Despite its wide ranging Hartford customer base, not all downtown property owners view Hartford Steam Co. (HSC) as the best answer to their heating and cooling needs.
Last year, for example, the owners of Connecticut River Plaza decided to take their 556,000-square-foot office towers off the HSC grid. Instead, FBE Limited and Cammeby’s International, which agreed earlier this year to sell Connecticut River to the state of Connecticut, opted to install their own central heating and cooling plant as part of a multi-million dollar property upgrade.
David Jakubowski, the general manager for Hartford’s State House Square and Connecticut River Plaza, said he thinks long-term contract requirements, outdated equipment, and cost will hinder HSC in the coming years.
“After negotiating with HSC for many months on a new contract, we came to realize that we would be leaving significant dollars on the table if we stayed,” Jakubowski said.
With its own central heating and cooling system, Jakubowski said Connecticut River Plaza will reap long-term savings and recoup expansion costs within five years.
Besides potential costs savings, Jakubowski said he also had concerns about HSC’s infrastructure.
“The distribution lines in the street moving the steam and chilled water from their plant to our buildings are a weak point in the link,” he said. “With miles and miles of piping, we had concerns about the viability of the piping — many sections are decades old. If sections were to fail, and they do, at a peak demand time, the downtime to repair could be significant.”
If HSC’s piping did break down, it could lead to significant rate increases, Jakubowski said, adding that HSC is an unregulated utility.
Derek Rudd, president and chief operating officer at Hartford Steam, said he disagrees with Jakubowski’s assessment, arguing Hartford Steam’s district energy service is not only current, but also clean, effective and would have served Connecticut River Plaza well into the future.
“Hartford Steam’s system incorporates combined heat and power and thermal energy storage technologies — plus we use some of the highest-efficiency chillers around,” Rudd said. “And we’re going to be installing fuel cells, so we definitely are looking at whatever technologies make sense.”
Rudd says Hartford Steam conducts regular nondestructive testing of its piping system, and that it’s in excellent shape. In addition, the company also has a detailed piping maintenance plan that it follows to ensure service reliability.
“If we can’t reliably provide service, we may as well not be in business,” Rudd said. “We have to deliver — and we do. We get high marks from our customers on that. Properly maintained piping systems have incredible longevity.”
As for being unregulated, Rudd says ultimately it’s the customers that regulate the business.
“It’s a competitive marketplace and we understand that,” Rudd said. “We have to keep our rates competitive and our service impeccable to remain viable and we have. In more than 50 years of business, we have only lost about [three to four] customers. Not every company can say that. We have a solid track record.”
Jakubowski, however, isn’t optimistic about the future of the HSC system overall.
“As technology improves and building operators scramble to continue their green-initiatives and reduce operating costs, the cost savings and energy efficiency able to be generated by installing plant and equipment to generate on-site heating and cooling far outweigh the benefits of the redundancy touted by HSC,” he said.
Rudd stands on Hartford Steam’s substantial track record, saying the company is always identifying and learning new ways to increase efficiency and reduce emissions.
“Hartford Steam’s only business is energy. That’s what we do,” Rudd said. “We’re not responsible for fixing a building’s fountains or polishing the floors or fixing the elevators. Energy is our core competency. And because we have central plants, we have the flexibility to adjust our fuel sources and accommodate technological changes.”