Energy Conservation & Performance Contracting Dos Palos – Oro Loma Joint Unified School District November 19, 2009 Justin Surratt Energy Solutions – Buildings Business Justin.Surratt@buildings.schneider-electric.com 916.425.9586

Agenda Schneider Electric: Who we are… Performance Contracting Preliminary Energy Audit Results Suggested Energy Conservation Measures Investment Grade Audit and Risk Evaluation Questions/Comments

Schneider Electric: Who we are… Key Markets for Our Company Our Buildings Business Division Works Primarily in the K-12 Market Energy Solutions Provider We provide Facility and Energy Conservation solutions that maximize building performance but most importantly, maximizing the school district’s return on investment Performance Contracting Specialization Utilize Energy Savings Dollars, as a result of the project, to offset the cost of the facility improvements

History with District & Current Central Valley Customers History with Dos Palos – Oro Loma Joint Unified School District History with CASBO - Central Section Delhi Unified School District Completed Investment Grade Audit Development Construction Vote: December 2009 Clovis Unified School District Exploration and Discovery Phase

Performance Contracting Utilities $ Annual Bill

Performance Contracting Utilities $ Annual Bill Improvements “CM at Risk” plus… + Design + Energy Focus + Energy Savings Guarantee CM at risk- Customer assumes that we are paid on a fee…if you bring it in cheaper than lump sum given, you split the fee as an incentive. Sempra writes their contracts this way. You have to know your audience to know whether or not to include this. **Need to clarify how we get paid. *Make sure to ascertain that the customer knows what CM at risk is…good place for interaction with the audience.

Performance Contracting Utilities $ Annual Bill Improvements Third party funding -Secured against Savings -Paid on Schedule of Values Up-Front Cost Schedule of Values— We get paid on a SOV…explain how third party escrow account works for financing. We are paid when we do work…draw-down schedule. Generally, we like to be paid on the work we have done. (Percent of Completion)

Performance Contracting Utilities $Historical $ New Bill Guarantee: $Savings >= Payment $Diff.= $Payment Improvements Guarantee PC Review Up-Front Cost Guarantee box…may not want to put the yellow box in there because of negative cash flow. The goal of the project is to have a break even or positive cash flow, but this doesn’t take into account a negative cash flow project. States where laws state that savings has to cover price of the project…we interpret that savings have to pay for the financed part of the project.

Performance Contracting: What? Solar (PV) Lighting Major Mechanical Water Cons. Building Envelope Energy Management Power Systems

Performance Contracting: What?

Performance Contracting The goal of PC is to implement a project that will be offset by the energy savings as a result of the project Example: $100,0000 Annual Energy Savings x 15 Years = $1,500,000 Break-Even Facility Project Opportunity

Performance Contracting: How? Stage 1: Determine if PC is right for you Stage 2: Develop Project: Investment Grade Audit Stage 3: Implementation, measurement and verification

Step 1: Determine if PC is right for you Feasibility Assessment Completed: November 2008 Reported to Tim Zearley Workshop Completed: March 2009 Reported to “Energy Committee” Board Member Joe Castillo Board Member Dewayne Weagel Dr. Brian Walker Tim Zearley Select DPOLJUSD Maintenance Staff

Step 1: Determine if PC is right for you Preliminary Energy Audit Completed: July 2009 Reported to “Energy Committee” Next Steps: Investment Grade Audit – TBD Construction & Implementation Measurement and Verification of Performance

Preliminary Energy Audit Results $92,865 Savings Opportunities (15% Savings) Building Savings Impact Dos Palos HS 59% Bryant MS 15% Dos Palos ES 12% Marks ES 10% Oro Loma 4% Baseline Annual Utility Cost: $606,197 Potential Annual Energy Savings: $92,865 Savings Percentage: 15.3%

Total Energy Cost/Savings by Site Annual Energy Cost Dos Palos-Oro Loma USD $267,698 $98,113 $75,272 $67,230 $97,883 $60,820 $55,233 $84,701 $86,078 $226,499 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 Dos Palos High School Bryant Middle Dos Palos Elementary School Oro Loma Marks Elementary Baseline Proposed

Total Energy Cost/Savings per sq. ft. Annual Energy Cost ($/sf) Dos Palos-Oro Loma USD $1.88 $1.81 $1.99 $1.59 $1.58 $1.50 $1.61 $1.94 $1.73 $0.00 $0.50 $1.00 $2.00 $2.50 Dos Palos High School Bryant Middle School Dos Palos Elementary School Oro Loma Marks Elementary Baseline Proposed

Suggested Energy Conservation Measures District-wide Lighting Modernization Satisfies Facility Master Plan EPAct 2005 Compliance Comprehensive Energy Management System (EMS) Future State Energy Mandate Compliance (e.g. AB32) Heating Ventilation and Air Conditioning (HVAC) Upgrades

Lighting Modernization Classrooms and Workspaces T12 Fixtures  T8 Federal Mandates require phasing out of T12 Magnetic Lighting Ballasts by 2010 (EPAct 2005) The energy efficiency AND light quality will be improved as a result of these upgrades. Gym Lighting Upgrades Upgrading the gymnasium lamps to high-bay T8 or T5 fluorescent fixtures will allow for instant ON/OFF control while reducing electricity demand. Exterior Lighting Upgrades Campus Security Enhancement

Lighting Modernization Opportunity Retrofitting the T12 lamps to T8 lamps and electronic ballast will save energy while maintaining proper light levels. Upgrading the gymnasium lamps to high-bay T8 or T5 fluorescent fixtures will allow for instant ON/OFF control while reducing electricity demand. Occupancy sensors can be installed in some areas where occupancy varies to reduce operation when spaces are unoccupied. Benefits Installation of the new lighting systems and controls will reduce the electrical demand and energy use. The light quality will be improved as a result of these upgrades.

Energy Management System Opportunity A district-wide Energy Management System (EMS) upgrade will provide tighter control of schedules and setpoints for HVAC equipment. Benefits An EMS provides significant energy savings by running equipment only when it is needed while providing comfort for the occupants in the facilities. Relevant Considerations Expansion and modernization of existing Alerton EMS. Also note that no controls exist at Dos Palos High School, which is an opportunity for excellent operational and energy savings.

HVAC Upgrades Opportunity Benefits Replacing units that have reached the end of their economic useful life with new, high efficiency units will decrease electricity and gas use and provide better temperature control. Benefits Capital Cost Avoidance strategies Operational Savings can be realized as soon as possible Opportunity to choose brand/type of equipment Planning for best operating system structure

Performance Contracting: How? Stage 1: Determine if PC is right for you Stage 2: Develop Project: Investment Grade Audit Stage 3: Implementation, measurement and verification

Next Step: Investment Grade Audit Schneider Electric will provide Customer with the following: A list of energy conservation measures planned for each facility; A description of how the energy conservation measures would interact with the existing equipment in the facilities; Financial analysis; Guaranteed energy services contract for the facilities; Utility analysis; Project pricing for a turnkey installation

Investment Grade Audit Investment Grade Audit Agreement 10¢ / square foot Owner pays if Schneider Electric hits target, but Owner decides to back out. Otherwise, costs rolled into project financing. Preliminary Audit defines the target savings.

Investment Grade Audit Proposed Cost: $33,317 If project is selected following IGA: No up-front cost; Cost is rolled into Construction Contract If no project is selected following IGA: the district would be responsible for the IGA cost Proposed School Board Vote on IGA December 17, 2009

$2,785,950 Cost of Doing Nothing… Lost Savings in Energy Consumption $92,865/year x 15 years = $1,392,975 Lost Facility Improvements (Capital Avoidance) Break-Even Project Opportunity: $1,392,975 Total Opportunity Cost of NOT leveraging energy savings for facility improvements…. Lost Energy Savings + Lost Facility Improvements = $2,785,950

Financial Risk Evaluation District Risk Cost of Investment Grade Audit (note no up-front cost if project moves forward to construction) $33,317 Opportunity Cost = Guaranteed Opportunity Lost Cost of Doing Nothing (Lost Energy Savings + Lost Improvements) $2,785,950

Financial Risk Evaluation $33,317 Potential Loss (IGA Cost if NO Project is Selected) vs. $2,785,950 Guaranteed Opportunity Lost

Investment Grade Audit Proposed School Board Vote on IGA December 17, 2009

Questions/Comments? Justin Surratt Tim Zearley Justin.Surratt@buildings.schneider-electric.com 916.425.9586 Tim Zearley Chief Business Officer Dos Palos – Oro Loma Joint Unified School District