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Commissioning of Federal Energy Savings Performance Contracts (ESPC)

Commissioning of Federal Energy Savings Performance Contracts (ESPC). May 20, 2003 Doug Dahle National Renewable Energy Lab. Overview. Federal ESPC Program Overview Commitment to Integrate Commissioning ESPC Project Implementation Process Working Draft for Super ESPC Contracts

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Commissioning of Federal Energy Savings Performance Contracts (ESPC)

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  1. Commissioning of Federal Energy Savings Performance Contracts (ESPC) May 20, 2003 Doug Dahle National Renewable Energy Lab

  2. Overview • Federal ESPC Program Overview • Commitment to Integrate Commissioning • ESPC Project Implementation Process • Working Draft for Super ESPC Contracts • Commissioning Provider Input • Potential for Commissioning Agent Role

  3. Federal ESPC Program OverviewPrinciples ESPC is a contracting method whereby the contractor (Energy Service Co.- ESCO) incurs the cost of implementing energy savings measures and is paid from a share of any energy and energy-related savings directly resulting from implementation of such measures during the term of the contract.

  4. ESPC Principles

  5. ESPC Principles • No Federal Capital Appropriations Required • 25 year Contract Authority • Retrofits of Existing Federal Buildings • Agency Infrastructure Improvements • ESPCs deliver 2 Principle benefits • 1- Energy & Related O&M Cost Savings • Guaranteed Savings – M&V (legal requirement) • 2- Facility Operations Improvements • Confirmed by Commissioning (contract requirement) • ESCO Conducts Commissioning & Agency Oversight

  6. DOE FEMPESPC Program Highlights • Federal ESPCs (’86-’96) – $300M • Transaction Cycle - 2+ years to award • Estimated Federal Energy Investment - $2-3B • Critical Need to reduce Transaction Cycle • Procurement Vehicle for Streamlined ESPCs • DOE Master Contracts called “Super ESPCs” • Usable by all Federal Agencies • Streamlines Agency ESPC Procurements • DOE ESPCs (’98 – ’02) - $400M

  7. DOE FEMPESPC Program Keypoints • DOE Super ESPCs • Competitive Procurement for 6 DOE Regions • Incorporates Standard Provisions for ESPCs • Awards to Multiple ESCOs - $750M/region • All Energy Efficiency & Renewable Technologies • Allows Agency to Select from DOE ESCOs • Site Specific Terms & Conditions • Transaction Cycle – 10-12 months (avg.)

  8. DOE FEMPESPC Program Goals • Annual ESCO Investment - $120M • Continuous Improvement of Public/Private Partnerships • Focus on Federal/ESCO Business Practices • M&V Plans & Reporting Consistency • O&M during 15+ year term • Commissioning at Project Acceptance

  9. Commitment to Integrate Commissioning • ESCO Industry Support for Commissioning • DOE forms Fed/ESCO Working Group • Objectives • Mainstream ESPC Commissioning • Jointly develop consistent practices/tools • NREL Contracts for Cx Expertise to support working group activity • Farnsworth Group – March ‘03

  10. Commitment to Integrate Commissioning • Tasks for Farnsworth Group • 1) Participate in WG Telecons & Meetings • 2) Develop Guidelines/Templates/Tools • 3) Conduct Workshop for Govt & ESCOs • 3/24 workshop identified needs for ESPCs • 4) Develop Information Brochure for Agencies • Benefits of Commissioning and Agents • 5) Pilot Project – Farnsworth as Cx Agent • Project Intent thru Lesson Learned 1 year after acceptance – (process feedback)

  11. ESPC Project Implementation Process • Four Phases • 1) Project Planning • Agency Selects ESCO • 2) Initial Project Development • ESCO Submits Initial Proposal (at risk) • 3) Negotiate & Award Delivery Order • ESCO Investment Grade Audit & Proposal • 4) Implementing Delivery Order • Design/Construction/Acceptance • Multi-year Performance Period

  12. Working Draft Super ESPC Cx Process – Phase 1 • DOE Introduce Cx Process • Cx Activity and Submittals to be provided by ESCO • Agency responsible for Cx process and deliverables oversight and review

  13. Working Draft Super ESPC Cx Process – Phase 2 • DOE & ESCO begin Project Intent discussion • ESCO addresses design constraints • Agency issue of Notice of Intent provides commitment for ESCO to begin Cx activity

  14. Working Draft Super ESPC Cx Process – Phase 3 • After Agency Notice of Intent • Form CxP Team (ESCO CX Agent) • ESCO Convenes a Project Intent Workshop • ESCO Drafts Project Intent Document • Use PI Document to guide development of the final proposal and to increase certainty of acceptance • Refine Project Intent Document based upon negotiations to match the Final Proposal • ESCO Outline of Cx Plan

  15. Working Draft Super ESPC Cx Process – Phase 4 • After Delivery Order Award • Refines Project Intent Document based on design of Energy Conservation Measures (ECMs) • ESCO develops the Cx Plan and submits with Design & Installation Plans meeting Project Intent • Utilize Design Checklists • ESCO tracks energy and maintenance benefits, and expected indirect benefits (productivity, satisfaction, and others) • Agency verifies design using checklists

  16. Working Draft Super ESPC Cx Process – Phase 4 • After Notice to Proceed with Installation • Agency/ESCO Review the the commissioning process activities, why and benefits, during pre-construction meeting • ESCO Integrates Cx activities during construction and turnover into project specifications (construction checklists, meetings, performance testing, etc.) • Agency review selected equipment, materials, and other submittals for compliance with the project intent • Agency witness selected performance testing

  17. Working Draft Super ESPC Cx Process – Phase 4 • Prior to Acceptance • ESCO completes punch list items • ESCO submits O&M Manuals and conducts training • ESCO Submits As-Builts and Post Installation M&V report confirming annual cost savings potential • Agency conditionally accepts ECMs (payments begin) • ESCO conducts seasonal testing as required • ESCO submits final Cx Report • Agency reviews final Cx Report

  18. Commissioning Provider Input • Welcome Voluntary Input from Cx Provider Industry • Review & Comments on Guidelines, Tools, Templates and Cx for ESPC Information Brochure developed for Agencies and ESCOs (thru 12/03) • Contact by e-mail • Steve Dunnivant, Cx Working Chair • steved@emp2.com energy@com • Doug Dahle • douglas_dahle@nrel.gov

  19. Potential for Cx Agent Role • ESCOs commitment to Integrating Cx • Using Cx Expertise as subcontractors or company team members • DOE ESCOs listed at http://www.eere.energy.gov/femp/financing/espc/super_espc_escos.html • Consider acquiring GSA Energy Management Service Schedule Contract • Provides easier access for Federal Agency procurement of Cx services • http://www.gsa.gov/Portal/content/pubs_content.jsp?contentOID=115442&contentType=1008

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