Energy Savings Projects

1. Big Ten Sustainability ConferenceNovember 14-15, 2010Funding Strategies:Energy Savings Projects and Seed Grants Funding Strategies

2. Energy Savings Projects

3. Energy Savings Projects Program Components • Commissioning • Continuous Commissioning (CCX) • Rapid Commissioning (RCX) • Guaranteed Energy Savings Projects (GESP’s) • Energy Savings Projects (ESP’s) • Energy Conservation Measures (ECM’s) • Seed Grants

4. Annual Budgets • Guaranteed Energy Savings Projects (GESPs) and Energy Savings Projects (ESPs ) – 10 yr payback • $5,000,000 to $10,000,000 • Applies to all University facilities • Energy Conservation Measures (ECMs) – 5 yr payback • Commissioning = $580,000 • Stand alone = $500,000 • Incorporated in Projects = $500,000 • Applies only to E & G facilities

5. PENN STATE’sTraditional Guaranteed Energy Savings Project (GESP) Contracting Process

6. Measurable or Guaranteed Results $ spent should not increase as a result of a GESP UTILITY PAYMENT UTILITY COMPANY REVENUE ANNUAL UTILITY BUDGET ENERGY SAVINGS UNIVERSITYIMPROVEMENTS

7. Organized Process • In the Commonwealth of Pennsylvania, • energy performance contracting was standardized • through the procurement code……………… The Guaranteed Energy Savings Act (GESA) is provided for under Chapter 37 of Act 57 (1998), and as amended by Act 77 (2003).

8. Traditional Guaranteed Energy Savings Program Process

9. Penn State’s Process • Select Project Sites • Issue Request for Letters of Interest • Select up to 3 ESCOs from LOIs and Issue RFP • Evaluation and Selection of ESCO • Execute Energy Audit Contract • Audit conducted by ESCO approved by Penn State • Negotiate and execute GUARANTEED ENERGY SAVINGS CONTRACT • Determine financing method and secures monies • Construction Period begins • Project accepted and approved • Guaranteed period commences • Ongoing project monitoring

10. GESP Process • Select Project Sites • A campus or group of buildings • Similar customers • Similar needs • Target projects of $2,000,000 to $4,000,000 • Establish the selection committee Example: Penn State Altoona 2007 FY utility cost = $1,400,000 20% Expected Savings = $280,000 over 10 years = $2,800,000 Selection Committee: • Director Housing & Food Service • Director Business Operations • Assistant DBO • Foreman Operation and Maintenance • Heat & Vent Technician • Project Manager • Mechanical Engineer

11. GESP Process • 2) Issue request for letters of interest (LOI) • List of 18 qualified ESCOs from the DGS site • ESCO reference projects • Team member qualifications • ESCO financial information • 3) Select 3 ESCOs and issue the RFP • The RFP establishes the foundation of the GESP • Requirements, terms, and conditions • Expectations and selection process • Schedules for meetings, proposals and presentations • 4) Evaluation and selection of ESCO • From 3 proposals select 1 ESCO to complete an IGA • Written proposal evaluation • Interview Evaluation • DGS forms available

12. GESP Process • 5) Execute the Investment Grade Audit Agreement (IGA) • The next step in the contractual process • Builds on the RFP • The IGA agreement is absorbed into the GESA • 6) Audit conducted by ESCO • Partnership between the ESCO and the owner • Commonly takes 3 to 6 months • Measure from the proposal are refined • Cost and savings can not vary by 10% • The IGA report becomes the basis of the GESA • 7) Negotiate and Execute Guaranteed Energy Savings Contract

13. GESP Process • 8) Determine the financing method • Penn State uses internal financing • ESCO offer a wide range of options • Construction Period begins • Project accepted and approved • Guaranteed period commences • Ongoing project monitoring

14. Sample GESP (Altoona Campus) Total Projected Savings = $ 363,124 Payback = 8.1 years on financed amount

15. Sample GESP (Altoona Campus) Total Projected Savings = $ 363,124 Payback = 8.1 years on financed amount

16. Sample GESP (Altoona Campus) Total Projected Savings = $ 363,124 Payback = 8.1 years on financed amount

17. Sample GESP (Altoona Campus) Total Projected Savings = $ 363,124 Payback = 8.1 years on financed amount

18. Sample GESP (Altoona Campus) Total Projected Savings = $ 363,124 Payback = 8.1 years on financed amount

19. Energy Saving Program Process w/ In-House Labor • Simplified process for working with in-house forces • Based on stipulated savings as determined by Penn State energy engineers • Reduced cost due to elimination of ESCO profits

20. Sample ESP Projects

21. Sample ECMs • Energy Savings Projects with maximum 5 year simple paybacks Continuous Process • Occupancy Sensors – HVAC – Many Buildings • Lighting – Many Buildings • Thermostatic Valves – Many Buildings Batch Process – • Lab air flow adjustments – Wartik & Hosler • Valve replacement – Leonhard • Valve Replacement – South Henderson • Heat recovery ACF 1&2 – Research East • Heat Recovery – Althouse • 100% OA – Rec Hall rm 151 and HVF 05 • RTU replacement – Research West

22. Sustainability Seed Grant Program:“Crowd Sourcing” New Ideas

23. Sustainability Seed Grant Program:“Crowd Sourcing” New Ideas

24. Sustainability Seed Grant Program • Goal : To foster basic and applied research, practice, education, and outreach as it relates to sustainability • Penn State Institutes of Energy and the Environment partnership with Outreach, OPP & several colleges • $350,000 funding available • Grants awarded May 2010 • Grants need to be by June 30, 2012

25. Sustainability Seed Grant Program Encouraging Collaboration 13 awardees 75 proposals

27. Results 24% reduction BTU/GSF

28. What’s next. . .?

29. What’s next. . .? Conventional Investments Endowment ENERGY SAVINGS

30. Thank you. Comments? Questions?