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Published byGabriel McLaughlin Modified over 8 years ago
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1 May 10, 2011 Procurement and Financing Options for Facility Improvements Siemens Industry, Inc. Building Technologies
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2 Building Operating Management (BOM) Magazine The Funding Challenge
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3 Building Operating Management (BOM) Magazine The Funding Challenge
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4 What is Performance Contracting A legislative vehicle that allows public entities to improve their facilities, by using their energy and operational budgets to fund a project, with guaranteed results.
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5 Local Government Performance Contracting (Illinois Compiled Statutes ; 50 ILCS 515) Local Government Energy Conservation Act City/county must issue a Request for Proposal (RFP) Selection is based on “greatest value to the City”, not lowest bid Maximum term is 20 years Majority vote by city/county board is required Architect/engineer review is required prior to signing contract City may use future capital expenditure dollars as savings to assist with project funding Savings must meet or exceed all costs associated with the program Savings must be guaranteed
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6 A Practical Way to Address Funding Concerns Throughout your building’s life, you face efficiency and environmental challenges Aging infrastructure Inefficient equipment and lighting Increased energy use Rising/volatile energy prices Organization initiatives and mandates to reduce GHG emissions Performance Contracting with guaranteed results: –Make facility & infrastructure improvements –Reduce energy use and associated expenses –Your energy savings finance your improvements –Have a positive environmental impact
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7 Performance Contracting Overview Key Elements: Savings are guaranteed Savings pay for improvements Money going to utility redirected back to you Harvest savings now Leverage low hanging fruit to fund other projects Turnkey solution Focus on your core business Performance Contracting Economics Utility Bill Payment Savings Utility Bill
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8 Performance Contracting Overview Key Elements: More efficient and accurate meter reading and billing Savings pay for improvements Unaccounted for usage redirected back to you Harvest revenue now Less rate increases to customers Turnkey solution Focus on your core business Performance Contracting Economics
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9 Preliminary Audit ESCO’s will provide a comprehensive investment grade audit (IGA) with project recommendations, costs and savings County will review each proposal and select the comprehensive energy plan that provides the most innovation and project savings Upon selection the County can work with the ESCO on prioritizing the Energy Conservation Measures (ECMs). Getting Started
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11 Performance Contracting - Financial Approach Financing Tailored around project economics Competitive process or work with current financial provider Tax-exempt rates Guarantee provisions Offer a guaranteed fixed project cost No change order policy for a given scope Energy savings guarantee Key Budget neutrality Savings must equal cost
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12 Measurement and Verification (M&T) – Annual Contract Different M&V options can be used Measure specific vs. utility bill Proven savings calculations where appropriate Simplest and most cost effective approach The Municipality manages and controls their buildings Debt Service – Loan Service Extensive experience in providing financing Tailored around project economics Competitive process or work with current financial provider Tax-exempt rates What is the Cost
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13 Local Government Performance Contracting Helping our Nation’s Communities become Vibrant, Growing and Green Becky Werra, LEED AP Account Executive 312-215-2137 Becky.Werra@Siemens.com Becky.Werra@Siemens.com
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