Practical Ways for Towns to Save Money with Clean Energy Projects

Doreen Hamilton

April 30, 2014

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Today’s Discussion

What is Performance Contracting?

Tolland’s Challenges and Goals

New Complexities in the Energy Landscape

The Town of Tolland and their Solutions

Viable financing options

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What is Energy Performance Contracting (EPC)?

• Alternative funding mechanism to upgrade energy consuming building systems

• Make improvements now and pay for them out of future, guaranteed energy savings

• Public Act 11-80 formally recognizes EPC as a viable means to achieve State’s energy goals

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Where has this been done?

• Town/Schools of Stafford, CT

• Town/Schools of Colchester, CT

• Town/Schools of Stratford, CT

• Middletown, CT Schools -2 phases

• Town/Schools of Monroe, CT

• Danbury, CT Schools – 4 phases

• Town/Schools of Tolland, CT

“It works with the service upgrade vendor, Honeywell Building Solutions, guaranteeing energy and cost savings over a 15-year period and the efficiency fund providing an incentive payment of $790,000. “

“We financed in a smart fashion. It happened quickly. It is environmentally correct. We are saving energy, and the program pays for itself,” said the Mayor.

“This was an easy decision. Other cities should do it.” Mayor John Harkins,

Stratford, CT

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Tolland’s Challenges and Goals

External Pressures– Rising Costs– Budget Pressure– Aging Infrastructure– Do more with less

Goals– Decrease Energy

Consumption– Green/Sustainability– Facility Renewal– Manage Costs

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Building a Team

• Consensus Building – Boards• Formation of a Committee• Outside Consultant or not• Town & School Support• Process Road map• Procurement Process – RFP, RFQ or State

– Request for Proposal– Request for Qualification– State Process

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Advanced Controls and Building Optimization

Micro Grids & On-Site Generation •

Sustainability and Behavior Management

Renewable Energy

Today’s Energy Solution is More Complex

Sup

ply

Str

ateg

ies

Dem

and Strategies

Operational Challenges

• Deferred Maintenance• Life Cycle Management• Rising Energy Costs

Energy Efficiency

Finding the right solutions for you requires integrated strategies

Energy Efficiency• Incentives

• Financing

Sustainability and Behavior Management

Advanced Controls and Building OptimizationRenewable Energy

Microgrids & On-site Generation – CT Legislation

Multiple Buildings

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Infrastructure Upgrade Options

• Emergency EquipmentRepairs/Replacement

• Building Damage

• Life Safety Issues

• Environmental Compliance

• Security

Unplanned

• Must CompleteRegardless of Return

Must Do Projects

• New Program Launch

• New Facility

• Capital Equipment

• Planned Facility Renewal

Budgeted

• Compete for Capital

• Prioritized

• Projects Have SimilarBusiness Risk

Capital Investments Performance-Based Projects

• Reduce Risk

• Guarantee Savings

- Efficiency Improvements

- Productivity

- Managed Asset Renewal

• Option to Include

- “Must Do” & “Capital Projects”

Can Be Independent ofCapital Budgets

• Funded Through Energy & Operational Cost Avoidanceand Third Party Sources

• Project Risk With Vendor

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• Town of Tolland energy conservation efforts• Celtic Energy was selected as the Third Party Owner

Representative • Developed Request for Proposal – Honeywell selected• Development of Investment Grade Audit

• 30-60-90% reviews• Energy & Infrastructure Improvements• Utility Incentive Review• Legal Review• Finance Bid/Review• Final Board Approvals – School & Town• Project $10.2M, 0% financing, incentives from NU $859,000, 20

year program, energy & operational savings of $573k annually

Town of Tolland Process

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Tolland’s Solution

Energy Conservation Measure Lighting and Lighting Controls Upgrade

Boiler Plant Upgrades Install Boiler Burner Controls

Ground Source Heat Pump (GSHP) Conversion - TMS

Ground Source Heat Pump (GSHP) Conversion - TIS Variable Frequency Drives on Pump Motors

Replace Kitchen Equipment - Intermediate School Building Management System Upgrades

Demand Control Ventilation Weatherization

Water Conservation High Efficiency Transformers

Install Hot Water Piping Insulation Desktop Computer Power Management

Replace CRT Monitors with LCD Monitors Control of Computer Peripherals

Retro Commissioning

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Financing Options• Financing Vehicles

– Tax Exempt Lease– Power Purchase Agreement (PPA)– Utility sources– Bonds– PURA rate buy down

• Funding Sources– Energy and Operational

Cost Avoidance– Energy Efficiency Grants– 0% Financing– Incentives

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Questions

Doreen.Hamilton@Hone

ywell.com

860.305.9661