nevada governor’s office of energy 1 round-up the savings to pay for facilities improvements
TRANSCRIPT
Nevada Governor’s Office of Energy
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Public Facilities Retrofit Program
Governor’s Office of Energy
Sue Stephens
Energy Program Manager
Nevada Governor’s Office of Energy
Public Facilities Retrofit Program
Grant from U.S. Department of EnergyTo increase energy efficiency through performance contracting
For state and local governments
Nevada Governor’s Office of Energy
Public Facilities Retrofit Program
For:• State agencies and state higher education institutions• Cities, counties, school districts, other government districts
Education • Information
– Visit our website: www.energy.nv.gov– Sign-up for our upcoming newsletter
• Workshops – Las Vegas (February 6th)– Winnemucca (March 18th)– Reno (March or April – not yet scheduled)
Technical Assistance• Best practices• Model procurement and contracting documents• Guidance to develop a successful project
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Nevada Governor’s Office of Energy
Public-Private PartnershipMission:
Increase awareness and use of performance contracting in Nevada.
Public Sector Participants• Nevada Governor’s Office of Energy• Project managers of successful projects• Others interested in the mission
Private Sector Participants: • ESCOs• Vendors of energy efficient equipment• Performance contracting specialists/consultants• Utilities • Others
Public Facilities Retrofit Program
N
Nevada Chapter
Nevada Governor’s Office of Energy
Contact Us
We’re here to help you get started
and see you through
Don’t Delay! Contact us Today!
Sue Stephens
Energy Program Manager
Public Buildings Retrofit Program
775-687-1850 Ext. 7325
www.energy.nv.gov
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Nevada Governor’s Office of Energy
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Public Facilities Retrofit Program
Governor’s Office of Energy
Linda Smith
Program Consultant (9Kft Strategies in Energy)
Nevada Governor’s Office of Energy
Competing needs for the budget Maintenance problems or
comfort complaints Limited expertise on
technologies Too many demands on
staff time to launch new
projects
Yet…you want to replace equipment and
modernize your facilities
What Problems Do You Face at Your Facility?
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Nevada Governor’s Office of Energy
An Innovative Solution
Performance Contracting
Energy Savings
Performance
Contracting
…a smart way to get better buildings
If you face these problems….you are
not alone
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Nevada Governor’s Office of Energy
Energy Savings Performance Contracting (ESPC)
Projects pay for themselves!
Savings stack up over time…
A way to upgrade your facilities without dipping into your capital budget…Using future cost savings to pay for projects
What is Energy Savings Performance Contracting?
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Nevada Governor’s Office of Energy
Each year money in your budget is freed-up to pay for equipment!
How It Works – Annually
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Nevada Governor’s Office of Energy
• Financed through lease-purchase agreement (municipal tax-exempt)
• Annual cost savings exceed annual payments
• Does not impact debt (common legal perspective)
• Financing term is up to 15 years (per legislation)
• Blend and leverage funds (savings plus utility rebates, grants, bonds, budgeted funds)
How It Works - Financing Multi-Year Lease-Purchase Agreement
Maintenance Costs
Utility Costs
ANNUAL BUDGET
SavingsPay for Improve-ments
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Nevada Governor’s Office of Energy
Contract with an
Energy Service Company
(ESCO)
The ESCO brings in
a team of specialists
The ESCO Partner
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Nevada Governor’s Office of Energy
A qualified ESCO puts many different pieces
together in a turnkey approach:
Identify and evaluate project opportunities
Help arrange for financing and other funding sources
Design, install, commission and manage projects
Measure and verify savings
Train staff, provide ongoing maintenance services And, guarantee that projected savings will
cover all costs
The ESCO Partner
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Nevada Governor’s Office of Energy
ESCO
Agency/Owner
How ESPC Works
Financier
ESCO guarantee: Savings => Payment
Performance Contract
Lease-Purchase Agreement or other funding arrangement
2 Contractual AgreementsSecured by the ESCO Guarantee
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Nevada Governor’s Office of Energy
Measures that save: • Energy• Water• Operational, utility, maintenance
costs• And beyond (waste handling and
other infrastructure improvements)
A Broad Range of Measures:
• Lighting equipment replacements• Building automation system
upgrades• HVAC system improvements• Boiler replacements• Plant improvements • Renewable energy systems• Landscape irrigation• Plumbing fixture replacements• Commissioning • Utility rate adjustments• LED traffic and
street lighting systems
EPC Scope
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Nevada Governor’s Office of Energy
5 Steps to Success and Program Services
Decide if performance contracting is right for you (Assess your needs & potential benefits) Services: FREE engineering study, Board presentation, meetings
Select an Energy Service Company, ESCO (Develop an RFP)
Services: FREE RFP development, advisor
ESCO identifies energy-saving opportunities (Develop an investment grade audit contract)
Services: Audit contract development, negotiating tips, engineering review of audit
ESCO implements projects (Negotiate an Energy Performance Contract)
Services: Contract development, negotiating tips, engineering & process advisor
Verify savings and enjoy the benefits (Monitor long-term performance)
Services: Engineering review of results and basic follow-up monitoring
Nevada Governor’s Office of Energy
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City of Henderson – Facilities Management
Ed McGuire
Kathy Ogle
Nevada Success Story
in Performance Contracting
BACKGROUND – The City of HendersonOne of America’s Premier Cities•275,000 residents•105 square miles, 817 miles of streets•Over 2 Million square feet of City Buildings under roof•60 miles of trails, most have lights•11 pools•7 Recreation Centers•52 parks- 1200 plus acres •Still adding amenities•Population rising, use of facilities rising•BUDGETS FALLING
BACKGROUND: Continued•City owned Water and Wastewater plants•BUDGETS FALLING •Operational Costs are Rising•All the NON-Glamorous Stuff is wearing out•Out of date technology•BUDGETS FALLING •Annual Electricity- $10.3 Million•Annual Natural Gas- $542K•Annual Water- $2.3 M (includes sewer charges)•Utilities are $3.3 Million a year for Facilities
BACKGROUND: Continued
•BUDGETS FALLING •Las Vegas Valley Economy Sucks•Residents staying home, staycationing at Rec. Centers•Clients expecting more, willing to pay less•Clients NEED affordable, durable, cost effective and reliable “stuff”•City needs to replace or refresh the big ticket, utility consuming stuff•What do we do? DO MORE WITH LESS?•Can you do everything with nothing?
NRS CHAPTER 332 - PURCHASING: LOCAL GOVERNMENTS to the rescue!
The section applies to: Every political subdivision or other entity which has the right to levy or receive money from ad valorem taxes or other taxes or from any mandatory assessments, including counties, cities, towns, school districts and LVVWD
See Subsection NRS 332.300 PERFORMANCE CONTRACTS FOR OPERATING COST-SAVINGS MEASURES!
Performance Contracting Process• RFP and ESCO Selection by owner• Kickoff meeting with scope discussion• Develop Financial Grade Audit with multiple
workshops to determine final scope• Energy Services Agreement signed• Final Design completed• Construction• Measurement and Verification of savings• Ongoing O&M
The City has past experience with PERFORMANCE CONTRACTS FOR OPERATING COST-SAVING MEASURES
In 2006 and 2007 The City of Henderson entered into an energy performance contract with an ESCOto upgrade and retrofit a variety of items.
The first Energy Savings Performance Contract (ESPC) completed by the City was a $2.8M energy savings project for the Justice Facility. Completed in 2007, the project is saving over $250,000 per year. Funding was a combination of 1/3 Capital Funds and 2/3 medium term bond (10 years).
The second project cost $20M and is saving about $2M a year!
The second project was financed with a 15 year loan. The City put out a Request For Proposals for bank loans and received several inquires, with Bank of America delivering the best terms.
Both projects have GUARANTEED savings, if the savings goal is not achieved either the ESCO installs further upgrades to increase savings or pays down the cost of the energy saving measure until the cost benefit is positive. Your ESCO is your business partner, select them carefully!
PROJECT DESCRIPTION:The selected citywide measures include:•Retrofitting or replacing over 4,000 building lighting fixtures•Replaces 23,000 4’ T-12 lamps with T-8 28 watt high output lamps•Installing over 1,500 new lighting occupancy sensors •Installing/upgrading energy management system in 15 facilities •Replacing 17 boilers in nine facilities•Replacing 2 chillers in 2 facilities •Retrofitting over 310 plumbing fixtures•Installation of ultraviolet water treatment on indoor swimming pools (improves indoor air quality and decreases chemical usage)
UV Water treatment 200 Ton Magnetic bearing, Frictionless McQuay Chiller ready for install
Examples of sexy projects
PROJECT DESCRIPTION cont.•Installed two 30-kilowatt photovoltaic arrays•Replaced rooftop HVAC units at multiple locations•Retrofit or replaced nearly 28,000 HPS street lights with induction lighting technology
•Replaced 12 large exhaust fans at the Jail•Repaired or replaced appurtenant maintenance items that don’t meet the energy saving test but are critical and failing like valves, controllers etc., paid for with energy savings.
HPS Inductive
All old lamps, ballasts, fixtures and thermostats were recycled, all new equipment is low emission, high efficiency. Two R-22 refrigerant equipped chillers were upgraded with new R-134a compatible chillers (non ozone depleting refrigerant)
•Coordination with 1900 full time employees•Convince the Public Works, Finance, Utilities and Building Department heads the project will work and pay for itself•Coordinate 15 contractors working in 36 locations plus all 817 miles of public streets•Built-in conflicts with all the old valves, switches and connections. Every shutdown was an adventure!•All the buildings were open for business and remained so for the term of the contract•No major shutdowns, no closures
The City had the dream team for this project:
The City selected the most qualified Energy Service Company (ESCO), they function like a Prime Contractor in a design/build. The ESCO selects “subs”, designers, engineers, suppliers and installers to complete the project.
The City hired a third party energy consultant to provide project oversight. This is required by NRS 332.360, the third party must possess an AEE “Certified Energy Manager” certification.
City staff managed the day to day work and helped coordinate with the occupants of all the locations, processed all payments, reviewed certified payroll and attended bi-weekly coordination/project meetings.
Original Contract Amount : $17,506,991.00Change orders owner added 13%: $2,589,678.00Contract Price after This Change $20,096,669.00
Added to the Base Contract via change orders, all owner requested changes or additional work funded by others
NV Energy Rebates total approximately $845,000American Recovery Act Funds $1,043,000City Capital Funds $700,000
No time growth
Sample power consumption, 3 Buildings
Convention Center, Black Mountain Rec. Center and Emergency Services Facility. Power consumption 2008 to 2011 for June, July and August. Summer Months show 35% decrease at each location!
• The project reduced the City’s carbon footprint, greenhouse gas emissions and remove 240 milligrams of mercury.
• The project appreciably reduced maintenance cost and effort • The project has resulted in a Cultural Change at the City of Henderson• All rebates were spent on additional related energy saving work.• The project had a $20 million dollar impact with $700,000 direct cost • All equipment was high efficiency, low emissions and low or mercury free• Most street lamps were retrofit, those that could not were replaced and
recycled• All 28,000 street lamp ballasts were recycled• The project has reduced utility spending by $2.4 Million dollars a year!• Using EPA Energy Star benchmarking software, City Hall improved over 20
points (20%).• Savings has exceeded the contract based on 17% guaranteed savings
Summary
Nevada Governor’s Office of Energy
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Public Facilities Retrofit Program
Governor’s Office of Energy
Chris Halpin, PE, CEM, CMVP, LEED AP
Program Consultant – Technical Assistance (Celtic Energy)
Nevada Governor’s Office of Energy
• Determine if Performance Contracting is right for you– Assessment of facility opportunities through performance
contracting– On-site meetings and facility walk-throughs– Benchmarking energy use and costs– Support for your decision-making team to get the “go” decision
• Competitively select an ESCO– Apply a standardized process– Help prepare the RFP– Serve as a neutral advisor
FREE Technical Assistance to Get Started
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Nevada Governor’s Office of Energy
• Your project’s savings will pay for continued technical assistance (as referenced in statute)
• Investment Grade Audit– Provide a 3rd party review of the savings projections and
recommended measures
• Performance Contract (implementation contract)– Educate and advise during contract negotiations– Ensure thorough documentation– Ensure reasonable project costs, markups, etc.– Ensure sound measurement and verification
approaches
Continued Technical Assistance
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Nevada Governor’s Office of Energy
FREE Technical Assistance
• Conduct a training seminar for Agency personnel to ensure understanding of ESPC scope, financing, M&V, etc.
• Discuss “Lessons Learned” from previous ESPCs
• Secure commitment of all stakeholders to ESPC
• Liaison with NV Energy Office
Building the Project Team
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Nevada Governor’s Office of Energy
• Meet with facility management staff, discuss O&M, ECM opportunities– What projects have been completed?– Are there critical infrastructure needs?– Planned projects short of funding?
• Review and benchmark existing utility data. Compare facilities to peers using BTU/SF, $/SF– Create utility baseline– Helps prioritize targets
FREE Technical Assistance
Determine if Performance Contracting is right for youAssessment of facility opportunities
through performance contractingOn-site meetings and facility walk-
throughsBenchmarking energy use and costsSupport for your decision-making
team to get the “go” decision
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Nevada Governor’s Office of Energy
• Follow standardized RFQ/RFP process established by the energy office through this DOE grant
• Help prepare the RFP– Use the energy office template, modify
as needed– Assist with Technical Facility Profile
• Building descriptions, utility data, plans
• Serve as a neutral advisor– Discuss assembly of selection
committee– Brief committee on RFP issuance,
proposal review and scoring criteria, ESCO selection process,etc.
– Assist with “Board” presentations
FREE Technical Assistance
Competitively select an ESCOApply a standardized
processHelp prepare the RFPServe as a neutral
advisor
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Nevada Governor’s Office of Energy
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Public Facilities Retrofit Program
Governor’s Office of Energy
Sue Stephens
Energy Program Manager
Nevada Governor’s Office of Energy
WHY should I consider doing a performance contracting project?
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Nevada Governor’s Office of Energy
Meet Climate Change & Energy Saving Goals • Reduce energy use, long-term
Modernize infrastructure• Better buildings now
Good Environmental Stewardship• Energy & water savings• Pollution prevention• Renewable energy opportunities• Reduce our dependence on fossil fuels
Wise use of government dollars• Reduce the taxpayer burden• Divert wasted energy dollars to pay for infrastructure
Economic development• Create Jobs – real jobs now! (ESCO staff, Subcontractors to ESCOs,
Equipment suppliers , engineers, installers, on-site energy managers,
service providers and more)• Pump money into your local economy
Benefits for all levels of government
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Nevada Governor’s Office of Energy
Benefits for the facility manager
Solution to Limited Budgets• Capital improvement without spending capital dollars • Avoid the cost of delay – it costs money to wait!• Leverage other funds
(utility incentives, grants, bonds, in-house funds)• Stabilize budgets – less risk from future energy rate increases• A sustainable approach, post-ARRA
Better Buildings!• Comprehensive, whole-building approach for better systems and deep savings• Improve work/study environment - indoor air quality, comfort and lighting quality• Modern systems
Sustained Energy Savings• Ongoing project monitoring to verify savings• The ESCO takes on the risk of performance
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Nevada Governor’s Office of Energy
Benefits for the facility manager (more)
Maintenance Problems Solved!• Handle deferred maintenance (finally!)• Manageable systems• Trained staff
A Good Process• Time-effective, cost-effective approach for completing facilities energy upgrades• Guarantee of energy savings offloads financial and performance risk• One stop shop = single point of accountability (ESCO)• ESCO selected for best value, not lowest bid • Owner participates in final equipment and subcontractor
selection• Low-interest financing options available• Annual savings verification done per International
Performance Measurement & Verification Protocol (IPMVP)
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Nevada Governor’s Office of Energy
Contact Us
We’re here to help you get started
and see you through
Don’t Delay! Contact us Today!
Sue Stephens
Energy Program Manager
Public Buildings Retrofit Program
775-687-1850 Ext. 7325
www.energy.nv.gov
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