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Practical Ways for Towns to Save Money with Clean Energy Projects

Doreen Hamilton April 30, 2014. Practical Ways for Towns to Save Money with Clean Energy Projects. Today’s Discussion. What is Performance Contracting? Tolland’s Challenges and Goals New Complexities in the Energy Landscape The Town of Tolland and their Solutions

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Practical Ways for Towns to Save Money with Clean Energy Projects

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  1. Doreen Hamilton April 30, 2014 Practical Ways for Towns to Save Money with Clean Energy Projects

  2. Today’s Discussion What is Performance Contracting? Tolland’s Challenges and Goals New Complexities in the Energy Landscape The Town of Tolland and their Solutions Viable financing options

  3. What is Energy Performance Contracting (EPC)? • Alternative funding mechanism to upgrade energy consuming building systems • Make improvements now and pay for them out of future, guaranteed energy savings • Public Act 11-80 formally recognizes EPC as a viable means to achieve State’s energy goals

  4. Where has this been done? • Town/Schools of Stafford, CT • Town/Schools of Colchester, CT • Town/Schools of Stratford, CT • Middletown, CT Schools -2 phases • Town/Schools of Monroe, CT • Danbury, CT Schools – 4 phases • Town/Schools of Tolland, CT “It works with the service upgrade vendor, Honeywell Building Solutions, guaranteeing energy and cost savings over a 15-year period and the efficiency fund providing an incentive payment of $790,000. “ “We financed in a smart fashion. It happened quickly. It is environmentally correct. We are saving energy, and the program pays for itself,” said the Mayor. • “This was an easy decision. Other cities should do it.” Mayor John Harkins, Stratford, CT

  5. Tolland’s Challenges and Goals External Pressures • Rising Costs • Budget Pressure • Aging Infrastructure • Do more with less Goals • Decrease Energy Consumption • Green/Sustainability • Facility Renewal • Manage Costs

  6. Building a Team • Consensus Building – Boards • Formation of a Committee • Outside Consultant or not • Town & School Support • Process Road map • Procurement Process – RFP, RFQ or State • Request for Proposal • Request for Qualification • State Process

  7. Today’s Energy Solution is More Complex • Energy Efficiency • Incentives • Financing Multiple Buildings • Energy Efficiency Supply Strategies Demand Strategies Finding the right solutions for you requires integrated strategies • Sustainability and Behavior Management • Operational Challenges • Deferred Maintenance • Life Cycle Management • Rising Energy Costs Microgrids & On-site Generation – CT Legislation • Micro Grids & On-Site Generation • Sustainability and Behavior Management • Advanced Controls and Building Optimization • Renewable Energy • Advanced Controls and Building Optimization • Renewable Energy

  8. Infrastructure Upgrade Options • Capital Investments • Performance-Based Projects • Must Do Projects • New Program Launch • New Facility • Capital Equipment • Planned Facility Renewal • Reduce Risk • Guarantee Savings • - Efficiency Improvements • - Productivity • - Managed Asset Renewal • Option to Include • - “Must Do” & “Capital Projects” • Emergency EquipmentRepairs/Replacement • Building Damage • Life Safety Issues • Environmental Compliance • Security • Unplanned • Must CompleteRegardlessof Return • Budgeted • Compete for Capital • Prioritized • Projects Have SimilarBusiness Risk • Can Be Independent ofCapital Budgets • Funded Through Energy & Operational Cost Avoidanceand Third Party Sources • Project Risk With Vendor

  9. Town of Tolland Process • Town of Tolland energy conservation efforts • Celtic Energy was selected as the Third Party Owner Representative • Developed Request for Proposal – Honeywell selected • Development of Investment Grade Audit • 30-60-90% reviews • Energy & Infrastructure Improvements • Utility Incentive Review • Legal Review • Finance Bid/Review • Final Board Approvals – School & Town • Project $10.2M, 0% financing, incentives from NU $859,000, 20 year program, energy & operational savings of $573k annually

  10. Tolland’s Solution

  11. Financing Vehicles Tax Exempt Lease Power Purchase Agreement (PPA) Utility sources Bonds PURA rate buy down Funding Sources Energy and OperationalCost Avoidance Energy Efficiency Grants 0% Financing Incentives Financing Options

  12. Questions Doreen.Hamilton@Honeywell.com 860.305.9661

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