1. PACE Technical Standards Eddy Trevino, P.E., Program Manager State Energy Conservation Office August 2015

2. Agenda Overview Project Process Exhibits and Reference Materials

3. Overview Local Government Code Sec. 399.002. DEFINITIONS. Qualified Improvement – Permanent improvement fixed to property – Customer side of the meter – Decrease water or energy consumption or demand – Energy technology to generate electricity, provide thermal energy, or regulate temperature

4. Overview Local Government Code Sec. 399.011. REVIEW REQUIRED. Independent third party Before construction activities – Review of water or energy baseline conditions – Review of projected water or energy savings After project is completed – Verification that the qualified project was properly completed and is operating as intended

5. Overview Participants Property Owner – Separate contracts Independent Third Party Review (ITPR) Engineer – At beginning and through PACE contract Engineer of Record – At beginning and through construction phase Contractor – At beginning, construction and M+V

6. Overview Technical Standards Investor Confidence Project (ICP) Energy Performance Protocols (EPP) for Standard and Large Commercial Facilities Standardize the technical review of energy efficiency projects to bring uniformity and reliability on a national scale

7. Overview Technical Requirements Step 1: Establish Baseline Water and energy use must be measured Step 2: Project Savings Water and energy conserving measures must be quantified Step 3: Independent Third Party Review Project must be reviewed by the ITPR Engineer Step 4: Annual Reporting Property Owner reports savings to PACE Administrator

8. Project Process Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

9. Project Process Is there a potential project? Engage an Engineer and/or Architect for Preliminary Assessment Purposes Conduct Preliminary Utility Audit – Identify energy and water retrofit opportunities Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

10. Project Process Engage Independent Third Party Reviewer (ITPR) Engage Engineer of Record – Full Assessment – FAST TRACK Assessment Engage Contractor if Design Build Contract Measurement and Verification (M&V) – Plan (decide at beginning) – Implementation Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

11. Project Process Engage Independent Third Party Reviewer (ITPR) Engage Engineer of Record – Full Assessment – FAST TRACK Assessment Engage Contractor if Design Build Contract Measurement and Verification (M&V) – Plan (decide at beginning) – Implementation Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

12. Independent Third Party Review The ITPR Engineer Technical Standards Manual – Section II Selected by the property owner Validates projected future energy or water savings (not an original review) Verifies that project was properly completed and is operating as intended Reviews and validates of post-construction M&V reports Ideally, the same ITPR should follow a project from initial review to project completion

13. Independent Third Party Review ITPR Engineer Qualifications Technical Standards Manual – Section II Licensed Professional Engineer with energy/water efficiency experience Without conflict or relationship to the project One of the following certifications: – American Society of Heating, Refrigeration, and Air-Conditioning Engineers (ASHRAE) – Building Energy Assessment Professional (BEAP) – Building Energy Modeling Professional – Association of Energy Engineers (AEE) – Certified Energy Manager (CEM) – Certified Measurement and Verification Professional (CMVP) – Certified Energy Auditor (CEA) – Building Commissioning Association – Certified Commissioning Professional – Investor Confidence Project (ICP) Credentialed Quality Assurance Provider

14. Independent Third Party Review ITPR Engineer Certifications Technical Standards Manual – Section II Reviewer’s Certification Statement of Compliance

15. Independent Third Party Review (ITPR) ITPR Engineer Site Visits Technical Standards Manual – Section II Site Visit 1: Reviewer’s Certification Reviews completed Energy/Water Assessment Report Visits site Project Verification Certificate – No conflict of interest – Certification that project complies with PACE guidelines – Sealed by Texas Professional Engineer

16. Independent Third Party Review (ITPR) ITPR Site Visits (cont.) Technical Standards Manual – Section II Site Visit 2: Statement of Compliance Post Construction Revisit the site to confirm that the improvements were properly installed, meet EPP guidelines, and are operating as intended Statement of Compliance – No conflict of interest – Certification that project complies with PACE guidelines – Sealed by Texas Professional Engineer

18. Project Process Engage Independent Third Party Reviewer (ITPR) Engage Engineer of Record – Full Assessment – FAST TRACK Assessment Engage Contractor if Design Build Contract Measurement and Verification (M&V) – Plan (decide at beginning) – Implementation Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

19. Full Assessment / Fast Track Protocol Engineer of Record Responsibilities Technical Standards Manual – Section III Multiple Energy and/or Water Efficiency Measure Projects Fast Track Type 1 – Like-for-Like Replacement – Example: Lighting retrofit or A/C unit upgrade Type 2 – Single-Measure Efficiency Projects – Example: Window film, additional insulation, or reflective roof coating Type 3 - Distributed Generation – Examples: CHP, micro turbines, solar photovoltaic (PV) Full Assessment

20. Full Assessment / Fast Track Protocol Engineer of Record Responsibilities Technical Standards Manual – Section III Fast Track Projects do not qualify for the FAST TRACK approach if: – Project requires energy modeling – Project requires IPMVP (Option C or D) measurement and verification – Project value to building appraisal ratio exceeds 0.10 (10%) Full Assessment

21. Protocol Engineer of Record Responsibilities Technical Standards Manual – Section III 1.Establishes energy and water baseline conditions 2.Prepares the Energy/Water Assessment Report 3.Provides oversight during construction activities 4.Evaluates project performance (M&V)

22. Protocol Approaches for Different Project Types Technical Standards Manual – Section III 1.Commercial Projects – ASHRAE standards based 2.Industrial and Agricultural Projects – Facility, process or equipment 3.Distributed Generation (DG) – Metering of delivered energy without a baseline is often recommended in the M&V approach – Delivers energy on customer side of meter

23. Protocol Using Prior Audits Technical Standards Manual – Section III Engineer of Record: Prior ASHRAE Level II or Level III energy/water audit may be used provided that it was completed within the last three (3) years – see conditions Update baseline utility data

24. Protocol Projected Savings Calculations Technical Standards Manual – Section III Engineer of Record “Open book” methodology – Savings calculations are transparent – Results are readily verifiable “Closed book” methodology (proprietary software is prohibited) – Exception – If it meets open book methodology standards

25. Project Process Engage Independent Third Party Reviewer (ITPR) Engage Engineer of Record – Full Assessment – FAST TRACK Assessment Engage Contractor if Design Build Contract Measurement and Verification (M&V) – Plan (decide at beginning) – Implementation Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

26. Texas PACE law: “After a qualified project is completed, the local government shall obtain verification that the qualified project was properly completed and is operating as intended.” ITPR Engineer Validation – ASHRAE Guideline 14, Whole Building Performance Path and the International Performance Measurement and Verification Protocol (IPMVP) – IPMVP Options (Decided when Full Assessment is Developed) Owner’s Contractor – May continue M&V throughout the term of the assessment or as contractually specified Protocol Verifying Completion and Operation Technical Standards Manual – Section III

27. Project Process Contractor implements retrofit project Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

28. Project Process Contractor completes retrofit project Verifying Completion and Operation Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

29. Texas PACE law: “After a qualified project is completed, the local government shall obtain verification that the qualified project was properly completed and is operating as intended.” ITPR Engineer Validation – ASHRAE Guideline 14, Whole Building Performance Path and the International Performance Measurement and Verification Protocol (IPMVP) – IPMVP Options (Decided when Full Assessment is Developed) Owner’s Contractor – May continue M&V throughout the term of the assessment or as contractually specified Protocol Verifying Completion and Operation Technical Standards Manual – Section III

30. Independent Third Party Review (ITPR) ITPR Site Visit Technical Standards Manual – Section II Site Visit 2: Statement of Compliance Post Construction Revisit the site to confirm that the improvements were properly installed, meet EPP guidelines, and are operating as intended Statement of Compliance – No conflict of interest – Certification that project complies with PACE guidelines – Sealed by Texas Professional Engineer

32. Project Process Owner Reporting Pre Application Application and Review Financing and Contractor Engagement Construction Retrofits Final Review Repayment / Reporting

33. Owner is required to provide a post-construction Annual Savings Report to the PACE administrator. – Submitted during the term of the assessment or throughout the term of the M&V – Shall be reviewed and validated by the ITPR Full Assessment Protocol Owner Reporting Recap Technical Standards Manual – Section III

34. EXHIBITS

35. Exhibit A: INDUSTRIAL PROTOCOL Exhibit B: AGRICULTURAL PROTOCOL Exhibit C: INDEPENDENT THIRD PARTY CERTIFICATION Technical Standards Exhibits

36. Reference Materials Accepted methods for data collection, measurement, and savings calculations should be used on proposed projects. Technical methodology relies primarily upon the Investor Confidence Project (ICP) - Energy Performance Protocols (EPP) for Standard and Large Commercial Facilities. – Contains processes that form a framework for bringing together all aspects of project implementation from establishing a baseline and audit, through M&V. American Society for Testing and Materials (ASTM) E2797-11, Building Energy Performance Assessment (BEPA) Standard (data collection and baseline calculations for the energy audit, building asset data); International Performance Measurement and Verification Protocol (IPMVP) (latest edition); American National Standards Institute/Building Owners and Managers Association (ANSI/BOMA) Z65.3- 2009 (gross floor area measurement); ASHRAE Guideline 14-2002 (measurement of energy and demand savings); ASHRAE Procedures for Commercial Building Energy Audits (latest edition); National Institute of Standards and Technology (NIST) Life-Cycle Costing Manual, NIST Handbook 135 (latest edition); ASHRAE Standard 202, Commissioning Process for Buildings and Systems (latest edition); ASHRAE Guideline 4, Preparation of Operating and Maintenance Documentation for Building Systems (latest edition); ASHRAE Guideline 1.4, The Systems Manual for Facilities; (latest edition); ASHRAE Handbook-2011, Fundamentals, Chapter 39 (Codes and Standards); and ASHRAE Guideline 14, Whole Building Performance Path (2002 edition); The Alliance for Water Efficiency (AWE) Conservation Tracking Tool; and EPA WaterSense Product Guide.

37. QUESTIONS? Dub Taylor, Director Eddy Trevino, Program Manager State Energy Conservation Office Eddy.Trevino@cpa.texas.gov 512-463-1876