CCM Energy Efficiency Program

(1)

CCM Energy Efficiency Program

Town of Willington

Jerry Drummond, CEM, CEP

Sales Team Leader

Energy Solutions Siemens

Andy Merola, BEP

CCM Energy &

Program Development Manager

Energy Solutions, Siemens

(2)

Why now?

9

Y

’

di

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d ll

9

You’re spending these dollars now

in your operating budget and will spend these

dollars in FY ‘13 ’14

dollars in FY 13- 14

“The money needed for energy investments is already in the budget and

being spent on wasted energy.

The financing source for the Energy

Effi i

i

t

t i

i ht th

i

id d tilit

t ”

Efficiency investment is right there in avoided utility costs.”

Financing Energy Projects through Performance Contracting,

Shirley J. Hansen, Ph.D.

9

The decision isn’t “if” to spend, but “how”

The decision isn t if to spend, but how

“Government agencies spend more than $10 billion a year on energy —

while grappling with tightening budgets. Yet nearly one-third of the energy

used to run typical government buildings goes to waste.”

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(3)

What is Energy Savings

Performance Contracting?

ESPC is a Partnership:

9

No-upfront-cost

contract

ing method

9

Siemens (ESCo selected by CCM

member towns) installs improvements known as “Energy

member towns) installs improvements known as Energy

Conservation Measures” (

ECM

s)

9

Siemens is paid during construction from an escrow

f

account funded via municipal lease purchase agreement

9

Lender is

paid over time

from the energy, water,

operations and maintenance savings resulting from the

ECMs

9

Siemens

guarantee

s savings ≥ program costs;

if

t Si

Willi t

th diff

if not, Siemens pays Willington the difference

(4)

• Market alternative to a cash purchase or tax-exempt municipal bond issue

What

is

a

Municipal

Lease

Purchase

Agreement?

p

• Interest is exempt from federal taxation, allowing rates to be set lower than for

bonds, providing the municipality with significant cost savings

• Non-appropriation clause: municipal payment obligation terminates if it fails to

appropriate funds to make lease payments

• Municipality holds title to the leased equipment

Advantages include:

•

Fast, simple approval process

(as compared to issuing a bond referendum)

•

Reduced transaction costs

(most costs associated with bond financing are

eliminated)

(

•

Lower interest rates

(the interest income is tax exempt; the lessor passes these

savings to the municipality in the form of a lower interest rate)

•

Full financing

(covers all project costs; no down payment required; funding into an

escrow account ensures the municipality has deepest vendor discounts)

•

No large capital outlay

(project costs paid for as they are incurred; helps local

governments and school districts manage their capital reserve fund balances)

(5)

Where do we find savings?

f

h

d

ll

Out

of

Each

Energy

Budget

Dollar

75%

‐

80%

is

typically

used

as

intended

‐

for

heating,

20%

‐

25%

is

“wasted”

by

less

efficient

equipment

cooling,

ventilating,

etc.

and

funds

our

program

The

budgeted

dollars

do

not

change;

we

simply

use

dollars

that

otherwise

would

be

spent

on electricity and fuel oil to fund installation of new more efficient equipment;

CCM

Energy

Efficiency

Program

7/11/2013

5

7/11/2013

5

on

electricity

and

fuel

oil

to

fund

installation

of

new,

more

efficient

equipment;

(6)

How

do

we

budget

for

this?

(You

already

have)

(

y

)

Current Energy Budget

$231,329

Budget impact of “No”

Budget impact of “Yes”

$231,329

Budget impact of “No”

$231,329

Budget impact of “No”

$231,329

*

Willington receives

$757,500 in energy efficiency

Budget impact of Yes

$231,329

improvements with $0 capital cost

in a 17-year

program

entirely funded by $47,700 or 20.62%

annual energy savings from the existing energy

budget.

(7)

ECM Overview

Energy Management System (EMS)

• Control strategies

• Add ability to current control system

Programmable Thermostats

• Quick payback; will drive other measures

E

i

t d h

b ildi

• Ensures no energy is wasted when buildings are

unoccupied

• Increases occupant control

Cooler Controls

(8)

ECM Overview

Network Controller

• Network based PC control system to power down

machines when not in use

• Applies to every building

• Helps with IT department’s current initiative to reduce

Helps with IT department s current initiative to reduce

energy usage and waste

Lighting

• Incentives available from CL&P

• Good paybacks + O&M savings from longer life lamps

• Mix of LEDs, de-lamping, new lamps, new ballasts, and

(9)

ECM Overview

Building Envelope

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Wi d

d Ai S li

f

b ildi

• Doors, Windows, and Air Sealing for buildings

• New Insulation in FD Ceiling

School Boilers – financed and guaranteed

• School contracts directly with Hartford Steam Boiler

• Rebuild three boilers

Rebuild three boilers

• New burners

(10)

Completed & Next Steps

Completed:

9

Preliminary Energy Audit

9

P

t ti

f fi di

9

Presentation of findings

9

Recommendation to proceed to Detailed Energy Audit

9

Approval to proceed

9

Detailed Energy Audit completed

9

Presentation of findings

9

Multiple meetings with Willington staff to finalize scope of work

Next Steps:

9

Approval to proceed with project

9

Approval to proceed with project

9

Town counsel review of CCM-approved ESPC agreement

9

Construction (complete heating system

improvements by 10/15/13)

(11)

(12)

Years: Construction - 9

Construction

1

2

3

4

5

6

7

8

9

PROGRAM SAVINGS

Energy Savings

$

17,538

$

47,359

$

49,253

$

51,223

$

53,272

$

55,403

$

57,619

$

59,924

$

62,321

$

64,814

Annual Gross Savings

$

17,538

$

47,359

$

49,253

$

51,223

$

53,272

$

55,403

$

57,619

$

59,924

$

62,321

$

64,814

Cumulative Savings

$

17,538

$

64,897

$

114,150

$

165,374

$

218,646

$

274,050

$

331,669

$

391,593

$

453,915

$

518,729

PROGRAM COSTS

Principal & Interest

$

17,538

$

43,113

$

44,888

$

46,735

$

48,658

$

50,660

$

52,743

$

54,911

$

57,168

$

59,517

Performance Assurance

$

-

$

4,246

$

4,365

$

4,486

$

4,611

$

4,739

$

4,871

$

5,006

$

5,145

$

5,288

Annual Gross Costs

$

17,538

$

47,359

$

49,253

$

51,221

$

53,269

$

55,399

$

57,614

$

59,917

$

62,313

$

64,805

Cumulative Costs

$

17,538

$

64,897

$

114,149

$

165,371

$

218,640

$

274,038

$

331,652

$

391,569

$

453,882

$

518,687

CASH FLOW

Annual Net Cash Flow

$

-

$

0

$

1

$

2

$

3

$

5

$

6

$

7

$

8

$

9

Cumulative Net Cash Flow

$

-

$

0

$

1

$

3

$

7

$

11

$

17

$

24

$

33

$

42

Years: 10 through 17

10

11

12

13

14

15

16

17

Total

PROGRAM SAVINGS

Energy Savings

$

67,407

$

70,103

$

72,907

$

75,823

$

78,856

$

82,010

$

85,291

$

88,703

$

1,139,828

Annual Gross Savings

$

67,407

$

70,103

$

72,907

$

75,823

$

78,856

$

82,010

$

85,291

$

88,703

$

1,139,828

Cumulative Savings

$

586,135

$

656,238

$

729,145

$

804,968

$

883,825

$

965,835

$

1,051,126

$

1,139,828

PROGRAM COSTS

Principal & Interest

$

61,961

$

64,506

$

67,154

$

69,910

$

72,778

$

75,764

$

78,871

$

82,104

$

1,048,979

Performance Assurance

$

5,435

$

5,586

$

5,742

$

5,902

$

6,066

$

6,235

$

6,407

$

6,586

$

90,714

Annual Gross Costs

$

67,397

$

70,092

$

72,896

$

75,811

$

78,844

$

81,998

$

85,278

$

88,690

$

1,139,694

Cumulative Costs

$

586,084

$

656,176

$

729,072

$

804,883

$

883,727

$

965,726

$

1,051,003

$

1,139,694

CASH FLOW

Annual Net Cash Flow

$

10

$

11

$

11

$

12

$

12

$

12

$

13

$

13

$

135

Cumulative Net Cash Flow

$

52

$

62

$

74

$

85

$

97

$

110

$

123

$

135

$699,611

3.40%

Schools

$

498,758

$

31,273

$63,290

17

Years

Town

$

264,143

$

16,086

$57,900

Actual Finance Period

17

Years

Total

$

762,901

$47,359

Capital Contribution

$0

1

$757,511

$292,041

$47,694

4.0%

15.66

Years

2.8%

2.0%

Financial Proforma: All Program Costs funded by Energy Savings only. Additional Operation & Maintenance Savings are not included.

Annual Savings

Energy Escalation

Simple Payback

Operational Escalation

Service Escalation

Payments per Year

Amount Financed

Total Interest Payments

Program Cost

Annual Interest Rate

Grants and Rebates

Lease Term

(13)

Town Buildings

Cost Savings Payback Cost Savings Payback Cost Savings Payback Cost Savings Payback Cost Savings Payback Cost Savings Payback Energy Conservation Measure ($) ($) (Years) ($) ($) (Years) ($) ($) (Years) ($) ($) (Years) ($) ($) (Years) ($) ($) (Years) Lighting Retrofit and Controls $ 49,876 $ 3,372 14.8 $ 38,879 $ 2,760 14.1 $ 23,879 $ 1,332 17.9 $ 1,07616,805 $ 15.6 $ 2,03216,742 $ 8.2 $ 10,572146,181 $ 13.8

Building Envelope $ 8,456 $ 1,019 8.3 $ - $ - - $ 11,233 $ 1,085 10.3 $ 92319,412 $ 21.0 $ - $ - - $ 39,101 $ 3,028 12.9

Weatherization/Building

Envelope $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ -

-Steam Improvements $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ -

-Programmable Thermostats $ 1,800 $ 674 2.7 $ - $ - - $ 1,800 $ 441 4.1 $ 4,951 $ 321 15.4 $ - $ - - $ 8,552 $ 1,436 6.0

Vending Machine Controls $ - $ - - $ - $ - - $ - $ - - $ - $ 367 - $ - $ - - $ - $ 367

-Network Controller for PCs $ 642 $ 405 1.6 $ 381 $ 184 2.1 $ 100 $ 57 1.8 $ - $ - - $ 60 $ 37 1.6 $ 1,183 $ 683 1.7

CoolTrol Controls for Walk-in

Freezers and Refrigerators $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ -

-Development, Engineering,

M&V Set-up $ 8,112 $ - $ 8,112 $ - $ 8,112 $ - $ 8,112 $ - $ 8,112 $ - $ 40,561 $

-Boiler Rebuild/Burner Replacement (done with sub

directly by school) $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ - - $ - $ -

-Totals $ 68,886 $ 5,470 12.6 $ 47,372 $ 2,944 16.1 $ 45,125 $ 2,915 15.5 $ 2,68749,280 $ 18.3 $ 2,06924,914 $ 12.0 $ 16,086235,579 $ 14.6

School Buildings

Cost Savings Payback Cost Savings Payback Cost Savings Payback Energy Conservation Measure ($) ($) (Years) ($) ($) (Years) ($) ($) (Years) Lighting Retrofit and Controls $ 78,097 $ 4,219 18.5 $ 7,868139,208 $ 17.7 $ 12,087217,305 $ 18.0

Building Envelope $ 31,769 $ 2,013 15.8 $ 41,693 $ 3,721 11.2 $ 73,462 $ 5,735 12.8

Weatherization/Building

Envelope $ 46,779 $ 2,237 20.9 $ 49,528 $ 2,814 17.6 $ 96,307 $ 5,051 19.1

Steam Improvements $ 46,387 $ 3,425 13.5 $ - $ - - $ 46,387 $ 3,425 13.5

Programmable Thermostats $ - $ - - $ - $ - - $ - $ -

-Vending Machine Controls $ - $ 201 - $ - $ 201 - $ - $ 402

-Network Controller for PCs $ 1,845 $ 916 2.0 $ 4,252 $ 2,110 2.0 $ 6,097 $ 3,026 2.0

CoolTrol Controls for Walk-in

Freezers and Refrigerators $ - $ - - $ 8,250 $ 579 14.2 $ 8,250 $ 579 14.2

Development, Engineering,

M&V Set-up $ 8,112 $ - $ 8,112 $ - $ 16,225 $

-Boiler Rebuild/Burner Replacement (done with sub

directly by school) $ - $ 367 - $ - $ 601 - $ - $ 968

-Totals $ 13,378212,990 $ 15.9 $ 17,894251,043 $ 14.0 $ 31,273464,033 $ 14.8

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