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Learn how to manage energy costs effectively with Performance Contracting through Guaranteed Energy Savings Act. Get insights on project parameters, financial terms, ESCO qualifications, and more.
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CentennialSchool District A Strategic Plan ForManaging Energy Costs With a Focus on Act 77/39, the Guaranteed Energy Savings Act (GESA) Performance Contracting June 22, 2011
How Can We Focus Our Energy to Manage Energy Costs? Formulate a simple, yet strategic, interactive & effective, “Comprehensive Energy Solution”
Performance Contracting • A streamlined process to implement a self-funded energy-efficiency and facility improvement construction program that: • Allows the costs of installation to be paid with no out-of-pocket capital expense from funds already in the existing operating budget; • Directs savings from energy-efficiency measures to the payment of installation, financing and supporting O&M costs; and • Guarantees that the energy savings achieved will exceed and pay for all project costs.
Performance Contracts General Parameters: • Single Prime Contractor – not “low bid” • RFP process for selection (streamlined) • Energy & operational savings = project costs • Guaranteed (carefully structured) • Lease-purchase financing or by operating funds (utilities), capital funds • Non-funding cancellation clause (not LGDA debt) • Prevailing wages, Perf./Paymnt. Bonds, etc. • 20 yr. contract period max. allowed
ECMs or FIMs • Energy Conservation Measures (ECMs) or Facility Improvement Measures (FIMs) • Traditional (lighting, HVAC, controls, bldg. envelope, etc.) • Causally related (roofs, carpeting, paint) • Non-causally related (a max. of 15% of total project cost) • Review and inclusion of capital improvement projects • Facility Management Services • Renewables (Solar, PV) and Demand Response • Use of Industry Engineering Stds.(ASHRAE, RS Means, etc.)
Opportunity Assessment • Utility Bill Review (2 to 3 yrs.): Generate current baseline energy & facility use data • Staff Interviews: problems, needs, wants • Near-term capital budget, operating budget • Facilities review: Existing conditions (MEP) • Benchmarking: EPA Energy Star, PASBO, others • Initiate RFP process
Proposal Review & Recommendation • Proposals evaluation • ESCO qualifications, experience • ECM energy savings verification, generate accurate cash flows • Define financial benefits • Utilize “Design Build” mindset • Mix and Match ECMs to Create “Best Value” Project • As close to “apples to apples” as possible • PC Agreements are negotiable!! • Financial Terms & Conditions • Scope of Work, User and ESCO Responsibilities, Management Team • Risk Parameters, Construction Provisions • Incorporate SD equipment choices and trusted local vendors and/or subcontractors into the ESCO team and project scope.
Measurement & Verification (“M&V”) • Identifying, Measuring and Quantifying Savings • Approach based on specific ECM and costs of M&V • International Performance Measurement and Verification Protocol (“IPMVP”) • “A”: engineering calculations, “stipulated” savings • “B”: “A”+ “Pre-Post” measurements • “C”: “B”+ metered utility data vs. baseline usage • “D”: “C” similarities w/ calibrated simulation
CSD Building Survey Data • Energy Use Intensities (EUIs), EPA Ratings • Admin. Bldg. = 60,000 BTU/sf, 94 (??) • Leary E.S. = 73,000 BTU/sf, 68 • Longstreth E.S. = 86,000 BTU/sf, 54 • Klinger M.S. = 86,000 BTU/sf, 59 • Log College M.S. = 70,000 BTU/sf, 66 • EUI Benchmark = 49,000 BTU/sf, 59,000 with A.C. • EPA Energy Star Rating Target = 75 min. • Scope of ECMs dependent on future plans for each building • Potential first year energy savings of $150,000
Case Study #1: Bucks Cty SD:2008/2011, 15 year, $14.8M(See Case Studies Handout) • Primary purpose: update/consolidate building controls district-wide (DDC + some pneumatic) and to provide substantial energy savings facility improvement modifications (FIMs) wherever feasible within allowed payback term • FIMs: BAS/DDC district-wide consolidation of JCI & Siemens systems, lighting replacements/retrofits, occupancy sensors, demand ventilation control, CV to VAV system conversions, demand response program, VFDs, Hi-E transformers, kitchen exhaust hood controls, boiler replacements and boiler controls, chiller replacements and heat recovery, solar pool heater, PV installation, power factor correction, vending machine misers, outdoor lighting control 15 yr. utility cost avoidance = $25.8M (5% escalation adjusted) 15 yr. operational cost avoidance = $0 15 yr. total project costs = $21.7M including annual service costs, 3 yrs.M&V, and FPI; (Installed cost = $14.8M) • Energy savings to be calculated/stipulated in smaller schools with few FIMs, verified by pre/post wattage measurements for certain FIMs (such as lighting), and entire building annual utility bill comparison pre-post FIMs in larger buildings with substantial FIMs
Case Study #2: Lancaster Cty SD: 2005/2008, 15 yr, $3.6M • PC linked to MEP renovations in four schools to extend scope of work • Primary purpose to update/consolidate bldg. controls district-wide (pneumatic & DDC) via selected vendor & negotiated pricing, to extend renovations budget, and to control certain mechanical equipment purchase (boilers by C.O.) • ECMs: BAS/DDC district-wide, lighting replacements/retrofits, occupancy sensors, demand ventilation control, water fountain compressor controls, vending machine misers 15 yr. utility cost avoidance = $3.9M (5% escalation) 15 yr. operational cost avoidance = $750K 15 yr. total project costs = $4.5M (Installed cost = $3.6M with Owner adds) • Energy savings to be stipulated, lighting verified by pre/post measurements
Case Study #3: Mont. Cty SD: 2005/2006, 10 year, $1.24M • Primary intended to upgrade lighting and replace boilers in one ES • ECMs: lighting replacements/retrofits, occupancy sensors, demand ventilation control, 2 new boilers in ES, vending machine misers 10 yr. utility cost avoidance = $1.45M (2% escalation) 10 yr. operational cost avoidance = $179K 10 yr. total project costs = $1.5M (Installed cost = $1.24M) • Energy savings to be pre/post measured & calculated (stipulated)
Why PHM-PEC? • Lengthy Experience in GESA Project Development, Management & Evaluation • Local Firm, Local Clients, Local Public Involvement, Established Tradition, Measurable Results • Independent Consulting Co-Venture: Vast Industry Experience • Address Needs Items in Capital Budget • Tailor RFQ/RFP to Fully Advantage Client’s Wants/Goals • Ensure Competition from Reputable/Capable ESCOs • Thorough Review of Submittals; Expert Recommendation • Creativity in Scope Development & Project Implementation • Keen Insight into Contract Language and Potential Pitfalls • Licensed Engineer Oversight • Personal Client Relationships: Key to Success
END QUESTIONS & ANSWERS Phillip H. Mowry, P.E. Voice: 610.637.2175 phmassociates@verizon.net Joseph S. Solomon Voice: 610.565.0633 jsolomon@ProvidentEnergyUS.com Michael R. Lang Voice: 610.565.5507 mlang@ProvidentEnergyUS.com