Energy

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Energy Facility Renewal Solutions forPost
Secondary Education FacilitiesFunding Site
Improvements Through Energy Efficiency
Luis Rodrigues Darryl Hill May 30, 2007
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IntroductionCorporate Overview
Proud 122 year heritage
120,000 employees in nearly 100 countries
A Fortune 100 company31.4B in sales
David M. Cote Chairman and CEO
1.4B in sales in Canada
4,900 employees in Canada
Over 75 years in Canada
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Todays Agenda

• Introduction
• Challenges
• Performance Contracting
• Program Development
• Implementation
• Additional Considerations
• The Owners Perspective
• Summary
• Question and Answer

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Growing Challenges and Concerns
Escalating energy costs, volatility and energy
security
Rising operating costs
Attracting faculty and students
Faculty/student safety and security
Aging facilities and deferred maintenance
World class learning experience
Reduced levels for investment in new
infrastructure
Conflicting priorities for available capital
Environmental policies
Productivity concerns
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An Effective Solution The Power of Performance
Based Contracting
Why is Performance Based Contracting an effective
solution?
A comprehensive self-funded program whereby
the equipment and technology installed to
modernize buildings and facilities is paid by
guaranteed energy and operational savings
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An Effective SolutionThe Power of Performance
Based Contracting
Solutions to Short-term Long-term Challenges
Fixing Existing Problems Unplanned
repairs Building damage Life safety
concerns Environmental issues Security challenges
Capital Improvements Capital cost
avoidance Equipment upgrades Deferred maintenance
Facility renewal
BudgetingProcess
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An Effective Solution The Power of Performance
Based Contracting
Other Benefits to Performance Contracting
Fixing Existing Problems
Capital Improvements

• Proactively address facilities renewal deferred
  maintenance
• Enabler to implement the multi-year capital plan
• Enhance learning environment through better
  facilities
• Redirect savings towards education priorities
• Address environmental stewardship goals
• Create a sustainable savings program

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A Comprehensive Solution
Mechanical Central Plant
Lighting systems
Building envelope
Capital cost avoidance opportunities
Longer term programs provide additional
opportunities to enhance results
Infrastructure improvements
Ventilation and air quality improvements
Productivity enhancements
Environmental compliance concerns
Energy awareness programs
Security
Renewable energy initiatives
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Selecting the Right PartnerKey to a Successful
Long-Term Program
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How the Process WorksDisciplined Program
Development is an Absolute
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How the Process WorksDisciplined Program
Development is an Absolute
Step 2
Create Letter of Intent
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How the Process WorksDisciplined Program
Development is an Absolute
Step 3
Step 2
Create Letter of Intent
Program Development
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How the Process WorksThe Contract Financing
Performance Contract
Program Financing

• Defines responsibilities of both parties
• Establishes baseline measurement performance and
  savings measurement and verification plan
• Annual savings reconciliation process
• Designed to guarantee self funding mechanism
  through entire program period

• Arrange most suitable approach
• Internal vs. external options (banks, other
  lending institutions or through service provider)
• Strategize various cash-flow models, consider
  existing operating and capital budgets
• Consider the impact of available grants, utility
  rebates, and other funding sources

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How the Process WorksTypical Contract
Financing Approach

• During Project Construction

During Performance Period
Structured so guaranteed savings stream funds
payment obligation
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How the Process WorksEnergy Intensity vs.
Facility Condition
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How the Process Works
Step 3
Step 2
Create Letter of Intent
Program Development
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Project Management is CriticalAttention to
Detail Paramount in an Occupied Education Facility
During the Project
Pre-project
Post-project
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• Additional Considerations

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Taking the Risk Out of Major Site
ImprovementsAllowing Facility Staff to Take
Ownership
Staff Training
Training is critical to help your maintenance
staff to better manage change and ongoing
facility management

• Training of front-line staff to upgrade their
  skills
• Orientation to goals and new technology
• Relevant content from different areas
• Customized programs by the service provider
• Training at suppliers facilities
• Government training programs (NRCan)

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Taking the Risk Out of Major Site
ImprovementsSupplement Facility Staff - if
Required
Support Services
A program tailored to meet the facilitys
particular needs is important

• Warranty response
• Emergency 24 X 7 response
• Equipment maintenance
• Comprehensive agreements vs inspection services
• Enhanced technical services
• Emerging technologies briefings
• Energy monitoring services
• Regulatory consulting

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Proactive Internal External EducationCommunicat
ion is Critical in Post Secondary Facilities
Employee Communication - Internal
Provides information to faculty and
students Alleviates feelings of
uncertainty Communicates implementation progress
and milestones Ongoing conservation awareness
maximizes results

• Public Relations - External

Positive messages to the community Responsible
program to address cost control, facilities
renewal and environmental stewardship
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• The Owners Perspective

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The Owners PerspectiveConfederation College
Why the College Chose the Program

• Utility costs were growing faster than any other
  cost
• In 1997 costs were 1.99/ft2, Ontario average was
  1.36
• Deferred maintenance costs were about 9M
• Looked to the program to provide
• Alternative, guaranteed funding from utility
  savings
• Reduce deferred maintenance
• Environmental program cornerstone

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The Owners PerspectiveConfederation College
Results

• Utility reduction 2001-2005

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The Owners PerspectiveConfederation College
The Bottom Line

• 2005-06 costs 1.83/sf vs Ontario College
  average of 2.16/sf

4M Positive Cash Flow 2M Deferred Maintenance
reduction
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The Owners PerspectiveMemorial University of
Newfoundland and Labrador
Why Memorial Chose the Program

• Continuing to build on the phase 1 success story
• Reduce and control escalating utility costs
• Improve operational efficiencies
• Address deferred maintenance issues and capital
  renewal
• Proactive environmental stewardship
• Including promoting stewardship beyond just their
  facilities
• The guarantee self funded value proposition

Excellent buy-in from all levels within the
University
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The Owners PerspectiveMemorial University of
Newfoundland and Labrador
Results

• Will reduce utility and operational costs by
  1.6M annually and address capital renewal
• Environmental benefits
• Cost neutral conversion from bunker C 6 oil to
  cleaner burning 2 oil
• Reduce green house gas emissions by 7,310 tons
• Implemented a comprehensive communications
  strategy
• Students incorporated in the program

Significant improvements and benefits to Memorial
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Atlantic Canada Community CollegesCurrent
Activity
Nova Scotia Community College

• Working with Daniel Kelly to identify and develop
  self funded facility renewal program
• Conducted site visits and utility analysis for
  Nova Scotia campuses

• New Brunswick Community College

• Participated in the APCCC college greening forum
• Potential pilot project at the Moncton Campus
  that will involve the students
• Working with Stephen Ethier to develop the Energy
  Management and System Technology program
  curriculum

College of the North Atlantic

• Completed successful EPC/Facility renewal
  programs at four campuses including Gander,
  Burin, Clarenville, Baie Verte

Holland College

• No current activity

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Summary
Significant Benefits for Post Secondary Education
Facilities
Reduce energy consumption and costRedirection of
energy spend to fund improvements Address
deferred maintenance and facility
renewalImproved facilities for students and
faculty Environmental stewardshipConserving
resources for the future Guaranteed
outcomesResponsible initiative for
facilities Performance Contracting is
provenInnovative but proven results across
Canada
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Question Answer