Post on 31-Dec-2015
description
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May 10, 2011
Procurement and Financing Options for Facility Improvements
Siemens Industry, Inc.
Building Technologies
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Building Operating Management (BOM) Magazine
The Funding Challenge
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Building Operating Management (BOM) Magazine
The Funding Challenge
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What is Performance Contracting
A legislative vehicle that allows public entities to improve their facilities, by using their energy and operational budgets to fund a project, with guaranteed results.
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Local Government Performance Contracting
(Illinois Compiled Statutes ; 50 ILCS 515) Local Government Energy Conservation Act City/county must issue a Request for Proposal (RFP) Selection is based on “greatest value to the City”, not lowest bid Maximum term is 20 years Majority vote by city/county board is required Architect/engineer review is required prior to signing contract City may use future capital expenditure dollars as savings to assist
with project funding Savings must meet or exceed all costs associated with the program Savings must be guaranteed
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A Practical Way to Address Funding Concerns
ImprovementsModernizationOptimization
Energy Management
Finance
Generate
SuccessGuarantee
SavingsEnergy Usage
OperationEnergy Supply
Throughout your building’s life, you face efficiency and environmental challenges
Aging infrastructure
Inefficient equipment and lighting
Increased energy use
Rising/volatile energy prices
Organization initiatives and mandates to reduce GHG emissions
Performance Contracting with guaranteed results:
– Make facility & infrastructure improvements
– Reduce energy use and associated expenses
– Your energy savings finance your improvements
– Have a positive environmental impact
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Performance Contracting Overview
Before PerformanceContract
During PerformanceContract
After PerformanceContract
Key Elements:
Savings are guaranteed
Savings pay for improvements
Money going to utility redirected back to you
Harvest savings now
Leverage low hanging fruit to fund other projects
Turnkey solution
Focus on your core business
Performance Contracting Economics
Utility Bill
UtilityBill
Payment
Savings
Savings
UtilityBill
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Performance Contracting Overview
Key Elements:
More efficient and accurate meter reading and billing
Savings pay for improvements
Unaccounted for usage redirected back to you
Harvest revenue now
Less rate increases to customers
Turnkey solution
Focus on your core business
Performance Contracting Economics
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Preliminary Audit• ESCO’s will provide a
comprehensive investment grade audit (IGA) with project recommendations, costs and savings
• County will review each proposal and select the comprehensive energy plan that provides the most innovation and project savings
• Upon selection the County can work with the ESCO on prioritizing the Energy Conservation Measures (ECMs).
Getting Started
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..\Sustainability CD\Start.exe
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Performance Contracting - Financial Approach
Financing Tailored around project economics Competitive process or work with current financial provider Tax-exempt rates
Guarantee provisions Offer a guaranteed fixed project cost No change order policy for a given scope Energy savings guarantee Key Budget neutrality Savings must equal cost
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Measurement and Verification (M&T) – Annual Contract• Different M&V options can be used • Measure specific vs. utility bill• Proven savings calculations where appropriate• Simplest and most cost effective approach• The Municipality manages and controls their buildings
Debt Service – Loan Service• Extensive experience in providing financing• Tailored around project economics• Competitive process or work with current financial provider• Tax-exempt rates
What is the Cost
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Local Government Performance ContractingHelping our Nation’s Communities become Vibrant, Growing and Green
Becky Werra, LEED APAccount Executive312-215-2137Becky.Werra@Siemens.com