A Simply Better Business Model for EBCx · MEP/HVAC assets, typically involving capital, that...

A Simply Better Business Model for EBCx

Sandy Selman

Co-Founder/CEO

Sanus Connect, Inc.

AIA Quality Assurance

The Building Commissioning Association is a Registered Provider with The American Institute of Architects Continuing Education Systems (AIA/CES). Credit(s) earned on completion of this program will be reported to AIA/CES for AIA members. Certificates of the Completion for both AIA members and non-AIA members are available upon request.

This program is registered with AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product.

Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

BCxA Conference – Chicagoland, IL – 2019 2

Learning Objectives

BCxA Annual Conference – Chicagoland, IL – September 2019 3

• Expand capabilities and influence in providing consulting services to

owners

• Standardize the process for project investigation creating a quality control

layer

• Approach EBCx from the perspective of the client’s financial management

function thus increasing touchpoints for the EBCx provider within the

client’s organization

• Enable standardization in how EBCx projects are implemented

• Increase the probability that identified opportunities result in funded

projects

What problem did we solve for?


• A global property management firm wanted to develop a

product to differentiate their service and take advantage of the

scale of their business.

Our observations


• Capital plans are ultimately decided by asset managers without

the ability to distinguish “gotta haves” from “nice to haves” in a

site team’s wish list.

• Asset managers have no ability to know whether a site team’s

wish list even includes all the items they would want to know

about that can impact property valuation and cash flow.

Is there a more effective way to undertake EBCx?


Asset Value

Operational

Sophistication

Capabilities & Condition

of Existing Equipment &

Systems

NOI

Infrastructure

Quality

Directly observe/measure these variables:

The data helps understand these inter-relationships … .... so property owners & managers

can drive better financial outcomes

Utility

Costs

R & M

Costs

Capital

CostsDeferred

Maintenance

A methodology is needed that utilizes direct examination of equipment, systems and

operating sophistication to empower asset managers and operators to make more

financially effective decisions around their MEP/HVAC infrastructure …

EBCx Tool Components (1 of 2)


• Onboarding web app for Chief Engineers

▪ Gather basic information

• Mobile app-guided walkthrough and controls

interview (by EBCx team)

▪ Easy user interface

▪ Standardized and rigorous

▪ Dynamic questioning

▪ Designed for speed

▪ In-app data capture

▪ Highly scalable

EBCx Tool Components (2 of 2)


Outputs

• CFO-friendly Decision Map that provides the

context necessary to confidently make capital

allocation decisions

• Back-up report with analysis and details

• Visual equipment library that also captures

any identified issues

Facility Improvement Measures (FIMs) Broadly Defined


Operating SOPs: How do existing SOPs compare to best practices for buildings

with similar mechanical architecture and utilization? Our goal is to optimize

performance in view of the existing mechanical design.

Deferred Maintenance: What is the condition of key equipment and systems?

Projects: Are there opportunities to upgrade mechanical infrastructure that generate

an attractive ROI?

Utility Interface: Is there a more financially effective way to engage with the energy

market?

Data: Where and how can data play a role to improve operations and ensure

ongoing commissioning?

Deferred

Maintenance

Operating

SOPs

ProjectsData

Utility

Interface

The EBCx tool identifies opportunities to improve NOI and/or infrastructure quality in

five subject areas:

Organizing FIMs by Priority


• Operating SOPs

• Deferred Maintenance

• Projects

• Utility Interface

• Data

FIMs

Mission Critical

FIMs that are essential

to the continued ability

of the building to

provide a safe,

comfortable and

functional tenant

environment.

Priority:

Low/No Cost

Items costing, in the

aggregate, < $150K

that deliver out-size

benefits and can

typically be included in

the R&M budget.

Priority:

Deferred Maintenance

FIMs that mitigate the

risk of unplanned

equipment downtime

and/or more expensive

maintenance or

equipment

replacement.

Priority:

ROI-Driven

Improvements to

MEP/HVAC assets,

typically involving

capital, that reduce

operating costs and

generate a discernible

ROI.

Non-Priority

Opportunities to improve

MEP/HVAC assets that

are discretionary due to

low/questionable ROI

and/or lack of

essentiality to continued

building performance.

Decision Maps Create Context For Capital Planning


Legend

Mission Critical

Priority: Low/No Cost

Priority: ROI-Driven

Priority: Deferred Maintenance

Non-Priority

Essential

Discretionary

High Cost

Low ROI

Low Cost

High ROI

Replace steam DHW

Add enthalpy sensors

Re-engineer BAS sequences

TAB, I/O calibration Trend/monitor pumps/fans

Wireless pneumatic thermostats

Integrate chillers to BAS

Upgrade field control panels

Replace burner on pony boiler

(if do not electrify DHW)

Operator training

Re-evaluate energy sourcing

Install perimeter space temp sensors;

connect to BAS

Fans (except S-6)

• Refurbish/replace coils and pans

CV-1 through 5

• Instrument to benchmark

performance

• Refurbish, as indicatedCalibrate gas meter

Interval data on utility meters

Real-time monitoring:

heating/cooling plants

Retrofit 3-way valves to pressure-independent 2-way

VFD on primary river water condenser pump

Important Takeaways


• This approach applies the EBCx Best Practice of prioritizing

measures based on building/owner’s goals

• The 5 subject areas listed above are the main goals of asset

ownership with respect to the MEP/HVAC infrastructure

• The Decision Map provides the common language for EBCx

teams to attain goal alignment with property ownership around

asset value maximization

• We make liberal use of the term “FIMs” because these

measures include improvements that have real implications for

asset value and go well beyond energy savings

The Pilot Process


• The technique was tested on 3 downtown Chicago multitenant office buildings ranging

from 525,000 – 750,000 GSF, each with their own central plant.

• Two buildings were mirror images of one another, the larger was building was newer and

on the district cooling system.

• EUI and occupancy was quite different between the mirror image buildings – EUI was

lower in the building with the longer operating hours.

• EUI in the newer building was 2 – 3X that of the other buildings.

• The onboarding process engaged the chief engineer and general manager of each

property.

• A 4-person team walked each building – about 5 hours was required to gather all data.

Results


• Approved MEP capital projects prior to the pilot fell into the “Non-Priority” category

• EUI discrepancy between the mirror image buildings attributable to different operating

style of the two chief engineers and a mis-calibrated gas meter

• Discovery of the broker OA damper mechanisms was the root cause of the high EUI in

the newer building – capital was re-programmed to address this issue and the chilled

water plant was cancelled

• A serious design flaw was discovered in the mirror image buildings that was overlooked

by the otherwise highly competent site team

• A package of low/no cost FIMs were approved “on the spot” for all 3 buildings

• The client expressed interest to apply the technique across the entire portfolio

Real Financial Benefits Delivered


Facility Improvement Measures (FIMs)Est. Annual

Benefit

Cost To

Implement

First-Year

“Profit”

Approved “on the spot” (Low/No Cost) $455K ($367K) $88K

Cancellation of chilled water plant ($195K) $3,000K $2,805K

Repair OA dampers $450K ($660K) ($210K)

Theoretical initial 12-month cost (3 buildings) --- ($189K) ($189K)

Net First-Year Benefits $2,494K

Additional benefits not captured above:

• Identified 11 ROI-Driven and 9 Deferred Maintenance FIMs

• Highlighted training needs, particularly in respect of BAS operation and sequences

Benefits to Commissioning Firms


• Utilize a scalable, repeatable methodology for EBCx

• Expand touch points within the client organization beyond engineering to the CFO or

asset manager – this is where the money is – to make your firm more valuable to your

client

• Generate recurring revenue from periodic audits

• Generate a proprietary sales funnel of project implementation opportunities with a higher

probability to be funded

• Leverage IoT and other technologies to enrich your data sets and extend your

competitive advantage

Sandy SelmanCo-Founder/CEO

Sanus Connect, Inc.

M: (203) 434-3005

[email protected]

17

mailto:[email protected]

A Simply Better Business Model for EBCx · MEP/HVAC assets, typically involving capital, that...

Documents

Transcript of A Simply Better Business Model for EBCx · MEP/HVAC assets, typically involving capital, that...