1. Energy Services: Funding Site Improvements Through Energy Conservation Initiatives
September 2007

2. Summary Introduction Trends and Challenges
Performance-based Energy Services
Implementation Process
Financial Considerations
Summary
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3. Ainsworth – Corporate Overview
Profile:
65 years in business
Wholly owned subsidiary
of OMERS
Annual sales of $100M
Staff of over 700 people
Offices in 5 major centres
across Canada
Offerings:
Energy Services
Design Build and Project Management
Mechanical and Electrical Contracting
Mechanical and Electrical Maintenance
Building Automation
Drives and Motors
IT outsourcing and help desk service
Dispatch Centre and Service Portal
So, just to give you a brief overview of Ainsworth:
Read ‘Our profile’ and ‘Our offerings’
As you can see we offer a comprehensive list of services for institutional, commercial and industrial buildings. In particular, today’s presentation will be on the energy conservation services we can provide to municipalities.
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4. Trends and Challenges
Financial Issues:
Infrastructure Issues:
Escalating energy costs and volatility
Rising operating costs
Budget pressures
Conflicting priorities for available capital
No extra capital for ‘special’ projects (such as energy conservation)
Aging asset base
Increased deferred maintenance concerns
Reactive versus proactive maintenance
Reduced levels for investment in new infrastructure
Financial issues, infrastructure issues and environmental stewardship goals must all be addressed within the
existing tax base.
We recognize there are a number of challenges currently facing municipalities. They can be broken down into 2 areas: financial issues and infrastructure issues.
In terms of financial issues, energy costs are escalating and volatility in prices is becoming the norm rather than the exception, municipal operating costs are on the rise, you are facing increased budget pressures and as a result, there are conflicting priorities for the available capital that exists.
However, infrastructure issues also must be taken into consideration including an aging asset base, increased concerns about deferred maintenance, challenges dealing with reactive maintenance (waiting until something actually breaks down) versus proactive maintenance (retrofitting and upgrading equipment to ward off any breakdowns) and of course, reduced levels of investment for new infrastructure.
Ultimately, you must address both these issues plus your environmental stewardship goals – all within your existing tax base. Can this be done? Yes. And we show you how on the next slide.
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5. Energy Services: Performance-based Solutions
A comprehensive “self-funded” program in which new equipment and technology is installed to modernize and improve buildings and facilities – and is paid for by the guaranteed energy and operational savings.
Ainsworth provides third-party financing to fund the capital cost of the project so there is no impact to capital or operating budgets.
After Retrofit
Before Program – Escalating Energy Costs
Savings Pay for Site Enhancements
Program Period
It IS possible to effectively address your financial and infrastructure issues and environmental stewardship goals by using a performance-based approach to energy services.
Read definition
In other words, the measures you install to conserve energy and make your facility more efficient will generate both operational and energy savings each year – and these savings are guaranteed by Ainsworth. There is an initial up front cost for the new equipment (such as boilers, chillers and lighting etc)...but these measures generate significant savings over a period of time that will ultimately pay for the project - thereby enabling you to recoup your initial investment.
After the generated energy savings have paid for the project, any additional savings would be kept by the municipality to invest as they see fit.
The graph on this page illustrates how performance-based energy services work – reference graph
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6. Benefits to Performance-based Solutions
Fix Existing Problems:
Unplanned repairs
Building damage
Life safety concerns
Address environmental stewardship goals (3 R’s)
Make Capital Improvements:
Capital cost avoidance
Equipment upgrades
Deferred maintenance
Enhance facility conditions
There are a number of short and long-term benefits when it comes to choosing a performance based approach to energy services. Some of these include:
Existing problems such as: (read slide) and Capital Improvements such as: (read slide)
Read next line and explain:
When we say ‘assume financial risk’ we mean that Ainsworth guarantees that you will generate energy and operational savings – and these savings will pay for the new measures/equipment that have been implemented in your facility. If the savings we guarantee you are not realized, we will write you a cheque for whatever the difference is.
These GUARANTEED savings will enable you to improve the efficiency of your building, enhance productivity and manage asset renewal.
Ainsworth assumes the financial risk and GUARANTEES all of the savings, allowing the project to proceed outside of the existing budgeting process.
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7. Our Approach
We take a holistic approach to your buildings to assure optimum energy usage
1. Optimize savings by taking an integrated view of all building systems
Important to understand the interaction of various systems
“Cherry-picking” measures will sub-optimize savings
2. Occupant comfort is paramount
Measure should not reduce occupant comfort
Existing system deficiencies can be corrected
When we look at the energy- using systems in your facility, we take what is called a holistic approach. We examine how various energy systems interacts with one another as part of an integrated whole – while at the same time maintaining occupant comfort. For example, we are not going to take a look at your heating and air conditioning systems and suggest that in the winter you turn down the thermostat and in the summer turn up the air conditioner in order to reduce energy consumption…while that may save you some money, it certainly won’t improve staff efficiency – people will be pretty unhappy in fact.
So we look at things that can be improved or upgraded such as installing energy efficient lights, high efficiency boilers, etc.
Our approach: (read slide)
3. Optimize capital assets
Consideration for current equipment life expectancies
Savings of individual measures needs to include life cycle analysis (net present value approach)
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8. Energy Conservation Measures
Our program will target energy conservation measures for all energy dependant systems within your municipality.
Facilities:
City Hall
Public Works Garages
Administration
Police stations
Community centres
Arenas
Libraries
Fire stations
Street/traffic lighting
Sewage systems
Conservation measures:
Lighting
Heating, ventilation and air conditioning systems
Building automation
Central plants (chillers & boilers)
Building Envelope
Insulation
Water conservation
Process systems
Co-generation
Our energy services program targets the following energy dependent systems within a building or facility.
Some examples include: (read slide)
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9. Selecting the Right Partner
Select partner
Energy Audit:
Customer provides utility bills & site visits conducted
No Cost
Finalize Contract &
Apply for Grants
Finalize scope and payback criteria
Preliminary proposal w/ savings and payback criteria
Implement Energy Conservation Project
Sign Letter of Intent (LOI)
Prepare Feasibility Study
Does Proposal make economic sense?
Cost of feasibility study rolled into project
Monitor & verify savings (on an annual basis)
Did we meet payback criteria? NO
Annual process
for life of guarantee NO
This is an overview of how the entire process works.
If you are wondering whether your building is energy efficient or an energy hog, we offer municipalities a NO-COST energy audit. This involves us taking a look at 12 months worth of your energy bills and conducting site interviews with maintenance personnel. We then generate a page preliminary proposal outlining how much you currently spend on energy, what type/age of equipment you have, our proposed improvements/upgrades and how much in energy and operating costs you will save if you implement our proposed measures – including the payback criteria. (I have included a sample proposal to give you an idea of the document you receive from us at no cost)
If the proposal makes economic sense to you then you can choose to move forward with the process. The proposal we provide to you can be used to sell the process internally. If it does not make economic sense to you, you can choose to say no thanks – not interested. If that is the case, we part ways at this point and there is no obligation for you to go forward with anything and there is absolutely no cost to you.
(Explain rest of steps using the step 1-5 backup slides)
YES
Did we meet savings?
YES
yes
No further action,
No cost
Customer proceeds w/ project
YES
Customer retains any excess savings no
No further action,
Do not pay for
feasibility study
Customer pays for cost of feasibility study
Ainsworth pays the difference NO
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10. Ainsworth - your ‘Single Source’ Partner
Implementation
Ainsworth - your ‘Single Source’ Partner
Methodology
Open Book Project Accounting
Includes copies of invoices and labour reports
Design Build Process
Complete turn - key solution
Engineering and drawings
Energy audits and feasibility studies
Our Capabilities
Staff of over 15 engineers and project managers
Multiple trades people on staff (400 GTA & 700 nationally)
On going monitoring and verification of savings
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11. Financial Considerations
Contract
Defines responsibilities of both
parties
Establishes baseline performance
requirements and a measurement and verification plan
Annual savings reconciliation process
Designed to guarantee “self-funding”
mechanism through entire program
period
Program Financing
Arrange most suitable approach-
internal vs. external options (i.e.
reserve capital vs. financing).
Strategize various cash-flow models.
Consider existing operating and
capital budgets
Consider the impact of available
grants and utility rebates
If you choose to move forward with an energy conservation program, this slide outlines some of the financial considerations that we work closely with you on including contract and program financing.
In terms of the contact: (read slide)
Program Financing: (read slide)
Municipalities are consistently facing budget pressures and may not have the reserve capital necessary for the initial investment that would be required for such a program. If this is the case, we work with you to design a suitable approach to financing – can be done through an operating agreement over a period of years if necessary. We will also identify which government and retailer grants you are eligible for and work with you to apply for them.
The energy project savings are guaranteed….this means that if your facility does not generate the savings we’ve projected then we write you a cheque for the difference = this means there is no risk to you or the municipality that the project will not perform the way we’ve told you it will.
Whatever financing option you choose, the performance of the energy project is GUARANTEED by Ainsworth.
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12. Summary
Performance-based Energy Services: a fiscally responsible solution for your municipality
Reduces energy consumption and costs
Leveraging energy savings funds required infrastructure
Provides opportunity to address deferred maintenance
Will improve reliability and comfort
Effectively addresses environmental stewardship
Pro-active conservation of non-renewable resources
Outcomes are guaranteed
Performance risk assumed by the ESCO
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