Transforming utility customer service: The ECO2 program at McDonalds

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Utility customers are becoming increasingly more concerned about climate change, its societal repercussions, and how it impacts their businesses. As a result, many commercial & industrial (C&I) customers are developing, publicizing, and executing on corporate sustainability goals. This series of articles seeks to explore how utilities are helping customers meet sustainability goals and facilitate a transition to a low-carbon future.

This article presents a case study on how McDonald’s is using building design principles and a robust building retrofit program to help it meet its science-based target by partnering with franchisees to reduce greenhouse gas emissions related to McDonald’s restaurants and offices by 36% by 2030 from a 2015 base year. McDonald’s has proactively developed an innovative program that makes it simple for franchisees to analyze and install energy efficiency upgrades while keeping an eye on the bottom line and operational considerations.

 McDonald’s recognizes that not every restaurant operator is an energy expert and may not know how to take the first steps towards building retrofits that help lower energy consumption, save money, and reduce GHG emissions. In order to overcome this obstacle, McDonald’s makes it as easy as possible for franchisees to make energy efficiency upgrades.

According to Steve DePalo, McDonald’s North American Director of Sustainability, the company evaluates new equipment and technologies, researches suppliers of that technology, and then develops an approved list of energy efficiency technology and equipment. Operators can then select from the approved equipment. The mechanism for helping franchisees through this process is a program created by McDonald’s called ECO2. In this program, franchisees can get support analyzing their utility spend and review of possible energy efficiency upgrades, including utility incentive management for pre-approved equipment and technology.

The ECO2 program is designed to make energy retrofits effortless. Franchisees are given the opportunity to have an energy assessment performed at individual restaurants and are then presented efficiency upgrade options at each restaurant aligned with the pre-approved equipment and technology list. The assessment looks not only at technical opportunities but also incorporates financial considerations related to utility energy efficiency incentives and details a payback and return-on-investment (ROI) for each measure identified.

There is a cost associated with the assessment that normally is borne by the franchisee. In some jurisdictions, however, utilities will pay part or all of the assessment cost in order to reduce any potential financial hurdles for the franchisee to uncover energy efficiency opportunities that can then be processed through the utility efficiency program. The assessment can help prioritize which retrofits to install based on pre-defined criteria like payback period.

Working with utilities helps McDonald’s and its franchisees leverage franchisee investment dollars and get energy efficiency projects approved that might not otherwise meet investment criteria. Communication between utilities and McDonald’s fosters collaboration and leads to beneficial outcomes, like utilities paying for the ECO2 assessment, as well as enhanced incentives for implementation.  

DePalo stresses how communication between utilities and their customers is crucial for mutually beneficial energy outcomes.  

“There are still too many utilities designing programs “˜in a vacuum’ and not speaking to enough of their customers to see how they can partner to help us reach our sustainability goals and how we can achieve our goals together,” DePalo said.  

Reiterating the need for utilities to be nimble and really think of their customer’s needs when designing incentive programs and rate structures, DePalo continued, “We need utilities to be more flexible and adapt to the challenges our franchisees face, and partner with us.” DePalo is serious about utility collaboration — he is active on the Customer Advisory Board of Edison Electric Institute’s National Key Accounts Program, interacting with utilities and providing valuable industry feedback.

McDonald’s is also pushing the boundaries of building design with a goal of reducing energy and water by 20% in new restaurants from the 2005 building design, and the introduction of their first Net Zero energy designed restaurant in Orlando earlier this year. In its new global flagship Net Zero designed restaurant in Orlando, McDonald’s has utilized solar panels and solar glass on the V shaped roof, louver windows that can be opened to let warm air out and cool air in, green walls, solar powered parking lights, and low-flow plumbing fixtures to help achieve its Net Zero goal. With this new building, McDonald’s has shown that it is possible to design super-efficient buildings with a stunning aesthetic.   

McDonald’s balances its commitment to sustainability with operational excellence in a way that makes it simple and cost effective for franchisees to undertake energy retrofit projects. The company is pushing the envelope in building design principles, designing a Net Zero restaurant, while also contributing renewable energy to the nation’s power supply via two wind and solar projects in Texas, all in support of reducing its GHG emissions. Working closely with utilities allows McDonald’s franchisees to stretch their energy investment dollars further, amplifying the impact of their efficiency efforts.

Other articles in this series:

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