1. M&V Planning Working Group Update M&V Summit, New Orleans 5/5/03 Satish Kumar and Venkat Kumar

2. Key Information Name: M&V Planning (previously known as M&V Decision Tool) WG Members: Aamer Athar, Satish Kumar, Venkat Kumar, Terry Sharp, Gopal Shiddapur, Mark Stetz, Lia Webster Working Group Lead: Satish Kumar Date Formed: November 1 st, 2001 Expected Date of Completion: May 15 th, 2003 Current Status: ????

3. Framework Goals Develop a framework to help in the development of the M&V plan Introduce relevant issues at an early project development stage. Keep the framework simple to increase its usability Organization Context (ESPC Cash-Flow and M&V Risk Mgmt. Diagram) M&V Planning Flow Chart M&V Planning Instructions Example List of Objectives, Constraints, and Risk Elements

4. ESPC Cash-flow Model In reality, there are uncertainties around each cash flow component Before ESPC During ESPC Energy + O&M Agency Cash flow ($) weather, energy prices, etc. Savings + Equip performance, model assumptions, etc. Energy + O&M = ESCO Payment + Typically fixed Energy + O&M ESCO Payment =

5. M&V Risk Management Organization’s Cash-flow Organization Risk Tolerance Uncertainty w/ no risk mgmt $0 for M&V $/yr Expected Cash-flow Uncertainty w/ some risk mgmt $X for M&V Uncertainty w/ more risk mgmt $2X for M&V

6. 1. List ECM and project objectives and constraints 3. Evaluate savings risk for the M&V option. 4. Estimate cost for the M&V option. Is M&V cost acceptable? ABCD M&V approach too risky. M&V cost not acceptable. Evaluate new M&V Option. 5. Write M&V Plan. Cost acceptable Select an M&V Option 2. Evaluate Project and ECM level Objectives & Constraints to identify candidate M&V options. Risk acceptable

7. Typical Examples Typical Objectives Desire to track energy savings through utility metering, Desire to Verify Energy Performance Annually, Maximize Infrastructure by using Least-Cost M&V Option. Typical Constraints Historical Utility Data not Available, High Degree of Interaction between ECMs ECMs Scope Affects a Very Small Portion of Overall Utility Baseline Typical Risk Elements Operating Hours Degradation of savings Major Changes to the Facilities Savings Risk Associated with the Performance of O&M, Repair & Replacement

8. Future Steps The current version has been arrived at after many iterations Final approval pending with the Working Group Approved document to be put on the A-Team web site and to be made available to ESCOs and PFs M&V Planning Tool to be included in Project Management Plan and other project kick-off documentation package Dissolve the M&V Planning Working Group