STATE OF ALASKA DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES ENERGY SAVINGS PERFORMANCE CONTRACTING Energy Savings Performance Contracting Introductions Joel St. Aubin, P.E.: Chief, Public Facilities State of Alaska Department of Transportation & Public Facilities Energy Savings Performance Contracting Topics Energy Saving Performance Contracting (ESPC) Define Performance Contracting Discuss Performance Contracting Process/Methodology Summarize State of Alaska Performance Contracting Project Discuss Project Financing Questions Energy Savings Performance Contracting Performance Contracting • An innovative method for purchasing energy saving improvements in buildings • Single procurement to purchase complete package of services • Includes financing of all project costs • Payments to contractor are contingent upon actual level of savings Energy Savings Performance Contracting Performance Contracting Traditionally, ESPC projects do not rely upon capital monies to fund facility infrastructure improvements (i.e. they are “self-funding”). Energy Savings Performance Contracting Building Cost over 40 Years: Real World Costs* Construction Operation 11% 50% Financing 14% Alterations 25% *ASHRAE - American Society for Heating, Refrigeration & Air Conditioning Engineers Energy Savings Performance Contracting PC Methodology Performance Contract Phases Preliminary Investment – Engineering Construction Energy Grade Audit Design/Build Management Analysis Owner/Occupant Monitoring Commissioning Measurement Training Guarantee Energy Savings Performance Contracting Project Specifics Commercial Buildings - Energy Use Comparison ASHRAE 1995 HDD>7000 State of AK Aggregate Public Safety Building Dimond Courthouse State Office Building 32% Aviation Building Potential Douglas Island Building Savings Court Plaza Building DOT&PF Annex Building DDC Alaska Office Building (Siemens) 0 50,000 100,000 150,000 200,000 250,000 BTU/SQ. FT./YR Energy Performance Contracting Energy Savings Performance Contracting Project Specifics Energy Savings Performance Contracting Project Specifics Energy Savings Performance Contracting Energy Performance Contracting Project Specifics Energy Savings Performance Contracting Project Specifics Energy Savings Performance Contracting Project Specifics Energy Savings Performance Contracting Project Specifics Energy Savings Performance Contracting Project Specifics Energy Savings Performance Contracting Energy Performance Contracting Project Specifics Energy Savings Performance Contracting Project Specifics ECM Feasibility Matrix 0 - 5 Year Payback 5-10 Year Payback 10+ Yea d e y n e se ic za et la ic g g ui n g g g g ff d n u ENERGY CONSERVAT ION MEASURE af Is la ff in in io O in in in in A C on ho O S P s ld ld ld ld ld ld at a F im la lic CAT EGORY rt rt te sk P ui ui vi ui ui ui g ou ou T ta D ub B B A B B B B la ou O S C A P D D BUILDING ID 1 2 3 4 5 6 7 8 CONST RUCT ION YEAR 1949 1979 1975 70's 1973 80's 70's 60's GROSS SQUARE FOOT AGE 57,652 40,128 79,116 41,974 214,426 63,000 43,000 24,000 Cooling Plant Upgrades Heating Plant Upgrades Lighting Systems Energy Management System/ DDC Upgrades Ventilation Management/Demand Control Utility Data Acquisition & Analysis System Electric Motors/ Drives/ Pumps and Fans Mechanical Equipment Upgrades Water Conservation Building Envelope Improvements Domestic Hot Water Heating Systems Office Equipment & Machine Load Controllers Notes: 1. T he simple payback ranges above are for discussion purposes only. Savings and construction costs a Siemens' knowledge of the identified buildings, professional experience with similar facilities and sound e Energy Savings Performance Contracting Project Financing: Funding Solutions Financing: Capital Financing Arrangements Up to 25 Year Terms Aggressive Rates Multiple Funding Sources: 1st or 3rd Party Financing Capital Budget Allocations: Allocate Capital Dollars for All or Part of Each Project Energy Savings Performance Contracting Financing: Business Methodology Identify & confirm financing early in audit process 1st or 3rd party financing in agency’s best interest Guarantee 100% of documented savings NO SHARED SAVINGS—all savings above guaranteed amount are returned to Owner. Energy Savings Performance Contracting Financing: Business Methodology (cont’d) Engineer the financial solution—No Surprises All unused construction contingencies will be returned to the Owner Siemens offers Industry-best interest rates Debt payments: monthly, quarterly, semi- annually, annually Open-book/Guaranteed Maximum pricing Energy Savings Performance Contracting Questions? Energy Savings Performance Contracting Implementation Costs Two Guarantees: Performance and Cost Construct the Performance Contracting scope as a Design-Build project with a cost-plus, fixed-fee/markup to a guaranteed maximum (GMAX) price, enabling contractor to manage the “first-cost” impact and minimize true life- cycle costs. Energy Savings Performance Contracting Implementation Costs Cost of Audit: Cost-Plus (Inclusive in PC) Cost Category Percent of Project Construction Cost Overhead 10% Profit (EBIT) 8% Markups on subcontractors  Markups on equipment/supplies  Markups on self-performed work  Design 8-12% Construction Management 5-8% Commissioning 2% Monitoring and verification 2% No. of Note:  Siemens only marks up subcontractors, equipment/supplies that we procure directly.  Siemens SELF-PERFORMED work (Professional Services or EMCS Systems) is fully burdened inclusive of overhead & Profit Energy Savings Performance Contracting
"Performance Contracting Savings Potential"