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We deliver enduring performance. Utilizing Performance Contracting to Meet the Presidents Climate Commitment Second Nature TAC Energy Solutions July 8, 2008

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We deliver enduring performance. Todays Agenda Introduction to the Clinton Climate Initiatives available resources ACUPCC Process and Performance Contracting

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We deliver enduring performance. Andrea Putman, Second Nature Co-Manager of the ACUPCC/CCI Partnership

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We deliver enduring performance.

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Goal Exponentially increase the number of large scale energy saving retrofit projects and reduce greenhouse gas emissions on campuses with no net increase in annual capital or operating expenses.

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We deliver enduring performance. Opportunity Buildings account for ~40% of global GHG emissions, up to 70% in big cities and 90% for college campuses Lifecycle Cost 75% of costs of buildings occur after construction is complete Efficiency Pays

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We deliver enduring performance. CCIs Energy Efficient Building Retrofit Program Energy Services Companies (ESCOs) Commitment Enter new markets on favorable terms Participate in EPC projects in partner cities Deliver sustainable projects with maximum savings with performance guarantees Develop mutually acceptable Terms & Conditions of Performance Contracts Guaranteed Maximum Price; open-book pricing; annual as well as total project savings guarantees; gain sharing (or cost reduction incentive) Work with CCI to reduce program costs

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We deliver enduring performance. Global Financial Institutions Commitment Provide reasonable & efficient access to capital Design financial solutions for EEBRP participants Lend capital for retrofits based on savings guarantees US $1 billion in capital each for the EE market

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We deliver enduring performance. CCI Purchasing Assistance 25 supplier agreements negotiated to date Reductions range 25-70% for more niche, high efficiency Chiller Technology Lighting Roofing/ Insulation Windows Carrier Optimum Energy Acuity Cooper GE Lighting Lemnis BASF Polyurethane Foam Enterprises Tremco 3M Bekaert

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We deliver enduring performance. Task Force APPA Arizona State University Catalyst Financial Group, Inc. City Colleges of Chicago Clinton Climate Initiative Donahue Associates, Inc. EcoAmerica Energy Ventures International Hannon and Armstrong Holland & Knight Los Angeles Community College District National Association of College and University Business Officers National Association of Educational Procurement National Association of Energy Service Companies Oberlin College Rocky Mountain Institute Second Nature Syracuse University Townsend Engineering U.S. Environmental Protection Agency, Energy Star U.S. Green Building Council

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We deliver enduring performance. For Further Information Jonathan Kevles, Clinton Climate Initiative Building Retrofit Program team member (857) 294-8163 jkevles@clintonfoundation.org Jonathan Magaziner, Clinton Climate Initiative Building Retrofit Program team member jmagaziner@clintonfoundation.org Andrea Putman, Second Nature Director of Sustainability Financing (703) 528-8579 aputman@secondnature.org http://www.presidentsclimatecommitment.org/html/solutions_cci.htm

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We deliver enduring performance. Todays Agenda Introduction to the Clinton Climate Initiative ACUPCC Process and Performance Contracting

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We deliver enduring performance. ACUPCC Process / Performance Contracting Establish a baseline Consider reduction strategies Implement strategies Measure results against baselines

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We deliver enduring performance. Performance Contracting Helps Meet ACUPCC Requirements 1.Understanding baselines and their significance in ongoing measurement of progress 2.Understanding the interaction of potential mitigation strategies in order to determine their real impact 3.Providing ongoing reporting to meet established requirements 4.Providing a funding stream to implement mitigation strategies

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We deliver enduring performance. Establishing Your Carbon Footprint (Baseline) Guidelines from ACUPCC Implementation Guide Encourages utilization of a standard protocol Suggests use of Campus Calculator from Clean Air-Cool Planet Ongoing reporting requirement to show progress

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We deliver enduring performance. Use of Campus Calculator Inputs Utility data provides the majority of the CO 2 output Scope 1 emissions central plant domestic HW heating Scope 2 emissions off site generation largely electricity but purchased steam Campus data regarding travel and fleet Scope 1 and 3 emissions transportation This section is the most difficult to pin down

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We deliver enduring performance. Sample Output from Campus Carbon Calculator

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We deliver enduring performance. Impacts on the Baseline Weather Student Population Campus Growth or Decline

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We deliver enduring performance. Sample Output from Campus Carbon Calculator

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We deliver enduring performance. Sample Output from Campus Carbon Calculator

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We deliver enduring performance. Sample Output from Campus Carbon Calculator

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We deliver enduring performance. Sample Output from Campus Carbon Calculator

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We deliver enduring performance. Points to Consider when Establishing a Baseline 1.For scope 1 and 2 emissions, enter as much historical utility data as possible 2.Include information on campus dynamics in your reporting process 3.Work toward benchmark data, eg. MMBtu/sq. ft., number CO 2 /student, or /square footage 4.Think trajectory, not snap shots in time 5.Always use actual data where it exists and make educated estimates where it does not

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We deliver enduring performance. Whats Next Once you know where you are, you will know where you arent! Clean Air-Cool Planets upcoming version (some what if tools) Controlling your trajectory

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We deliver enduring performance. Mitigation Option Evaluation 1.Potential to avoid or reduce CHG emissions 2.Flexibility as a step towards future emissions- reduction measures 3.Return on investment or financial impact 4.Potential to create positive and/or negative social and environmental side-effects 5.Relationship to other potential measures and opportunities for synergistic measures 6.Potential to be scaled upward if successful 7.Potential to involve students and faculty

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We deliver enduring performance. How Can You Know You Will Get What You Expect? Premise if you reduce energy consumption you reduce CO 2 emissions 1.Is there a way to guarantee energy reduction? 2.Why is it important to be assured that a mitigation strategy will work?

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We deliver enduring performance. How Can You Know You Will Get What You Expect? Faulty Assumptions Example Lighting Calculation Variable Wattage Before Wattage After- Power Saved per Fixture= # of Fixturesx # of Burn Hours per Yearx % of Lamps Not Burnt Outx Total kWh Saved=

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We deliver enduring performance. How Can You Know You Will Get What You Expect? Example Lighting Calculation VariableCorrect Wattage Before 137 Watts Wattage After- 80 Watts Power Saved per Fixture= 57 Watts # of Fixturesx 1000 # of Burn Hours per Yearx 2500 % of Lamps Not Burnt Outx 95% Total kWh Saved=135,375 kWh Faulty Assumptions

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We deliver enduring performance. How Can You Know You Will Get What You Expect? Example Lighting Calculation VariableCorrectIncorrect Wattage Before 137 Watts192 Watts Wattage After- 80 Watts82 Watts Power Saved per Fixture= 57 Watts110 Watts # of Fixturesx 1000 # of Burn Hours per Yearx 25004000 % of Lamps Not Burnt Outx 95%N/A Total kWh Saved=135,375 kWh440,000 kWh 225% Overstated Faulty Assumptions

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We deliver enduring performance. Sample Output from Campus Carbon Calculator

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We deliver enduring performance. Baselines and Climate Action Plans 1.Use real data where possible 2.Use the baseline as a guide to attacking the large sources of CO 2 emissions 3.Beware of CO 2 reduction based upon assumptions 4.Real CO 2 emissions come only from real energy savings

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We deliver enduring performance. Meeting Program Deadline Requirements Reporting Frequency Within 2 months of signature Create institutional structures to guide development and implementation of Climate Action Plan (CAP) Broad based among campus community High level participants empowered to enact plans Identify 2 tangible actions Must be implemented before end of year 2 Within 1 year of signature Report results of GHG emissions inventories Must identify calculator used and source of emissions coefficients

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We deliver enduring performance. Meeting Program Deadline Requirements Reporting Frequency Within 2 years of signature Implemented at least 2 tangible actions Updated GHG emissions inventory Submit CAP Includes target date for achieving climate neutrality Includes interim milestones prior to target date

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We deliver enduring performance. Meeting Program Deadline Requirements Elements of Climate Action Plan (CAP) Details of institution plans to achieve climate neutrality Plans to make climate neutrality and sustainability part of curriculum and to share knowledge within community Mechanisms for tracking progress on goals and actions Recommendation to incorporate CAP into comprehensive sustainability plan

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We deliver enduring performance. Meeting Program Deadline Requirements Format of CAP Introduction Background information Campus Emissions Include visual representations of emissions trajectory Mitigation Strategies Description of action plan to mitigate each emission source Outreach efforts Includes educational, research, and community Financing Tracking Progress

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We deliver enduring performance. Meeting Program Deadline Requirements Reporting Frequency Within 3 years of signature Progress in implementing CAP Updated GHG emissions inventory Within 4 years of signature Updated GHG emissions inventory Encouraged to submit narrative progress report of CAP annually but requirement is every other year

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We deliver enduring performance. Developing Meaningful Reports

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We deliver enduring performance. Developing Meaningful Reports

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We deliver enduring performance. Developing Meaningful Reports Customize to meet your unique environment You know what is important to your campus and community Centralized reporting system to track Actions taken Outreach efforts Evaluation of cost and benefits Quantitative tracking Prove results GHG, energy efficiency, sustainability Identify ROI for each action item Visibly show campus, community, and potential donors

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We deliver enduring performance. Evaluating Funding Options Funding Options available include: Cash on Hand Capital Campaign Financing Energy Performance Contract Combination of Options Above

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We deliver enduring performance. Evaluating Funding Options Considerations What is the financial impact of your investment? ROI? Establish/Retain campus identity? Public Relations/Press? % of goal achieved towards carbon neutrality? Reduction in deferred maintenance? Combination of above

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We deliver enduring performance. Evaluating Funding Options Benefits of Performance Contracting Keep more of your available cash Partial funding stream with guarantee of performance Whole building approach, not piecemeal Audit deliverables can be helpful in a capital campaign Achieve larger % of GHG emissions reduction and get to ultimate objective more quickly Reduction in deferred maintenance Gain much needed improvements in infrastructure Partnership approach Collaboration with entire campus community Students/staff can work with audit team to develop appropriate solutions for your campus

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We deliver enduring performance. Est. 1836 $25.1B Revenue - 2007 Offices in 102 countries Electrical Distribution Products Building Automation $2B Sales - 2007 Electrical Distribution Products Industrial Automation ENERGY SOLUTIONS 350+ projects nationwide Offices in 25 states STRATEGIC ACCOUNTS Telecom, Data Centers, Retail, Federal SYSTEMS INTEGRATION 17 branch offices focus on building automat. & security PARTNERS 300 partner offices throughout the US Video Security Systems and Support Equipment Critical Power & Cooling Services Company Overview

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We deliver enduring performance. TAC Energy Solutions TAC Higher Education Solutions We have been working with higher education for 15 years. We help campuses move forward in a sustainable, environmentally friendly, and energy efficient manner. We are using Clean Air Cool Planets Campus Calculator as part of our Audit process. Results to date: $47,000,000 in guaranteed utility savings 6,000,000 tons of CO 2 removed Equivalent of 64,000 cars off the road for a year or 88,000 acres of trees planted

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We deliver enduring performance. Questions/Comments?

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We deliver enduring performance. Contacts TAC Energy Solutions Mike Mumper NE/Midwest 717-232-8182 x233 mike.mumper@tac.commike.mumper@tac.com Barry Wilhelm Mid Atlantic/South 804-330-5660 x110 barry.wilhelm@tac.combarry.wilhelm@tac.com Jared McCurley West of Mississippi 312-286-4662 jared.mccurley@tac.comjared.mccurley@tac.com www.tac.com/am/cci