Memorandum
City of Lawrence
City Manager’s Office
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TO: |
City Commission |
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FROM: |
Eileen Horn, Sustainability Coordinator |
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CC: |
Tom Markus, City Manager |
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DATE: |
January 17, 2017 |
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RE: |
FCIP Energy Performance Contract |
Background
This Energy Performance Contract is made and entered into between Willdan Group, Inc., DBA 360 Energy Engineers and the City of Lawrence for the purpose of installing energy conservation measures in City owned buildings and facilities. Signing this contract will initiate the implementation of the energy conservation measures described in the Investment Grade Audit performed by 360 Energy Engineers.
Energy Performance Contract Terms
This Energy Performance Contract is not a typical construction contract for the City. Therefore, we have outlined the key responsibilities of both the energy service company (360 Energy Engineers) and the City of Lawrence, below.
The Energy Savings Guarantee (Schedule C) of the contract is the lynchpin of a performance contract. Basically, the City is agreeing to the energy savings projections calculated by 360 for the 22 year term of the project. The energy savings projections are guaranteed, not the maintenance savings. The annual energy savings for the project are $425,257. 360 is guaranteeing savings of $397,686 (approximately 93.5% of the total amount). Staff agrees that 360 has made reasonable assumptions in these projections.
For 36 months after project completion, 360 will monitor the Actual Energy Savings to be sure they match what was projected. If Actual Energy Savings fall short of the Energy Savings Guarantee, 360 will be responsible for either 1) repairing/replacing the equipment that is not meeting energy savings projections, or 2) reimbursing the City for the shortfall for the rest of the project term.
Typically energy service companies monitor savings for 24 months. 360 has agreed to monitor savings for 36 months at no additional cost to the City. Therefore, we will have annual savings reports to provide to the Commission in April 2019, April 2020, and April 2021. Should the Commission wish to extend the monitoring and energy savings guarantee term beyond 36 months, 360 has provided an annual fee ($25,600) for each additional 12 month term. If the monitoring period is extended, the annual fee of $25,600 is adjusted annually according to the Consumer Price Index. (See Schedule C)
The attached Energy Performance Contract made between 360 Energy Engineers and the City outlines the various responsibilities of the two parties:
360 Energy Engineers’ responsibilities:
· Has conducted an Investment Grade Audit of City Facilities.
· Has calculated annual energy and maintenance savings associated with the project.
· Will serve as general contractor for the project, managing the construction process and all subcontractors.
· Will monitor the annual energy savings for 36 months after project completion. If actual energy savings fall short of the energy savings guarantee, 360 ESCO shall reimburse the City for the full amount of the difference between the Actual Energy Savings and the Energy Savings Guarantee.
· Will not be responsible for maintenance of systems after installation, but will provide training to City of Lawrence staff on proper equipment operation.
· Will conduct a thorough and systematic performance test of each element and total system of the installed Equipment in accordance with the procedures specified in Schedule H and prior to acceptance of the project by the City.
· Will extend warranties for all equipment to the City.
· Will maintain appropriate insurance limits as outlined in the contract.
City responsibilities:
· Accepts the energy and maintenance savings calculations provided by 360.
· Will pay 360 Energy Engineers within 30 days of invoice receipt.
· Will be responsible for maintenance of all systems after installation.
· Will assist 360 in obtaining all necessary permits and approvals for installation of the equipment.
· Will work with 360 to coordinate installation and construction schedules.
· Will own all equipment installed, and will own all rights to the designs.
· Will provide access to City buildings for the completion of the work by 360 and subcontractors.
· Will notify 360 of any material changes that would impact the projected energy savings (i.e. change in use of the building, operating hours, etc).
· Will collaborate with 360 to allow them access to EnergyCAP, our utility tracking software to allow for timely tracking of Actual Energy Savings.
Attached to the contract are the following detailed schedules, exhibits, and appendices. We have provided a one sentence explanation of each of the schedule’s contents.
Schedule A Equipment to be Installed by ESCO
(This schedule lists all of the energy conservation measures and equipment to be installed in City buildings and facilities).
Schedule B Description of Premises; Pre-Existing Equipment Inventory
(This lists the 39 City buildings impacted by the project, totaling 1,028,505 square feet of building space)
Schedule C Energy Savings Guarantee
(This schedule details the calculation of the energy savings guarantee provided by 360 Energy Engineers, and the terms of that guarantee).
Schedule D Compensation to ESCO
(Explains the process by which the ESCO (360) will apply for payment from the City, and how those payments will be processed and approved.)
Schedule E Baseline Energy Consumption
(This is the baseline energy data used to calculate the energy savings, details the building operation schedules that the calculations were based upon).
Schedule F Savings Measurement & Calculation Formulae; Methodology to Adjust Baseline
(Shows formulas used to calculate energy savings).
Schedule G Construction and Installation Schedule
(Draft construction schedule for 2017).
Schedule H System Start-Up and Commissioning; Operating Parameters of Installed Equipment
(All systems and equipment installed or modified will include start-up and commissioning. A detailed plan will be provided after project initiation).
Schedule I Standards of Comfort
(Explains the temperature setpoints the buildings should operate at to achieve maximum savings).
Schedule J ESCO’s Maintenance Responsibilities
(360 is not responsible for ongoing maintenance of systems installed).
Schedule K Customer’s Maintenance Responsibilities
(Upon installation, the City will be responsible or maintenance of systems installed).
Schedule L Facility Maintenance Checklist
(360 will provide the City with a complete facility maintenance checklist prior to the Acceptance of Project Completion).
Schedule M ESCO’s Training Responsibilities
(360 will provide training to City of Lawrence staff on proper operation of all systems installed).
Schedule N General Conditions
(These are provided by the Kansas Corporation Commission and are the general conditions standard in construction projects. These cover both the state of Kansas and the City of Lawrence).
Schedule O Annual Installment Payment Schedule to Financing Party
(This is the annual installment payment schedule for project financing).
Schedule P Detailed ECM Savings Calculations
(Provided in the IGA report).
Schedule Q Detailed Pollution Credit Calculations
(Not applicable to this project).
Exhibits
Exhibit I Performance Bond
Exhibit II Labor and Material Payment Bond
Exhibit III i. Certificate of Acceptance – Investment Grade Audit
ii. Certificate of Acceptance - Installed Equipment
iii. Certificate of Acceptance – Project Completion
Exhibit IV Equipment Warranties
Appendices
Appendix A RFP for ESCO Solicitation
Appendix B ESCO Proposal
Appendix C Investment Grade Audit Agreement
Appendix D Investment Grade Audit Report