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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