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

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Presentation on theme: "Inefficient Building Issues Lighting Water HVAC Aging Equipment Emergency funding needed for repairs & Deferred Maintenance. Spare parts expensive."— Presentation transcript:

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6 Inefficient Building Issues Lighting Water HVAC Aging Equipment Emergency funding needed for repairs & Deferred Maintenance. Spare parts expensive Budget Funds reducing Costs going up Maintenance cost increasing Spare parts cost increasing Energy cost going up.

7 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

8 1. Provide a Self-Funded solution for an Energy and operational savings Project. –The Cost Avoidance dollars will actually PAY for the Project. 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.

9 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.

10 Example Actual Project: Self - Funded Project w/ Positive Cash flow Project Cost Avoidance (12 year term) 12 year Total Cost $7,611, year Total Savings $8,011,190 Positive $400,164 Actual Cash Flow over life of the project

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12 1993 Sep 2011 PC Path Set for NM Developing Pilot Programs House Bill 603 July 2009 PC Legislation PC Enabling Legislation Passed in NM PC Projects Completed Thru 2004

13 Selection of ESCO Audit the Facility Verify the savings Implement ECMs EMNRD Contact : Brian Johnson (505) EMNRD Contact : Michael McDiarmid (505) Finance The Project

14 Agency contacts EMNRD Agency gathers data on the facilities to Support RFP Process Issue RFP for Investment Grade Audit & Project Proposal to ESCOs Provide Walk thru and opportunity for questions for the ESCOs Enter Data in Energy Star Portfolio Manager to reference in the RFP Building Sq. Footage Building Utilities Data for 12 months Building Age And History Building Issues Asbestos, Etc.. Building Address Or Location Agency Selects short List of ESCOs for final Interviews Agency Awards Contract Agency Selects ESCO EMNRD Approves ESCO

15 The start point is for the Agency to contact EMNRD NM Energy Minerals and Natural Resources Department. (EMNRD) An Agency is a School, Higher Ed, Municipality, County or State agency.

16 EMNRD is available to assist the agency with developing a Request for Proposal (RFP) to ESCOs 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.

17 The Agency will Request Bid responses from ESCOs for the RFP. The Agency will provide a Pre Bid Walk thru for the ESCOs to walk the site(s) and ask questions.

18 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.

19 EMNRD will provide a Model IGA Contract to Agency EMNRD Reviews and certifies the completed IGA and Project Proposal from the ESCO. Financing by ESCO provided thru a competitive process ESCO Provides the IGA with Project Proposal. NOTE: Agency must have funding for IGA Costs Utility Cost savings must meet or exceed cost of the project Upon Approval From EMNRD the Project Proposal then moves to the Agency for approvals. Process for Schools Process for Municipalities Counties, High Ed and State

20 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. (DONT 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.

21 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

22 EMNRD will Provide a Sample Investment Grade Audit (IGA) Document The Path after EMNRD Approval. Determined by Agency

23 Superintendent and School Board gives approvals School District budgets for the succeeding fiscal year are approved during the regular legislative session PED compiles a list of school districts proposed projects, including information on annual payments and guaranteed savings. Once this Special Fund has been set up and funded, the Implementation can begin in the succeeding fiscal year. The Annual Performance Contract amount will be removed from the Schools SEG (School Equalization Guarantee) Account and placed into a Public School Utility Conservation Fund to fund the Performance Contract with. Next, PED notifies the Legislative Finance Committee of the proposed projects, during budget hearings preceding the regular legislative session.

24 The Contract is presented for approvals of the Governing Council, Commission or agency head. 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. Special Fund Appropriated from Operating Budget to Pay for the Performance Contract. Once this Special Fund has been set up and funded, Implementation can begin.

25 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. 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

26 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.

27 For Information on Performance Contracting, Go to: Select Link: Clean Energy Performance Financing

28 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 ( 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.

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30 Renewable Energy for Schools Michael Cecchini Director of Business Development

31 Benefits of Renewable Energy for Schools Energy Cost Savings – Operating Budget Reduced Peak Demand Charges Clean Energy Curriculum Opportunity

32 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 (ECMs) with a Guaranteed Savings Agreement which will self fund the project.

33 Installation Options for Schools

34 Parking Lot Shade Structures

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36 Using New Mexicos Energy Performance Contracting Law Brian Johnson ESC Public Co-Chair Facility Managers Training Workshop October 31, /31/2012New Mexico Energy, Minerals and Natural Resources Department 36

37 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 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 37

38 New Mexicos 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 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 38

39 Where can I get help? The Public-Private Partnership EMNRD – Energy Services Coalition – Schools: PED, PSFA 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 39

40 Clean Energy Performance Financing Model documents: –Request for Proposals (RFP) –Energy Audit Contract –Guaranteed Utility Savings Contract 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 40

41 School Capital Project Resources Public School Facilities Authority Bob Gorrell, Director Public Education Department Antonio Ortiz, Director, Capital Outlay Bureau /31/2012New Mexico Energy, Minerals and Natural Resources Department 41

42 Energy Services Coalition Brian Johnson, Public Sector Co-Chair Boone Birdsell, Private Sector Co-Chair /31/2012New Mexico Energy, Minerals and Natural Resources Department 42

43 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 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 43

44 Competitive Selection Stand-alone RFP Federal GSA (www.gsaelibrary.gsa.gov;www.gsaelibrary.gsa.gov Schedule 03FAC; Category ) Statewide Price Agreement (2013) 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 44

45 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 45

46 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 46

47 Your Future Utility Costs vs. Financing Costs Electricity prices are trending up Natural gas is trending down…future volatility? Propane is expensive 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 47

48 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 48

49 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 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 49

50 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. 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 50

51 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. 10/31/2012New Mexico Energy, Minerals and Natural Resources Department 51

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