STEPS TO SUCCESS WITH FCIP

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STEPS TO SUCCESS WITH FCIP

• Ryan Freed
• Kansas Energy Office

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What We Will Discuss

• What is Performance Contracting?
• The Benefits of Performance Contracting
• Potential Projects
• What is the FCIP?
• How to Participate in the FCIP
• The Cost of FCIP participation

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What is Performance Contracting?

• Provided by an Energy Service Company (ESCO)
• Improvements provide utility operational
  savings
• Reduced Utility Operational costs pay for cost
  of project
• ESCO guarantees performance of project

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Performance Contracting Benefits

• Extends Capital Dollars
• Life-Cycle Cost vs. First Cost
• No more Weve always done it that way
• ESCO designs and builds project
• Guaranteed performance
• NO CHANGE ORDERS

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Potential Projects

• Lighting daylighting, new lamps ballasts
• Heating Replace boilers, steam traps, pumps
• Cooling Replace chillers, cooling towers, etc
• Controls New Energy Management Systems
• Water Low-flow fixtures, waterless urinals
• Buildings Shell Insulation, windows, roofs
• Alternative Energy wind, solar, geothermal
• New Construction All utility-impacted systems
• .More

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What is the FCIP?

• Legislative Authority (KSA 75-37,125)
• Streamlined State Contract
• Pre-approved ESCOs
• Technical, legal, financial oversight
• Customer representation throughout process

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FCIP Benefits

• Standard Contract no surprises
• Pre-negotiated Markups Audit Costs
• No need for RFP
• FCIP Oversight
• FCIP Workshops for all Staff

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Who Can Participate?

• Any Public Agency
• State, County, City
• Statute allows any Political Subdivision
• Non-Profit Organizations

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What is the Process?

• Four Main Steps
• Preliminary Audit
• Investment Grade Audit
• Energy Performance Contract
• Measurement Verification

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Preliminary Audit

• Arrange Site Tour by Selected ESCOs
• No Cost to Customer
• FCIP Participates in all steps except selection
• ESCOs Present to Customer Customer Selects ESCO
  for Investment Grade Audit

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Investment Grade Audit

• Standard contract signed by Customer, ESCO and
  FCIP
• Intense site survey
• FCIP Reviews Audit Workshop w/ Customer
• No charge if no project found

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Energy Performance Contract

• Customer ESCO determine final scope of project
• ESCO helps arrange financing
• FCIP Reviews Contract Workshop w/ Customer
• Open-Book Pricing

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Measurement Verification (MV)

• ESCO proves performance
• MV period length varies customer choice
• FCIP reviews MV, provides customer assistance,
  settles disputes

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The Cost of FCIP Participation

• FCIP is a fee-funded program
• Fee is based on formula
• 4 of the first 100,000 of the project amount
• 3 of the next 400,000 of the project amount
• 2 of the next 500,000 of the project amount
• 1 of the next 4,000,000 of the project amount
• ½ of the any amount in excess of 5,000,000
• Fee paid only if Performance Contract signed
• Fee can be part of financing

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What Has Been Done?

• 147 Million Total Project Costs
• More than 11 million in Annual Savings!!
• 7 Cities
• 6 Counties
• 6 Community Technical Colleges
• 15 State-Owned Buildings
• 11 University Projects
• 21 USDs

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Summary

• FCIP provides budget-neutral facility upgrades
• FCIP oversight provides confidence to staff and
  public
• Customers staff can focus on performance, not
  process

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Any Questions?

• Ryan Freed
• Kansas Energy Office
• 785-271-3152
• r.freed_at_kcc.ks.gov