Measurement

1
Measurement Verification Section

• Part 1 MV Overview
• MV in the Five Phases
• Part 2 Risk Assessment
• Risk Assessment and Allocation
• Part 3 FEMP M V Methods
• Methods and Applications
• Part 4 M V Plan Review
• Checklist
• Part 5 M V Case Studies
• Application of lessons

2
Part 1 MV Overview

• Purpose of MV
• MV in the five phases
• Contractor responsibilities
• Owner responsibilities

3
Purpose of MV
Purpose of MV

• Performance Contracting is an arrangement where
  the exact benefits are only known afterwards
• There is an element of risk related to the
  uncertainty of the delivered benefit
• MV quantifies the savings
• MV allocates risk between parties
• MV supports the guaranteed savings

4
Savings
Purpose of MV

• ESPC can recognize two types of savings
• Energy Cost Savings
• Energy-Related Cost Savings

5
Energy Cost Savings
Purpose of MV

• Reductions in energy use
• Reductions in peak demand
• Reductions in energy rates
• Shifting time-of-use to lower-cost periods
• Converting to less expensive fuels
• Self-generation (and cogeneration / CHP)
• Reduced water and other utility use

6
Energy-Related Cost Savings
Purpose of MV

• Energy-related cost savings are primarily due to
  reduced OM expenses
• Parts labor costs
• Emergency repair costs
• Equipment replacement costs
• Cost savings must come from existing budgets or
  it will be difficult to pay the ESCO!

7
Super ESPC is Guaranteed Savings
Actual saving will fluctuate, but should always
be greater than the guaranteed amount
Actual Estimated Guaranteed
Savings
1 2 3 4 5 6 7 8 9 10 11 12 13
14 Contract Year
8
Why You Need MV
Purpose of MV

• Savings are guaranteed, but actual savings
  fluctuate every year
• MV demonstrates guarantee is met
• MV identifies problems
• MV verifies continued success of projects
• What you dont measure, you cant manage (Jack
  Welch, former GE CEO)

9
MV During the Five Phases
10
Phase 1 Planning

• What are project motivators?
• Improved comfort, better performance
• Reduced energy costs
• Reduced OM costs
• What does MV need to accomplish?
• Monitor equipment performance
• Find additional savings
• Improve OM
• Enforce guaranteed savings

11
Owner Responsibilities

• Define project goals in terms of
• Necessary performance improvements
• Energy cost savings
• Energy-related cost savings
• Define MV requirements
• Total energy cost savings
• Equipment performance
• Long-term verification
• These need to be included in the RFP!

12
Phase 2 Project Development

• Contractor Responsibilities
• Complete Risk Responsibility Matrix
• Develop MV Overview in Initial Proposal
• Explain and justify overview
• How will risks responsibilities be assigned?
• How will contractor prove performance?
• What will be measured?
• What will not?

13
Responsibility Matrix

• The Risk Responsibility Matrix describes how
  the contractor will address risk factors that
  affect savings and project economics. These are
  broadly characterized as
• Financial and Economic
• Facility Usage and Operations
• Equipment Performance
• RR Matrix drives MV Overview

14
MV Overview

• The MV Overview (a.k.a. Initial MV Plan) is
  submitted as part of Initial Proposal. It is not
  a complete plan, but
• Describes intended approach
• Purposely lacks detail
• The MV Overview allows the Owner and the
  contractor to develop a satisfactory MV Plan
• The MV Overview drives the Detailed Energy Survey

15
Owner Responsibilities

• Owner Responsibilities
• Discuss planned physical or operational site
  changes with contractor
• Provide energy use and rates to contractor
• Review RR Matrix, MV Overview and assumptions
• Provide critical comments and feedback
• Engage Project Facilitator and third-party support

16
Phase 3 Negotiation and Award

• Contractor Responsibilities
• Modify Risk Responsibility Matrix
• Perform Detailed Energy Survey and document
  baseline information
• Finalize Site-Specific MV Plan
• Develop ECM Commissioning Approach

17
Detailed Energy Survey

• MV Plan drives Detailed Energy Survey (DES)
  activities
• The Detailed Energy Survey defines the baseline
  of the facility, which consists of
• Energy use and cost history
• Equipment list and measured performance
• Factors that influence energy use
• Operations and maintenance costs
• If this information is not documented, it is
  lost. It cannot be determined after
  installation.

18
Site-Specific MV Plan

• RR Matrix drives MV Plan
• The Site-Specific MV Plan includes
• What will be done (and when)
• How will performance be verified
• Who will conduct these activities (and when)
• How will savings be calculated
• How will baseline be adjusted to account for
  varying conditions
• OM reporting requirements for Owner

19
Commissioning Approach

• ECM Commissioning (Cx) approach is not a complete
  plan
• Describes (generally) how each ECM will be
  commissioned prior to acceptance

20
Owner Responsibilities

• Review MV Plan and Cx Approach
• Provide critical comments and feedback
• Approve Site-Specific MV Plan and Cx Approach
• Participate in and witness DES activities
• Review DES baseline information
• Engage Project Facilitator and third-party
  support

21
Phase 4 Implementation

• Contractor Responsibilities
• Submit Commissioning Plan
• Commission measures
• Submit Commissioning Report and
  Post-Installation Report

22
Commissioning Plan Report

• Commissioning (Cx) is the process of ensuring
  that systems are installed, tested, and capable
  of meeting design intent
• The Commissioning Plan defines start-up
  procedures and functional performance tests for
  each piece of equipment as well overall systems
• The Commissioning Report documents the
  commissioning activities and any issues that were
  discovered and resolved

23
Post-Installation Report

• The contractor submits the Post-Installation
  Report after the project has been installed. It
  includes
• Project description
• List of installed equipment (as built)
• Performance measurements
• Expected savings for the first year

24
Owner Responsibilities

• Witness MV and commissioning activities. Be
  involved!
• Approve Commissioning and Post-Installation
  reports
• Engage Project Facilitator support

25
Phase 5 Performance Close-Out

• Contractor Responsibilities
• Provide agreed-upon performance-period services
• Perform required operations maintenance
• Submit Annual Reports
• Take corrective action (if needed)
• Annual savings reconciliation (if needed)

26
Annual Reports

• The contractor submits Annual Reports to
  demonstrate that savings have occurred. They
  should include
• Project description
• Performance measurements this year
• Realized savings for the year
• Comparison to the guaranteed amounts
• Reports should also contain
• Problems that need Owner attention
• Operations maintenance and repair replacement
  activities conducted

27
Owner Responsibilities

• Contract administration
• Perform agreed-upon operations maintenance
• Submit proof of preventive maintenance
• Witness verification activities
• Review approve Annual Reports
• End of contract term

28
Review and Discussion

• Actual savings from Super ESPC are only known
  after project implementation
• Savings guarantees are only as good as the MV
  supporting them
• The Owner sets the MV goals the ESCO implements
  the plan

29
Review Questions

• Why is MV needed?
• Who is responsible for MV?
• How are MV and commissioning different?

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