Energy Performance Contracting

November 3, 2009

Performance ContractingDecember 11, 2009

Topics of Discussion

Why Look at Performance Contracting

Financial Options

Performance Contracting Process

Sample Improvements and Benefits

Implementation

Initial review – Johnson Controls

Performance Contracting Fundamentals

Participants

• NMU as the Customer• Environmental Services

Contractor ESCO as a partner

– Design/Build with Guaranteed Savings

– Competitively Bid work, open book– NMU participates in design, review

and fund disbursement

Performance Contracting uses guaranteed energy and operational savings to fund infrastructure

improvements and renewable energy projects

New Operational Costs

Annual Debt Service

Budget Neutral Approach

Current Operational Costs

Excess SavingsBefore After

Financial Fundamentals

Key Advantages

Low risk guaranteed energy savings – or ESCO pays the difference

Utilize professional service company to implement program

Maximize energy savings as soon as possible through improvements that decrease operational costs

Results: healthier, more comfortable and productive environments, including green solutions,

Savings finance debt service

University Control

• University participates in project selection

• Construction draw schedule with release approvals by NMU

• ESCO is paid out of construction funds NOT as portion of savings

• Annual Measurement and Verification determined by service agreement between NMU and ESCO

University Control

• Savings and performance are guaranteed

• Savings above guarantee stay with NMU

• Rebates, Grants and Incentives

– Identify any and all funds during business case analysis

– Document preparation and proposal writing services

Comprehensive Process

Competitive Process

Commitment to Provider

Project Cost, Savings and Performance are Guaranteed

First Payment at end of construction

Systems & Equipment Opportunities

HVAC– Re-Commissioning– Heat Recovery– Mechanical Equipment Replacement

Lighting – Perform a Detailed Lighting Audit– Standardize inventory– Lighting controls

Water Conservation– Domestic water – Non-Domestic water

Systems and Equipment Opportunities

Direct Digital Controls– Audit Existing Control Systems– Control Commissioning– Building System Monitoring

Performance Technologies– Utility tracking and analysis– Real-time reporting– Campus asset management

Additional Benefits

Current Status

• Verify Opportunity- completed 12/10/09

• Three Buildings Jacobetti Center ‘80, JXJ ‘69, UC ‘66

• HVAC/Controls. Electrical, H2O consumption

• Preliminary indication of 20% savings possible

Implementation Schedule

Dec 10-11 Preliminary analysisDec 23 Draft reportJan 5 Final report Jan 15 Issue RFQFeb 1 Proposals due from

ESCOFeb 7 Select ESCO PartnerFeb 7-May 1 Design, bid, orderMay 1- Aug 1 Implementation

Questions

• Energy Conservation• Sustainability• Space Utilization• Performance Contracting