STEPS TO SUCCESS WITH FCIP

Ryan Freed Kansas Energy Office

What We Will Discuss…       What is Performance Contracting?

The Benefits of Performance Contracting Potential Projects What is the FCIP?

How to Participate in the FCIP The Cost of FCIP participation

What is Performance Contracting?

    Provided by an Energy Service Company (ESCO) Improvements provide utility & operational savings Reduced Utility & Operational costs pay for cost of project ESCO guarantees performance of project

Performance Contracting Benefits      Extends Capital Dollars Life-Cycle Cost vs. First Cost  No more “We’ve always done it that way” ESCO designs and builds project Guaranteed performance

NO CHANGE ORDERS

Potential Projects          Lighting: daylighting, new lamps & ballasts Heating: Replace boilers, steam traps, pumps Cooling: Replace chillers, cooling towers, etc Controls: New Energy Management Systems Water: Low-flow fixtures, waterless urinals Buildings Shell: Insulation, windows, roofs Alternative Energy: wind, solar, geothermal New Construction: All utility-impacted systems ….More

What is the FCIP?

     Legislative Authority (KSA 75-37,125) Streamlined State Contract Pre-approved ESCOs Technical, legal, financial oversight Customer representation throughout process

FCIP Benefits      Standard Contract – no surprises Pre-negotiated Markups & Audit Costs No need for RFP FCIP Oversight FCIP ‘Workshops’ for all Staff

Who Can Participate?

  Any Public Agency  State, County, City  Statute allows any “Political Subdivision” Non-Profit Organizations

What is the Process?

 Four Main Steps  Preliminary Audit    Investment Grade Audit Energy Performance Contract Measurement & Verification

Preliminary Audit     Arrange Site Tour by Selected ESCOs No Cost to Customer FCIP Participates in all steps except selection ESCOs Present to Customer – Customer Selects ESCO for Investment Grade Audit

Investment Grade Audit     Standard contract signed by Customer, ESCO and FCIP Intense site survey FCIP Reviews Audit – Workshop w/ Customer No charge if no project found

Energy Performance Contract     Customer & ESCO determine final scope of project ESCO helps arrange financing FCIP Reviews Contract – Workshop w/ Customer Open-Book Pricing

Measurement & Verification (M&V)    ESCO proves performance M&V period length varies – customer choice FCIP reviews M&V, provides customer assistance, settles disputes

The Cost of FCIP Participation     FCIP is a fee-funded program Fee is based on formula: 4% of the first $100,000 of the project amount 3% of the next $400,000 of the project amount 2% of the next $500,000 of the project amount 1% of the next $4,000,000 of the project amount ½% of the any amount in excess of $5,000,000 Fee paid only if Performance Contract signed Fee can be part of financing

What Has Been Done?

  $147 Million Total Project Costs More than $11 million in Annual Savings!!

  7 Cities 6 Counties     6 Community & Technical Colleges 15 State-Owned Buildings 11 University Projects 21 USDs

Summary    FCIP provides budget-neutral facility upgrades FCIP oversight provides confidence to staff and public Customer’s staff can focus on performance, not process

Any Questions?

Ryan Freed Kansas Energy Office 785-271-3152 [email protected]