Agenda. What would a 30% reduction in energy use do for your budget? The next generation of energy and infrastructure projects in MI

Transcription

1 What would a 30% reduction in energy use do for your budget? The next generation of energy and infrastructure projects in MI Presented by: Scott Mason 1 Agenda Traditional energy efficiency Next generation of energy efficiency Enabling legislation What are your goals? 1

2 Today s budget challenges hinge on infrastructure Maintenance must compete with a growing list of priorities Infrastructure: $270 billion needed to modernize and maintain the nation s schools Government Accountability Office assessment by the Center for Green Schools Page 3 What is performance contracting? Cities, Counties and Schools Energy $$$$ Utility A facility owner can pay for today s facility upgrades with tomorrow s energy savings without tapping into capital budgets. U.S. Department of Energy Page 4 2

3 What is performance contracting? Energy More Efficient Infrastructure $$ Utility A facility owner can pay for today s facility upgrades with tomorrow s energy savings without tapping into capital budgets. Implement Technology Upgrades Capture Energy Savings U.S. Department of Energy Page 5 Energy Services Company (ESCO) Types of energy savings projects Simple project Requires little up-front money Saves 3-7% on utility costs Comprehensive project 4% Larger opportunity for deeper retrofits 53% Saves 20-50% on utility costs *Projected savings *Projected savings Cost $72,000 Savings $9,000 % Savings 4% Sample scope: Control system modifications Retrofit lighting Cost $18,000,000 Savings $1,200,000 % Savings 53% Sample scope: New Windows Complete New Mechanical Systems New Lighting and Controls Page 6 3

4 Model most used for comprehensive energy projects Quick Payback Long Payback Lighting Variable drives Energy management Major HVAC Building envelope Roofing Cost Savings Cost Savings 7 Energy savings performance contracting Project example Funding equation $1.3 million Client budgeted utilities 30+% savings $400,000 Est. annual savings $10 million That can be leveraged over 20 years with low interest funding Comprehensive solution Confidential Property of Schneider Electric Enhance client facilities Infrastructure improvement Address critical capital improvement needs Improve safety Reduce carbon footprint Increase visibility into energy/utility use Apply best practices from world-class entities around the world 8 4

5 Efficiency unlocks new funding streams for reinvestment Lease/purchase Shared savings Cash Grants Sinking funds Bonds (Limited/unlimited) 9 The opportunity to implement energy upgrades with no capital outlay has a universal appeal, but there is also an array of market drivers underlying the decision to sign an EPC that reflect specific business pain points of customers ESCOs bring the technical and engineering expertise to customers without the human capital to manage major energy efficiency improvements in-house The business case for engagement has shifted to sell the value of tackling deferred maintenance and expanded from the traditional framing of efficiency benefits The next generation of performance contracting Source: Navigant Research Report - Q Energy Service Company Market Overview 5

6 Our clients are tackling much more than energy 96% Percentage of our customers using energy efficiency projects to impact their top ambitions. Funding big ambitions for schools Improve student performance Build efficient infrastructure Community engagement 6

7 We want to be a regional leader in sustainability We re improving sustainability to attract new students and staff We need to improve classroom comfort We want to improve safety and security on school grounds.upgrade our athletic environments We need to tackle our overwhelming list of deferred maintenance We want to reduce energy expenses so we can invest more in teachers salaries Educators missions in their words 7

8 New legislation > Old vs New what s changed?? Expanded Scope Allowed Funding Limitations Installment Purchase Agreements & Lease Purchases (at the board level) Non Debt Transaction Here is what MI gave you A new arrow in your quiver WI experience Stories from WI These are the types of things we can do 8

9 Ambitions: Lakeland Union High School 700 students To be the Star of the North Ambitions: Maximize sports tourism revenue Fiscal responsibility Progressive regional leadership27 Enhance the learning environment & attract new students Become more independent about creating their own energy Lakeland Union High School Solutions: > Building automation system > HVAC upgrades > PC and plug load management > Expanded solar PV > LED lighting > Building envelope improvements > Public awareness plan Results 60% reduction in energy consumption $2.7 million in total savings 1,100 tons of CO2 removed 300,000 kwh/yr solar energy 9

10 Celebrate Your Good News Story Marketing Plan Overview Key Messages Grow Lakeland Union High School s image as best-in-class education provider Student Engagement Get students involved in learning the impact of habits and behavior on energy savings. Conserve My Planet Energy Engineer Class Visit Earth Day Event Celebrate our planet and give students an opportunity to learn about sustainability first-hand Scholarship Program Partner on a custom scholarship program to promote STEAM & STEM learning Video Case Study Produce a short video to highlight Lakeland Union High School s success Communications Plan Position LUHS as The Star of the North through media blitz, including press release, social media, website updates, signage, etc. Showcase LUHS s commitment to being good stewards of public funds and the environment Page 19 The importance of having a long-term capital plan > Consider first cost versus lifecycle cost > The time, money, expertise equation > Avoid unplanned budget spikes Over its lifecycle, a $10 million building requires a $40 million budget to pay for the cost of maintenance and utilities Confidential Property of Schneider Electric First Cost lifecycle cost 20% Vs. 80% When buildings are starved of necessary maintenance, it reduces their lifecycle and makes them much more costly to operate 20 10

11 Having a strategic plan helps expand your scope of work Maximize energy and utility efficiency, and plan for future use Tap new funding and invest little or nothing upfront Funding Energy Enable your community s vision Technology Modernize technology and improve communication Give the public high-profile advances in sustainable energy Public Image Facilities/ Operational Update neglected, aging facilities and systems People Engagement Educate and change behaviors that impact your budget and the environment Confidential Property of Schneider Electric Benefits of working with a trusted partner Identify and secure more funding options at lower costs Reduce risk by contractually guaranteeing performance Collaborative approach to project design helps achieve your vision Comprehensive program includes design, construction and performance guarantee Overcoming your greatest challenges: Time Money Expertise 11

12 Questions? Learn more at Page 23 Capital lease (or tax-exempt lease purchase) > Allows tax-exempt entity to buy equipment using a lease-purchase agreement > Borrower owns the equipment immediately, lender holds lien on equipment as collateral > Excellent tool to leverage operational savings to achieve facility upgrades > Not just for short-term financing > No tax pledge required With the right mix of improvements, using capital leases to renovate and upgrade those buildings energy systems can pencil out to a budgetneutral or even budget-positive solution. Mark Killingsworth, Crews & Associates Confidential Property of Schneider Electric 24 12

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