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Phoenix   Energy Performance Contracting Presentation
 

Phoenix Energy Performance Contracting Presentation

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HUD Phoenix Energy Workshop

HUD Phoenix Energy Workshop
September 16-17, 2008

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    Phoenix   Energy Performance Contracting Presentation Phoenix Energy Performance Contracting Presentation Presentation Transcript

    • Energy Performance Contracting (EPC) Leverage your Facilities in your organization’s journey toward sustainability Donald Barrette West Region Project Development Siemens Building Technologies (602) 677-9027 donald.barrette@siemens.com 1
    • Today’s Facility Issues Restricted budgets/Continuing Resolution Increasing energy prices/Reduced Funding Demand for greater energy responsibility Potential Solution: Create a High Performance Building with an Energy Performance Contract
    • Energy Performance Contracting: Definition An Energy Performance Contract Is: A financial tool for implementing energy efficiency and facility improvements, where the cost savings generated by the improvements service the debt from project development and construction. Energy Service Company (ESCO) implements the program using a design-build approach, and guarantees the financial and operational performance of the measures installed. ESCO carries the performance risk and construction cost risk of the program.
    • Typical Project Components Lighting: Retrofits & controls Cooling: Chillers, towers & pumps Heating: Boilers, steam traps & pumps Ventilation: Variable speed, CO2 Controls: Energy management Building envelope: Windows & insulation Water: Efficient fixtures
    • Financial Benefits to Customers Capital improvements to facilities Utilize utility funding High-efficiency equipment Lower Utility Costs 20-50% Lower O&M costs Guaranteed energy savings Fixed price contracts Financing available Payments from savings Single-source responsibility
    • Non-Financial Benefits Improved occupant comfort Upgraded buildings & systems Use of new technologies Positive environmental impacts Guaranteed performance Single-source responsibility Reduced environmental footprint
    • The Potential Customers? Public sector – public school districts; public colleges and universities; federal, state and local governments; national labs Public & Indian Housing Private sector – hospitals; private colleges and universities; office buildings; casinos and hotels; condos; business campuses; manufacturing complexes Customer profile – Have long-term view of facilities – Need capital for investment – Opportunities for energy, water, operational efficiency improvements
    • Green Energy Performance Contracting - Some details Install the same Energy Efficiency in traditional PC, but add Water Efficiency, Renewable Energy, Waste Management, Green Policies and Procedures, etc. Obtain Energy Star rating or LEED-EB certification Entire project paid for through savings in existing operations and maintenance budgets Guaranteed Results Sound too good to be true? It’s not, in fact it’s very feasible with well established contracting mechanism = Energy Performance Contracting 8
    • Performance Contracting: Getting Started Define performance contracting procurement process in Customer’s organization Define objectives of energy program Select an Energy Services Partner Customer and Energy Services Partner determine energy program terms for Letter of Intent – Technical terms: Preliminary scope for energy program – Financial terms: Cash flow, financing term, detailed engineering fee Prepare LOI for execution by Customer
    • What is a HUD Energy Performance Contract? A HUD incentive that allows a PHA to capture the cost value of utility consumption reduction through implementation of conservation measures
    • Free Improvements • Nothing in life is free – HUD pays, NOT the PHA HUD’s Hidden Grant Program New Money PHA avails itself to a HUD financial incentive
    • The Four HUD Incentives 1. Frozen Rolling Base 2. Add-On Subsidy 3. Resident Paid Utilities 4. Rate Reduction
    • Frozen Rolling Base Freezes the 3-year rolling base utility allowance at the level of consumption before installation of the energy improvements. This incentive applies when payments by the PHA to an ESCO or third party financier are dependent on the amount of energy cost savings realized. The PHA retains 100 percent of the cost savings during the contract period, and at least 75 percent of these yearly profits are used to pay off the loan until it is fully amortized.
    • Add-On Subsidy A PHA can request an additional subsidy as an quot;add-onquot; to its total operating subsidy eligibility. This additional subsidy would be applied to amortizing payments for a loan contracted to finance energy-conservation improvements with a repayment period not to exceed 12 years (20 years with a waiver). The add-on subsidy is often used to do straightforward retrofits such as lighting, refrigerators and other bulk purchases.
    • Resident Paid Utilities PHAs undertaking energy conservation measures may include resident-paid utilities under the consumption reduction incentive The PHA may exclude from its calculation of rental income the increased rental income due to the difference between the baseline allowances and the revised allowances of the projects involved, for the duration of the contract period.
    • Rate Reduction If a PHA takes action beyond normal public participation in rate-making proceedings…then the PHA is permitted to retain 50 percent of the annual savings realized from these actions… The rate incentive may be combined with the frozen base and additional subsidy incentives. When used together, the baseline utility costs and savings under the performance contract shall be calculated as the baseline consumption times the prevailing utility rate for the budget year for which lower rates were negotiated...
    • Case Study Sky City Community School Energy Conservation Measures Included: Lighting replacement Building Automation Chiller Replacement VAV’s in all rooms High efficiency boilers Motors and Pumps Exterior Windows – Double pane low-e Re-roofed building – added ridged insulation Energy Savings after first year 76% 17
    • Case Study Cuyahoga Metropolitan Housing Authority Energy Conservation Measures Included: $33.6 Million Energy Performance Contract in Cleveland, Ohio Green Roofing System Natural Gas consumption reduced by over 1 million CCF per year Utility cost reduced by over $3.7 million annually No initial cost to the Housing Authority or HUD 18
    • Questions & Answers Donald Barrette West Region Project Development Siemens Building Technologies (602) 677-9027 donald.barrette@siemens.com