Doing More with Less: Increasing Reliability and Efficiency While Decreasing Energy Spending

2011 VACo Annual ConferenceLarry Godleski, VP, Energy Efficiency

Constellation Energy at a Glance

• A leading supplier of competitive power and natural gas, energy products and services for home and business

• Customers in 38 states & Washington, DC

• Owns and operates Maryland’s largest utility, Baltimore Gas and Electric Company

• 12,000+ megawatts of generating capacity – fossil, nuclear and renewable

• FORTUNE 500 company

• Revenues: $14.3 billion (2010)

• Ticker symbol: (NYSE) CEG

• Headquartered in Baltimore, Maryland

• 10,000+ employees (includes CENG)

We help customers intelligently buy, manage and use energy

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Pressures in Today’s Marketplace

o A Political Landscape In Motiono Enhanced Pressure on Operating Budgetso Uncertainty in the Financial Markets

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The Challenges Facing Elected Officials Today

Energy Efficiency Must Maintain Visibilityo Recent Shifts in Legislative Policy and Focuso Model Programs Under Reviewo Resource Allocation (Financial and Human)

The Business of Government: Needs vs. Meanso Operating Costs Continue to Escalateo Tax Revenues Remain Stagnant o Financial Subsidies Dramatically Reducedo Infrastructure Continues to Age While the Need for Services Continues to Expand

Financing is a Requirement for Successo Concern over Approaching Debt Ceilings and Focus on Debt Ratingso Market Access and Availability of Financing o Balance Sheet Preservation

Energy Efficiency Value Proposition

Q↓

COST = (P x Q↓) over T

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Energy Performance Contracting will significantly reduce the quantity of energy used, and therefore cost, over time while

improving the reliability of your facilities

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Energy Spend

Energy Savings

Lighting System Upgrades• Occupancy based redesign• Direct/indirect systems• Intelligent lighting system controls• High efficiency re-lamp and re-ballast• LED Applications• Street and traffic lighting upgrades• Incandescent to fluorescent conversion• Parking area lighting upgrades

Miscellaneous• High efficiency motors• Kitchen exhaust hood control systems• Variable speed drives on many systems• Elevator controllers• Instantaneous hot water heaters• Retro / Continuous commissioning• Appliance / plug load timers

Water Conservation• Ultra-low flow toilets• Ultra-low flow urinals• Low flow faucet aerators• Low flow showerheads• Groundwater irrigation• Laundry Ozone systems• Leak detection systems

Building Automation System Upgrades• Enhance existing systems• Complete new DDC systems• Unoccupied setback control• Integration of multiple systems• Remote access and monitoring• Efficient operation algorithms• Outside air control strategies

Renewable Energy• On-site Solar Energy Systems• Geothermal system• Heat pump installation• Wind energy• Alternative fuel conversion

Communication, Training & Awareness• Stakeholder involvement• Communications – internal &

external• Community participation

Central Plants • Steam to hot water conversion• District steam & HW systems• New chiller & boiler installations• New cooling tower installations• Primary/secondary systems• Heat recovery systems• Variable speed pumping systems• Steam trap replacements

HVAC System Upgrades• New air handling system

installations• Economizer / HVAC Damper• Zone isolation• Constant volume to variable air

volume conversions• De-stratification fans

Building Envelope• Window replacement• Roof improvements/replacements• Stack effect mitigation• Crack repair/weather-stripping• Window solar film

Energy Conservation Measures (ECMs)

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Energy Performance Contracting Success in Virginia• March 2001: Energy & Operational Efficiency Performance-Based

Contracting Act – Maximum 15 year blended payback; self funding – Savings guaranteed by energy services company (ESCO)

• Virginia’s record of success with energy performance contracting– Over $350mm of projects completed to date

• Resources: – Va DMME Performance Contracting website:

http://www.dmme.virginia.gov/DE/StateAgencyProgs/performancecontracting.shtml Charlie Barksdale

– Constellation Energy Efficiency website: http://www.constellation.com/SolutionsForBusiness/ProductsServices/EnergyEfficiency/Pages/EnergyEfficiency.aspx

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2011 ACEEE State Energy Efficiency Scoreboard

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Virginia Ranks #34 in Energy Efficiency Policies

Case Study: FCC Petersburg

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• Constellation implemented a $10.6mm EPC project at the Federal Corrections Facility in Petersburg, one of the larger prisons in the US (3,400 inmates; 1mm sq. ft.)

• FCC Petersburg is saving more than $1.4mm annually in energy costs

• The energy conservation measures (ECMs) include:– 350-hp biomass boiler base load heating source

– First of its kind at a DOJ facility– Geothermal heat pump system for the gymnasium– Solar PV system on the new biomass boiler building – Two all-electric vehicles

“Please extend a thanks to your staff for doing a superb job at the ribbon cutting event. Everyone enjoyed the function and the hands-on look at the ECMs. Well done!”

Dave WilliamsEnergy Project Manager FCC Petersburg

Conclusion

• Counties can save money and enhance reliability and environmental attributes even in today’s challenging economy

• Virginia has a very successful energy performance contracting process that must be utilized to a greater extent (ACEEE ranking #34)

• Constellation has over 25 years of experience implementing energy performance contracts

– Over 4,000 projects with an average savings of 102% (exceed guaranteed savings)

– 142,000 MWh conserved by customers in 2010

– Financed and built over $1Bn in energy related projects

– National Super Energy Savings Performance Contract supplier chosen by DOE

Energy performance contracting is a technical means to a financial end

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Larry Godleski, VP, Energy EfficiencyWalter.Godleski@Constellation.com

(724) 657-4040