Industry Blogs

We are approaching the end of the 2018-2019 heating season in North America, although homeowners in the colder northern sections of the United States and throughout Canada will likely need their heating systems for another two, maybe even three months. As you know, our long cold seasons can take a heavy toll on hydronic heating systems. Here’s a rundown on some of the more common boiler and component problems facing home and business owners and what can be done to remedy them.

Radiator cold spots

If your home’s or business’s radiators are not uniformly hot throughout, the following could be the culprit:

• air in the piping and components;
• a malfunctioning component or part, such as a circulator or a valve; and, finally, our “favorite” villain —
• rusty or corroding system pipes that ultimately fill the radiators with magnetite.

What is magnetite? As air and water mix inside the pipes of an untreated hydronic heating system, an iron oxide sludge, called magnetite, forms. As these small (.0003-micron) particles circulate and accumulate inside the system, they begin to adversely affect heat-transfer rates and boiler efficiency. Eventually, iron oxide buildup can lead to equipment damage and/or failure, resulting in costly repairs. Just how extensive is this problem? A recent study analyzing returns to European pump manufacturers found that nearly 70 percent of circulator returns consisted of failures triggered by iron-oxide buildup. The study also showed that more than 95 percent of the debris in hydronic heating systems consists of iron oxide*.

The fix? To eliminate air in the system, first try bleeding your radiators. But if the cold-spot problems persist, bring in a professional plumbing and heating contractor to:

• conduct a full system inspection;
• upgrade failing parts;
• fully cleanse the system with a magnetic dirt filter, as well as a chemical cleaner, such. This maintenance should remove not only the rust, but also all the other debris.

Noisy system

Maybe your boiler rattles every time it rolls into action. Maybe you are routinely treated to a chorus of bangs, gurgles, whistles and rumbles from elsewhere in the system. Regardless, such noise goes beyond mere annoyance; it might indicate more serious problems. Once again, air as well as a buildup of limescale are the most common culprits.

The fix? To eliminate the pipe noise, get rid of any trapped air by bleeding your radiators. If that doesn’t work, call a professional to flush the entire system of limescale and air. If the noise originates in your boiler, your service technician will work to remove limescale in the heat exchanger.

Leaks and drips

Water leakage from your boiler is never a good sign. Leakage usually means a breakdown is imminent. It’s a simple problem to spot. Is there any water beneath the boiler or around its pipes and tank? Causes can range from broken parts to corroded pipes.

The fix? Whether the problem stems from a damaged component or simple wear and tear, there’s only one answer for leaks and drips: Call a professional to check your boiler.

On the subject of leaks, it is often questioned whether cleaning chemicals cause leaks within hydronic systems. The answer to this is — no, if, of course, you are using correctly formulated chemicals, which includes surfactants, dispersants, and inhibitors that make it pH neutral. The surfactants and dispersants help dislodge, lift and move the corrosion, while the inhibitors protect the vulnerable metals during cleaning.

Complete protection

The rising popularity of high-efficiency boilers and the increased use of high-efficiency ECN (electronically commutated motors) pumps with these boilers, have helped lower fuel bills. That’s the good news. The downside: both of these positive trends can also create system-performance headaches for home and business owners. We will explore the why behind these problems in a future blog. For now, understand that both trends can lead to premature system and component failure because of the buildup of iron oxide sludge (magnetite) and other nonmagnetic debris. Both can rob hydronic heating systems of their high efficiency and superior performance.

The solution is magnetic dirt filtration, along with regular and proper system cleansing and protection. This is the only way to prevent the buildup of magnetite and the costly problems it can cause.

GUEST BLOGGER:  Brian Salem, ADEY Western/Central North America area sales manager.

Growing up in his Dad’s plumbing company, Brian has a wealth of experience within the HVAC/P industry. Professionally, Brian has been in the industry since 2004 and joined ADEY in 2017 – his role began as OEM Manager for North America but due to ADEY’s growing network of North American Reps, Brian has now taken the reigns as ADEY’s Western/Central North America Area Sales Manager. Brian Salem: brian.salem@adey.com, (847) 440-6665

Egg Family in front of Egg Geothermal Systems, Tampa, FL

Some time ago, I was asked by a colleague to comment on a story that was being written about the growth of the geothermal HVAC industry. Across Canada and through the United States, government and private entities have embraced the environmental and financial wisdom of clean heating and cooling. Technical trainings classes, informational programs and trade conferences were being hosted across the U.S. and people like my husband, Jay Egg, were asked to come and share information and knowledge with the mechanical industry. I was asked why I insisted that Jay travel up to New York the day after my first open cranial surgery. Here’s what I remember:

Some people know, but many likely do not that it started back in September 2017 (This is a link to the Egg Family Blog for the whole back-story). I was suddenly diagnosed with multiple brain aneurysms that would require a lengthy and dangerous open-cranial surgery to treat the largest and most dangerous. Once completed, there would be several smaller surgeries scheduled to deal with the remaining aneurysms. The largest surgery was scheduled for the October 16, the day before my husband was scheduled to travel to New York to attend and speak at the 2017 International Energy and Sustainability Conference located near Farmington State College from October 17-19.

Kristy Egg, Before, During and After Surgery

Jay’s first response was to cancel the trip that would require him to fly out early on the morning of the 17^th, the day after the brain surgery. I argued with him for days about the trip and eventually, as expected, I won.  I talked him into going up to the Energy Conference with the following arguments:

My surgery started at 7 a.m. and was anticipated to be completed by 3 p.m. on October 16, 2017. Considering an hour or two for recovery, I was expected to be in my ICU room by evening. He would know by then what the prognosis was, and if anything had changed. He could then make the calls to his associates to firm up his travel to New York.

Anticipation of Surgery, October 16, 2017

If something did go wrong, as amazing as he is at being a consultant and mechanical professional, he is not a brain surgeon. Although I have been known to describe the flow of blood to my students using a “water piping system” metaphor, with drains and valves, the truth is that it’s a bit more complicated. Even with Jay’s knowledge of heat transfer and fluid flow, he was unlikely to be able to scrub in and assist in re-engineering my cerebral artery blood flow. He stayed with me in ICU overnight and around  5 a.m., he kissed me goodbye and  asked me to behave and rest. I told him that I would as long as he promised to go to New York and do a good job. And then he headed to the airport, keeping his end of the bargain.

I believe in what the good folks in this industry are doing and striving to accomplish. For the past 20 years I have watched as my husband worked tirelessly to make the Geothermal HVAC industry a more utilized and promoted entity. Now more than ever, I am convinced that I made the right decision; I wasn’t trying to become some self-sacrificing martyr. I just knew that some things are worth doing right. If problems with my recovery did arise, my parents and children were going to be by my side; I needed him to be where he could do the most good.

Jay still travels often; teaching, consulting and often collaborating with other like-minded clean energy organizations. Although it hasn’t always been easy, we also learned a great deal about the compassion and generosity of the geothermal & mechanical community.

NYSERDA Technical Committee Image circa 2016

I have remained sidelined with continuing and persistent seizures, but my hope shines bright for the future. There are many times that Jay could have taken a position for a company and worked the steadier and less traveled path than we have chosen.

Bill Nowak with Kristy (r) & Hannah Egg at 2018 IGSHPA Conference

His unwillingness to bend is one of the reasons that I sent him to New York the morning after my surgery. He believes in clean heating and cooling enough to promote its use, even when sometimes that belief causes discomfort in his own plans or desires.

Jay doesn’t work for a specific manufacturer, nor does he endorse one brand over another. He works for the industry, to grow the consumer base and increase uptake & use. He works with whatever brand will best accommodate the project and showcase the best that the geothermal industry has to offer governments, communities, commercial projects and residences that are wise enough to listen.

Kristy Egg is a Registered Nurse, mother of six, grandmother of four.

LinkedIn https://www.linkedin.com/in/kristy-egg-38990052/

Dain Hansen is vice president of Government Relations, The IAPMO Group. He lends his frequent perspective of Capitol Hill, and the plumbing industry.

Pricey Water Bills Fix Could Mimic Successful Energy Program. Subsidizing water bills for low-income families may be more difficult than a similar successful program for energy, but that’s the road map a bipartisan group of lawmakers is exploring. The nature of the water industry—with tens of thousands of municipal-owned water suppliers that often serve 1,000 people or fewer—could make it far more difficult to implement than in the more consolidated power sector, the water industry cautions. Sen. Ben Cardin (D-Md.), one of the lawmakers working on the legislation, said many in Congress are hearing from their constituents that water and sewer bills are beginning to crowd out other items from their household budget. Cardin has said the issue really hit home for him when he was campaigning for a local candidate in Baltimore recently. “Every door I knocked on, they were asking me about their water bills—every door,” he said. “It’s obviously an essential utility and they just can’t afford it.”  The bill Cardin is crafting with Sen. Roger Wicker (R-Miss.) and Rep. Marcia Fudge (D-Ohio) is modeled on a program at the Department of Health and Human Services that subsidizes energy bills in low-income areas. It would establish a five-year pilot that would give grants to 32 water utilities across the country to establish low-income assistance programs there. Cardin and Wicker first introduced the bill in the Senate late last year. Cardin said his strategy for this year is to attach the measure to a larger piece of legislation, although it’s possible it could pass on its own, suggests Hansen.

US-China Trade Negotiations. US-Chinese negotiators met in Washington this week as part of an effort to find agreement on their trade disputes by March 1. Limited progress was expected in this week’s talks, and our judgment of the results are in line with those expectations despite the positive talk from the White House following the negotiations. There will be growing anticipation of a final deal later this month, particularly if a potential meeting between President Trump and Chinese Premier Xi takes place, as expected. If a deal is struck by March 1, it will not be a far-reaching agreement that will address the myriad issues that have divided the US and China, particularly structural issues embedded in China’s trading and economic policies. That type of deal will require more time to negotiate – beyond March 1 – and is still not certain even then. It is likely President Trump will seek a more comprehensive agreement – much more than an increase in Chinese purchases of US agriculture and other products. If such an agreement needs a deadline extension beyond March 1, the question is whether there will be increased US tariffs imposed then. This will depend on the pace of progress in the negotiations and the personal Trump-Xi dynamics from their likely meeting. Due to our belief that the Chinese will be slow to make commitments in areas of importance to the US, do not rule out increased tariffs after March 1. While many are confident these negotiations will eventually produce a final deal between the two countries later this year, our sense is that progress will occur slowly and only after more pain is afflicted, poses Hansen.

White House Looks To Move Pipelines Forward. The White House is considering new executive orders that would weaken states’ authority to block energy projects and would help speed the construction of pipelines, according to sources familiar with the matter. Possible actions include changing Obama-era draft guidance for complying with a section of the Clean Water Act as a way to hinder state governors who have used the law to oppose energy projects, according to a person with knowledge of the discussions. The potential executive orders wouldn’t address one of the the oil and gas industry’s main complaints: tariffs on imported steel that executives say hamper growth. Any new executive orders, which could be part of a broader, long-delayed infrastructure plan, would likely draw pushback from Democrats like New York Gov. Andrew Cuomo as well as Republican state leaders who are wary of ceding power to protect their rivers and streams to the federal government. Trump has pledged to drive “U.S. energy dominance” abroad, capitalizing on the decade-long surge in U.S. oil and gas production that has lifted output to record levels. The sector has remained a bright spot in an economy that experts say may be in danger of dipping into recession. U.S. companies have opened the spigots on oil shipments since the ban on exports was lifted in 2015, and the U.S. has become one of the leading global shippers, says Hansen. 

Historically, the construction industry has been one of the slowest to adopt new technology, lagging only behind agriculture in digitalization. But that’s changing as software entrepreneurs turn their attention to the needs of the deskless workforce.

The ubiquity of mobile devices, cheap and powerful cloud computing, 5G, and the Internet of Things (IoT) are all making it possible to put robust technology into the hands of deskless staff, including construction workers. The venture capital industry has taken notice—funding for construction technology has seen a steady uptick since 2013.

CFOs should partner with their IT teams to modernize their back-office systems, and prepare to handle a flood of data from the field as paper processes become digital. They should also figure out exactly what field data they want, what tools work best to get it, and how to integrate that data into their financial software. Deployed strategically, new tools can help construction finance teams resolve many challenges, including:

Business continuity planning

Family-owned businesses are common in the construction industry, and many thriving mid-market and even large companies are still majority-owned by founding families. Finance leaders need to create business continuity plans, whether that’s figuring out how to transfer company ownership to the next generation, establishing an ESOP (Employee Stock Option Plan), or selling or merging the company. There’s a lot of work involved in valuating the business, figuring out the best planning scenario, and helping negotiate relevant deals. Industry-specific ERPs (such as Viewpoint’s Vista) and cloud procurement platforms (such as Concur) can give finance professionals a better view into their numbers, help with planning scenarios, and standardize the purchasing process across acquired or merged companies. (Full disclosure: both companies are Nvoicepay partners).

Changing accounting standards

Revenue recognition is always top of mind in the industry. For the past several years, the Construction Financial Management Association (CFMA) has sought to ensure that the new Financial Accounting Standards Board (FASB) rules around revenue recognition are favorable—or at least not punitive—towards the construction industry. As these new rules are implemented, CFOs seek to refine their strategies for how to bill against contracts, and tie revenue to either a percentage of completion or work-in-progress schedules. Mobile technologies that expedite communication between the office and the field can also help speed the flow of information.

Risk management

Construction carries more risk, especially out on the job site, than many other industries—and insurance costs are rising. Some companies are investigating captive insurance programs, in which multiple companies pool their assets and fund their own risk by placing money under management so they don’t have to pay such exorbitant premiums.

Insurance companies have responded with more flexible products to try to help companies control their costs. CFOs need to evaluate their options—and if they want to participate in a captive insurance program, every participant needs to undergo a thorough assessment of their financial stability.

While a modern ERP system can facilitate most of that process, the assessment would also look at safety and security practices. There’s a lot of technology that can help reduce jobsite risk. Drones can monitor job sites for safety and security. Sensor-equipped wearables can alert workers to smoke or toxic chemical exposure, and geo-fencing can provide alerts when they’re entering a hazard zone. Firms can also use autonomous equipment to do work in environments that are too hazardous for human workers.

In the office, payment automation software such as Nvoicepay can mitigate payment fraud as part of an overall risk-management program.

Attracting and retaining talent

Lots of companies face growth opportunities while lacking enough employees to do the work. With unemployment at new lows, it’s been difficult to hire and keep good employees.

CFOs are working with HR—and, occasionally, external strategists—to refine their hiring, retention, and benefit strategies. Mobile training technology can help onboard unskilled workers faster, allowing companies to draw from a larger talent pool. Virtual reality technologies also offer promise for quicker training.

Improving job-cost accounting

Tablets and handheld phones let field staff capture data and send it back to their offices electronically. GPS-enabled time cards can record employee work hours and location on a mobile phone. IoT devices can measure equipment run time.

Cash management strategies

Cash management is probably the biggest challenge at any construction company, and effective work-in-progress (WIP) schedule management is critical. Key to the challenge is coordinating between the subcontractor confirming that a job is complete, project managers verifying that completion, and the accounting department billing the owner and syncing everything with the WIP schedule. This is also an area where drones and mobile apps can increase the speed and accuracy of data delivery to finance.

Finance also needs visibility, flexibility, and precision control over making and timing payments. With cloud-based payment-automation software, a project manager sitting in a truck can review a payment file, prioritize subcontractor payment schedules, and approve payments immediately, without having to return to the office to sign a stack of checks and backup documentation. Subs get paid faster and the job keeps moving.

With all the new purpose-built technology coming down the pipe, we’ll finally start to see some real movement towards digitizing the construction industry. Finance teams should prepare by enabling themselves with modern cloud systems for accounting, spend management, and payments. They need to enable the field with tools that communicate data back to the office in near real-time. Most importantly, they need to work out how to coordinate it all towards productivity gains and growth, and join the ranks of data-driven CFOs who have done the same in other industries.

Jason Krankota is VP of Construction Sales, West Region at Nvoicepay. His expertise in construction business technology spans 20 years, with 10+ years focused on corporate payments, accounts payable, and expense management solutions.