1. GUARANTEED ENERGY SAVINGS CONTRACTS
Energy Savings Contracting: How to Increase Transparency and Reduce Costs

2. GUARANTEED ENERGY SAVINGS PRICE CONTRACT
What is the Product of a Performance Contract?
An Energy Services Company (ESCO) proposes a project that will save $100,000 per year for an initial investment of $1 million dollars. The $100,000 annual savings is guaranteed by the ESCO.
The ESCO will implement various Energy Conservation Measures (ECMs) to accomplish this savings.
The ESCO will allow you to finance the initial $1 million investment by financing $100,000 payments for 10 years. After that the savings are yours to keep.

3. GUARANTEED ENERGY SAVINGS PRICE CONTRACT
What is the Product?
The product that you are buying is the $100,000 per year energy savings
You are now spending $100,000 per year to create efficiency as opposed to spending it on electricity and other utilities.
But…

4. GUARANTEED ENERGY SAVINGS PRICE CONTRACT
…what if?
What if the ESCO can save the district $100,000 per year with a one time investment of $50,000 to implement building automation controls?
Now the ESCO has met its contractual obligations, saved you $100,000 per year on your utility spend, collected $1 million from you, only invested $50,000, and reaped a profit of $950,000.

5. Key Difference Between Statute and the KPC Process
GUARANTEED ENERGY SAVINGS PRICE CONTRACT
Key Difference Between Statute and the KPC Process

6. GOALS FOR QUALIFIED PROVIDERS
Reduce operating costs for Kentucky K-12 school districts
Improve classroom environmental conditions
Improve maintenance and operation of facilities
Reduce carbon footprint and negative environmental factors
Manage and complete the project within defined time schedule, approved budget and quality goals.
To represent the best interests of the Owner

7. Ability to successfully implement the project
SCHOOL DISTRICT PROPOSAL SCORING CRITERIA
Ability to successfully implement the project
Past performance with K-12 schools as evidenced by project results in last 10 years
Technical Approach
Level of detailed design being offered with a strong preference toward more detailed designs and equipment lists.

8. Pricing Approach SCHOOL DISTRICT PROPOSAL SCORING CRITERIA
The willingness to follow OPEN BOOK PRICING approach without exception
Fees for various services
Overhead and profit level
Willingness to guarantee “no change orders” within agreed to scope of work

9. Implementation Approach
SCHOOL DISTRICT PROPOSAL SCORING CRITERIA
Implementation Approach
The reasonableness and effectiveness of the installation approach based on past customer experience.
Support Approach
The effectiveness of the on-going support and training being offered with preference given to timely support at a low cost.

10. Construction Cost Comparison (HVAC)
Traditional Plan & Spec Process
School District Price
63% overall price increase
Architect Fees & Allowances (10%)
$2,853,238 final price to School
General Contractor markup (9%)
$2,593,8531 price to School before Arch fees
Mechanical Contractor markup (18%)
$2,379,681 price to General Contractor
Temperature Controls markup (15%)
$2,016,679 price to Mech. Contractor
Controls Installation
Controls Equipment
$1,753,634 cost
– R S Means Data

11. Construction Cost Comparison (HVAC)
Traditional ESCO Process
KPC ESCO Process
School Corporation Price
??% overall price increase
School District Price
5% Profit
Specific Scope with exact price to School prior to award.
Fees are Fixed
$???? final price to School
ESCO OH &
Profit (??%)
ESCO
Self performs professional tasks–eng, PM, controls5
$?? price to School
Is ballpark without defined scope
ESCO Selected without defined scope or price
$1,753,634$1,753, cost
$??? price to ESCO
All Install Contractors
All Equipment
Mechanical Contractor markup (??%)
Temperature Controls & Electrical markup (??%)
$?? price to Mech. Contractor
Controls Elect Install
Controls Elec Equip
$ cost

12. GUARANTEED ENERGY SAVINGS CONTRACTS
Questions?

13. Sam Atkins Mark Ryles, AIA
GUARANTEED ENERGY SAVINGS CONTRACTS
Sam Atkins
Mark Ryles, AIA
(606)
Cell: (859)
Kentucky Educational Development Corporation
904 Rose Road
Ashland, KY 41102
(800)
Ohio Valley Educational Cooperative
P. O. Box 1249
100 Alpine Drive
Shelbyville, Kentucky 40066
(502)