Energy-as-a-service kept six Dunkin' stores' energy costs level for years

At one of Sean-Paul Ferrera's Dunkin' restaurants in the San Antonio area, a new HVAC system had an effect nobody would list in an energy audit: the doughnuts stay fresher through the day.

Ferrera owns six Dunkin' locations. He told Facilities Dive reporter Lisa Burden that he has used an energy-as-a-service program from Budderfly for the past six years. He started with one store and later enrolled all six. He said the arrangement limited his rising energy costs, improved building controls and kept temperatures more consistent. Before he signed, he said, he hadn't known the model existed.

The same Nov. 5 report places that franchise alongside much larger buyers. Beacon Health System, a nonprofit serving Indiana and Michigan, has a 30-year agreement with Enfra that Beacon says is speeding up efficiency work at its two largest hospital campuses. Baptist Health has also signed a 30-year partnership with Enfra.

Six doughnut shops and two health systems are buying the same model for different stated reasons. Taken together, the cases suggest energy-as-a-service is bought for predictability and outside expertise at least as much as for the energy it saves. That affects what a facilities director or CFO should check before signing.

Hospitals sign up for three decades

According to an emailed statement from Steve Scannell, Baptist Health's chief investment officer, the arrangement gives the health system access to expertise that would be hard for it to build in-house. Facilities Dive says the model is gaining ground with small businesses as well as large institutional operators. Many of them view it as a way to modernize aging infrastructure while keeping capital in their core operations. For a hospital, that core operation is patient care, and energy equipment has to compete with it for the same capital budget.

The engineering problem on a hospital campus is getting harder. Writing in EC&M on Oct. 21, Richard Austin and Jeff Mark of Affiliated Engineers said campuses and commercial buildings that move to all-electric systems take on higher power densities. Planning for those loads is specialized design work, and it is the kind of expertise Scannell described as hard to build internally.

Equipment makers are now paying to train that workforce. Schneider Electric and SKILLED Nation are offering $3,000 scholarships to students pursuing technical education and training for careers in building automation, energy management, HVAC, electrical systems, facilities engineering and maintenance, and related fields, Facility Executive reported. This year, the program includes an additional $100,000 investment from Schneider Electric. Now in its fourth year, it has received more than $300,000 in funding from Schneider Electric. When a vendor funds the pipeline for a skill, that suggests the skill is hard to find. For a health system weighing a 30-year outsourcing deal against hiring, that shortage is part of the decision.

Level bills when prices jump around

Ferrera's most notable claim is about stability rather than savings: costs held level for years as utility rates climbed. Steve Bauer made a related point in a July piece for the U.S. Green Building Council. He wrote that even before Middle East tensions heightened, the U.S. Energy Information Administration had tracked American electricity prices rising steadily faster than inflation. He attributed this to infrastructure investment, fuel costs and growing demand, with data centers and electrification as particular drivers. He noted that under time-of-use pricing, a handful of high-demand days can noticeably change what a month costs to operate.

The common thread across a six-store Dunkin' franchise and two hospital systems on 30-year terms is that buyers are paying for a steadier energy line and for expertise they don't have to hire. For an owner-operator with thin margins, a predictable line item may be worth more than a slightly lower average cost.

There is a strong objection to that reading. A steadier bill is only as good as the baseline behind it. KMC Controls, a building automation maker, points out in an October post that total consumption can mislead: a site can use more energy and still be more efficient if its activity grew faster, and usage can fall while efficiency gets worse.

Maintenance after the upgrade

The International Energy Agency's explanation for gains beyond lower bills is mechanical. Cutting losses such as excess heat, inefficient combustion and friction helps equipment run more smoothly and reliably, and electrified processes have fewer moving parts and points of failure.

That data comes from industrial assessments, and the IEA's examples are mostly from factories. A hospital campus or a quick-service restaurant could see different results. Restaurant and retail operators could see their largest gains in indirect benefits like these, which never show up on the energy line.

Thirty-year contracts in long-lived buildings

Long terms make more sense when the buildings involved will last. An American Council for an Energy-Efficient Economy analysis of EIA projections estimates that 62% of the U.S. building floor space that will exist in 2050 had already been built by 2022.

Mike Mustapha, writing in Buildings, raises a point that carries a warning for 30-year contracts. He notes that nobody knows exactly what a building will be asked to do in 2040 or 2050. A contract that spans that period works best if it can adapt as the building changes. Hospital buyers will likely want to know how contract terms handle a new wing, a change in use or a shift to all-electric systems.

Ferrera's approach was to test the model at one store and expand to the other five once it worked, which is a lower-risk way to try it.