www.brewer-garrett.com Ohio energy services company, Brewer-Garrett, shares a presentation on energy savings performance contracting. Powerpoint by Kelly Tisdale of The Brewer Garrett Company.

1. Redevelopment of E & G Facilities:
Public-Private Partnerships
Performance Contracting
July 12, 2011 Kelly Tisdale, CEM, LEED AP

2. Agenda
• Energy Environment
• Institutional Energy Challenges
• ORC 3345.61-3345.66 (HB7)
• Performance Contracting Benefits
• Performance Contract Structure
• Performance Guarantee
• Performance Contracting Process
• Value Proposition

3. Energy Environment
• Water
– Local rates escalating at 7-9 % annually
• Natural Gas
– Deregulated utility
– Volatile pricing based on global economic forces
• Electricity
– Deregulation in Ohio
– Minimum price increases of 2-5 % annually

4. Institutional Energy Challenges
• Issues:
– Reliability
– Conservation
– Sustainability
– Achievement of HB 251 Targets
• Solution:
– Energy Conservation and Management
Programs Utilizing Performance
Contracting

5. Performance Based Contracting
ORC 3345.61-66 (HB 7)
• State of Ohio enacts legislation in 1993-1994
• ORC 3345.61-66 (HB7) defines:
– Energy conservation measures (ECMs)
– Avoided capital costs, water conservation measures (WCMs) and
operating cost savings
– RFP issuance process to use performance based contracting
– Exemption from competitive bidding requirements (ORC 153)
– Energy Services Company (ESCO) selection methodology
– Payback period of 15 years for ECMs/WCMs
– Financing options

6. What is Energy Savings
Performance Contracting?
• Uses energy savings to provide the funding stream for
up-front facility infrastructure and capital improvement
projects
• Utilizes design/build approach vs. spec/bid approach
• Finances up front project construction through a third
party; paid for from the savings stream
• Allows for comprehensive/co-authored scope
• Guarantees results

7. Performance Contracting Benefits
• Reduces energy and maintenance costs
• Improves comfort and environment
• Improves client satisfaction
• Creates opportunity to address deferred maintenance
without capital expenditure
• Reduces energy consumption
• Reduces greenhouse gases
• Improves sustainability
• Creates opportunity to incorporate sustainable, GREEN
design practices and technology
• Creates competitive advantage for enrollment/donor
strategies

8. Contract Structure – Key Elements
• Engineering/design/construction/commissioning
• Energy performance guarantee
• Service and audit
• Financing

9. How does Guarantee Work?
• No risk to the institution
– Bond construction/energy savings
– Contractually defined turnkey program for a fixed price
in a specified time period with guaranteed results
• Guaranteed results
– Savings guaranteed for the contract term
– If savings not achieved, institution reimbursed 100 %
of the savings variance
– Excess savings retained by the institution

10. Accountability Reduces Institutional Risk
• Allows design/build approach with single contracting entity
• Promotes market-based engineering and innovation
• Bonds design/construction/installation/energy savings
• Eliminates cost overruns/change orders
• Delivers turnkey result in defined schedule
• Meets/exceeds provisions of:
– HB 251
– ASHRAE 90.1-2004; 62.1-2004; 55-2004
– Illuminated Engineering Society Standards & Practices (IESNA)
– Labs 21
– International Monitoring and Verification Protocol (IMVP)

11. Performance Contracting Process Steps
• Develop RFP (State of Ohio Attorney General Templates)
• Advertise and solicit proposals
• Evaluate proposals
• Select ESCO
• Finalize detailed engineering solutions
• Finalize contracts (State of Ohio Attorney General Templates)
• Obtain financing and finalize financing documents
• Close/fund transaction
• Install project in construction period
• Commence contract performance periods
• Provide ongoing audit/reporting/savings reconciliations
• Provide ongoing service (optional)

12. Value Proposition:
Performance Contracting
• Satisfies HB 251 20% energy consumption/greenhouse gas reduction
• Provides menu of ECMs to achieve the highest ROI possible
• Enables co-authored project scope that meets institutional priorities
• Guarantees cost and savings
• Captures market opportunity for low-interest financing
• Reduces utility, operating and maintenance costs
• Addresses deferred maintenance
• Engages staff/students in technical/behavioral training
• Ensures long-term contract performance that is monitored/verified
• Promotes institutional outreach and engagement in “green” initiatives
• Enhances institution’s commitment to sustainability/environmental
stewardship

13. Leadership in Ohio
Higher Education Projects
KSU Residence
Services
No. of Project Project Project
Client Phases ECMs Savings Cost Sq. Ft.
($Millions) ($Millions) (Millions)
3 277 37 27 2.9
2 110 73 51 3.1
5 115 57 29 2.6
CSU Campus
Totals 10 502 167 107 8.6
Tri-C Campus
KSU Stark Campus
KSU Satellite Campuses

14. Redevelopment of E & G Facilities:
Public-Private Partnerships
Performance Contracting
July 12, 2011 Kelly Tisdale, CEM, LEED AP