1. Phoenix Convention Center Phoenix, Arizona M&V Contracting / Business Perspective Track 5: Project Financing Session 5: M&V: High- and Low-Level Perspectives Scott Trotier Northrop Grumman Corporation August 12, 2015

2. Energy Exchange : Federal Sustainability for the Next Decade Typical Contract – Areas of Concern M&V, like any contract, has key areas of concern that should be readily understood by all parties: Scope of Work Standard of Performance Indemnity Payment – All too often, this information is not readily apparent in the M&V Plan. Solution – summarize it in a Performance Work Statement. 2

3. Energy Exchange : Federal Sustainability for the Next Decade Baseline M&V Plan Post-Installation Report Annual Report on ECM Performance 3 Scope of Work

4. Energy Exchange : Federal Sustainability for the Next Decade Performance Use Other, i.e. – Witnessing – Utility Rates – Escalation Rates – Reporting – Weather – M&V Precision / Confidence – Energy Related Cost Savings 4 Scope of Work - Responsibilities

5. Energy Exchange : Federal Sustainability for the Next Decade Federal Energy Management Program (FEMP) M&V Guidelines International Performance Measurement and Verification Protocol (IPMVP) Office of Energy Efficiency and Renewable Energy (EERE) Uniform Methods Project: Determining Energy Efficiency Savings for Specific Measures Measurements & Witnessing Statistical Sampling – Precision / Confidence Security (physical and cyber) Calibration Standards 5 Standards of Performance

6. Energy Exchange : Federal Sustainability for the Next Decade Protection or Security against Damage or Loss – Annual Verification that Verified Savings are Equal to or Greater than Guaranteed Savings Emphasis on Payout Conditions – Payouts if Required 6 Indemnity

7. Energy Exchange : Federal Sustainability for the Next Decade ESCO Payments – For Shortfalls in Guaranteed Savings Agency Payments – Implementation Costs – Annual Costs 7 Payment

8. Energy Exchange : Federal Sustainability for the Next Decade Optimize Economizer – Fixed Dry-Bulb Temperature – Option A – Retrofit Isolation with Key Parameter Measurement 8 Example

9. Energy Exchange : Federal Sustainability for the Next Decade Damper Positions / Control Methodology Spot Measurement of Flow Rates Temperature Data Monitored – Outside Air, Return Air, Mixed Air, and Supply Air AHU Start/stop Monitored Baseline and Savings Determined by Engineering Analysis 9 Example - Baseline

10. Energy Exchange : Federal Sustainability for the Next Decade Trend MAT and OAT (ESCO responsibility) Verify Operations through Periodic Functional Performance Tests (ESCO responsibility) Stipulate RAT, Schedule, Flow Rate, Weather (Agency responsibility) Verify Savings by Comparing Trended Data with Ideal Curve (ESCO responsibility) 10 Example – M&V Plan

11. Energy Exchange : Federal Sustainability for the Next Decade Operational Verification through – Functional Performance Test (simplified) Verify Calibration of Sensors and Actuators Override OAT Below Fixed Setpoint Verify Economizer Mode is Enabled Override OAT Above Fixed Setpoint Verify Economizer Mode is Disabled Clear Override – Trend Data Analysis 11 Example – Post Installation Report

12. Energy Exchange : Federal Sustainability for the Next Decade 12 Example – Trend Data Analysis

13. Energy Exchange : Federal Sustainability for the Next Decade Economizer savings will be estimated using a combination of measured and stipulated parameters and engineering analysis in accordance with FEMP M&V Guidelines 4.0, Option A. Proper operations shall be verified prior to acceptance by a Functional Performance Test. Annual saving shall be verified through periodic Functional Performance Tests and trend data analysis of MAT as a function of OAT. Failure to annually demonstrate proper operations or trending will trigger a shortfall in Verified Savings that will be estimated by adjusting the engineering analysis. Any shortfall in Guaranteed Savings will be credited by the ESCO to the Agency as soon as administratively possible. 13 Example – Performance Work Statement

14. Energy Exchange : Federal Sustainability for the Next Decade Economizer savings will be estimated using a combination of measured and stipulated parameters and engineering analysis in accordance with FEMP M&V Guidelines 4.0, Option A. Proper operations shall be verified prior to acceptance by a Functional Performance Test. Annual saving shall be verified through periodic Functional Performance Tests and trend data analysis of MAT as a function of OAT. Failure to annually demonstrate proper operations or trending will trigger a shortfall in Verified Savings that will be estimated by adjusting the engineering analysis. Any shortfall in Guaranteed Savings will be credited by the ESCO to the Agency as soon as administratively possible. 14 Example – Performance Work Statement Emphasis on Areas of Concern

15. Energy Exchange : Federal Sustainability for the Next Decade FEMP M&V Guidelines http://energy.gov/eere/femp/articles/resources- implementing-energy-savings-performance- contracts http://energy.gov/eere/femp/articles/resources- implementing-energy-savings-performance- contracts IPMVP www.ipmvp.orgwww.ipmvp.org EERE Uniform Methods Project: Determining Energy Efficiency Savings for Specific Measures http://energy.gov/eere/about-us/ump-protocols http://energy.gov/eere/about-us/ump-protocols Scott Trotier, Northrop Grumman Corporation, scott.trotier@ngc.com, 443-754-0922 scott.trotier@ngc.com 15 Resources