Visit for more details and webinar recording: http://bit.ly/frankenenergyforum More than 100 Minnesota local government officials and business leaders gathered recently at the University of Minnesota St. Paul Campus--along with more than 50 on a live webinar--to talk about retrofitting buildings. The event was officially called the _Forum on Energy Savings: Retrofitting Programs for Minnesota Cities, Counties, and Businesses. According to Senator Al Franken, who convened the event, renovating buildings to make them more energy-efficient--called retrofitting--saves money, improves real-estate values, strengthens our infrastructure--and could be the next big thing for Minnesota's economy. Energy-efficient retrofits will also create badly-needed jobs in both the construction and manufacturing industries. Senator Al Franken joined with a number of Minnesota partners to hold this forum, including the Clean Energy Resource Teams, University of Minnesota's Institute on the Environment, MN Chapter of the Energy Services Coalition, Minnesota Pollution Control Agency, Urban Land Institute, Minnesota Waste Wise, and the Minnesota Department of Commerce. Deputy Secretary Daniel B. Poneman with the U.S. Department of Energy was a guest speaker.

1. Hosted by the Initiative for Renewable Energy and the Environment
27 January 2012 • University of Minnesota, Twin Cities

2. Dick Hemmingsen, Managing Director,
Innitiative for Renewable Energy & the Environment
Mayor Chris Coleman
St. Paul, Minnesota
Commissioner Paul Aasen,
Minnesota Pollution Control Agency
U.S. Senator Al Franken

3. Bill Heaney, MN Energy Jobs Association
Jay Behnken, Trane
Madonna Rykken, Honeywell Building Solutions
Commissioner Rhonda Sivarajah, Anoka County
Andrew Dykstra, Anoka County

4. Retrofitting of Public Buildings

5. Agenda
■ Overview of Performance Contracting (PC)
■ Why use Performance Contracting . . . The Benefits
■ Some Myths…Busted
■ Case Study – Anoka County
■ Questions (if time permits)

6. Existing MN Legislation
■ Procurement method for state, municipal and k-12
■ Payback requirements varies by sector
■ Provides funding for capital projects
■ Savings offset project costs
■ No new taxes
■ No upfront money required
■ Performance and savings are guaranteed
■ Improves operating efficiency/ Enhances working environment
■ Flexible and unique for each customer

7. Benefits of PC
Traditional Bid / Spec Performance-Based
Low bid awarded based on specifications Awarded based on performance & lifecycle
costs
Project costs funded by capital budget Payments for projects are offset by
guaranteed savings freeing up capital for
other needs
Piecemeal approach based on available Comprehensive approach
dollars
Up-front fee for evaluation/studies No up-front fee required
Performance & savings are not guaranteed Long-term performance & savings are
guaranteed
Multiple contracts with multiple vendors One contract, single-point accountability
Contractors have no accountability to Performance-based contractor is tied to
lifecycle costs guaranteeing savings over term of contract
Owner assumes risk Performance contractor takes risk

8. How it Works
Performance Contracting is a way to fund improvements with no
additional cost to taxpayers.
Excess Savings
Savings
Savings Fund
Existing Improvements
facility,
energy,
operations & Existing
$ Existing
maintenance facility,
facility,
costs energy,
energy,
operations &
operations &
maintenance
maintenance
costs
costs
Before During After

9. The Myths
■ Loss of project control
■ Unsure of guaranteed savings measurement
process
■ Project costs more through performance contracting
■ I don’t have a choice of the product manufacturer
■ We have our own skilled personnel
■ Only applies to greater Minnesota areas

10. Potential Opportunities
Lighting Water Waste Water Street Lighting Parking Meters
Landfill Sites
HVAC Ice Arenas Swimming Pools Plumbing Building
Fixtures Envelope Issues
. . . & more

11. City of Rochester
Challenges Solutions
■ Aging facilities & infrastructure  Lighting, Temperature Controls, Water Upgrades
■ Limited capital  Building Envelope issues
■ Increasing energy & operational costs  Traffic Signal Upgrades
 Steam Trap Repair
Project Details
 Boiler Replacements
 $5.6M
 Building Automation Systems
 12 Year Agreement
 Ice Arena Dehumidification, energy recovery & ceilings
 Utility Savings:$502K/year  Variable speed drives, high efficiency motors & pumps
 Operational Savings:$102K/year  Fire alarm & security upgrades
 Rebates - $300K •Results
■ Addressed long overdue capital improvements
■ Improved reliability of mechanical systems
■ Improved comfort, efficiency and taxpayer image
■ Environmental benefits – reduced GHG emissions

12. Anoka County – Government Facilities
Challenges Solutions
■ Aging facilities & infrastructure ■ Lighting and fixture upgrades
■ Occupancy sensors
■ Budget shortfalls/limited capital
■ Exterior photocells
■ Increasing energy & operational costs ■ Energy efficient motors and pumps w/ VFD’s
■ Uncomfortable working environment ■ Water saving retrofits on fixtures
■ Energy management system
Project Details ■ Central heating & cooling plant upgrades
■ $12.5M of facility upgrades ■ Mechanical system improvements
■ Annual energy/operational savings of $873,000 ■ Temperature control system upgrades
■ On-site generator to manage peak demand
■ 30+ buildings
■ Training of staff
■ Over 1.4 million square feet ■ Measurement and verification
■ 7 phases of work
Results
■ Addressed long overdue capital improvements
■ Improved reliability of mechanical systems
■ Improved comfort, efficiency and taxpayer image
■ Environmental benefits

13. Questions
Madonna Rykken | 612.865.1492
Business Development Manager
Honeywell Building Solutions
Madonna.Rykken@honeywell.com
Jay Behnken | 651-468-2715
Comprehensive Solutions Manager
Trane Minneapolis/St. Paul
jbehnken@trane.com

14. Anoka County
MEPC Meeting
April 7, 2011
Andrew Dykstra
Director of Facilities Management and Construction
(763) 323-5385

15. Anoka County Facilities
 Total of 2,500,000 square feet of buildings.
Anoka County Library
Facilities
Anoka County Parks
and Recreation
Facilities
Anoka County Facilities

16. Why Anoka County Did a Project?
 Aging Infrastructure/Deferred Maintenance
 Increasing Energy and Operating Costs
 Occupancy Comfort Issues
 Lack of Funding $$$
Aging HVAC
Obsolete Control
Systems
Degrading Building
Envelope
Increasing IAQ Inefficient
Physical Asset
Requirements Infrastructure
Deterioration

17. Types of Projects
 Lighting Retrofit
 Energy Management System Upgrades
 Energy Efficient Motors/Variable Speed Drives
 Central Heating and Cooling Plant Replacements
 Dual Duct Ventilation System Conversion
 Back-up Generators
 Temperature Control System Repairs
 Water Conservation
 Insulation Replacement
 Power Factor Correction
 Miscellaneous Improvements

18. Financial Results
 $12.5 million in projects
– 7 phases
– Over 10 years
 Energy and Operational Cost Reduction Exceed
$873,000 annually (for all 7 phases).
 Annual Energy & Operational Savings by Year

19. How the State’s Guaranteed Energy Savings Program
and Public Building Enhanced Energy Efficiency
Program Can Help.
Janet Streff
Manager, State Energy Office
Minnesota Department of Commerce

20. Encouraging Energy
Efficiency and Public
Building Retrofits in the
State of Minnesota

21. • Minnesota Department of
Commerce
• Division of Energy Resources
• State Energy Office
• Providing energy information
for over 35 years…
• Energy conservation, efficiency, &
renewables
• Through technology, analysis, grants,
programs, & public outreach
• Data, reports, publications, presentations,
website, call center, training, public events 21

22. • Getting Started – Tools
• Access B3 Benchmarking Website
• Building Construction Data –
• Square footage, operational equipment,
occupancy and usage
• Energy Consumption Data –
• Electrical and natural gas – kW, kWh, therms
22

23. • Benchmarking your buildings
gives you the information you
need to get started
• MN has benchmarked 6,400 of
its public buildings
23

24. Set Energy Code Target Range Dramatic difference in return on
investment for retrofit $$
50% Over Code
120
100
Number of Buildings
Best Candidate Buildings
for Investing Energy Efficiency Dollars
80
60
40
20
0
10 40 70 100 130 160 190 220 250 280
Annual KBtu/sq. ft.
24

25. 25

26. 26

27. •Mechanical Systems
•Heating Systems
•Ventilation Systems
•Air Conditioning
•Electrical Systems
•Energy Management Systems
•Lighting Retrofits
•Building Envelope
•Water Conservation
•Renewable Energies
27

28. • MN Public Sector Programs
• Public Buildings Enhanced Energy
Efficiency Program (www.PBEEEP.org)
• Retrocommissioning through extended
studies
• Smaller capital projects
• Guaranteed Energy Savings
Program
• Revamping state performance contracting
program via Dayton’s Executive Order 11-12
• RFQ for energy service companies 1/30/12
28

29. • Legislative Background – State Energy Improvement
Financing Program
• Minn. Stat §16B.321 – 16B.322 enacted in 2008 to
address two fundamental constraints to reducing
energy consumption in state buildings:
• Access to expert technical assessment to
identify measures to reduce energy
consumption
• Access to financing to implement
recommended measures
• Economic feasibility is determined by ability to pay
back financing out of savings realized by energy
improvement project
29

30. Through People and Organizations
Program:
 Center for Energy and Program Administrator
Environment (CEE)
Provider:
 PBEEEP Qualified Contractor(s) Complete projects
State
 Department of Commerce,
Div of Energy Resources
Local Government:
 City, County, School District Project Building Owner
30

31. Enhances public building energy
efficiency through retro- CX and
retrofits
• Reduces energy use
• Reduces operating costs
• Reduces greenhouse gas
emissions
• Creates/retains jobs
• Promotes renewable, alternative
energy sources
31

32. • Guaranteed energy savings
program reinvigorated through
Executive Order 11-12
• DER staff provide technical,
financial and contractual assistance
to local units of government
seeking building retrofit
programmatic support.
• DER is part of the Energy Service
Coalition – MN Chapter
32

33. • National, nonprofit, organization of public &
private sector members, working in partnership
with the U.S. Department of Energy
• Working together at state & local level to
increase energy efficiency and renew building
infrastructure through the use of Energy
Savings Performance Contracts
 MN Dept. of Commerce Energy Service Companies
 MNSCU Product Manufacturers
 Local Unions Utility Companies
 Renewable Energy Cos Installing Contractors 33

34. Savings
 Significantly reduce energy use Comfort
Productivity
 Improve facilities’ environment
 Reduce deferred maintenance
 Avoid expenditure of capital
 Reduce operations and maintenance
 Improve productivity
Energy
 Reduce waste
 Fund projects through energy Liability
Repairs
savings
34

35. • SEE Action Network
• State and local effort facilitated by the federal
government that helps states, utilities, and
other local stakeholders take energy
efficiency to scale and achieve all cost-
effective energy efficiency by 2020.
• Existing Commercial Buildings WG goals
include enlisting 10 state and 30 local
governments to adopt one or more solutions
(benchmarking, green leasing, RCx)
• http://www1.eere.energy.gov/seeaction
35

36. • Launched by President in December 2011
• Partners commit to an energy savings
pledge, a showcase building, and to share
their progress
• MN participants include State of MN, Best
Buy, 3M, Cummins – and more?
• 1.6 Billion sq. ft. committed, $2B
financing through allies
• 300+ manufacturing facilities 36

37. • GreenStep Cities – 30+ MN cities
signed up for voluntary challenge,
assistance program
• Building efficiency one of 28 best
practices
• City policies/programs useful to
other cities
• http://greenstep.pca.state.mn.us
37

38. State programs and GreenStep
Buildings & Lighting Best
Practices Actions:
1. B3 Benchmarking
2. GESP
3. PBEEEP
www.MnGreenStep.org

39. Division of Energy
Resources Contacts
PBEEEP: Abby Finis abby.finis@state.mn.us
GESP: Peter Berger peter.berger@state.mn.us
GESP: Eric Rehm eric.rehm@state.mn.us

40. Please use roving microphones for
questions and comments
For those joining us online,
please submit questions via chat

41. Deputy Secretary,
U.S. Department of Energy

43. Retrofitting Private Buildings
Mayor Jim Hovland of Edina
Former State Senator John Doll
Kate Worley, Co-Executive Director, Minnesota Waste Wise

44. EDINA EMERALD ENERGY
PROGRAM (PACE)
Mayor Jim Hovland
City of Edina
January 27, 2012

45. EDINA PACE PROGRAM DOCUMENTS
•Program Report and Administrative
Guidelines
•Application and Petition for Special
Assessment
•Bond Purchase Agreement
•Bond Resolution
•List of Eligible Improvements
•Summary of Financing Process
•Flow Chart of Financing Process

49. Property Assessed Clean Energy
Financing
Senator Franken - GreenStep Cities Event
January 27, 2011
John Doll
Former State Senator, District 40

50. nearly 35% of U.S. energy use
and carbon emissions come from our buildings

51. Benefits of Deep Energy Retrofits in
Commercial Buildings
• Significant Energy Consumption Savings
•Net Increase in Cash Flow
•Healthier Environments for Tenants and Employees
•Improved Productivity Levels
•Higher Occupancy Rates/Higher Rents
•Improved Marketability of the Property
•Increased Property Values
• Energy Efficiency Credits

52. Why PACE?
PACE provides a pathway to overcome inherent
barriers to investing into critical deep energy retrofits in
the private sector:
short term investment horizons,
split incentives,
capital competition,
high upfront costs,
tight credit or low levels of liquidity.
It provides a perpetual funding mechanism for EE and RE projects
that can overcome the above concerns. And because energy savings
make the projects cash-flow positive, and because total asset value is
increased, companies improve their financial position without having
to tie up any of their equity or debt capacity.

53. What is PACE?
Property Assessed Clean Energy financing is a
local government program that uses a 100+
year old provision of the property tax code to
create a land secured financing district that
allows property owners to pay for
improvements that are in the public interest.
In this case, improving building energy
efficiency and installing renewable energy
upgrades.

54. PACE Basics
Provides capital
Contractor paid
to fund energy
for retrofit
retrofit
Pays special Energy savings
assessment on pay for capital
property tax bill improvements

55. PACE Basics
Owner –arranged PACE financing
model
Property
Owner
Apply for and Guaranteed Energy
receive approval Saving
for Special Performance
Assessment Contract
Local ESCO
Government Arrange
Pay Special Financing
Assessment
Through Property Tax
Pay collected Construction
Assessment to lender Payments
Commercial

56. Key Provisions of MN PACE
• MN Statute 216C.436 authorizes local governments to issue and sell revenue bonds
under the program through special assessment on property tax.
•Allows multi-jurisdictional PACE programs through an authorized implementing entity.
• Senior Lien Status (Tax Lien) of Financing not to exceed 10% of assessed value
• Transferability of lien – Financing is land/property secured. A change in ownership of
the property does not accelerate or otherwise alter the original payment period.
• “Opt-in” program - All properties within energy financing district are eligible and, if
owners qualify under established underwriting rules and guidelines, may participate in
PACE program.
•Best Practices and strong underwriting guidelines significantly reduce the risk of
default.
• Requires an energy audit or renewable energy system feasibility study
• Program sustainability ensured through quality assurance and controls
•Bonds issued under this subdivision are not a debt or obligation of the issuer or any
local government that issued them, nor is the payment of the bonds enforceable out of

57. Benefits of PACE
To Property Owners To Lenders
• Very Low Default Rates
• No upfront cash needed
• Better Loan-to-Value Ratio
• Improved Cash Flow
• Improved property value
• Less investment risk
•Off-balance sheet financing •Improved marketability of asset
• Savings to Investment Ratio > 1
• Guaranteed revenue stream -
• Improved property Positive cash flow improves
values/marketability property owner’s financial position,
thus their ability to repay the
•Minimizes the split incentive barrier financing
•Property tax liens can pass through
to tenants •ESCO participation provides
additional layer of performance
• Removes Holding Period Bias security
•Special assessments can transfer

58. Commercial PACE
PACE Financing for Commercial Buildings
to Reach $2.5 Billion Annually by 2015 –
Pike Research, June 2010
According to a new report from Pike Research, PACE programs will continue to proliferate
in the United States, and by 2015 investment in PACE financing for commercial buildings
will total $2.5 billion annually, under a baseline forecast scenario. This level of investment
would result in the creation of 50,000 new jobs, and would mitigate almost 8 million metric
tons of carbon dioxide (CO2) emissions, equivalent to taking 1.7 million cars off the road
for a year.
“PACE programs are gaining momentum around the country, and they represent a very
promising mechanism for overcoming many of the barriers to energy efficiency retrofits for
commercial buildings,” says Pike Research managing director Clint Wheelock. “The
majority of buildings would benefit from energy retrofits, with neutral to positive cash flow in
addition to the other environmental and social benefits.”

60. For more information -
Contact: John Doll at 612.366.6822 or
2johndoll@gmail.com
Building a sustainable future based on clean energy

61. Getting Started

62. Know Utility Rebates
Program Rebate
Lighting Efficiency Rebates for installing efficient lighting in existing and
new buildings.
Heating and Cooling Efficiency Energy efficient boilers & burners, furnaces, steam
traps, chillers, economizers, PTAC’s. Prescriptive &
custom.
Motor Efficiency Prescriptive and custom rebates for motors and VFD’s
that meet or exceed NEMA premium efficiency
standards.
Efficiency Controls Automated building systems controls for lighting,
HVAC and others.
Custom Efficiency Projects that involve energy savings but are not
included in other programs.
Recommissioning Building system tune-up—improve efficiency of
existing operating systems and controls.
Refrigeration Recommissioning Commercial refrigeration system tune-up—improve
efficiency of existing refrigeration systems.

63. Xcel Energy T12 Bonus Rebate
50% Bonus Rebate for T12 Lighting
through March 31, 2012
If you still have T12 lights, now is the time to act. Financial
incentives are their highest.
Pick up a lighting rebate form today

64. The Private Sector Continuum
Catalog private commercial buildings
How many, how big, who owns, etc.
Identify private sector targets
Prioritize (value, sq. ft., business type, etc.)
Develop outreach plan
Who makes contact, when, how, etc.
Conduct energy audits
Identify mid-cost vs. ESCO projects
Identify upgrade options & take to City Hall

65. Where to Turn for Help

66. Useful Resources in Minnesota
Green Step Cities
Energy Smart
Your energy utility
Minnesota Division of Energy Resources
Center for Energy and the Environment (CEE)
Minnesota Technical Assistance Program (MnTAP) or Retired
Engineers Technical Assistance Program (RETAP)
Clean Energy Resource Teams (CERTs)
Your city economic development department
Your county or regional economic development programs

67. Contact Info
www.mnenergysmart.com
Kate Worley
(651) 292-4662
kworley@mnchamber.com

68. Please use roving microphones for
questions and comments
For those joining us online,
please submit questions via chat

69. Thank You for
Joining Us!
Hosted by the Initiative for Renewable Energy and the Environment
27 January 2012 • University of Minnesota, Twin Cities