1. Energy Savings Performance Contracting (ESPC)
Pick a logo for the main page of your presentation. Delete the other logo.

2. What is an ESCO? Energy Services Company (ESCO)
Some similarities to a Design/Build firm
Turnkey service for energy efficiency projects
Expertise in energy engineering
Commissions project work
Measures and Verifies Energy Savings

3. ESCO Benefits GUARANTEED: Maximum project cost Energy savings
Collaboration between Owner, DES, and ESCO Ability to fast-track
Owner involved with contractor selection Owner involved with equipment selection
One responsible entity (ESCO)
GUARANTEED:
Maximum project cost
Energy savings
Equipment/System performance
Presenter
:41:02
Joe – 2 min

4. What is DES’s Role Prequalified Providers Project Oversight
Contractual Framework & Coordination
Financial Transparency
1986 RCW 39.35
Legislative Authority to GA (Now DES)

5. Energy and/or Water conservation projects such as:
Qualifying Projects
Energy and/or Water conservation projects such as:
Building lighting
Street lighting
HVAC modifications
Steam & condensate
Boiler & chiller systems
Energy management control systems
Building and grounds water conservation

6. Financing Current Operational Costs New Operational Costs Before
Savings
Savings
Annual Debt Service
New Operational Costs
Utility & Maintenance Costs
Utility & Maintenance Costs
Utility & Maintenance Costs
Before
During
After

7. Financing Options Energy Service Company (ESCO) Financing
State Financing
State Treasurer’s LOCAL Program
3 - 5% interest rate
10, 12 or 15 year loan
Private Financing
Agency intra-budget financing

8. Department of Enterprise Services Experience
Energy conservation in public facilities since 1986
Over 500 projects totaling $300 million
Over $100 million in energy cost saved
$30 million in utility rebates brought to the projects
Clients include state agencies, colleges and universities, cities and towns, counties, school districts, port districts, libraries, hospitals, health districts:
Highline College Olympic College Yakima School District Valley Medical Center City of Tukwila
King County
Tumwater School District Department of Corrections University of Washington Veterans Administration
City of Olympia Port of Bellingham
…and dozens more
Customers:

9. Sequence of an ESCO Project
Project initiated by Interagency Agreement
ESCO
Selection
Measurement & Verification
Preliminary Audit #1
Design & Construction #3 #5 #4 #6 #2
Investment Grade Audit

10. Interagency Agreement
DES initiates an Interagency Agreement (IAA) between the State and the client agency
DES management fee schedule is included in the IAA
The Client signs and DES executes the IAA

11. ESCO Selection
DES pre-qualifies Energy Service Companies (ESCOs) biannually and creates a registry through an RFQ
The client reviews qualifications and chooses the ESCO that is right for them
ESCO Interviews are optional

12. Preliminary Audit
Walkthrough to identify facilities and systems to study
Client establishes cost-effectiveness criteria
ESCO conducts a preliminary audit
Client and DES review the list of energy conservation measures proposed
The client decides whether to proceed with an investment grade audit

13. 4. Investment Grade Audit
Up to this point, there is no obligation to pay for ESCO services
If you proceed with construction, the cost of the investment grade audit is included in the guaranteed project cost
If you do not proceed with construction of energy saving measures which meet your payback criteria, you are billed for the audit
If no measures are found that meet payback criteria, there is no cost for the audit

14. 4. Investment Grade Audit (continued)
ESCO and DES sign investment grade audit agreement, Client signs funding authorization
ESCO develops investment grade audit with cost and savings guarantee
Client may list favorable subs and equipment
Client and DES review and comment on draft audit
ESCO incorporates comments, presents audit results, and submits an energy services proposal (ESP)
The ESP includes all project costs

15. 5. Design and Construction
Client and DES review energy services proposal
ESCO and DES sign construction contract
Client signs funding authorization
DES issues notice to proceed
Client and DES review design documents
Bid documents prepared by ESCO
Sub-contractors and equipment selected
DES manages ESCO project construction
DES and Client verify ESCO’s costs and savings

16. Measurement and Verification
First year measurement and verification (M&V) is part of every project
M&V is covered under a separate agreement, authorized by the client
2 – 3 years of M&V are recommended for systems which require frequent adjustments, such as controls systems
If using loan to fund Energy project may want to extend M&V

17. Highline College Performing Site survey for crane pick
What's coming out of that vault?
Uh oh….
Central Heating Plant
Direct Buried Piping - VE
Engage DES approval for Engineering investigation
Develop cost analysis for repair options
Expedited Contracting, Tight construction window

18. What was presented: Options Studied:
Cured-In-Place Pipe Lining (Trenchless)
Open Cut Excavation and Pipeline Replacement
Direct Boring (Trenchless)
Satellite Boiler
Temporary Boilers (If piping failed prior to a permanent fix)
Each Option Included:
Overview of the option
Advantages
Disadvantages
Impact of students and staff
Timeframe for completion
ROM Total Project Cost

19. B29 Construction B4 9/16/17 9/17/17 10/18/17 11/18/17 1/05/18 11/19/17
Installation Completed
Discovery
9/16/17
9/17/17
10/18/17
11/18/17
1/05/18
DES on Board
NTP for IGA
Report Delivered
NTP for Construction
11/19/17

20. Attractive ESCO Projects
Projects with significant Energy/Utility Savings
Interior and exterior Lighting (LED)
HVAC projects – chillers, boilers, pumps, AHUs, distribution systems, commissioning
Water conversation projects
Building Envelope Upgrades

21. Attractive ESCO Projects
Projects with some energy savings and significant project complexities
Projects that require scheduling work around client requirements on critical deadlines
Projects with numerous unknowns like retro commissioning projects or major HVAC renovations
Projects that need contractor flexibility
Projects that need guaranteed cost & energy savings to apply for grants

22. Low Bid Vs ESCO Process
ESCO Process – Design and Construction are by the same Company.
ESCO Process – Project’s cost and energy savings are guaranteed and construction invoicing is “open book”.
ESCO Process – You select ESCO from our prequalified list. The ESCO process is your choice. The DES energy program and ESCO have a lot of incentive to ensure successful projects.

23. Washington Colleges Seattle Central College Highline College
Eight ESCO projects – continuous from 2008 to current
Has used three ESCOs
Started with Commerce grant
Highline College
Six ESCO projects – continuous from 2011 to current
Has used one ESCO
Edmonds College
Nine ESCO projects – from 2000 to current
Received two Commerce grants

24. DES Commissioning Program
Existing Building Commissioning
Energy Hogs
Control/Comfort Issues
Buildings that have not been Commissioned for over 10 Years
Prequalified On-Call Commissioning Firms
Sequence similar to ESCO projects
Commissioning firms are not allowed to do construction activities (agreement – not a construction contract)

25. DES RCM Program
New Program – will start accepting clients/marketing early 2019
Program is intended to provide our clients a pathway to reduce utility costs/carbon emissions and sustain those improvements
Program will be flexible in scope and cost. We will tailor to meet your specific needs. Could be whole campus, specific building(s) and/or specific systems
Program will partner with the WSU Energy Office to provide training and energy efficiency information.
Goal is to train your staff

26. ELCCAs Strive for “Net Zero Ready”
Building Orientation (Future Solar PV)
Building Exterior (Insulation/Windows)
Roof/Conduits/Electrical system designed for future Solar PV
Pay close attention to Mechanical system
New Washington State Energy Code limits choices
If recommended Mechanical system is new to you and your staff, ask questions and request examples.

27. Joe Sullivan DES Energy Program 360-407-9377 Joe.Sullivan@des.wa.gov
Thank You
Joe Sullivan
DES Energy Program