inefficient building issues lighting water hvac aging equipment emergency funding needed for repairs...
TRANSCRIPT
Get Smart !!
Reduce Energy Use,Get Capital Project $$$
Boone Birdsell ESC Private Co-Chair
New MexicoEnergy Services Coalition
Reference:
Chapter 6, Article 23 of the New Mexico Statutes
Public Facility Energy Efficiency andWater Conservation Act
Amended July 1, 2009
Performance Contracting
Performance Contracting is a Procurement Tool that enables you to use Future Cost Avoidance to
Pay for the up front costs of Energy Efficiency Measures thru a
“Guaranteed” savings program.
75%
25%
Sample Facility Costs
Energy
Maintenance 50%35%
15%
Sample Facility Costs
Energy
Cost Avoidance
Maintenance
Before PC After PC
75%
25%
Sample Facility Costs
Energy
O&M
Before PC
Performance Contracting
• Inefficient Building Issues• Lighting• Water• HVAC
• Aging Equipment• Emergency funding needed
for repairs & Deferred Maintenance.
• Spare parts expensive
• Budget Funds reducing• Costs going up
• Maintenance cost increasing• Spare parts cost increasing• Energy cost going up.
Business as usual
Performance Contracting
50%35%
15%
Sample Facility Costs
Energy
Cost Avoidance
O & M
After PC
• Replace the old Equipment• Put Cost Avoidance in place
• Building Automation • High efficiency HVAC• High efficiency Lighting• Increase building envelope
efficiencies.• Water conservation• Renewable Energies
Carve out a “Cost Avoidance” piece of
the pie.
• Reduce Maintenance• Increase Comfort levels
1. Provide a “Self-Funded” solution for an Energy and operational savings Project.
– The “Cost Avoidance “ dollars will actually “PAY” for the Project.
Performance ContractingSolutions
2. Provides additional funding to “Leverage” the energy project.
– The “Cost Avoidance” dollars, “Leveraging ” the budget dollars present to increase the Project Scope.
– The Scope can be increased on the project with the additional “Cost Avoidance” dollars.
Both Options provide a Guaranteed Solution.
OR
• ESCO- Energy Services Company• An ESCO is a commercial business
that provides and arranges financing for a broad range of comprehensive energy and operational savings solutions, including energy audits, design, and implementation, training, commissioning, measurement and verification.
Who Provides Performance Contracting?
Example Actual Project: Self-Funded Project w/ Positive Cash flow
• Project “Cost Avoidance” (12 year term)• 12 year Total Cost $7,611,026• 12 year Total Savings $8,011,190• Positive $400,164 Actual Cash Flow over life of the project
Performance Contract Guarantee
* Guaranteed work to be done.
No Change Orders
* Guaranteed Cost Avoidance and Open Book Pricing
* Guaranteed payback time period
Performance Contract History in NM.
1993
Sep 2011 PCPath Set for NM
Developing Pilot Programs
20112009
House Bill603 July 2009PC Legislation
2012
PC EnablingLegislation Passed in NM.
2004
PC Projects CompletedThru 2004
Performance Contracting Paths For New Mexico 2012
Selection of ESCO
Audit the Facility
Verify the savings
Implement ECM’s
Oversight and guidance is provided by The New Mexico Energy Minerals and Natural Resources Dept. (EMNRD)
EMNRD Contact : Brian Johnson(505) [email protected]
EMNRD Contact : Michael McDiarmid(505) [email protected]
FinanceThe Project
Agency contactsEMNRD
Step 1-Selection of ESCOOverview
Agency gathers data on the facilities to Support RFP Process
Issue RFP for Investment Grade Audit & Project Proposal to ESCO’s
Provide Walk thru and opportunity for questions for the ESCO’s
Enter Data in Energy Star Portfolio Manager to reference in the RFP
Building Sq. Footage
Building Utilities Data for 12 months
Building AgeAnd History
Building IssuesAsbestos, Etc..
Building AddressOr Location
Agency Selects short List of ESCO’s for final Interviews
Agency Awards Contract
Agency Selects ESCO
EMNRD Approves ESCO
The start point is for the Agency to contact EMNRD
Step 1-Selection of ESCO
EMNRD
Agency
NM Energy Minerals and Natural Resources Department. (EMNRD)
An “Agency” is a School, Higher Ed, Municipality, County or State agency.
EMNRD is available to assist the agency with developing a Request for Proposal (RFP) to ESCO’s thru a bidding process.• EMNRD has sample RFP documents to use.
The Agency will need to compile the following info for the RFP Document:• Building age and history with environmental issues (Asbestos, etc.)• Square footage of each building on the RFP. • At least 12 months of utility data for each building.• Building name, locations and addresses.
Step 1-Selection of ESCO
EMNRDAgency
RFP
The Agency will Request Bid responses from ESCO’s for the RFP.
The Agency will provide a Pre Bid Walk thru for the ESCO’s to walk the site(s) and ask questions.
Step 1-Selection of ESCO
EMNRDAgencyRFP
ESCO Companies
The Agency Selects the ESCO through Agency procurement EMNRD Certifies the ESCO.
• The ESCO is a Qualified Provider for this project only. The Contract is awarded to the ESCO only After EMNRD
Approval.
Step 1-Selection of ESCO
EMNRDAgency
Selected ESCO
EMNRD will provide a Model IGA Contract to Agency
Step 2-Audit the Facility Overview
EMNRD Reviews and certifies the completed IGA and Project Proposal from the ESCO.
Financing by ESCO provided thru a competitive process
ESCO Provides the IGA with Project Proposal.NOTE: Agency must have funding for IGA Costs
Utility Cost savings must meet or exceed cost of the project
Upon Approval From EMNRD the Project Proposal then moves to the Agency for approvals.
Process for Schools
Process for MunicipalitiesCounties, High Ed and State
Path A Path B
Step 2-Audit the Facility
EMNRDAgency
IGA
EMNRD will Provide a Sample Investment Grade Audit (IGA) Document for the Agency to submit to the ESCO.
The Agency must have funding for the IGA cost in the event that they decide not to move forward with the project. (DON’T WORRY!)
The ESCO will provide the Audit per the IGA Document. The ESCO will Identify & list ECMs (Energy Conservation Measures) EMNRD will oversee the competitive financing process for the Final
Proposal that will be turned in with the IGA.
ESCO
Step 2-Audit the Facility
EMNRD
Agency
IGA
The ESCO Completes the Investment Grade Audit which includes:• A “shovel ready” Project
Proposal• Financing• Guaranteed terms• Guaranteed Scope
ESCO
The EMNRD Reviews and approves the proposal
Step 2-Audit the Facility
Path A
Path B
EMNRD
Agency
EMNRD will Provide a Sample Investment Grade Audit (IGA) Document
Schools City, County, State, Municipalities &High Ed.
• The Path after EMNRD Approval.
• Determined by Agency
Step 3- Finance the Project
Superintendent and School Board gives approvals
School District budgets for the succeeding fiscal year are approved during the regular legislative session
Path A – Approvals for Schools
PED compiles a list of school districts’ proposed projects, including information on annual payments and guaranteed savings.
Once this Special Fund has been set up and funded, the Implementation can begin in the succeeding fiscal year.
The Annual Performance Contract amount will be removed from the School’s SEG (School Equalization Guarantee) Account and placed into a “Public School Utility Conservation Fund” to fund the Performance Contract with.
Next, PED notifies the Legislative Finance Committee of the proposed projects, during budget hearings preceding the regular legislative session.
Path B- Approvals for Municipalities , Counties and State Agencies &
Higher Ed.
The Contract is presented for approvals of the Governing Council, Commission or agency head.
Once the Governing Council or Commission has approved the contract a Special Fund is set up for the sole purpose of paying the Performance Contract Costs.
Special Fund Appropriated from Operating Budget to Pay for the Performance Contract.
Step 3- Finance the Project
Once this Special Fund has been set up and funded, Implementation can begin.
Step 4- Implement the Project
The Performance Period for the Contracts begins at customer approval and sign off of project completion.
The Project does not have change orders unless there are changes that the customer requires.
The Project with All Energy Conservation Measures (ECMs) is ready to start Implementation
The ESCO is responsible for Managing the Project.Providing Training, Ensuring the Design and development of the project
Step 5- Verify the savingsThe Project must have a Measurement and Verification (M&V) program to track and verify the savings of the performance Guarantee.
The ESCO can also be responsible for O&M if required for the project.
For Information on Performance Contracting, Go to:
HTTP://www.CleanEnergyNM.org Select Link: Clean Energy Performance Financing
Energy Performance ContractingFAQ
Q: How Long can you finance an EPC Project?A: Up to 25 years, depending on the equipment Life expectancy.
Q: What types of Projects qualify for an EPC Project?A: Almost all retrofits projects that save energy.See (6-23-2 Item B of the Statutes)
Q: Who provides Financing for an EPC Project?A: The ESCO provides the financing as part of the EPC Project.
Thank You!
Renewable Energy for Schools
Michael Cecchini
Director of Business Development
Benefits of Renewable Energy for Schools
• Energy Cost Savings – Operating Budget
• Reduced Peak Demand Charges
• Clean Energy
• Curriculum Opportunity
Ways for Schools to Implement a Solar Project
• CES Procurement
• Design/Build/Own – GO Bond Funding
• Power Purchase Agreement – Third Party Funded & Owned
• Performance Contract – Incorporate Solar in with other Energy Conservation Measures (ECM’s) with a Guaranteed Savings Agreement which will self fund the project.
Installation Options for Schools
Installation Options for Schools
Parking Lot Shade Structures
Thank You!
New Mexico Energy, Minerals and Natural Resources Department
36
Using New Mexico’s Energy Performance Contracting Law
Brian JohnsonESC Public Co-Chair
Facility Managers Training WorkshopOctober 31, 2012
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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Basic Features of the Law
• schools, state agencies, municipalities, universities• energy savings are guaranteed• up to 25-year term allowed• all types of efficiency & renewable measures• EMNRD oversight:
– “Qualified Provider” certification– Energy savings are accurate and reasonable
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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New Mexico’s Energy Performance Contracting Law• Where can I get help?
The Public-Private Partnership• How do I get started?
ESCO Selection• Your Future:
Projecting Utility Costs vs. Financing Costs• The Guarantee:
How Schools are Protected
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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Where can I get help?
The Public-Private Partnership• EMNRD –
www.CleanEnergyNM.org • Energy Services Coalition –
www.EnergyServicesCoalition.org
• Schools: PED, PSFA
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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www.CleanEnergyNM.org
Clean Energy Performance Financing• Model documents:
– Request for Proposals (RFP)– Energy Audit Contract– Guaranteed Utility Savings Contract
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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School Capital Project Resources
Public School Facilities Authority• Bob Gorrell, Director• [email protected]• 505-988-5989
Public Education Department• Antonio Ortiz, Director, Capital Outlay Bureau• [email protected]• 505-827-661310/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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Energy Services Coalition
Brian Johnson, Public Sector Co-Chair• [email protected]• 505-476-3313
Boone Birdsell, Private Sector Co-Chair• [email protected]• 505-270-1831
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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How do I get started?
Contacted by an ESCO or heard from EMNRD about Energy Performance Contracting?• Contact EMNRD• OK for ESCO to offer school unsolicited proposal,
but…• Want ESCO hired competitively• Deemed “Qualified Provider” by EMNRD
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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Competitive Selection
• Stand-alone RFP• Federal GSA
(www.gsaelibrary.gsa.gov; Schedule 03FAC; Category 871 202)
• Statewide Price Agreement (2013)
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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New Mexico Energy, Minerals and Natural Resources Department
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New Mexico Energy, Minerals and Natural Resources Department
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Your Future
Utility Costs vs. Financing Costs• Electricity prices are trending up• Natural gas is trending down…future volatility?• Propane is expensive
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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New Mexico Energy, Minerals and Natural Resources Department
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The GuaranteeHow Schools are Protected• We want energy $$$ savings• Guarantee is for energy BTU savings• Baseline-to-current-year energy comparison• Baseline adjustments needed• Utility bill accounting vs. avoided energy costs• Model documents
– strong language for savings calculations and measurement & verification plan
– Need to enforce
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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Sample Contract Language
Proposed Energy and Water Savings Calculations and Methodology • Provide detail description of analysis methodology used. Describe
any data manipulation or analysis that was conducted prior to applying savings calculations.
• Detail all assumptions and sources of data, including all stipulated values used in calculations.
• Include equations and technical details of all calculations made. (Use appendix and electronic format as necessary.) Include description of data format (headings, units, etc.).
• Details of any savings or baseline adjustments that may be required. • Detail energy and water rates used to calculate cost savings. Provide
post-acceptance performance period energy and water rate adjustment factors.
10/31/2012
New Mexico Energy, Minerals and Natural Resources Department
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Baseline Adjustments…
…shall only be made for any of the following changes in conditions affecting the facility: • utility rates• number of days in the utility billing cycle• floor area• operational schedule• facility temperature• weather• amount of equipment or lighting used in the facility• space types in the facility• material changes to the facility. 10/31/2012
Thank You!