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7/28/2019 Service Customer Presentation 013113
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Service Customer Offerings
Dallas, Texas
1/31/13
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Agenda
Customer Purchase Criteria Customer Economics
Potential Service Offerings Testing of Offerings Immediate Plan Potential Add-on Offerings Budget Implications
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Customer Purchase Criteria
Services Offerings
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Service Customer Purchase Criteria
Perceived Need Escalating operating costs Sustainability agenda Operating personnel capabilities Management knowledge of plant equipment Increasing equipment maintenance issues
Budget Constraints Limited capital Annual time horizon
Value Proposition Risk vs. reward
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Customer Economics
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Customer Economics
Most customers looking at the payback Payback calculated as upfront cost divided by
electrical savings Electrical savings calculations consist of
Kwh rate Assumed improvement Ton hours produced Starting efficiency measurement
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Current EffTrack Economics
Larger systems are the only ones that areviable
Large upfront cost to get equipment installed Upfront cost based on number of chillers Annual cost based on tonnage
Must assume at least 15% improvement Need utilization rates over 24% Situations where electric rates are below $.07
kwH are very difficult to justify
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Plant Scenarios Typical EffTrackInstallations
Tonnage 2000 2000 2000 2000Initial Cost 70,000$ 70,000$ 70,000$ 70,000$
Annual Cost 12,000$ 12,000$ 12,000$ 12,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 153 55 27 16
Tonnage 4000 4000 4000 4000Initial Cost 112,000$ 112,000$ 112,000$ 112,000$Annual Cost 18,000$ 18,000$ 18,000$ 18,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 121 43 22 11
Tonnage 8000 8000 8000 8000Initial Cost 170,000$ 170,000$ 170,000$ 170,000$Annual Cost 30,000$ 30,000$ 30,000$ 30,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%
Improvement 5% 10% 15% 20%Payback (Months) 94 34 17 9
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Potential Service Offerings
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Potential Service Offerings
EffTrack EffTrack Lite
ChillSmart Analysis Ongoing ChillSmart Analysis Assessment Offerings Modified Shared Savings Arrangements
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The Hudson Services Funnel Go for the Full Monte first!
Earn an upfront margin and secure high margin recurring revenue ie. Sell the traditional EffTrack equipment and monitoring service
Take less upfront margin but secure monitoring service of thechillers, ie. EffTrack Lite
Go for some recurring revenue, ie. Ongoing ChillSmart Demonstrate our Brilliance, ie. Assessment or ChillSmart
Use the Assessment as our foot in the door and refund some of thecost if we can later up sell to a full monitoring solution
Try to get some remediation work Make sure customer understands all Hudson Services
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EffTrack Install components on chiller
4 temperature sensors 2 differential pressure sensors (flow) 2 refrigerant pressure sensors Electrical CT to gather volts, amps power factor Data gathering panel at each chiller, Master for each 6 chillers
Transmit data in 15 min. intervals to Tulsa Calculate efficiency Review for alarms Generate reports
Advise customer of operating issues Costs
Upfront ~ $25K per chiller Ongoing ~ $5 per ton per year Payback between 1 and 3 years
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EffTrack Lite Lower upfront cost to customer by using
customer existing equipment Have customer recalibrate existing sensors
and have customer add any additional sensors Gather information from BAS systems and/or
existing energy management systems
Charge customer a one-time set-up fee, aquarterly fee per plant and a quarterly fee perton
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Plant Scenarios EffTrack LiteTonnage 2000 2000 2000 2000Initial Cost 10,000$ 10,000$ 10,000$ 10,000$Annual Cost 9,000$ 9,000$ 9,000$ 9,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 46 11 6 3
Tonnage 4000 4000 4000 4000Initial Cost 20,000$ 20,000$ 20,000$ 20,000$Annual Cost 18,000$ 18,000$ 18,000$ 18,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 46 11 6 3
Tonnage 8000 8000 8000 8000Initial Cost 20,000$ 20,000$ 20,000$ 20,000$Annual Cost 30,000$ 30,000$ 30,000$ 30,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%
Improvement 5% 10% 15% 20%Payback (Months) 33 7 4 2
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ChillSmart
Use stand alone ChillSmart product if we cantsell other recurring service
Charge for ChillSmart in three tier formatbased on size of chiller (prices per chiller)
700 tons or less charge $3,500 700 to 1,000 tons charge $5,000 Greater than 1,000 tons charge $6,000
Use one free refrigerant and oil analysis for amulti site client demonstration of service
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Plant Scenarios ChillSmartTonnage 2000 2000 2000 2000Initial Cost 10,500$ 10,500$ 10,500$ 10,500$
Annual Cost -$ -$ -$ -$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 7% 7% 7% 7%Payback (Months) 12.2 8.7 6.6 5.1
Tonnage 4000 4000 4000 4000Initial Cost 20,000$ 20,000$ 20,000$ 20,000$Annual Cost -$ -$ -$ -$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 7% 7% 7% 7%Payback (Months) 11.6 8.3 6.2 4.9
Tonnage 8000 8000 8000 8000Initial Cost 36,000$ 36,000$ 36,000$ 36,000$Annual Cost -$ -$ -$ -$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%
Improvement 7% 7% 7% 7%Payback (Months) 10.5 7.5 5.6 4.4
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Ongoing ChillSmart
Contract for 2 years of basic ChillSmart analysis Analysis includes full chemistry tests every six
months, and reports once a quarter Manual data sheets sent in once per week that
include at least 3 readings if the chiller was operating Annual charge in three tiers (prices / year / chiller)
700 tons or less charge $4,500 700 to 1,000 tons charge $6,000 Greater than 1,000 tons charge $7,500
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Scenarios Ongoing ChillSmartTonnage 2000 2000 2000 2000Initial Cost -$ -$ -$ -$
Annual Cost 13,500$ 13,500$ 13,500$ 13,500$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 10% 10% 10% 10%Payback (Months) 11 7.9 5.9 4.6
Tonnage 4000 4000 4000 4000Initial Cost -$ -$ -$ -$Annual Cost 24,000$ 24,000$ 24,000$ 24,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 10% 10% 10% 10%Payback (Months) 9.8 7.0 5.2 4.1
Tonnage 8000 8000 8000 8000Initial Cost -$ -$ -$ -$Annual Cost 45,000$ 45,000$ 45,000$ 45,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 10% 10% 10% 100%Payback (Months) 9.2 6.6 4.9 3.8
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Assessments
Offering includes 5 task process System Overview and Data Collection Fluid Chemistry
System Modeling & Energy Assessment Engineering Optimization Analysis Final Presentation & Report
Objectives of Assessment Show customer that we can save them money Introduce customer to Hudson capabilities Create a recurring revenue stream
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Modified Shared Savings No upfront cost to customer Charge customer a monthly fee that roughly equates to our
costs plus 20% profit over first two years (no term toagreement)
Year three and beyond charge is $6K per year per plant and$3.00 per ton per year
Customer agrees to pay 20% of identified or actual electricalsavings over 4 year period (whichever is larger) providingpayback is less than 2 years
Applicable for EffTrack and EffTrack Lite services Circumvents the annual budget cycl
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Scenarios Shared SavingsTonnage 2000 2000 2000 2000
Initial Cost -$ -$ -$ -$Annual Cost 33,380$ 33,380$ 33,380$ 33,380$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 15% 15% 15% 15%Payback (Months) 36.3 25.9 9.7 7.6
Tonnage 4000 4000 4000 4000Initial Cost -$ -$ -$ -$Annual Cost 64,520$ 64,520$ 64,520$ 64,520$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 15% 15% 15% 15%Payback (Months) 35.1 25.1 9.4 7.3
Tonnage 8000 8000 8000 8000Initial Cost -$ -$ -$ -$Annual Cost 86,880$ 86,880$ 86,880$ 86,880$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%
Improvement 15% 15% 15% 15%Payback (Months) 11.8 8.4 6.3 4.9
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Testing of Offerings
EffTrack Childrens Hospital of Phil.,Honeywell
EffTrack Lite Aria Health, Hershey Medical,Toyota
ChillSmart Teva Ongoing ChillSmart None yet. Assessments P&G
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Immediate Plan Resurrection!!!
Customer EffTrack reports caught up Derrick Get JL&L satisfied with the Honeywell account - Jim Re-engage CBRE Jim
Formalize simplistic data gathering format for ChillSmart analysis Fully define the Ongoing ChillSmart offering Sell one/two accounts each from the agreed services to iron out the operational
details Train existing Hudson employees on EffTrack offering
Riyaz and Charlotte person to go to Rocky Mount Senthil and Steve to go to Tulsa
Send legacy EffTrack employees on a reclamation job Hire one dedicated customer service engineer Put one more distributor/rep in mid-Atlantic region
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Potential Add-on Sales
Refrigerant sales Reclamation work Consulting services Additional chemistry tests Additional Assessments Increased device monitoring (later)
Boilers Air compressors Pumps Electrical equipment
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Budget Implications