ESPC Life of Contract Plan: Site-Level Performance Period Administration W. Steve Dunnivant EMP2, Incorporated

Session Learning Objectives: Education ▪ Training ▪ Resources Steve to write objectives

Education ▪ Training ▪ Resources ESPC Life of Contract Plan Overview Purpose of the Life of Contract (LOC) Plan: – Template serves as a step-by-step user guide. – Provides critical documentation of the ESPC project to aid in performance period contract management. – Retain control of the performance of the contract and related ECMS, savings and responsibilities. – Monitor project processes to ensure contract parameters are being met. – Designed to endure possible staff turnover over the life of the contract.

Education ▪ Training ▪ Resources ESPC Life of Contract Plan Overview Document development is initiated at the final installation phase of the project. Structure of the Workbook – LOC Plan Data Collection – Document the equipment, the performance and the savings verification data along with the post-installation reports, witnessing, and testing. – Document the O&M and the R&R requirements so that the Agency can monitor and verify that the actions are accomplished as required by the contract. – Define the activities to support annual M&V verification processes confirming all inspections are accomplished and the M&V report can be accepted/rejected annually for the life of the contract. – Includes instructions on how to resolve savings deficiencies and/or use and control escrow accounts.

Education ▪ Training ▪ Resources Witnessing Several requirements exist that require the Agency to witness various activities by the ESCO. It includes: – Final Inspections – Final Acceptance – Commissioning Tests – Maintenance and preventative maintenance per O&M plans (First Year) The witnessing activities are essential to ensure that testing is accomplished per the test plans with calibrated test equipment.

Education ▪ Training ▪ Resources Contact Information The DOE may initially insert the initial Points of Contact (POC) for DOE and the ESCO Personnel. The Agency shall insert the Agency POCs and be responsible for maintaining an up-to-date POC list for the life of the contract. All Information should be verified and updated annually. AGENCY Site Approving Official Administrative Contracting Officer Contracting Officer Contracting Officer Technical Representative Procurement Contracting Officer Resource Efficiency Manager Administrative Contract Specialist DOE DOE Contracting Officer Representative DOE IDIQ Contracting Officer DOE Federal Financing Specialist Project Facilitator NREL Renewable Energy Screening Contact ESCO Primary Point of Contact O&M Service Representative Construction Supervisor/Manager M&V Specialist Emergency Contacts Non Emergency Contacts Sample POC’s for Typical LOC Plan Management

Education ▪ Training ▪ Resources Project Information Performance data from the Contract, Implementation, Testing, Witnessing, Commissioning and Acceptance efforts compiled to complete the workbook. Review the workbook with the Agency personnel, training those person(s) to ensure understanding of the contents of the workbook. Collect the contractual data on savings from the first year of the contract. Notify the agency that the construction period savings should be verified prior to acceptance. Review the responsibilities for O&M, including PM and R&R, for the COTR, ensuring identification of which party is responsible for each activity. Review and insert the results from the first year of M&V. Key correspondence and project documents should be kept and stored in a safe and easily accessible location

Education ▪ Training ▪ Resources Task Order (TO) Project Listing The Task Order listing identifies the total list of potential ECMs that are covered by the IDIQ contract for the project. The ESCO for this contract is encouraged to continually look for energy savings opportunities, and both the Agency COTR and the ESCO can use the list for ideas and recommended areas for review. The possibility exists that ESPC contracts do not initially accomplish the goals in one phase, some additional areas of improvement may be required in order to achieve the energy goals of: – EO 13423, EO – The Energy Policy Act of 2005 (EPAct) – The Energy Independence and Security Act of 2007 (EISA) – New opportunities for energy conservation must be completed per the requirements of the DOE IDIQ contract. Task Order Project Listing - Technology Categories Sample

Education ▪ Training ▪ Resources Awarded Project Overview The Project Overview table represents the top-level information about the project; recording the basic parameters of the project. It also gives guidance to the first payment funds that come from: – Construction period savings – Utility, city, county and state provided incentives – Agency funding Awarded Project Overview Sample

Education ▪ Training ▪ Resources Savings Summary Schedule TO-4 summarizes the savings calculations made by the ESCO for each ECM (shown in both energy units and dollars by each energy commodity. This data is recorded in the LOC Plan in the event that problems with savings realization occur; assisting in determining where savings issues occur and where additional savings may be captured. Notes – ESPC savings payments will use the bundled approach that does allow an over- performing ECM to compensate for an under-performing ECM, as long as total annual savings are realized. – The savings determination is typically made by using the measured energy consumption and the contractually identified method of energy rate escalation or actual energy rates. – The DOE may assist in review of the energy rate escalation calculation for the first year M&V to ensure the proper procedure is followed by the ESCO. – Follow-up M&V reports should be reviewed by agency staff or subcontractor cognizant of the M&V process.

Education ▪ Training ▪ Resources Documentation Matrix Pre-Award Documents Site-Data Preliminary Assessment and Contractor Selection Notification Letter PA/Phase I ESCO Submittal Agency Specific Requirements Notice of Intent to AwardTO RFPIGA Award Documents Contract DocumentsKey Correspondence Project Implementation DrawingsInstallation Plan/Schedule Commissioning/Acceptance Test Plan(s) Key Correspondence Final Submittals/Acceptance Documents Commissioning/Acceptance Report Post-Installation ReportManualsTraining DocumentsKey CorrespondencePunch List Post-Acceptance Performance Period Annual M&V Reports Repair and Replacement (R&R) Operations and Maintenance (O&M) Payment RecordsKey CorrespondenceUtility Invoices Equipment Identification Document(s)

Education ▪ Training ▪ Resources Financial Schedules Relative to the Performance Period Schedule TO-1 contains the total estimated savings for the ESPC. The Guaranteed Savings is compared to the actual savings received to determine if the ESCO met their guarantees. Schedule TO-2 is not essential to the management of the ESPC contract during the performance. Schedule TO-3 captures the annual cash flow for the project funding loan principle and interest, and operational costs payable to the ESCO for work scope. Schedule TO-4 shows the energy savings for each ECM of the contract. – The savings in terms of energy units require annual verification and help determine the dollar value of actual savings. – Comparison for guaranteed savings minus actual savings determines either accomplishment of guarantees or shortfalls. – Savings accomplishment is determined in a bundled condition; over-performing ECMs can counter underperforming ECMs. Schedule TO-5 shows the annual cancellation ceiling for each year of the contract

Education ▪ Training ▪ Resources O&M/R&R Responsibilities List Operations and Maintenance Operations – Equipment Identification – Term – Operation Schedule – Operational Log(s) Preventative Maintenance – Term – PM Schedule – Preventative Maintenance Log – Points of Contact Repair and Replacement – Responsibility and Roles (From PA) – Term – Repair and Replacement Log – Points of Contact

Education ▪ Training ▪ Resources Annual Project Savings To Date Savings and Tracking – The Contractor Guaranteed savings data is found on Schedule TO-1. – The actual savings data is produced by the M&V process each year. – Tracking this data can determine trends and anticipating problems and/or increased maintenance requirements. Payments – Year zero funds are the construction period savings plus incentives earned and/or any Agency applied funds prior to total project acceptance. – Post-Installation Performance Period begins when the equipment performs satisfactorily for the 30-day period prior to Full Acceptance. – The savings data obtained at Post-Installation should document the As-Built operational savings. – If this data is shown to be below the guaranteed savings the contractor can: Introduce additional savings measures to make up the difference at their expense, or The payment stream can be either temporarily adjusted for short-term problems or permanently adjusted for deficient ECM performance.

Education ▪ Training ▪ Resources Annual Project Savings Tracking: Identifying Health of the Contract Deficiencies: Reconciliation of Annual Savings and Payments – If deficient ECMs are found, the payment can be permanently modified to correct the deficiency by adjusting the payment stream downward. – If a shortfall occurs and the savings are not realized: It is necessary to recover over-payments by reducing the payments for the next 12 months. There is no carry-over allowed from year to year. Shortfalls are not allowed to accrue past the end of the annual true-up period. – If the data shows a shortfall, permanent reduction in payments may be in order. – IDIQ’s contract “Disputes Clause” should be used to resolve any problems.

Education ▪ Training ▪ Resources Annual Project Savings Tracking: Reconciliation Application In the Field Agency X Sample – Conditions – Shortfalls – Reconciliation Steps – Result

Education ▪ Training ▪ Resources Annual Project Savings Tracking: Reconciliation Application In the Field Sample of Shortfall Cues: Agency X

Education ▪ Training ▪ Resources Savings should be normalized for weather. – Savings are not typically “adjusted” due to weather, but rather must be delivered despite the weather. – Over-achieved savings from a good weather year may not be carried over or averaged with previous years, and may not be carried over or averaged to the following year(s). Typically based upon historical and TMY data and measured per the M&V Option selected for each ECM. The Risk, Responsibility and Performance Matrix typically assigns weather risk to the Agency. Weather Conditions TMY Data:

Education ▪ Training ▪ Resources Measurement and Verification Plan Final Proposal – The Measurement and Verification Plan and the subsequent annual M&V reports describe the methodology for savings verification and present the justification data for the assessments. Status and Checklist – M&V monitoring can range from occupancy and equipment use schedules on the Agency, to equipment operational and performance characteristics and status on the ESCO. – On-going review throughout each year eliminates ending with limited or no knowledge, even if only general, of when the equipment started abnormal operation Annual M&V Report – Annual M&V reports are essential to maintaining a historical set of performance, inspection, and testing information for the project. – Reports support potential project performance evaluations, government audits, and potential conflict resolution.

Education ▪ Training ▪ Resources Agency Training and Awareness Training requirements are dependent upon the terms agreed upon in the contract. The IDIQ standard terms, unless modified, require annual re- training if the agency has responsibility for O&M. – The ESCO must provide training for all aspects of the O&M of the equipment and systems. – The ESCO must provide manuals for everything in the scope, which fully defines the O&M of the equipment and systems. – Best Practice: The Agency will have several personnel attend the training to ensure that someone at the agency can train new hires in the future.

Education ▪ Training ▪ Resources Additional Contacts and Resources Main Office 1950 Keene Road Bldg E Richland, WA