Energy Savings Performance Contract · Performance & savings are not guaranteed Long-term...

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Energy Savings Performance ContractPreliminary Findings

© Ameresco, Inc. 2015, All Rights Reserved

December 2, 2015

Preliminary Findings

City of Mankato Administration Project Review

n Ameresco Introduction

n Energy Savings Performance Contracting Your trusted

AgendaAgenda

© Ameresco, Inc. 2015, All Rights Reserved 2

Performance Contracting

n Preliminary Assessment Findings

n Next Steps

Your trusted sustainability partner

Broad Base of SolutionsBroad Base of Solutions

Ameresco offers a comprehensive array of energy solutions to address energy at every stage – before, at, and after the meter – and on an integrated basis supporting best practices and customer value.


ReRe--Purposing of Current Utility Budget DollarsPurposing of Current Utility Budget Dollars

Annual Cash Outlay from Operating Budget (Tangible)

$Ut

ility

Ex

pens

esESPC Example n Minnesota State Statute §471.345

- Energy Efficiency Projects

n Energy savings pay for infrastructure improvements

n Energy savings guaranteed

n Ameresco to pursue grants, utility


= Utility Costs

= Project Payment

2

$ Expe

nses

1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19Current Year

Utility Budget

Future Annual Energy Budgets After Energy Eff. Improvements

Re-Purposed Portion of Current Utility Budget to Finance Project Construction

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Ameresco to pursue grants, utility rebates, local incentives, etc.

n Self-funded with little or no capital

n Project guaranteed up to 20 year term

n Finance Rates are still LOW

Key Differences Key Differences –– Benefits of Performance Contracting Benefits of Performance Contracting

Traditional Spec / Bid Performance-BasedLow bid awarded based on specifications (written by staff or consultant?)

Awarded based on performance & lifecycle costs

Project costs funded by capital budget Project Payments are offset by guaranteed cost savings freeing up capital for other non energy city project needs

Piecemeal approach based on available funding

Comprehensive approach(6 – 12 month project completion)


funding (6 – 12 month project completion)Up-front fee for evaluation/studies No up-front fee required

Performance & savings are not guaranteed

Long-term performance & savings are guaranteed

Contractors have no accountability to lifecycle costs Performance-based contractor is tied to

guaranteeing savings over term of contract

City assumes cost savings risk Ameresco shoulders cost savings guarantee and risk

Multiple contracts with multiple vendors One contract, single-point accountability

City of Mankato Use of EnergyCity of Mankato Use of Energy

Overall, the City spent approximately $ 2,535,256 in 2014 on gas and electric utilities for City Facilities and Infrastructure (Buildings, Water & Waste Water Treatment, Street Lighting, …etc). The chart below shows the breakdown between electric and gas costs. *


* Energy use costs are based on Data provided by the City of Mankato

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2014 Utility Consumption by Facilities 2014 Utility Consumption by Facilities Building or Facility Electric Gas

Public Works $ 2,317 $ 71,344 City Hall $ 88,178 $ -Parks $ 91,837 $ 30,233 Street Lights $ 367,728 $ 16,493 Water Treatment $ 409,873 $ 30,143 Waste Water Treatment $ 607,064 $ 124,724 Public Housing $ 114,729 $ 42,639 Convention Ctr $ 315,299 $ 114,712


NOTE: Preliminary Assessment Identified Facility Improvement Measures follow Minnesota Green Step Cities best practices for Buildings and Lighting

http://greenstep.pca.state.mn.us/recognition.cfm**

Ameresco Proud Sponsor of the• 2014 GreenSteps Cities Award• 2015 GreenSteps Cities Award

* Utilities based on data provided by City of Mankato

Convention Ctr $ 315,299 $ 114,712 Fire Halls $ 5,261 $ 12,692 Airport $ 59,026 $ 30,965

$ 2,061,311 $ 473,945

City of Mankato Opportunities for

Facility Improvement


Facility Improvement

LIGHTING Solutionsn Retrofit Interior/Exterior/Street Lighting

Fixtures w/ LED lighting technologyn Increase use of controls & sensors to

optimize operations.n Interconnect existing Energy Management

Control (EMS) system for unoccupied control

Lighting Improvements Lighting Improvements –– Interior, Exterior, Street LightsInterior, Exterior, Street Lights


controln Optimize light levels

Benefitsn Reduces energy and operating costsn Improves overall lighting qualityn Increases avoided future O&M and capital

cost needsn Improves work environmentn Reduces summer building cooling loads

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LED Maintenance Cost Savings: 70LED Maintenance Cost Savings: 70--80%80%

0 4 8 12 16 20

HPS fixture

YEARS

RelampRelamp & reballast Relamp

Relamp & reballast


80% Less Maintenance (and Expense)

This schedule represents the average time to replace key components of both HID and LED cobra heads. The LED fixture requires far less maintenance.

HID ballast: every 8 years

HID lamp: every 4 years

Photocontrol: every 10 years

LED driver: every 13-17 years

Photocontrol every 20 years

0 4 8 12 16 20

LED fixture

YEARS

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LED LED Light Technology Light Technology

n LEDs are rapidly becoming the light source of choice for application, beating other technologies in every category:– Color quality– Energy consumption– Service life (100,000+ hours for street lights)– Precise optical control (better uniformity)


– Precise optical control (better uniformity)– Dimming / Controllability– Lowest total cost of ownership

n No mercury in the product making it the ultimate green and environmental option

n LED directional control capabilities minimizes light pollution(ex: up-lighting)

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Saves Mankato $$$ Saves Mankato $$$ –– Everyday!Everyday!

LED Street Lighting Benefitsn 60-75% average energy savings

over metal halide (HID) or high/low pressure sodium

n Low light level depreciation over time means your streets will always be bright


always be brightn Maintenance savings potential

300% plusOther Tangible Savings n Reduction work order

requests & maintenance paperwork

n Reduced procurement effort and materials inventory

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LED Street LightingLED Street Lighting

n Next Phase of Project Development will identify Implementation Costs and Guaranteed Energy Savings


n 100,000+ hours LED Node life (20+ years)

n Excess Annual Savings can be redirected to other unfunded city projects

Maintenance Savings ExampleMaintenance Savings Example


LED Parking Ramp Lighting UpgradeLED Parking Ramp Lighting UpgradeSouth West Transit Authority – Eden Prairie


LED Lighting High Pressure SodiumLumens = 4365 Lumens = 8550

Color Temp = 4000 K; CRI = 65 Color Temp = 2000 K; CRI = 22

Estimated Burn hrs. = 300,000 Estimated Burn hrs. = 24,000

Watts = 56 Watts = 115

Lighting Improvements / Restroom ImprovementsLighting Improvements / Restroom Improvements

RESTROOM Solutionsn Install water control devicesn Properly adjustment flow

for each individual porcelain fixtures

n Install water flow aerators

Benefits


Benefitsn Reduces water resource consumption n Lowers water/sewer and supplies costsn Improved fixture flow & operationn Future capital cost avoidance

Building EnvelopeBuilding Envelope

AIR INFILTRATION Solutionsn Seal Wall/Roof connectionsn Weather strip and caulk windows and doorsn Adjust exterior door closers for improved close

timing n Seal wall/roof penetrations

BenefitsReduces energy consumption while increasing


n Reduces energy consumption while increasing energy cost savings

n Eliminate air infiltrationn Improves moisture barrier

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BUILDING CONTROL Solutionsn Upgrade remaining pneumatics controls to Direct Digital Controln Upgrade Energy Management program to optimize occupied

space set back operations and settingsn Standardize city wide control set pointsn Upgrade graphical display for easy operation, monitoring and

reportsn Install additional controls - CO2, CO, NO sensors for makeup and

Building Control Improvements Building Control Improvements


n Install additional controls - CO2, CO, NO sensors for makeup and outdoor air systems

Benefitsn Energy consumption/costs reductionn Enhanced operator controln 24/7 system wide troubleshooting and monitoringn Simple web access to all systems/buildings reportsn Improved comfort / work environmentn Historical trending for operational costs analysis

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Motor & Speed Control ImprovementsMotor & Speed Control Improvements

MOTOR AND SPEED CONTROL Solutionsn Upgrade remaining high

efficiency electric motorsn Implement variable speed

controls/drives to precisely match operational needs for Air Handling Units or Equipment


Handling Units or Equipment

Benefitsn Energy use/cost reductionn Increases equipment/motor life

cyclen Improved operational control of

building/equipmentn Capital cost avoidance for

equipment replacement (old motors)

Ventilation ImprovementsVentilation Improvements

Electrical Transformer Solutionsn Replace City owned Electrical

Transformers n Install New High Efficiency Transformer

units

Benefits


Benefitsn Energy Conservationn Reduced Summer building heat loadsn Extends life of Transformers (capital cost

avoidance)

AHU REPLACEMENT Solutionsn Replace Air Handling Units which are beyond life

expectancy as applicable (Office Spaces/Verizon Ctr.)n Install Energy Recovery systems where possiblen Modify existing units to maximize outdoor air

economizersn Covert Constant Volume to Variable Air Volume

(VAV) Systems

Ventilation ImprovementsVentilation Improvements


(VAV) Systemsn Recommissioning Existing Air Handlers for efficient

operations

Benefitsn Reduced fuel use and energy costsn Better comfort of occupied zonesn Extends life of productn Allows for improved space utilization and flexibility

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Sanitary Lift Station ImprovementsSanitary Lift Station Improvements

Lift Station Solutionsn Investigate opportunities to make the

lift stations more energy efficient and monitor performance.

n Utilize soft starters or variable speed drives on the lift pumps where applicable


applicablen Utilize SCADA controls to remotely

monitor lift station operation

Benefitsn Reduced electrical demand chargesn Real time monitoring to manage costs

and maintain system integrity

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Waste Water Treatment Plant ConsiderationsWaste Water Treatment Plant Considerations

WWTP Solutionsn Investigate positive displacement blower

unit(s) replacement water with alternative blower units.

n Investigate conversion air dispersion equipment in treatment process

Benefits


Benefitsn Reduced electrical energy consumption costs

and demand chargesn Reduce future operational maintenance costsn Reduce excessive equipment sound levelsn Improve BOD and COD control

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Preliminary Savings Analysis


Savings Analysis

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Preliminary Utility Savings PotentialPreliminary Utility Savings PotentialElectricity Natural Gas Total Utility

Expense % Range Reduction

Savings Range Expense

% Range

Reduction

Savings Range Expense

% Range

Reduction

Savings Range

City of Mankato $2,061,311 5%-7% $103k-

$177k $ 473,945 10%-15% $47k-$75k $2,535,256 6%-8% $150k-

$215k

City of Mankato Proposed Energy Reduction


$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

2014 2016

$2,061,311 $1,917,019

$473,945 $402,854

Electricity Gas

n Operation & Maintenance (TBD) Lighting maintenance materials – lamps and ballasts

n Long-Term Operational Savings (TBD) Deferred Maintenance/Future Capital Costs Based on capital improvement projects selected

Additional Areas of Savings Potential To Be QuantifiedAdditional Areas of Savings Potential To Be Quantified


Potential Annual Savings Range - $75K - $104K+ / year

City of Mankato Cost Savings OpportunityCity of Mankato Cost Savings Opportunity

Annual Energy and Maintenance Costs Avoidance Savings

~ $220k-300kCost Savings each year *

20 year Performance Contract Project Size

Ameresco’s Preliminary Energy Assessment Findings


Contract Self Funded

Performance Contract

Project Size ~ $2.6M - $3.6M *

Self Funding Project Redirects a portion of Current Energy

Budget “No New Taxes”

Funded from Energy Savings, Future O&M and Capital Cost Avoidance, Est. Utility

Rebates - $75K+

* Based on 2014 annual energy consumption costs

Preliminary Project Scope and FundingPreliminary Project Scope and Funding

General List of Facility Improvements for Further Investigationn Lighting retrofits & controlsnWater conservation retrofitsn Lift Stationsn High efficiency transformersnWaste water treatment equip upgrades

n Building controls & automation

n Pneumatic to direct digital control

n Street light upgradenWater treatment Eqpt


Funding Sources to be fully evaluated in Detailed Analysisn Energy, operations and other short/long term budget savings

opportunitiesn Xcel Energy Rebates - $60K - $80K (based on final project scope)n Private or 3rd Party Financing n Other sources to be explored in detailed analysis

AMERESCO AMERESCO -- Asset SustainabilityAsset Sustainability


Development Process& Next Step


& Next Step

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Energy Performance Contract Energy Performance Contract -- Project Development StagesProject Development Stages

PreliminaryAnalysis(no cost)

Investment Grade Audit

Performance Agreement

n Introduce n Detailed Analysis n Project Planning

(6-9 Months)

ConceptApproval

Savings Monitoring

n Needs Assessment n Savings M&V

Long-Term Partnership Process from Concept through Savings Reconciliation


n Introduce Concept

n Build Consensus Administration City Council

n Letter to Proceed

Non-binding No Cost

n Detailed Analysis Utility Baseline

n Project Options Scope Funding Sources

n Energy Services Agreement

Development Costs carried Forward to Performance Agreement

n 3-4 Months

Project Planning

n Construction

n Commissioning

n Construction Measurement & Verification (M&V)

n 6 – 9 Months

Streamlined Implementation – Minimizes In-House Staff Time & Quicker Results

n Needs Assessment

n Project Goals

n Gather Information Budgets /Reports

n Site Surveys

n Feasibility Analysis

n 30 Days

n Savings M&V

n Annual Reports

n Annual Reconciliation

n Over Term of Agreement

Scope of Detailed AnalysisScope of Detailed Analysis

n Engineering design with project scope for each Facility Improvement Measures (FIM)

n Ameresco to establish energy cost savings for FIM

n Quantify utility rebates and other available incentives


n Prioritize facility improvement measures

n Recommended project & options

n Cash flow analyses

n Approximately 90-120 days to complete

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Next StepNext Step

Council Resolutionn Present Preliminary Assessment Findings to Counciln Council approves Project Development Agreement to

develop a self-funding Energy Savings projectn Ameresco will complete a Detailed Analysis to identify a

self-funding project, or there is No Cost to City of


self-funding project, or there is No Cost to City of Mankato

n There are No Up-Front costs to proceed at this timen Should a viable self-funding project not be approved for

implementation, an “exit fee” of $65k to $85k* would be due to Ameresco to cover a portion of incurred engineering expenses

* Dependent on agreed upon Project Scope in the Project Development Agreement

Key Project Milestones & Preliminary TimelineKey Project Milestones & Preliminary Timeline

Milestones Preliminary TimelineCouncil Resolution – Project Development Agreement Dec 2015

Deliver Detailed Findings & Recommendations to Council March 2016


Recommendations to CouncilCouncil Facility Improvement Selection April 2016

Council Approves Project and Financing Option May 2016

Implementation Phase Begins June 2016

Construction Acceptance January 2017

AMERESCO Information and ResourcesAMERESCO Information and Resources


Thank You!

Energy Savings Performance Contract · Performance & savings are not guaranteed Long-term...

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