireless occupancy sensors that run on batteries or ambient light in the space harvested using an integral solar cell. These sensors install anywhere within range of the receiver switch, which replaces the wall switch, and present no wiring requirements, although wireless technology is presently a premium option. Similarly, wireless photosensors are also available.
If the upgrade involves replacing light fixtures, consider integral controls. In a workstation-specific open office lighting layout, for example, direct/indirect fixtures can be installed that include an integral occupancy sensor and/or, if placed in a daylight zone, a photosensor and dimmable ballast, with the control wiring located inside the fixture. If the space is a hibay lighting application where metal halide is being replaced by fluorescent fixtures, consider fixture-integrated or mounted line-voltage occupancy sensors, which can be an economical addition to a new fluorescent fixture or separate add-on that is field installed. Photosensors could be similarly added for control of fixtures mounted over spaces that receive ample daylight from skylights.
Light levels can be stepped using a single ballast called a step dimming or light level switching ballast. If the existing space is already circuited for bilevel switching, step-dimming ballasts can be installed to ensure light levels are reduced uniformly, without a checkerboard pattern. These ballasts can operate without low-voltage wiring. Most products are programmed-start T8 ballasts, which may experience a loss of efficacy during light level reduction; dimming to 50%, for example, may reduce wattage by 40%. Instant-start step-dimming ballasts are available that offer proportional reductions in light output and input watts, although instant-start operation is not recommended by some manufacturers for applications with five or more ON/OFF cycles per day. Other hi/lo switching opportunities include corridors that receive a lot of daylight (with a photosensor) and stairwells (with an occupancy sensor).
Continuous-dimming ballast costs have been falling for years, putting this control method within reach of many upgrade projects. Efficiency has also improved such that dimmable ballasts are available that are as efficacious as standard instant-start fixed-output ballasts. Look for the NEMA Premium label for the most efficient ballasts
Monday, September 13, 2010
Sunday, September 12, 2010
CONSUMERS SET ELECTRICITY USE RECORDS IN PJM REGION
http://www.pjm.org/~/media/about-pjm/newsroom/2010-releases/20100811-consumers-set-energy-record.ashx
Contact: PJM News, toll free at 866-PJM-NEWS (866-756-6397)
FOR IMMEDIATE RELEASE
CONSUMERS SET ELECTRICITY USE RECORDS IN PJM REGION
Electricity Use Up 16 Percent Over Last Year
(Valley Forge, Pa. – Aug. 11, 2010) – Consumers in the 13-state PJM Interconnection region have set new records for electricity consumption for June and July and have used 16 percent more electricity
so far this summer than last summer.
Preliminary figures show that overall electricity consumption for June 2010 was 63,898,387 megawatt-hours (MWh), surpassing the previous record for June of 63,236,074 MWh set in 2008. (That’s enough electricity to power Switzerland for a full year.) The electricity consumption for July
2010 was 71,761,819 MWh, surpassing the previous record for July of 70,404,227 MWh set in 2006.
“The higher electricity loads we’re seeing are definitely because of the weather,” said Michael Kormos, PJM senior vice president – Operations, noting the correlation between higher temperatures and higher use. “Fortunately, it’s in these hotter than average times when we see the
true strength of the coordination between PJM and our member companies who make it possible to meet demand and keep the grid stable.”
Since May 25, average temperatures in the region have been higher than they’ve been since 2006. So far this year, the peak demand for electricity in the PJM region was 136,680 megawatts (MW) on July 6. Peak demand is the greatest amount of electricity used during a single hour. (One megawatt
is enough electricity to serve 800 to 1,000 homes.) This peak amount was 14 percent higher than last year’s peak demand. The all-time record peak demand was 144,644 MW set on August 2, 2006.
Consumers did set a new record demand this year for a Saturday. On July 24, 2010, peak demand was reached at 128,452 MW, unusual for a weekend when energy use typically is lower because fewer businesses and industries operate. That broke the old record by more than 8,000 MW – enough power to run a major city.
PJM Interconnection, founded in 1927, ensures the reliability of the high-voltage electric power system serving
51 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey,North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region’s transmission grid, which includes 6,038 substations and
56,500 miles of transmission lines; administers a competitive wholesale electricity market; and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. Visit PJM at
www.pjm.com.
Contact: PJM News, toll free at 866-PJM-NEWS (866-756-6397)
FOR IMMEDIATE RELEASE
CONSUMERS SET ELECTRICITY USE RECORDS IN PJM REGION
Electricity Use Up 16 Percent Over Last Year
(Valley Forge, Pa. – Aug. 11, 2010) – Consumers in the 13-state PJM Interconnection region have set new records for electricity consumption for June and July and have used 16 percent more electricity
so far this summer than last summer.
Preliminary figures show that overall electricity consumption for June 2010 was 63,898,387 megawatt-hours (MWh), surpassing the previous record for June of 63,236,074 MWh set in 2008. (That’s enough electricity to power Switzerland for a full year.) The electricity consumption for July
2010 was 71,761,819 MWh, surpassing the previous record for July of 70,404,227 MWh set in 2006.
“The higher electricity loads we’re seeing are definitely because of the weather,” said Michael Kormos, PJM senior vice president – Operations, noting the correlation between higher temperatures and higher use. “Fortunately, it’s in these hotter than average times when we see the
true strength of the coordination between PJM and our member companies who make it possible to meet demand and keep the grid stable.”
Since May 25, average temperatures in the region have been higher than they’ve been since 2006. So far this year, the peak demand for electricity in the PJM region was 136,680 megawatts (MW) on July 6. Peak demand is the greatest amount of electricity used during a single hour. (One megawatt
is enough electricity to serve 800 to 1,000 homes.) This peak amount was 14 percent higher than last year’s peak demand. The all-time record peak demand was 144,644 MW set on August 2, 2006.
Consumers did set a new record demand this year for a Saturday. On July 24, 2010, peak demand was reached at 128,452 MW, unusual for a weekend when energy use typically is lower because fewer businesses and industries operate. That broke the old record by more than 8,000 MW – enough power to run a major city.
PJM Interconnection, founded in 1927, ensures the reliability of the high-voltage electric power system serving
51 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey,North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region’s transmission grid, which includes 6,038 substations and
56,500 miles of transmission lines; administers a competitive wholesale electricity market; and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. Visit PJM at
www.pjm.com.
Saturday, September 11, 2010
ComEd Launches Nation's First 'Smart Grid Innovation Corridor'
Press Release Source: ComEd On Wednesday September 1, 2010, 12:14 pm EDT
CHICAGO, Sept. 1 /PRNewswire/ -- ComEd today launched the "ComEd Smart Grid Innovation Corridor," one of the broadest collections of Smart Grid pilots in the country. This suite of projects will evaluate the latest technology and implementation approaches in areas such as residential solar power, the company's first intelligent substation, distribution automation and electric vehicle charging stations.
The ComEd Smart Grid Innovation Corridor encompasses the 10 communities of Bellwood, Berwyn, Broadview, Forest Park, Hillside, Maywood, Melrose Park, Oak Park, River Forest and the Humboldt Park neighborhood in Chicago. It will build upon the information-rich Smart Meters currently installed in 130,000 residences within this area.
"Our innovation corridor is unlike any in the U.S.," said Anne Pramaggiore, president and chief operating officer, ComEd. "It allows us to study a variety of advanced Smart Grid technologies individually and in relation to each other. Through this deliberate approach, we will learn the best and most cost-effective way to deliver value to our customers, help them manage their bills, and improve system reliability."
Pramaggiore noted that the foundational technology for each pilot is the Smart Meter. ComEd recently launched one of the largest Smart Meter pilots in the country and is well-positioned to study the best approaches for creating a robust Smart Grid in northern Illinois.
"The Smart Meter is the on-ramp to the Smart Grid, and our goal is to ensure that these systems work for our customers. The ComEd Smart Grid Innovation Corridor allows us to prove out advanced technologies under realistic operating conditions," said Terence Donnelly, Executive Vice President of Operations, ComEd.
The five pilots to be initiated this year include:
Photovoltaic (PV) Pilot: This three-year project is partially funded by a $5 million U.S. Department of Energy grant. It will examine the customer benefits of residential solar generation, hourly pricing signals, the ability to sell back unused solar electricity and the impact of changes in customer load on the ComEd grid. Participants will be selected by the end of this year for the pilot, which is expected to begin in the spring of 2011.
Intelligent Substation: Microprocessor-based controls and advanced digital devices currently are being installed at a substation in Oak Park to create an "intelligent substation" that will feature automated monitoring and analysis to improve reliability and streamline maintenance. The intelligent substation will go live in December.
Distribution Automation: Automated power-line restoration devices and smart isolation switches will be installed to create "self-healing" lines that will automatically correct disturbances and minimize the duration of outages. Equipment will go live in December.
Electric Vehicles and Charging Infrastructure: Through partnerships with General Motors, the City of Chicago, the Electric Power Research Institute and industry groups, the next generation of electric vehicles will be studied and smart-charging infrastructure will be installed to encourage development of a Chicago market for electric vehicles. The first charging stations will be installed this fall, and ComEd will begin testing GM's Chevy Volt in 2011.
Dynamic Voltage Regulation: "Greening" the electric system by using Smart Grid technologies to reduce surplus voltage on distribution lines while maintaining high reliability. This pilot will go live in December.
To recruit participants for the PV Pilot, ComEd recently sent invitations to more than 25,000 customers who own a single-family home within the ComEd Smart Grid Innovation Corridor. One hundred homeowners will be selected to receive free rooftop solar panels and other equipment, free installation and Web access to monitor their electricity generation and consumption.
"ComEd is one of only two utilities in the nation approved by the U.S. Department of Energy to run a solar pilot, which positions us as an industry-leader in exploring innovative Smart Grid approaches that hold the promise of providing significant benefits to our customers, the electrical system and the environment," Donnelly said.
ComEd will work with the University of Illinois and Argonne National Laboratory, who will serve as research partners and assist the company in analyzing various aspects of the PV pilot, including the wealth of data that will be generated, customer perceptions and overall benefits.
For information on the ComEd Smart Grid Innovation corridor and other technologies, visit www.ComEd.com and search for "Smart Grid."
Commonwealth Edison Company (ComEd) is a unit of Chicago-based Exelon Corporation (NYSE:EXC - News), one of the nation's largest electric utilities with approximately 5.4 million customers. ComEd provides service to approximately 3.8 million customers across northern Illinois, or 70 percent of the state's population.
CHICAGO, Sept. 1 /PRNewswire/ -- ComEd today launched the "ComEd Smart Grid Innovation Corridor," one of the broadest collections of Smart Grid pilots in the country. This suite of projects will evaluate the latest technology and implementation approaches in areas such as residential solar power, the company's first intelligent substation, distribution automation and electric vehicle charging stations.
The ComEd Smart Grid Innovation Corridor encompasses the 10 communities of Bellwood, Berwyn, Broadview, Forest Park, Hillside, Maywood, Melrose Park, Oak Park, River Forest and the Humboldt Park neighborhood in Chicago. It will build upon the information-rich Smart Meters currently installed in 130,000 residences within this area.
"Our innovation corridor is unlike any in the U.S.," said Anne Pramaggiore, president and chief operating officer, ComEd. "It allows us to study a variety of advanced Smart Grid technologies individually and in relation to each other. Through this deliberate approach, we will learn the best and most cost-effective way to deliver value to our customers, help them manage their bills, and improve system reliability."
Pramaggiore noted that the foundational technology for each pilot is the Smart Meter. ComEd recently launched one of the largest Smart Meter pilots in the country and is well-positioned to study the best approaches for creating a robust Smart Grid in northern Illinois.
"The Smart Meter is the on-ramp to the Smart Grid, and our goal is to ensure that these systems work for our customers. The ComEd Smart Grid Innovation Corridor allows us to prove out advanced technologies under realistic operating conditions," said Terence Donnelly, Executive Vice President of Operations, ComEd.
The five pilots to be initiated this year include:
Photovoltaic (PV) Pilot: This three-year project is partially funded by a $5 million U.S. Department of Energy grant. It will examine the customer benefits of residential solar generation, hourly pricing signals, the ability to sell back unused solar electricity and the impact of changes in customer load on the ComEd grid. Participants will be selected by the end of this year for the pilot, which is expected to begin in the spring of 2011.
Intelligent Substation: Microprocessor-based controls and advanced digital devices currently are being installed at a substation in Oak Park to create an "intelligent substation" that will feature automated monitoring and analysis to improve reliability and streamline maintenance. The intelligent substation will go live in December.
Distribution Automation: Automated power-line restoration devices and smart isolation switches will be installed to create "self-healing" lines that will automatically correct disturbances and minimize the duration of outages. Equipment will go live in December.
Electric Vehicles and Charging Infrastructure: Through partnerships with General Motors, the City of Chicago, the Electric Power Research Institute and industry groups, the next generation of electric vehicles will be studied and smart-charging infrastructure will be installed to encourage development of a Chicago market for electric vehicles. The first charging stations will be installed this fall, and ComEd will begin testing GM's Chevy Volt in 2011.
Dynamic Voltage Regulation: "Greening" the electric system by using Smart Grid technologies to reduce surplus voltage on distribution lines while maintaining high reliability. This pilot will go live in December.
To recruit participants for the PV Pilot, ComEd recently sent invitations to more than 25,000 customers who own a single-family home within the ComEd Smart Grid Innovation Corridor. One hundred homeowners will be selected to receive free rooftop solar panels and other equipment, free installation and Web access to monitor their electricity generation and consumption.
"ComEd is one of only two utilities in the nation approved by the U.S. Department of Energy to run a solar pilot, which positions us as an industry-leader in exploring innovative Smart Grid approaches that hold the promise of providing significant benefits to our customers, the electrical system and the environment," Donnelly said.
ComEd will work with the University of Illinois and Argonne National Laboratory, who will serve as research partners and assist the company in analyzing various aspects of the PV pilot, including the wealth of data that will be generated, customer perceptions and overall benefits.
For information on the ComEd Smart Grid Innovation corridor and other technologies, visit www.ComEd.com and search for "Smart Grid."
Commonwealth Edison Company (ComEd) is a unit of Chicago-based Exelon Corporation (NYSE:EXC - News), one of the nation's largest electric utilities with approximately 5.4 million customers. ComEd provides service to approximately 3.8 million customers across northern Illinois, or 70 percent of the state's population.
Friday, September 10, 2010
Large Tax Refunds Await Unsuspecting Commercial Building Owners
Large Tax Refunds Await Unsuspecting Commercial Building Owners
September 1, 2010
By Ken Anno, Esq.
Founder & Managing Principal, CIC ENERGY CONSTRUCTION (Chicago General Contractor TGC 21344-1)
Founder & Principal, KUMA ENERGY SOLUTIONS
Association of Energy Engineers Member, NLB listed Lighting Designer & Qualified EPAct Certifier
The 2005 Energy Policy Act (EPAct) was the most significant overhaul of U.S. national energy policy since 1992. The policy’s objective was to reduce the national energy demand by 312 megawatts and carbon emissions by 10 million metric tons. Congress hoped to achieve these lofty goals by targeting commercial building owners by dangling a carrot in the form of $1.1 billion in tax-based incentives over 4 years (2005-2008) for improvements in sustainable building technologies, weatherization and energy efficiency.
The energy-efficient commercial-building property deduction (Section 179D) provides taxpayers with an immediate deduction of up to $1.80 per square foot for the installation of interior lighting, building envelope property, and heating, cooling, ventilation and hot water systems that significantly reduce power use. The cost of this property normally would be depreciated over 39 years. The use of accelerated depreciation techniques (rather than straight-line depreciation) increases the NPV of a project by shifting the cash flows forward in the project’s life thereby increasing present value of these cash flows.
“Energy-efficient property” is defined by EPAct 2005 to be commercial building property that is certified to reduce total annual energy and power costs to at least 50% less than a building satisfying ASHRAE 90.1-2001 Standard. Qualifying systems include 1) interior lighting systems, 2) heating, cooling, ventilation and hot water systems, and 3) building envelope. In addition, the property must 1) be otherwise depreciable property, 2) located in the United States, 3) paid to be constructed by the taxpayer seeking the deduction
The Emergency Economic Stabilization Act of 2008 extended the Section 179 tax deduction for the cost of energy efficient commercial building property placed into service during the taxable year. Under the extension, the property can be placed in service through December 31, 2013. This provision became effective for property placed in service after December 31, 2008 and before January 1, 2014. The 2008 extension further increased the amount of deductible Code Sec. 179 expensing to $250,000 from 125,000 and increased the phase-out threshold from $500,000 (adjusted for inflation) for reducing the deduction to $800,000 for property purchased and placed in service in tax years beginning in 2008. The 2009 Recovery Act further extended the $250,000 and $800,000 amounts to tax years beginning in 2009.
IRS NOTICE 2006-52 AND 2008-40
The IRS released interim guidelines pertaining to the deduction for energy-efficient commercial buildings under Section 179 (D). (See IRS Notice 2006-52, attached hereto as Exhibit A). IRS Notice 2006-52 was amplified by IRS Notice 2008-40, which set forth additional guidance relating to the deduction for energy efficient commercial buildings under Section179 (D) and is intended to be used in conjunction with Notice 2006-52.
THE RETROACTIVE SECTION 179 ELECTION DILEMA
Upon the 2008 extension, confusion has arisen over whether a Section 179 election could be made for qualifying property costs that were incurred over prior years when the tax payer did not know of the available tax deduction. In fact, the informational website www.section179.org specifically states that a taxpayer cannot claim Section 179 for previous tax years. However, this is simply incorrect.
The root of this confusion is that the permanent rule for elections to claim on expense method depreciation for many years has been that elections had to be made on the original income tax return for the year the property was placed in service (whether or not the return was timely) or on an amended return but only if filed within the time for filing a return (including extensions) for the taxable year. For taxable years beginning after 2002 and before 2008, a taxpayer was permitted to make an expense method depreciation election on an amended federal income tax return without the consent of the Commissioner. The amended return had to be filed within the time prescribed for filing an amended return for the taxable year. The statute has always been clear on the authority to revoke without the Commissioner’s consent
Any elections made under this Section, and any specification contained in such election, may not be revoked except with the consent of the Secretary. Any such election or specification with respect to any taxable year beginning after 2002 and before 2011 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable. §179 (c) (2).
The statute was amended in 2006 to extend the period for revocations to be made on an amended return before 2010, but that legislation did not extend the period for making elections on an amended return. The statute was amended again in 2007 to extend the date to “before 2011” for revocations without the Commissioner’s consent, but again without extending the period for making elections, which has led to confusion on the proper procedure on Section 179 election.
SECTION 179 TAX DEDUCTIONS CAN BE CLAIMED FOR PRIOR TAX YEARS BY FILING AN AMENDED TAX RETURN
A qualifying taxpayer can claim a tax deduction and refund by filing an amended tax return within 3 years from the date the original return was filed (including extensions) or within 2 years from the date the tax was paid. The IRS clearly authorizes a tax payer to make a Section 179 election for previous tax years as noted in the following IRS publications.
T.D. 9307: The Treasury had made an attempt to resolve the problem as evidenced in T.D. 9307 issued on December 26, 2006, which in revenant part stated:
The final regulations retain the rule contained in the temporary regulations providing that the making of a late depreciation election or the revocation of a timely valid depreciation election is not a change in method of accounting, except as otherwise provided by the Code, the regulations under the Code, or other guidance published in the Internal Revenue Bulletin. A commentator inquired whether a late Section 179 election may be made by requesting a change in method of accounting. Under Section 179 and the regulations under Section 179, a late Section 179 election generally is made by submitting a request for a letter ruling. However, for a taxable year beginning after 2002 and before 2010, a taxpayer may make a Section 179 election by filing an amended return. Accordingly, the IRS and Treasury Department have included a cross-reference to Section 179(c) and §1.179-5.).
Section 7 of IRS Rev. Proc. 2008-54 reiterated this point and expressly stated that the taxpayer could rely on this guidance even without a formal statutory amendment to Section 1.179-5(c).
For any taxable year beginning after 2007 and before the last year provided in § 179(c) (2) for revoking a § 179 election by a taxpayer with respect to any § 179 property, the taxpayer will be permitted to make a § 179 election without the Commissioner’s consent on an amended federal tax return for that taxable year. Currently, the last year provided in § 179(c) (2) is 2011. The Internal Revenue Service and the Treasury Department intend to amend § 1.179-5(c) to incorporate the guidance set forth under this Section 7. Until § 1.179-5(c) is amended, taxpayers may rely on the guidance set forth in this Section 7.
INFO 2009-0059: In INFO 2009-0059 released on March 27, 2009, the Office of Chief Counsel issued an Informational letter that stated that taxpayers can make or revoke an expense method depreciation (Sec. 179) election on an amended return for a taxable year beginning after 2007 and before 2011 without the need for Treasury Regulations to be issued. The IRS noted that taxpayers can rely on the guidance set forth in Rev. Proc. 2008-54, Section 7 for making and revoking such elections.
Section 7 of Rev. Proc. 2008-54 provides that for any taxable year beginning after 2007 and before the last year provided in Section 179(c) (2) for revoking a Section 179 election by a taxpayer with respect to any Section 179 property, the taxpayer will be permitted to make a Section 179 election without the Commissioner’s consent on an amended federal tax return for that taxable year. Further, Section 7 provides that the Internal Revenue Service and the Treasury Department intend to amend Section 1.179-5(c) to incorporate the guidance set forth under Section 7 and that until Section 1.179-5(c) is amended, taxpayers may rely on the guidance set forth in Section 7. See Section 7 of Rev. Proc. 2008-54.
CONCLUSION
Based on guidance issued by the IRS, a qualifying taxpayer is permitted to make a Section 179 election without the Commissioner’s consent on an amended federal tax return for a taxable year beginning after 2007 and before 2011 for energy efficient measures that meet the requirements set forth in IRS Notice 2006-52 and IRS Notice 2008-40. The simple translation is that building owners that meet the requirements as set forth above will enjoy additional cash flow in the form of a tax refund for project costs incurred within the past 3 years. To claim an unused 179D refund the taxpayer need only to file a Form 1040 X, “Amended U.S. Individual Income Tax Return.” A claim for a credit or refund must be filed within 3 years from the date the original return was filed (including extensions) or within 2 years from the date the tax was paid, whichever is later. According to Instructions for Form 1040X, the processing time is 8 to 12 weeks.
DISCLAIMER: The materials in this newsletter are offered for informational purposes only and are not legal or tax advice. Do not act or rely upon any of the resources and information contained in this newsletter without seeking professional legal advice from an attorney that you retain. Reproduction, distribution, republication, and/or retransmission of material contained in this Newsletter are prohibited unless the prior written permission of the Author and Kuma Energy Solutions have been obtained.
September 1, 2010
By Ken Anno, Esq.
Founder & Managing Principal, CIC ENERGY CONSTRUCTION (Chicago General Contractor TGC 21344-1)
Founder & Principal, KUMA ENERGY SOLUTIONS
Association of Energy Engineers Member, NLB listed Lighting Designer & Qualified EPAct Certifier
The 2005 Energy Policy Act (EPAct) was the most significant overhaul of U.S. national energy policy since 1992. The policy’s objective was to reduce the national energy demand by 312 megawatts and carbon emissions by 10 million metric tons. Congress hoped to achieve these lofty goals by targeting commercial building owners by dangling a carrot in the form of $1.1 billion in tax-based incentives over 4 years (2005-2008) for improvements in sustainable building technologies, weatherization and energy efficiency.
The energy-efficient commercial-building property deduction (Section 179D) provides taxpayers with an immediate deduction of up to $1.80 per square foot for the installation of interior lighting, building envelope property, and heating, cooling, ventilation and hot water systems that significantly reduce power use. The cost of this property normally would be depreciated over 39 years. The use of accelerated depreciation techniques (rather than straight-line depreciation) increases the NPV of a project by shifting the cash flows forward in the project’s life thereby increasing present value of these cash flows.
“Energy-efficient property” is defined by EPAct 2005 to be commercial building property that is certified to reduce total annual energy and power costs to at least 50% less than a building satisfying ASHRAE 90.1-2001 Standard. Qualifying systems include 1) interior lighting systems, 2) heating, cooling, ventilation and hot water systems, and 3) building envelope. In addition, the property must 1) be otherwise depreciable property, 2) located in the United States, 3) paid to be constructed by the taxpayer seeking the deduction
The Emergency Economic Stabilization Act of 2008 extended the Section 179 tax deduction for the cost of energy efficient commercial building property placed into service during the taxable year. Under the extension, the property can be placed in service through December 31, 2013. This provision became effective for property placed in service after December 31, 2008 and before January 1, 2014. The 2008 extension further increased the amount of deductible Code Sec. 179 expensing to $250,000 from 125,000 and increased the phase-out threshold from $500,000 (adjusted for inflation) for reducing the deduction to $800,000 for property purchased and placed in service in tax years beginning in 2008. The 2009 Recovery Act further extended the $250,000 and $800,000 amounts to tax years beginning in 2009.
IRS NOTICE 2006-52 AND 2008-40
The IRS released interim guidelines pertaining to the deduction for energy-efficient commercial buildings under Section 179 (D). (See IRS Notice 2006-52, attached hereto as Exhibit A). IRS Notice 2006-52 was amplified by IRS Notice 2008-40, which set forth additional guidance relating to the deduction for energy efficient commercial buildings under Section179 (D) and is intended to be used in conjunction with Notice 2006-52.
THE RETROACTIVE SECTION 179 ELECTION DILEMA
Upon the 2008 extension, confusion has arisen over whether a Section 179 election could be made for qualifying property costs that were incurred over prior years when the tax payer did not know of the available tax deduction. In fact, the informational website www.section179.org specifically states that a taxpayer cannot claim Section 179 for previous tax years. However, this is simply incorrect.
The root of this confusion is that the permanent rule for elections to claim on expense method depreciation for many years has been that elections had to be made on the original income tax return for the year the property was placed in service (whether or not the return was timely) or on an amended return but only if filed within the time for filing a return (including extensions) for the taxable year. For taxable years beginning after 2002 and before 2008, a taxpayer was permitted to make an expense method depreciation election on an amended federal income tax return without the consent of the Commissioner. The amended return had to be filed within the time prescribed for filing an amended return for the taxable year. The statute has always been clear on the authority to revoke without the Commissioner’s consent
Any elections made under this Section, and any specification contained in such election, may not be revoked except with the consent of the Secretary. Any such election or specification with respect to any taxable year beginning after 2002 and before 2011 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable. §179 (c) (2).
The statute was amended in 2006 to extend the period for revocations to be made on an amended return before 2010, but that legislation did not extend the period for making elections on an amended return. The statute was amended again in 2007 to extend the date to “before 2011” for revocations without the Commissioner’s consent, but again without extending the period for making elections, which has led to confusion on the proper procedure on Section 179 election.
SECTION 179 TAX DEDUCTIONS CAN BE CLAIMED FOR PRIOR TAX YEARS BY FILING AN AMENDED TAX RETURN
A qualifying taxpayer can claim a tax deduction and refund by filing an amended tax return within 3 years from the date the original return was filed (including extensions) or within 2 years from the date the tax was paid. The IRS clearly authorizes a tax payer to make a Section 179 election for previous tax years as noted in the following IRS publications.
T.D. 9307: The Treasury had made an attempt to resolve the problem as evidenced in T.D. 9307 issued on December 26, 2006, which in revenant part stated:
The final regulations retain the rule contained in the temporary regulations providing that the making of a late depreciation election or the revocation of a timely valid depreciation election is not a change in method of accounting, except as otherwise provided by the Code, the regulations under the Code, or other guidance published in the Internal Revenue Bulletin. A commentator inquired whether a late Section 179 election may be made by requesting a change in method of accounting. Under Section 179 and the regulations under Section 179, a late Section 179 election generally is made by submitting a request for a letter ruling. However, for a taxable year beginning after 2002 and before 2010, a taxpayer may make a Section 179 election by filing an amended return. Accordingly, the IRS and Treasury Department have included a cross-reference to Section 179(c) and §1.179-5.).
Section 7 of IRS Rev. Proc. 2008-54 reiterated this point and expressly stated that the taxpayer could rely on this guidance even without a formal statutory amendment to Section 1.179-5(c).
For any taxable year beginning after 2007 and before the last year provided in § 179(c) (2) for revoking a § 179 election by a taxpayer with respect to any § 179 property, the taxpayer will be permitted to make a § 179 election without the Commissioner’s consent on an amended federal tax return for that taxable year. Currently, the last year provided in § 179(c) (2) is 2011. The Internal Revenue Service and the Treasury Department intend to amend § 1.179-5(c) to incorporate the guidance set forth under this Section 7. Until § 1.179-5(c) is amended, taxpayers may rely on the guidance set forth in this Section 7.
INFO 2009-0059: In INFO 2009-0059 released on March 27, 2009, the Office of Chief Counsel issued an Informational letter that stated that taxpayers can make or revoke an expense method depreciation (Sec. 179) election on an amended return for a taxable year beginning after 2007 and before 2011 without the need for Treasury Regulations to be issued. The IRS noted that taxpayers can rely on the guidance set forth in Rev. Proc. 2008-54, Section 7 for making and revoking such elections.
Section 7 of Rev. Proc. 2008-54 provides that for any taxable year beginning after 2007 and before the last year provided in Section 179(c) (2) for revoking a Section 179 election by a taxpayer with respect to any Section 179 property, the taxpayer will be permitted to make a Section 179 election without the Commissioner’s consent on an amended federal tax return for that taxable year. Further, Section 7 provides that the Internal Revenue Service and the Treasury Department intend to amend Section 1.179-5(c) to incorporate the guidance set forth under Section 7 and that until Section 1.179-5(c) is amended, taxpayers may rely on the guidance set forth in Section 7. See Section 7 of Rev. Proc. 2008-54.
CONCLUSION
Based on guidance issued by the IRS, a qualifying taxpayer is permitted to make a Section 179 election without the Commissioner’s consent on an amended federal tax return for a taxable year beginning after 2007 and before 2011 for energy efficient measures that meet the requirements set forth in IRS Notice 2006-52 and IRS Notice 2008-40. The simple translation is that building owners that meet the requirements as set forth above will enjoy additional cash flow in the form of a tax refund for project costs incurred within the past 3 years. To claim an unused 179D refund the taxpayer need only to file a Form 1040 X, “Amended U.S. Individual Income Tax Return.” A claim for a credit or refund must be filed within 3 years from the date the original return was filed (including extensions) or within 2 years from the date the tax was paid, whichever is later. According to Instructions for Form 1040X, the processing time is 8 to 12 weeks.
DISCLAIMER: The materials in this newsletter are offered for informational purposes only and are not legal or tax advice. Do not act or rely upon any of the resources and information contained in this newsletter without seeking professional legal advice from an attorney that you retain. Reproduction, distribution, republication, and/or retransmission of material contained in this Newsletter are prohibited unless the prior written permission of the Author and Kuma Energy Solutions have been obtained.
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