Amalgamated Warbasse Houses (Warbasse) in Brooklyn is a 2585 unit apartment complex developed under the New York State Mitchell-Lama legislative initiative of the early 1960's. Warbasse has an average annual energy consumption on the order of 20 million kwh's of electricity and 300 million pounds of steam for heating, cooling and domestic hot water production.

Warbasse was originally built in 1964 and included a cogeneration plant based on three, high pressure, dual-fuel (oil and natural gas) fired boilers; two, 6 MW steam turbine generators and five, one thousand ton absorption refrigeration machines. This plant provides all of the thermal and electric requirements of the complex. Developments in the field of energy generation during the late 1980's offered Warbasse the opportunity to improve the economics of its energy generation.

FACING FINANCIAL PROBLEMS
Being a Mitchell-Lama housing complex and with a considerable number of its cooperators of limited financial means, Warbasse was starting to face a situation in the late 1980's in which it would have to allocate a considerable amount of funds towards major overhaul expenses on the existing boilers, turbines, etc. In addition, Warbasse would have had to set aside additional funds in order to comply with upcoming governmental environmental regulations that would require the expenditure of significant amounts of money towards the installation of pollution control equipment to comply with RACT emission standards as well as mandated monitoring equipment, severely straining Warbasse's means.

At that time, an earlier energy crisis had resulted in the federal and New York State governments passing legislation that provided incentives for Independent Power Producers to build highly efficient cogeneration plants for the production of electrical power.

INNOVATIVE FINANCIAL DEAL
As a result, Warbasse entered into an agreement with WCTP in the late 1980's that enabled the existing steam boiler/turbine based cogeneration plant to be converted into a more efficient gas-turbine based combined cycle cogeneration plant. As a result of this arrangement, Warbasse was able to avoid the necessity to appropriate a considerable amount of the funds that it otherwise would have had to secure to modernize its existing cogeneration plant and bring it into compliance with impending environmental regulations.

By entering into an arrangement with WCTP, WCTP was able to obtain a contract with Con Edison to supply 20 MW's of power to the utility. As a result of this contract, the majority of the cost required to modernize Warbasse's power plant was absorbed by WCTP, thus allowing Warbasse to utilize its limited financial resources to improve the efficiency of other plant systems, such as the absorption chiller driven air conditioning system. This agreement also allowed Warbasse to secure electrical power and thermal energy at a lower cost than Warbasse could have generated the energy itself.

MODERNIZATION
Subsequently WCTP expanded Warbasse's cogeneration plant to include five, 4.5 MW has turbine/heat recovery steam generators in an effort to increase the capacity and efficiency of the plant.

As a result of this agreement, Warbasse secured the following benefits:
1. Prior to this agreement, Warbasse was totally separate from Consolidated Edison's electric grid. It was necessary for WCTP to establish an electrical connection with the Con Edison grid in order to supply electric power to the utility. As a result of this arrangement, WCTP agreed to provide an emergency back-up power interconnection with the Con Edison grid. This interconnection was requested by Warbasse to reduce the probability of a black-out condition should the new, combined power plant fail. This connection was instituted and maintained at no cost to Warbasse, thereby providing an increased level of electric power reliability.

2. Since WCTP required their own operating personnel in the new combined plant, WCTP assumed the cost of employing four of the original 18 person staff, resulting in an annual cost savings of approximately $350,000.

3. Current environmental regulations require that the vast majority of the fuel consumed in producing Warbasse's energy needs be natural gas, yet the contract with WCTP dictated that Warbasse's annual fuel component cost be based on the price of No. 6 oil. Since recent natural gas prices have risen to considerably higher price levels than No. 6 oil and are expected to do so for the foreseeable future, Warbasse has reaped a considerable cost savings.

4. In accordance with the agreement, Warbasse receives a portion of the income that WCTP obtains from the sale of electricity to Con Edison.

5. Power plant equipment efficiency improvements implemented by WCTP have resulted in other savings to Warbasse such as in the cost for water and water treatment chemicals.

6. Additional savings to Warbasse will continue in the future, since the contract requires that WCTP assume responsibility for the periodic overhaul of some of Warbasse's original power plant equipment, such as the steam turbine generators.

CONCLUSION
It is estimated that Warbasse's current annual savings resulting from this arrangement amounts to approximately $1 million when comparing Warbasse's energy costs for the current year with the costs that Warbasse would otherwise have incurred if they continued to produce electrical and thermal energy with the original plant. This savings includes the reduction in fuel costs, operating staff expenses and the carrying charges on the capital expenditures that Warbasse would otherwise have had to incur.

Andrew J. Desiderio, P.E. can be contacted at 135 Spagnoli Road, Melville, NY 11747, 631-753-3200, ajdpe@aol.com.

Join us at the Buildings NY show on Wednesday, June 20 for the panel discussion "Dealing With the Energy Crisis for other innovative financing ideas and alternative energy sources. Admission is limited to first come, first served. All attendees earn 5 nyarm certification credits. Call NYARM for membership and certification information, 212-216-0654.

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