A medium office building has 800 luminaires equipped with four 40-W lamps and standard magnetic ballasts. The manager of the building agreed with an energy service company to replace these luminaires with four 32-W lamps and electronic ballasts. In the agreement, a specific calculation procedure was defined to verify the energy savings due to the lighting retrofit. In particular, it was agreed that the lighting system is operated 8 hr/day, 5 days/week, and 50 weeks/year. In addition, the wattage rating is set to be 192 W for the standard luminaire and 140 W for the energy-efficient luminaire.

Estimate the annual energy savings stipulated by the agreement. Determine the cost savings due to the lighting retrofit if the electricity cost is $0.07/kWh.