Key Steps in Developing A Performance Contract

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Key Steps in DevelopingA Performance Contract

• Cathy Catanzaro
• Johnson Controls

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6 Key Steps

• Organize and Mobilize
• Select a Qualified Energy Services Provider
• Facilitate Evaluate the Detailed Energy Audit
• Negotiate the Performance Contract
• Support the Installation of the Energy
  Conservation Measures
• Verify and Publicize Results Each Year

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1. Organize and Mobilize -- Data

• Collect and review energy usage and total cost.
• Identify existing community goals and piggyback
  energy issues to them.
• Network DOER, Energy Smart Communities,
  workshops.

• Identify inefficient facilities and document
  square footage by building.
• Identify deferred maintenance items
• Compare and benchmark energy cost per square foot.

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1. Organize and Mobilize -- People

• Involve key stakeholders Municipal leaders,
  board members, planning department, public works
  department, procurement, energy manager
• Designate or create an energy commission

• Mobilize support for performance contracting
• Develop and present recommendations such as
• The process and timeline for solicitation of
  energy management services proposals
• Goals for the performance project

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1. Organize and Mobilize

• Build Momentum for Performance Contracting
• Communicate Win/Win Solution
• Improve your infrastructure without capital
  expenditure
• Manage rising energy maintenance costs
• Increase comfort, reliability and safety of aging
  buildings, aging systems
• Aid facilities staff already stretched to limit

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2. Select Energy Services Provider

• Decide on appropriate process RFP/RFQ
• Facilitate and manage proposal solicitation
  Process
• Select most qualified energy management services
  provider

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2. Select Energy Services Provider

• Request for Proposals
• (1) Qualifications, Experience Expertise
• (2) Technical Approach to Performance
  Contracting
• (3) Technical Approach to the Project
• (4) Methodology of determining energy savings
• (5) Overall Costs, Considering Multiple
  Variables
• (6) Other Factors the municipality regards as
  reasonable and appropriate

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2. Select Energy Services Provider

• Request for Qualifications
• (1) References of other energy savings contracts
  (2) Quality of the products proposed(3)
  Methodology of determining energy savings(4)
  General reputation and performance capabilities
• (5) Substantial conformity with the
  specifications and other conditions set forth in
  the request for qualifications

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2. Select Energy Services Provider

• Request for Qualifications (Continued)
• (6) Time specified in the qualifications for
  the performance of the contract and(7) Any
  other factors the public agency considers
  reasonable and appropriate, which factors shall
  be made a matter of record.

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2. Select Energy Services Provider

• RFP
• 10-year Payback Period
• Preliminary audit and Technical Proposal
• Cost information for a proposed project

• RFQ
• 20-year Payback Period
• Qualifications based decision
• Process efficiencies

Next Step following both is Detailed Energy Audit.
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2. Select Energy Services Provider

• Manage the Proposal Solicitation Process
• Write and release the RFP or RFQ
• Provide access to facilities and information
• appropriate energy usage and total costs
• Facilities and square footage
• Site visits
• Establish Review Team
• Review and evaluate proposals

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2. Select Energy Services Provider

• Manage the Proposal Solicitation Process
• Interview top candidates
• Follow up to clarify outstanding questions, seek
  additional information
• Select the most qualified energy management
  services provider best match for your
  municipality and/or schools

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3. Facilitate Evaluate the Detailed Energy
Audit

• Execute an agreement to move forward with the
  selected provider to perform the DEA
• Provide access to facilities and data
• Review final recommendations, approve energy
  conservation measures and other aspects of the
  proposed project.

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4. Negotiate the Contract

• Involve municipal legal counsel to work with
  selected providers legal counsel.
• Gain understanding of contract components
• Technical
• Financing
• Energy savings guarantee
• Measurement and verification protocol
• Additional services

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4. Negotiate the Contract

• Establish your team early
• Be involved throughout the process
• Understand respective responsibilities throughout
  the contract term

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5. Support Project Installation

• Facilitate and coordinate access to people,
  facilities and data
• Participate in project updates
• Ask questions, communicate needs

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6. Verify Publicize Results

• Review and understand annual measurement and
  verification report of savings achieved
• Examine what energy costs would have been had the
  project not been completed

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6. Verify Publicize Results

• Communicate and publicize results of Win/Win
  Solution
• Energy Saved
• Costs Saved (energy, repair, maintenance)
• CO2 emissions saved
• Comfort, reliability and safety of public
  facilities enhanced