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Get Smart !! Reduce Energy Use, Get Capital Project $$$. Boone Birdsell ESC Private Co-Chair. New Mexico Energy Services Coalition. Reference: Chapter 6, Article 23 of the New Mexico Statutes Public Facility Energy Efficiency and Water Conservation Act Amended July 1, 2009 .

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Presentation Transcript
slide1

Get Smart !!

Reduce Energy Use,

Get Capital Project $$$

slide2

Boone Birdsell

ESC Private Co-Chair

slide3

New Mexico

Energy Services Coalition

slide4

Reference:

Chapter 6, Article 23 of the

New Mexico Statutes

Public Facility Energy Efficiency and

Water Conservation Act

Amended July 1, 2009

slide5

Performance Contracting

Performance Contracting is aProcurement 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.

Before PC

After PC

slide6

Performance Contracting

Business as usual

  • Inefficient Building Issues
    • Lighting
    • Water
    • HVAC
  • Aging Equipment
    • Emergency funding needed for repairs & Deferred Maintenance.
    • Spare parts expensive

BeforePC

  • Budget Funds reducing
  • Costs going up
    • Maintenance cost increasing
    • Spare parts cost increasing
    • Energy cost going up.
slide7

Performance Contracting

  • 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
  • Reduce Maintenance
  • Increase Comfort levels

Carve out a “Cost Avoidance” piece of the pie.

After PC

slide8

Performance Contracting

Solutions

1. Provide a “Self-Funded” solution for an Energy and operational savings Project.

  • The “Cost Avoidance “ dollars will actually “PAY” for the Project.

OR

  • 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.

slide9

Who Provides Performance Contracting?

  • 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.
example actual project self funded project w positive cash flow
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
slide11

Performance Contract Guarantee

* Guaranteed work to be done.

No Change Orders

  • Definitive Scope of Work
  • Definitive Cost Avoidance
  • Definitive Term

* Guaranteed

Cost Avoidance and Open Book Pricing

* Guaranteed payback

time period

slide12

Performance Contract History in NM.

House Bill

603July 2009

PC Legislation

Sep 2011 PC

Path Set for NM

1993

2004

2012

2011

2009

Developing Pilot Programs

PC Enabling

Legislation Passed in NM.

PC Projects Completed

Thru 2004

slide13

Performance Contracting Paths

For New Mexico 2012

Oversight and guidance is provided byTheNew Mexico Energy Minerals and Natural Resources Dept. (EMNRD)

Finance

The Project

Verify the savings

Selection of ESCO

Implement ECM’s

Audit the Facility

EMNRD Contact : Michael McDiarmid

(505) 476-3319

michael.mcdiarmid@state.nm.us

EMNRD Contact : Brian Johnson

(505) 476-3313

brian.k.johnson@state.nm.us

slide14

Step 1-Selection of ESCO

Overview

Agency contacts

EMNRD

Agency gathers data on the facilities to Support RFP Process

Enter Data in Energy Star Portfolio Manager to reference in the RFP

Building Sq.

Footage

Building Age

And History

Issue RFP for Investment Grade Audit & Project Proposal to ESCO’s

Building Utilities Data for 12 months

Building Issues

Asbestos, Etc..

Provide Walk thru and opportunity for questions for the ESCO’s

Building Address

Or Location

EMNRD Approves ESCO

Agency Awards Contract

Agency Selects ESCO

Agency Selects short List of ESCO’s for final Interviews

slide15

Step 1-Selection of ESCO

EMNRD

Agency

The start pointis for the Agency to contact EMNRD

An “Agency” is a School, Higher Ed, Municipality, County or State agency.

NM Energy Minerals and Natural Resources Department. (EMNRD)

slide16

Step 1-Selection of ESCO

RFP

EMNRD

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.
slide17

Step 1-Selection of ESCO

RFP

EMNRD

Agency

ESCO Companies

  • 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.
slide18

Step 1-Selection of ESCO

EMNRD

Agency

Selected ESCO

  • 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.
slide19

Step 2-Audit the Facility Overview

ESCO Provides the IGA with Project Proposal.

NOTE: Agency must have funding for IGA Costs

EMNRD Reviews and certifies the completed IGA and Project Proposal from the ESCO.

EMNRD will provide a Model IGA Contract to Agency

Upon Approval From EMNRD the Project Proposal then moves to the Agency for approvals.

Financing by ESCO provided thru a competitive process

Process for Municipalities

Counties, High Ed and State

Process for Schools

Utility Cost savings must meet or exceed cost of the project

Path A

Path B

slide20

Step 2-Audit the Facility

EMNRD

Agency

IGA

ESCO

  • 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.
slide21

Step 2-Audit the Facility

ESCO

EMNRD

IGA

  • The ESCO Completes the Investment Grade Audit which includes:
    • A “shovel ready” Project Proposal
      • Financing
      • Guaranteed terms
      • Guaranteed Scope
  • The EMNRD Reviews and approves the proposal

Agency

slide22

Step 2-Audit the Facility

  • The Path after EMNRD Approval.
    • Determined by Agency

EMNRD

Agency

Path A

Path

B

City, County, State, Municipalities &High Ed.

Schools

  • EMNRD will Provide a Sample Investment Grade Audit (IGA) Document
slide23

Step 3- Finance the Project

Path A – Approvals for Schools

Superintendent and School Board gives approvals

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.

Once this Special Fund has been set up and funded, the Implementation can begin in the succeeding fiscal year.

PED compiles a list of school districts’ proposed projects, including information on annual payments and guaranteed savings.

Next, PED notifies the Legislative Finance Committee of the proposed projects, during budget hearings preceding the regular legislative session.

School District budgets for the succeeding fiscal year are approved during the regular legislative session

slide24

Step 3- Finance the Project

Path B- Approvals for Municipalities , Counties and State Agencies &

Higher Ed.

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.

Once this Special Fund has been set up and funded, Implementation can begin.

The Contract is presented for approvals of the Governing Council, Commission or agency head.

Special Fund Appropriated from Operating Budget to Pay for the Performance Contract.

slide25

Step 4- Implement the Project

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

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.

slide26

Step 5- Verify the savings

The 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.

slide27

For Information on Performance Contracting, Go to:

HTTP://www.CleanEnergyNM.org

Select Link: Clean Energy Performance Financing

slide28

Energy Performance Contracting

FAQ

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.

renewable energy for schools

Renewable Energy for Schools

Michael Cecchini

Director of Business Development

slide31

Benefits of Renewable Energy for Schools

    • Energy Cost Savings – Operating Budget
    • Reduced Peak Demand Charges
    • Clean Energy
    • Curriculum Opportunity
slide32

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.
slide34

Installation Options for Schools

Parking Lot Shade Structures

using new mexico s energy performance contracting law

Using New Mexico’s Energy Performance Contracting Law

Brian Johnson

ESC Public Co-Chair

Facility Managers Training Workshop

October 31, 2012

New Mexico Energy, Minerals and Natural Resources Department

basic features of the law
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

New Mexico Energy, Minerals and Natural Resources Department

new mexico s energy performance contracting law
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

New Mexico Energy, Minerals and Natural Resources Department

where can i get help
Where can I get help?

The Public-Private Partnership

  • EMNRD –

www.CleanEnergyNM.org

  • Energy Services Coalition – www.EnergyServicesCoalition.org
  • Schools: PED, PSFA

New Mexico Energy, Minerals and Natural Resources Department

www cleanenergynm org
www.CleanEnergyNM.org

Clean Energy Performance Financing

  • Model documents:
    • Request for Proposals (RFP)
    • Energy Audit Contract
    • Guaranteed Utility Savings Contract

New Mexico Energy, Minerals and Natural Resources Department

school capital project resources
School Capital Project Resources

Public School Facilities Authority

  • Bob Gorrell, Director
  • rgorrell@nmpsfa.org
  • 505-988-5989

Public Education Department

  • Antonio Ortiz, Director, Capital Outlay Bureau
  • antonio.ortiz1@state.nm.us
  • 505-827-6613

New Mexico Energy, Minerals and Natural Resources Department

energy services coalition
Energy Services Coalition

Brian Johnson, Public Sector Co-Chair

  • brian.k.johnson@state.nm.us
  • 505-476-3313

Boone Birdsell, Private Sector Co-Chair

  • boone@yearoutenergy.com
  • 505-270-1831

New Mexico Energy, Minerals and Natural Resources Department

how do i get started
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

New Mexico Energy, Minerals and Natural Resources Department

competitive selection
Competitive Selection
  • Stand-alone RFP
  • Federal GSA

(www.gsaelibrary.gsa.gov;

Schedule 03FAC; Category 871 202)

  • Statewide Price Agreement (2013)

New Mexico Energy, Minerals and Natural Resources Department

your future
Your Future

Utility Costs vs. Financing Costs

  • Electricity prices are trending up
  • Natural gas is trending down…future volatility?
  • Propane is expensive

New Mexico Energy, Minerals and Natural Resources Department

the guarantee
The Guarantee

How 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

New Mexico Energy, Minerals and Natural Resources Department

sample contract language
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.

New Mexico Energy, Minerals and Natural Resources Department

baseline adjustments
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.

New Mexico Energy, Minerals and Natural Resources Department