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STEPS TO SUCCESS WITH FCIP Ryan Freed Kansas Energy Office.

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Presentation on theme: "STEPS TO SUCCESS WITH FCIP Ryan Freed Kansas Energy Office."— Presentation transcript:

1 STEPS TO SUCCESS WITH FCIP Ryan Freed Kansas Energy Office

2 What We Will Discuss… What is Performance Contracting? The Benefits of Performance Contracting Potential Projects What is the FCIP? How to Participate in the FCIP The Cost of FCIP participation

3 What is Performance Contracting? Provided by an Energy Service Company (ESCO) Improvements provide utility & operational savings Reduced Utility & Operational costs pay for cost of project ESCO guarantees performance of project

4 Performance Contracting Benefits Extends Capital Dollars Life-Cycle Cost vs. First Cost No more Weve always done it that way ESCO designs and builds project Guaranteed performance NO CHANGE ORDERS

5 Potential Projects Lighting: daylighting, new lamps & ballasts Heating: Replace boilers, steam traps, pumps Cooling: Replace chillers, cooling towers, etc Controls: New Energy Management Systems Water: Low-flow fixtures, waterless urinals Buildings Shell: Insulation, windows, roofs Alternative Energy: wind, solar, geothermal New Construction: All utility-impacted systems ….More

6 What is the FCIP? Legislative Authority (KSA 75-37,125) Streamlined State Contract Pre-approved ESCOs Technical, legal, financial oversight Customer representation throughout process

7 FCIP Benefits Standard Contract – no surprises Pre-negotiated Markups & Audit Costs No need for RFP FCIP Oversight FCIP Workshops for all Staff

8 Who Can Participate? Any Public Agency State, County, City Statute allows any Political Subdivision Non-Profit Organizations

9 What is the Process? Four Main Steps Preliminary Audit Investment Grade Audit Energy Performance Contract Measurement & Verification

10 Preliminary Audit Arrange Site Tour by Selected ESCOs No Cost to Customer FCIP Participates in all steps except selection ESCOs Present to Customer – Customer Selects ESCO for Investment Grade Audit

11 Investment Grade Audit Standard contract signed by Customer, ESCO and FCIP Intense site survey FCIP Reviews Audit – Workshop w/ Customer No charge if no project found

12 Energy Performance Contract Customer & ESCO determine final scope of project ESCO helps arrange financing FCIP Reviews Contract – Workshop w/ Customer Open-Book Pricing

13 Measurement & Verification (M&V) ESCO proves performance M&V period length varies – customer choice FCIP reviews M&V, provides customer assistance, settles disputes

14 The Cost of FCIP Participation FCIP is a fee-funded program Fee is based on formula: 4% of the first $100,000 of the project amount 3% of the next $400,000 of the project amount 2% of the next $500,000 of the project amount 1% of the next $4,000,000 of the project amount ½% of the any amount in excess of $5,000,000 Fee paid only if Performance Contract signed Fee can be part of financing

15 What Has Been Done? $147 Million Total Project Costs More than $11 million in Annual Savings!! 7 Cities 6 Counties 6 Community & Technical Colleges 15 State-Owned Buildings 11 University Projects 21 USDs

16 Summary FCIP provides budget-neutral facility upgrades FCIP oversight provides confidence to staff and public Customers staff can focus on performance, not process

17 Any Questions? Ryan Freed Kansas Energy Office

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