Energy Performance Contracting November 3, 2009 Performance Contracting December 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 Performance Contracting provides an opportunity to implement a SELF-FUNDING PROJECT paid for from future ENERGY AND OPERATIONAL SAVINGS with the RESULTS GUARANTEED

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 Savings Before 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 Preliminary Analysis Select Preferred Partner Investment Grade Audit Implementation Measurement and Verification RFQ Contract Project Closeout 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 Capital Programs Carbon Mgmt Engage Students Public Relations Financial Programs Renewable Energy Advanced Tech

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 Preliminary analysis Dec 23 Draft report Jan 5 Final report Jan 15 Issue RFQ Feb 1 Proposals due from ESCO Feb 7 Select ESCO Partner Feb 7-May 1 Design, bid, order May 1- Aug 1 Implementation

Questions Energy Conservation Sustainability Space Utilization Performance Contracting