Minimal risk to the client
P ROGRAM S TRUCTURE P ROJECTS U TILIZED
Qualifi llocated; te ard on a first ; EA
onth; has typically been
Schneider Electric has worked extensively with tax credit bonds over the past couple of years on many projects, so we have tremendous
experience in preparing the appropriate information for our member to apply.
Schneider Electric has implemented the following projects utilizing Qualified Tax Credit Bonds:
Liberty Hill ISD Bandera ISD • Valley View ISD • Brazosport ISD
• Montgomery County, Alabama ed Tax Credit QZABs apply thro
Bond Programs (QSCB, QECB,
• Interest rates typically below 2%
QZAB) • The term of the loan is varies • • • Loan amount determined by
to entity amount allocated
• QSCBs already a
QECBs subject to $1,000 application fee to the Sta Bond Review Bo come, first served basis
ugh T
per m 15-20 years
• Davis-Bacon ARRA wage regulations apply
• Savings are now applied as a the entity direct subsidy to
instead of a tax credit
State Energy ayback maximum
C e L
Schneider Electric was the first ESCO to use this program
• Graham ISD-first project Texas K-12 projects
• Texas Health and Human Services Commission
ons rvation Office
oanSTAR • No interest charged during • Other Program construction
• 3% Interest rate • 10 year simple p
• Revolving Loan program d by SECO administere
Tax Free Municipal Lease Purchase
vehicle used by ESCOs • 5+% interest rate • 20 year maximum term
beginning after construction • Flexible structures available
• Corpus Christi ISD
• Majority of K-12 and other city/county projects
• Most common financing •
Texas Woman’s University
Utility Standard Offer Incentives
(SOPs) rebate $/kWh and demand.
• Many rules governed by PUC • Similar Application processes
between different IOU’s • Different $ available by IOU
• Schneider Electric applies for SOP rebate dollars on every project where it is available. • Schneider Electric utilizes all rebate dollars
to buy down project costs.
• Schneider Electric has open book policy regarding SOP rebates
• IOU Standard Offer Programs
and by program year
million in SOP rebate dollars for Texas clients
• UNTHSC, Austin State Hospital & State School, TWU and others
Schneider Electric has obtained over $2
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The Cooperative Purchasing Network (TCPN)
Request for Proposal (RFP) Energy Performance Contracting Services Solicitation Number 12-54Schneider Electric will assist our members with the application process for any of the above financing
: Energy Efficiency & Conservation Block Grants ECBG), State Educatio
trict (ISD), Texas
Virginia , Texas Pennsylvania sylvania (Phase 4) nnsylvania ssouri Arkansas ennsylvania
ices Administration – Region 7 (Federal) st Region (Federal)
irst and foremost, the Davis-Bacon Act and the Buy American Provisions are
ions during the development, installation, and post-construction phases of a project.
ere are also ongoi arterly
a more seamless installation period and a reduction in the hours spent on ARRA paperwork. options. Typically, the application process will occur while Schneider is developing the project in order to save time and keep the development moving. Schneider will also assist in providing all relevant construction documentation for State and Federal approval of funding.
ARRA Specific Experience
Schneider Electric is currently under contract with multiple clients that are utilizing various programs within the American Recovery and Reinvestment Act (ARRA) funding for performance-based contracts; these funding programs most commonly include
(E n Program (SEP), and/or Qualified School Construction Bonds (QSCB). This client list includes, but is not limited to:
• Bandera Independent School Dis
• Biloxi Public Schools, Mississippi
• Brazosport ISD, Texas
• Buena Vista City Public Schools,
• City of Abilene, Texas (Phase 2)
• City of Houston – Hobby Center
• City of Houston, Texas (Phase 2)
• Cranberry Area School District,
• Hiram G. Andrews Center, Penn
• Liberty Hill ISD, Texas
• Mahanoy Area School District, Pe
• Marceline R-V School District, Mi
• North Little Rock School District,
• Panther Valley School District, P
• Piedmont City Schools, Alabama
• Prince William County Government, Virginia
• Roanoke City Schools, Alabama
• Shelby County Government, Alabama
• U.S. General Serv
• U.S. Navy – Southea
• U.S. Navy – Northwest Region (Federal)
• Valley View ISD, Texas
Schneider Electric has developed multiple processes necessary to remain compliant when working with ARRA-funded projects. F
two items that can have a significant impact on the procurement of a project and can cost the client and/or contractor if not adhered to correctly. Schneider Electric has had significant experience in following these provis
Th ng federal reporting requirements that require weekly, monthly, and qu reporting; some of these requirements include weekly wage reporting for the Davis-Bacon Act and quarterly Federal reporting on Form 1512. In addition, Schneider Electric has already developed the necessary reporting tools and brings a tremendous amount of experience to our members; this will
quate to e
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The Cooperative Purchasing Network (TCPN)
Request for Proposal (RFP) Energy Performance Contracting Services Solicitation Number 12-54The Savings Guarantee
Schneider Electric will adhere to International Performance Measurement and Verification Protocol (IPMVP). This approach eliminates uncertainty in energy savings, because we simply look at energy use before vs. energy after a project. The IPMVP Manual can be downloaded from the Department of Energy
ebsite in PDF format. Upon request, we will email the file to you.
w Metrix™ Utility Accounting System
energy savings realized
s are
ontracting project. The first is to
Savings = Baseline Energy Use - Post-Installation Energy Use
he equitable and accurate way to calculate initial energy savings potential is to develop a spreadsheet, hich duplicates your utility’s rate structure and billing calculations on a meter-by-meter basis. This is the pproach Schneider Electric uses during the detailed audit phase of every project we implement. Duplicating your utility’s actual billing calculations is critical because, depending upon the rate structure, a kilowatt-hour of electricity saved may be worth different amounts of money depending upon when and will be used for tracking and generating savings reports. Furthermore, Schneider Electric has subscribed to Accu-Data®, the real-time, interactive total weather database from Accu-Weather, Inc., the world’s leading commercial weather service. This will provide weather information from the closest North
merican Hourly/Special Surface Observation Site. A
Schneider Electric accounts for two types of savings during a performance contract: energy units and dollar
avings. The s
by our members during a given month are calculated by subtracting the current month’s amount of energy consumption from the corresponding baseline month’s energy
onsumption. The dollar saving c
calculated by first applying the current ility rate to the current month’s ut
energy. The same rate is then applied to the base month’s energy. Finally, savings figures are obtained by subtracting current dollars from base dollars. It is extremely important
to note that calculations are based on real rates that you pay to your electric and gas company. Savings calculations are performed separately for natural gas and electricity, and are added together to give the
otal energy cost savings during that month. t
Financial Guarantees
There are two steps to determining the effects of a performance c
establish a “baseline” energy usage for each utility meter. Measuring the savings that occur is done by tracking the difference between the baseline energy usage and the energy usage that occurs after the project is implemented. The process of tracking this difference is commonly referred to as measurement and verification (M&V).
Different methods of initial savings potential calculation and savings verification are used by different ESCO’s. In general:
Since energy use at a facility is rarely if ever constant, another way to look at the definition of M&V is comparing post-installation energy use with what the facility would have used if the ECMs had not been installed.
T w a
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The Cooperative Purchasing Network (TCPN)
Request for Proposal (RFP) Energy Performance Contracting Services Solicitation Number 12-54where it is saved. Then, once Schneider Electric’s engineers have determined what the energy consumption will be for each meter after we implement each ECM, the resulting energy consumption can be entered into your appropriate utility rate sheet to calculate what the utility bill will be after the ECM is
When measuring and verifying energy saving hneider Electric adheres to the International erformance Measurement and Verification Protocol (IPMVP), the IPMVP is an industry standard with
vings Calculation Method
actors (e.g., lighting operating hours or cooling ton-hours) are stipulated based on analysis of historical data or spot/short-term measurements. Performance factors and proper operation are measured or checked annually. Engineering calculations using spot or short- term measurements, computer simulations, and/or historical data may be used.
Option B: Savings are determined after project completion by short-term or continuous measurements taken throughout the term of the contract at the device or system level. Both performance and operations factors are monitored. Engineering calculations using metered data.
Option C: After project completion, savings are determined at the “whole-building” or facility meter level using current year and historical utility meter or sub-meter data. Analysis of utility meter (or sub-meter) data using techniques from simple comparison to multivariate (hourly or monthly) regression analysis. Option D: Savings are determined through simulation of facility components and/or the whole facility. Calibrated energy simulation/modeling; calibrated with hourly or monthly utility billing data and/or end-use metering.
Most building applications call for the use of Option C, the “whole-building” or meter-by-meter approach. We believe in guaranteeing savings in this manner because that is how you pay your utility bill, meter by meter. When characteristics of a particular building or system warrant, we may use one of the other options.
implemented. The difference between the before or “baseline” bill and the after bill is the dollar value of the calculated energy savings for that meter.
Using an “assumed” constant value for each kWh of energy saved, as many ESCOs do, overstates the true value of the energy saved. This creates a disparity between the amount of savings the ESCO claims to have achieved and the amount of savings our members’ facilities would actually realize.
Following project implementation, Schneider Electric’s performance assurance support services (PASS) department takes over the project throughout the guarantee period. Schneider Electric is one of the few companies to maintain a department whose sole responsibility is the measurement and verification of savings.
s, Sc P
guidelines for baseline energy usage determination and post-project energy savings verification. Our commitment to this standard ensures our members that savings calculation and verification will be repeatable and verifiable.
The IPMVP allows for four (4) options for savings verification. They are:
&V Option Sa M
Option A: Focuses on physical assessment of equipment changes to ensure the installation is to specification. Key performance factors (e.g. lighting wattage or chiller efficiency) are determined with spot or short-term measurements and operational f
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Use or disclosure of data contained on this sheet is subject to the restriction on the table of contents of this proposal
The Cooperative Purchasing Network (TCPN)
Request for Proposal (RFP) Energy Performance Contracting Services Solicitation Number 12-54The Schneider Electric contract contains specific information about financial guarantees. Following is an excerpt from the contract:
In the event the Actual Savings are less than the amount stated above, ESCO may, at its sole option, either pay Member the net present value of the series of annual savings reconciliations at 5 % interest
ate, each calculated as the difference
r between the Annual Savings Guarantee and the Actual Savings
dology as set forth in
Guaranteed Savings for the corresponding twelve (12)
espect to a s
performance and payment bond.
amount for the corresponding twelve (12) months, calculated as shown herein, or ESCO may elect to pay only for the savings shortfall to date and extend the measurement period for twelve (12) months at no cost to Member. ESCO will make payments for any savings shortfall to Member within thirty (30) days of that year's Savings Reconciliation. At the end of this extended measurement period, ESCO will again
etermine the savings for the remaining guarantee periods using the metho d
Schedule D and will again choose to reconcile any shortfalls with the same options presented at the conclusion of the initial measurement period. ESCO will make payments for any savings shortfalls to Member within thirty (30) days of the Savings Reconciliation.
-OR- n the event the Actual Savings are less than the I
months, ESCO will pay Member the difference between the Annual Savings Guarantee and the Actual Savings for the corresponding twelve (12) months. ESCO will make payments for any savings shortfall to Member within thirty (30) days of that year's Savings Reconciliation. In the event that there are any Excess Savings, such Excess Savings shall be used to offset any payments made by ESCO with r
ny hortfall.
Schneider Electric Energy Solutions honors a lump sum, fixed price for the defined scope of work, following a Detailed Energy Audit report performed by Schneider Electric. Additionally, we offer a bid
ond and a b
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The Cooperative Purchasing Network (TCPN)
Request for Proposal (RFP) Energy Performance Contracting Services Solicitation Number 12-54Risk Mitigating Strategies
Schneider Electric guarantees energy savings based on actual unit costs. Many companies use an average or blended cost derived from dividing total kWh by total dollars. This approach ignores the effect of demand charges and tends to overstate savings. Schneider Electric believes in calculating savings the same way you are charged for usage.
Sch id s, as well as any calculations needed to adjust the as e and national weather service data. We also
g guaranteed
av s out approval
nd r
ffers over a decade of experience with projects both large and small where our
conciliation is located in Schedule C of the Schneider Electric Energy Services
antee
One t ng that differentiates us from
ost companies is our attitude toward using “operational” savings as guaranteed savings. One of the
Schneider Electric believes in using only savings which are real and verifiable to document
ne er Electric includes baselines in our contract elin . All calculations are based on ASHRAE formulas b
include a measurement and verification plan developed during the detailed audit. This M&V plan follows the IPMVP standard for measuring and documenting post retrofit energy savings.
chneider Electric assumes the risk associated with performance contracting and achievin S
s ing , assuming the system is operated as designed and no modifications are made with ag eement by both parties.
a
If Schneider Electric should fail to meet the guaranteed energy savings, we will write a check in the amount of the savings shortfall to the member.
chneider Electric also o S
members have received exactly what we promised them. This spotless history, in and of itself, is the best way to reduce risk for our members. Past performance is the best indicator of future expectations.
• Frequency of Reconciliation
Schneider Electric will reconcile energy savings once per year. The section of the Schneider Electric ontract that pertains to re
c
Contract
• Repayment of Missed Savings
In the event of missed savings, Schneider Electric will begin the process of repayment. Schneider Electric will first try to understand why the shortfall has occurred. Because Schneider Electric is continuously monitoring the member’s usage, a lot of this research is done before the end of the anniversary of the Savings Guarantee Commencement Date. If it is determined that the shortfall has occurred because of a deviation from the original contract, i.e. – not using the schedules outlined in the contract, adding square footage to a meter being monitored without notifying Schneider Electric, not using the set-points set forth in the contract, etc. – then adjustments to the savings figure are made. If a shortfall still remains after adjustment, Schneider Electric will write a check for the adjusted amount. If it is determined that the shortfall is through no deviation of the original contract then a check will be cut for the full difference. Payments for any savings shortfall will be made by Schneider Electric to our member within 30 days of that year's annual Guaranteed Savings Reconciliation.
• Treatment of “Operational” (non-utility) savings as they pertain to the guar of he aspects of Schneider Electric’s approach to performance contracti m
results of entering a guaranteed energy savings partnership with Schneider Electric is the installation of various pieces of new mechanical, lighting, and control system equipment. The effect of replacing old equipment with new or using new equipment to automate processes previously performed manually is an improvement in the efficiency of the member’s facility maintenance department. While this efficiency improvement results in some sort of savings to the member, this “operational” savings is in many cases not quantifiable or verifiable and therefore, should not be used as guaranteed savings.
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Use or disclosure of data contained on this sheet is subject to the restriction on the table of contents of this proposal
The Cooperative Purchasing Network (TCPN)
Request for Proposal (RFP) Energy Performance Contracting Services Solicitation Number 12-54projects. Any non-energy savings included in a savings guarantee add risk to the member and increase the potential for financial shortfalls in future years. In most instances, “operational”
avings add more risk than value to the project. In some instances it may be appropriate to
es (PASS) Contract must be renewed on a yearly basis. If the member chooses not to renew PASS, then it is impossible for Schneider Electric to monitor and verify savings, thus voiding the guarantee.
• If measured specific guarantees are or are not used, explain how and to what extent Measured Specific Guarantee - Option B (IPMVP)
s
guarantee some type of operational savings. If this is done, those “savings” must be thoroughly understood and quantitatively agreed upon by the member and Schneider Electric to avoid financial shortfalls in future years of the guarantee.
• Any situations that would void the guarantee
In order to monitor and verify the guarantee, the Performance Assurance Support Servic
: Engineering calculations using metered data. - Savings are determined after project completion by short-term or continuous measurements taken throughout the term of the contract at the device or system level. Both performance and operations factors are monitored.