Title: Overview of the Texas ESC Chapter
1Texas Energy Services Coalition
- Overview of the Texas ESC Chapter
-
- Theresa Sifuentes Public Sector Co-chair
- Program Manager-LoanSTAR, SECO
- Kevin Vaughn Private Sector Co-chair
- Market Manager- Government Energy Solutions, TAC
Americas
2Texas Energy Services Coalition
- Introduction to
- Performance Contracting
-
- Presenters
- Carl Hurst, P.E. - State Government Solutions
Director, Western U.S., Johnson Controls, Inc. - Scott Naab, Trane Comprehensive Solutions
3Topics of Discussion
- Texas PC Projects
- Energy Conservation Legislation
- Performance Contracting 101
4Before we begin
- High interest from the legislature
- Plenty of available funding
- Good for the states budget
- Bond Review Board approves these projects
- You arent the first
- Long history of successful projects
5Prior Projects - State
6Prior Projects Higher Ed
7Prior Projects- Local Govt
8Current State Agency PC Projects
- Texas Department of Criminal Justice
- Texas Youth Commission
9Existing Statute
- State Agencies 2166.406 Texas Government Code
- City/County 302 Local Government Code
- State Higher Ed. 51.927 Texas Education Code
- School Districts 44.901 Texas Education Code
10History of Enabling Legislation
- Senate Bill 1811 1997
- Allows Higher Education to utilize TPFA
- House Bill 3530 - 1997
- Allows State Agencies to utilize performance
contracting - House Bill 2492 - 1999
- Extends term to 15 years
- House Bill 3286 2001
- Allows water conservation
11History of Enabling Legislation
- House Bill 2277 - 2001
- Clarifies RFQ procurement options
- Clarifies bonding issues
- Allows TPFA financing for State Agencies
- Third Party Engineer review
- House Bill 2278 2001
- Establishes SECO in Comptrollers Office
- Requires State Agencies to implement energy
conservation measures meeting the requirements of
Section 2166.406 Texas Government Code
122166.406 Texas Gov. Code
- 2166.406 Texas Gov Code
- (f)- term of ESPC contract limited to 15 years
- (g)- ESPC projects may be financed with TPFAs
Master Lease Purchase Program - (h)- contractor must guarantee savings
- (I)- agency shall procure ESPC using professional
services by 2254.004 (RFQ) and independent 3rd
party engineer shall review cost savings - (j)- legislature shall base agencys
appropriation for energy and water on the sum of - the agencys estimated annual energy and water
costs plus - the annual energy and water cost savings
resulting from the ESPC (thus finding the annual
project payment)
132113.301 Texas Gov. Code
- 2113.301 Texas Gov Code (appropriations)
- (b)- Before a state agency may use appropriated
money to make a capital expenditure for a state
facility purpose, the state agency must determine
whether the expenditure could be financed with
money generated by a utility cost savings
contract -
- (c) If it is practicable to do so, a state
agency that is using appropriated money must
finance a capital expenditure for a state
facility purpose with money generated by a
utility cost savings contract. - (d) If it is not practicable for a state agency
that is using appropriated money to finance a
capital expenditure for a state facility purpose
with money generated by a utility cost savings
contract, the state agency must provide
justification to the comptroller for the capital
expenditure.
14Other Initiatives
- RP 49 Executive Order
- SB 5 Efficiency Mandates for buildings
- Utility Standard Offer Programs
- Other Utility Incentives
- State Council on Competitive Govt (CCG)
15Performance Contracting Overview
- Scott Naab
- Trane Comprehensive Solutions
16What problems do you face at your facility?
- Limited budgets
- Maintenance problems
- or comfort complaints
- Limited expertise on technologies
- Too many demands on staff time
- to launch new projects
- Yetyou want to replace equipment
- and modernize your facilities
17If you face these problemsyou are not alone
- An Innovative Solution
- Energy
- Performance
- Contracting
- a smart way to get better buildings
18Energy Performance Contracting
Projects pay for themselves!
Savings stack up over time
19Heres How It Works...
- Money otherwise owed to the gas or electric
utility pays for equipment!
Annual Budget
Annual Budget
20How is the project funded?Multi-Year
Lease-Purchase Agreement
Annual Budget AFTER Improvements
- Financed through TPFA master lease program
- Annual cost savings exceed annual payments
- 15-year financing term (per legislation)
- Does not impact debt ceiling
- Endorsed by State Legislature Governor
- Results guaranteed by the ESCO
The money saved from the operating budget is used
to make the payments!
21Other Financing Options
Annual Budget AFTER Improvements
- Tax-Free Municipal Lease Purchase
- SECO LoanSTAR funds
- Proceeds of bonds
- Contract with the provider of the Energy
Conservation Measures - Utility Rebates
- Grants
The money saved from the operating budget is
used to make the payments!
22 What about risk?Performance
Contracting projects are significantly lower
risk than traditional projects
- Design build process gives agency control of
outcome - Single point of responsibility eliminates finger
pointing - Guaranteed Results
- The equipment will perform as intended
- The project will perform financially as intended
- The ESCO is obligated contractually by a
guarantee
Annual Budget AFTER Improvements
23 Performance Contracting is a Better
MethodThe ESCO is fully accountable for
project performance, costs and savings!
24Measurement and Verification of Project
Performance
- Established Protocols for Measurement and
Verification (MV) - IPMVP - International Protocol for Measurement
and Verification Procedures - MV Plan is required to be reviewed by third
party engineer - It is possible to measure actual performance !
25Some Example Measures
- Lighting Improvements
- Projects
- Replace fluorescent tubes ballast
- Replace fixtures
- Benefits
- Easily pays for itself within its lifetime
- Cuts energy cost of lighting system by 25 or
more - Improved lighting quality
- Better indoor environment
- Cooler rooms on hot days (less heat from lighting
system) - Leveraging opportunity buy other equipment with
savings from lighting -
26Some Example Measures (cont.)
- Heating System Improvements
- Projects
- Replace old boilers
- Upgrade with better controls
- Benefits
- Improved comfort
- Better internal environment
- Solve maintenance problems
- Eliminate the need to buy boiler
replacement from capital funds
27Some Example Measures (cont.)
- Water Utilization Improvements
- Projects
- Replace faucets and fixtures
- Improve irrigation systems and controls
- Benefits
- Pays for itself through water savings
- Improved application
- Solve maintenance problems
- Modernize optimize systems
28Other applications/opportunities
- Biomass
- Renewables
- Solar
- Geo Exchange
- Wind
- LEED certification
- Utility rebates
- Grant money
29A Key Differentiator of the process..
- Your Partnership with an
- Energy Service
- Company (ESCO)
-
30Your ESCO will put the pieces together
- Identify and evaluate opportunities (energy
audit) - Design systems (engineering), specify purchase
- Manage construction
- Arrange for financing
- Provide long-term energy management services
- Guarantee performance!
315 Steps to Success
- Decide if performance contracting is right for
you - (Assess your needs potential benefits)
- Issue an RFQ
- (Select Energy Services Company (ESCO)
- ESCO identifies energy-saving opportunities
- (Execute an audit contract)
- Savings verified by an Engineer
- (Approved by State Energy Conservation Office)
- ESCO implements projects
- (Develop and execute an Energy Performance
Contract)
32Many Advantages of Performance Contracting
- Better Buildings! Improved Comfort! Maintenance
Problems Solved! - Pay for projects with no up-front funds (your
utility budget pays for the projects) - One-stop shopping (single contract for multiple
projects)
33Many Advantages of Performance Contracting (cont.)
- ESCO Expertise from onset to completion
- Energy efficiency
- Operation and maintenance of buildings
- Project cost assessment
- Project financing
- Construction management
- Comprehensive, whole-building approach
- Training for your staff
- Ongoing project monitoring and trouble-shooting
to ensure sustained savings
34How to get Started
- Contact SECO
- http//www.seco.cpa.state.tx.us/sa_pc.htm
- Theresa Sifuentes,
- State Energy Conservation Office
- Program Manager
- (512) 463-1896
35Questions