inefficient building issues lighting water hvac aging equipment emergency funding needed for repairs...

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%


Energy

Cost Avoidance

Maintenance

Before PC After PC

75%

25%


Energy

O&M

Before PC


• 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


50%35%

15%


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

mailto:[email protected]


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.


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.


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.


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


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


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

http://www.cleanenergynm.org/

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


37

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


38

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


39

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


http://www.energyservicescoalition.org/


40

www.CleanEnergyNM.org

Clean Energy Performance Financing• Model documents:

– Request for Proposals (RFP)– Energy Audit Contract– Guaranteed Utility Savings Contract

10/31/2012



41

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





42

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





43

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


44

Competitive Selection

• Stand-alone RFP• Federal GSA

(www.gsaelibrary.gsa.gov; Schedule 03FAC; Category 871 202)

• Statewide Price Agreement (2013)

10/31/2012

http://www.gsaelibrary.gsa.gov/


4510/31/2012


4610/31/2012


47

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


4810/31/2012


49

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


50

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


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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!

inefficient building issues lighting water hvac aging equipment emergency funding needed for repairs...

Documents

agency slide

project slide

esco slide

esco emnrd

proposal slide

agency contacts emnrd

energy project

agency emnrd reviews