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PASBO Facilities Management Conference

Develop a Strategic and Integrated Energy Plan. Address a Wide Range of Complex and Inter-related Demand-Side and Supply-Side OptionsProject Development: Implement ECMs/EEMs/FIMs using Existing Operating Budget, w/ Applied Capital as neededLoad Management: PJM Demand ResponsePortfolio Purchasing:

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PASBO Facilities Management Conference

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    1. PASBO Facilities Management Conference A Strategic Plan For Managing Energy Costs With a Focus on Performance Contracting

    2. Develop a Strategic and Integrated Energy Plan Address a Wide Range of Complex and Inter-related Demand-Side and Supply-Side Options Project Development: Implement ECMs/EEMs/FIMs using Existing Operating Budget, w/ Applied Capital as needed Load Management: PJM Demand Response Portfolio Purchasing: Green/Brown Power in Retail Markets Incorporate Iterative Evaluation Techniques Benchmarking: Establish “Baseline” Utilization Profiles Measurement & Verification: Monitor/Quantify Impacts

    3. Performance Contracting A means of implementing 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.

    4. Background/Evolution “Shared Savings” Efficient equipment installed by an energy company resulting in reduced utility bills Utility cost savings shared at a pre-determined percentage, allowing for cost coverage and profit Lower energy costs => longer paybacks => defaults Performance Contracting Pre-established “Baseline” Usage and Rates to quantify and confirm “savings”

    5. Why PC? Capital budget constraints, financing availability, limited staff resources/expertise Frees capital budget dollars for other use Leverage funds in concert with PLANCON Permits use of “applied capital” to project Turn-key Operation/One-Stop Shopping Streamlined process for comprehensive projects Incorporate use of local, trusted subcontractors Long Term Benefits Improved environment and comfort levels Staff education and training

    6. Pennsylvania Application Guaranteed Energy Savings Act (“GESA”) most currently updated as Act 77 of 2004 allows “governmental units” (including School Districts) to utilize Performance Contracting permits for up to 15 years financing not subject to the restrictions of “Low Bid” considers “Best Value” and “Highest Quality”

    7. GESA Advantages Conventional Bid/Spec Energy projects compete for limited budget resources with other improvement projects Requires several years to secure funds to implement energy projects Incremental project implementation misses savings design opportunities Piecemeal approach to bidding and managing separate project components = high staff costs Multiple contracts with multiple vendors can result in conflicting project requirements GESA Project Energy projects are funded with utility bill savings All funds needed for comprehensive energy project are readily available Comprehensive project implementation maximizes savings design opportunities Lower staff costs and quicker completion of a comprehensive project Single contract with single point accountability for project performance

    8. ECM / FIM Applications Energy Conservation Measures (ECMs) and Facility Improvement Measures (FIMs) Traditional (lighting, HVAC, controls, etc.) Causally related (roofs, carpeting, paint) Non-causally related (whatever - 15% of Total) New in “Act 77” Review and inclusion of capital improvement projects Facility Management Services Renewables and Demand Response

    9. Procedural Elements

    10. Opportunity Assessment Utility Bill Review Generate Current Baseline Data Staff Interviews “Wish List” Near-Term Capital Budget Facilities Review “Walk Through”

    11. Consensus Building O & M Personnel Allay fears and stay involved through oversight Administrative/Financial Improvements to Facilities & Learning Environment with expert installation and no new funds Board Mitigate tough capital budget & “taxes” decisions

    12. Solicitation of Proposals Preparation Schedule: Pre-proposal conference, submittal date, clarifying Q&A period, interviews Evaluation Criteria Weights & Scoring Encourage Creativity, Incorporate Flexibility, Include Protection Provisions

    13. Proposal Review & Recommendation Proposal Presentation Firm’s Qualifications Comfort Level During ESCO’s Survey/Audit Technical As Close to “Apples to Apples” as Possible Project Management Financial Benefit

    14. Final Design & Documents Utilize “Design Build” Mindset Mix and Match ECMs to Create “Best Value” Project Energy Service Agreements are Negotiable!! Financial Terms & Conditions Detailed Scope of Work User and ESCO Responsibilities Risk Parameters Typical Construction Provisions Incorporate trusted and experienced local vendors and/or subcontractors into the ESCO team.

    15. 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

    16. M&V Options Matrix

    17. Project Oversight Manage Analysis of Energy Efficiency Options Tailor/Refine Cost Effectiveness Analysis Support Project Financing Efforts Consider Ongoing Consultancy/Management Design, Implementation, Savings assessments, M&V, Problem Resolution

    18. Case Study K-12 School District Facility needs stimulated action on cost reduction efforts Needs identified Energy efficiency improvements Facility upgrades

    19. Case Study: Results K-12 School District Modernized facilities and equipment Capital financing commitment of $3.3 M Guaranteed annual savings of >$386,000 Positive cash flow after debt service!

    20. Case Study: Graphical Results

    21. Case Study: Graphical Results

    22. Case Study: Graphical Results

    23. Who is Provident Energy? PA PUC Licensed Energy Supplier Electricity since 1998, Natural Gas since 2007 Highly Knowledgeable and Capable Team 40+ Years Energy Industry Experience Education: Engineering, Environment, Finance Current Client Aggregation: 700 Million KWh, 200 MW, 2 Million DKTh Includes ~70 School Districts

    24. Why Provident Energy? Lengthy Experience in GESA Project Development, Management & Evaluation Local Firm, Local Clients, Local Public Involvement, Established Tradition, Measurable Results Independent Consulting Firm w/ Vast Industry Experience Address Needs & “Wish List” Items in Capital Budget Tailor RFQ/RFP to Fully Advantage William Penn SD 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 Personal Client Relationships: Key to Success

    25. Contact Information Joseph S. Solomon, President Voice: 610.565.0633 Facsimile: 610.565.7853 jsolomon@ProvidentEnergyUS.com Michael R. Lang, Principal Voice: 610.565.5507 Facsimile: 610.565.7853 mlang@ProvidentEnergyUS.com www.ProvidentEnergyUS.com

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