2. David Kemp, P.E., PMP  Chief, Statewide Public Facilities Christopher Hodgin, P.E., C.E.M.  Program Manager, Energy Office P RESENTERS 02/03/2014Integrity ∙ Excellence ∙ Respect2

3. Energy Savings Performance Contracting Projects Accomplished & Highlights Alaska Housing Finance Corporation Alaska Energy Efficiency Revolving Loan Program Statewide Potential T OPIC O VERVIEW 02/03/2014Integrity ∙ Excellence ∙ Respect3

4. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Through energy savings performance projects – the state has achieved combined energy cost savings greater than $2.1M per year in statewide public facilities. ANNUAL ENERGY SAVINGS ACHIEVED Electricity > 7,700,000 kWh Natural Gas > 162,000 CCF Heating Oil > 227,000 Gallons CO2 Reduction > 9,500 Tons 02/03/2014Integrity ∙ Excellence ∙ Respect4

5. What is it?  Method for accomplishing energy improvement projects that are funded by the energy savings of those projects.  Energy Service Companies provide engineering analysis, proposed energy efficiency improvements and implement the negotiated improvements.  Project performance is monitored and guaranteed by the Energy Service Company for a specified period of time. E NERGY S AVINGS P ERFORMANCE C ONTRACTING 02/03/2014Integrity ∙ Excellence ∙ Respect5

6. Benefits to Energy Performance Contracting  Dollars that would have been spent on energy are used to implement energy efficiency improvements to the facility.  Can be funded by various methods.  Reduces energy use, maintenance & repair costs and the environmental footprint.  Improves the environment of the facility. E NERGY S AVINGS P ERFORMANCE C ONTRACTING 02/03/2014Integrity ∙ Excellence ∙ Respect6

7.  Examples of technologies implemented: New fluorescent and LED lighting technologies High efficiency heating systems (fuel oil, natural gas) Heat pump systems, air, ground-source, or seawater heat pump systems  Examples of Technologies Analyzed: Photovoltaic systems, wind systems, biomass systems, cogeneration E NERGY S AVINGS P ERFORMANCE C ONTRACTING 02/03/2014Integrity ∙ Excellence ∙ Respect7

8. Common Energy Improvements: Lighting Upgrades E NERGY S AVINGS P ERFORMANCE C ONTRACTING BeforeAfter At Mt. Edgecumbe High School (Sitka) – new high efficiency fluorescent lights were installed in the Gymnasium-both reducing energy use and dramatically improving the gym environment 02/03/2014Integrity ∙ Excellence ∙ Respect8

9. Common Energy Improvements: Heating, Ventilation, & Air Conditioning System Upgrades E NERGY S AVINGS P ERFORMANCE C ONTRACTING Before After At the Aviation Building (Anchorage) new high efficiency boilers and domestic hot water systems were installed to replace a failing heating system. 02/03/2014Integrity ∙ Excellence ∙ Respect9

10. Common Energy Improvements: Building envelope, windows, water conservation, building temperature controls E NERGY S AVINGS P ERFORMANCE C ONTRACTING New Windows, insulation and building temperature controls were installed at the Fish & Game Cordova Offices. 02/03/2014Integrity ∙ Excellence ∙ Respect10

11. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Electric Gas / Fuel Oil Energy Water/Sewer Utility Materials Maintenance Manpower Operational Savings Source of Savings 02/03/2014Integrity ∙ Excellence ∙ Respect11

12. How are energy performance projects funded?  Any source or combination of funding including deferred maintenance, grant, or financed loan funds. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Example: Project Cost = $100,000 Project Annual Energy Savings = $10,000 Simple Payback Cost / Savings = 10 years 02/03/2014Integrity ∙ Excellence ∙ Respect12

13. Energy savings available to pay for the energy improvements E NERGY S AVINGS P ERFORMANCE C ONTRACTING 02/03/201413Integrity ∙ Excellence ∙ Respect Baseline Energy Costs Duration of Loan Annual Energy Costs Completion of Energy Improvement Project Time New Reduced Energy Costs Guaranteed Savings (3 yrs min) State retains all savings for the future Project is paid back

14. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Energy Audit / Proposal Energy Performance Project Implementation Engineering, Design Development, Construction, & Commissioning Implementation Engineering, Design Development, Construction, & Commissioning Measurement & Verification Major components of Energy Performance Projects Before After DNR Palmer Hanger Facility 02/03/2014Integrity ∙ Excellence ∙ Respect14

15. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Energy Performance Project Energy Audit / Proposal Investment Grade Energy Audit & Proposal  The foundation for the project  Energy Efficiency Measures are developed, evaluated.  The expected annual energy and monetary savings is determined.  Project scope and implementation costs are developed.  Project payback, terms and funding or financing is determined. Heating, Lighting, Water 02/03/2014Integrity ∙ Excellence ∙ Respect15

16. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Energy Audit / Proposal Energy Performance Project Implementation Engineering, Design Development, Construction, & Commissioning Implementation Engineering, Design Development, Construction, & Commissioning Implementation  Coordinated and performed to the Owner’s needs.  Energy Service Company provides “turn key” management services to implement energy efficiency measures. 02/03/2014Integrity ∙ Excellence ∙ Respect16

17. E NERGY S AVINGS P ERFORMANCE C ONTRACTING Energy Audit / Proposal Energy Performance Project Implementation Engineering, Design Development, Construction, & Commissioning Implementation Engineering, Design Development, Construction, & Commissioning Measurement & Verification  Actual energy savings and facility operations verified.  For projects with energy saving guarantees:  The energy saved is guaranteed.  Any excess energy savings are kept by the owner.  Measurement & Verification methods from the International Performance Measurement & Verification Protocol 02/03/2014Integrity ∙ Excellence ∙ Respect17

18. P ROJECTS A CCOMPLISHED Fairbanks Anchorage Juneau Sitka Ketchikan Seward Cordova Palmer Coldfoot Nome Bethel Kenai Over 40 state facilities have had energy savings performance projects. 02/03/2014Integrity ∙ Excellence ∙ Respect18

19. American Recovery and Reinvestment Act Grant Projects Completed 2012 – facilities from all agencies  Approximate Project Cost:$10,000,000 >$320,000  Annual Energy Savings:>$320,000 Dept. of Corrections Facilities Completed in 2009  Approximate Project Cost: $9,000,000 >$1,000,000  Annual Energy Savings:>$1,000,000 Dept. of Admin / Dept. of Transportation & Public Facilities Completed in 2005  Approximate Project Cost:$3,000,000 >$650,000  Annual Energy Savings:>$650,000 P ROJECTS A CCOMPLISHED 02/03/2014Integrity ∙ Excellence ∙ Respect19

20. P ROJECTS I N -P ROGRESS Fairbanks Anchorage Juneau Sitka Ketchikan Seward Palmer St. Mary’s Chitina, Ernestine, Gulkana, Nelchina, Paxson, Slana, Tazlina Currently in stages of execution and development for energy savings performance projects for Departments of: Education & Early Development Public Safety Transportation & Public Facilities Corrections Health & Social Services Fish & Game State has term agreement with Energy Service Companies. 02/03/2014Integrity ∙ Excellence ∙ Respect20

21. Mt. Edgecumbe High School (Sitka, AK) Campus wide energy upgrades When the overall project is complete, results will be :  Total Annual Fuel Oil Savings: > 60,000 Gal  Total Annual Energy Savings: > $304,000 P ROJECT H IGHLIGHTS 02/03/2014Integrity ∙ Excellence ∙ Respect21

22. Available to all public agencies Project loan terms up to 15 year maximum No restriction on min or max loan amount Certified Energy Auditor or Manager involvement required Commissioning and Measurement & Verification Required Loan rates from : 1.5% – 4.5% A LASKA H OUSING F INANCE C ORPORATION A LASKA E NERGY E FFICIENCY R EVOLVING L OAN P ROGRAM 02/03/2014Integrity ∙ Excellence ∙ Respect22

23. Projects in current development to utilize the loan program include Departments of:  Corrections  Transportation & Public Facilities  Health & Social Services Anticipate loan agreements and executed contracts in 2014. A LASKA H OUSING F INANCE C ORPORATION A LASKA E NERGY E FFICIENCY R EVOLVING L OAN P ROGRAM 02/03/2014Integrity ∙ Excellence ∙ Respect23

24. Alaska Housing Finance Corporation White Paper Study:  “Energy Use in Alaska’s Public Facilities” Energy audits of 327 buildings An estimated 5,000 public facilities statewide Potential of $125M per year in annual energy savings. Over the lifetime of a building:  Construction costs are only 11%  Operation and Energy Costs over 50% Energy savings performance projects can help accomplish this. S TATEWIDE P OTENTIAL 02/03/2014Integrity ∙ Excellence ∙ Respect24

25. David Kemp, P.E., PMP Dept. of Transportation & Public Facilities Chief, Statewide Public Facilities David.Kemp@alaska.gov (907) 269-0811 Christopher Hodgin, P.E., C.E.M. Dept. of Transportation & Public Facilities Program Manager, Energy Office Christopher.Hodgin@alaska.gov (907) 269-7484 F OR F URTHER I NFORMATION Thank you for your attention and this opportunity. 02/03/2014Integrity ∙ Excellence ∙ Respect25