Wilshire Center/Koreatown Green Building Retrofit Program

1. Wilshire Center/KoreatownGreen Building Retrofit Program Presented by : Caroline Sim CRA/LA Doug Nordham, P.E. Arup Gary Russell, AIA WCBIC Christine Magar, AIA, LEED AP Greenform David Hodgins, LEED AP Clinton Climate Initiative March 3, 2011

2. Introductions of Program Team • Program Goals and Objectives • Program Process and Steps • Opportunities and Benefits for Participants • Case Studies and Examples • How Do You Get Started? Agenda

3. Doug Nordham, P.E. , Arup • Program Manager • Gary Russell, AIA, WCBIC • Community Liaison • Christine Magar, AIA, LEED AP, Greenform • Sustainability Consulting • David Hodgins, LEED AP, Clinton Climate Initiative • Financial Strategy Program Team Members

4. Buildings in the U.S. account for - 40% of U.S. primary energy consumption 72% of U.S. electricity consumption 40% of U.S. GHG emissions generation 48% Including building construction and embodied energy Goals and Objectives Did you know?

5. Why are existing buildings an important part of energy and carbon reduction? Mark Watts, Clinton Climate Initiative “And with 50-70% of existing buildings expected to still be in use in 2050, reducing energy demand by retrofitting existing stock will be a key policy instrument.” “As newer net zero buildings come on line, existing building stock will find it more difficult to compete with these new, more resource efficient buildings. They need to adapt, or they could become obsolete.” Dr. Jean Rogers, Nick Offer. “High Performing Property Portfolios.” A2 Magazine Issue 7: 18-19. Arup Goals and Objectives

6. The Program Goals include the following: WCBID Cool District Program target of 80% Carbon reduction by 2050 Provide FREE building energy assessments to eligible building owners Through the assessments, identify the feasible energy reduction projects and package those that will provide less than a 3 year payback Work with potential Energy Project Lenders to bring “packaged” financing options to the building owners Create an ongoing Program structure that will last for several years and be self-funding and sustaining Goals and Objectives

7. Why provide FREE Building Energy Assessments? • A Lawrence Berkeley National Lab study of 60 buildings of different types showed that: • • Over 50% had control problems • • 40% had HVAC equipment problems • • 15% had missing equipment • • 25% had BAS with economizers, VFDs, and advanced applications that were simply not operating correctly. • Savings from Energy Assessments • Value of Energy Savings: $0.11 ‐ $0.72/sq. ft. • Value of Non‐Energy Savings: $0.10 ‐ $0.45/sq. ft. • Source: Assoc. of State Energy Research Technology Internships and US Department of Energy Goals and Objectives

8. Preliminary Assessment Review of Opportunities Investment Grade Audit Financing and Design Project Implementation A Building Energy Assessment is a structured process that identifies viable and beneficial energy reduction/management opportunities within a particular facility. Building Energy Assessments – The Process

9. Preliminary Assessment Information Sources Goals Review Opportunities Building Operations & Maintenance Budget Reduced Operating Cost Improving Operations & Maintenance Building Management Systems Investment Grade Audit Identify Viable EE Measures Reduce Energy & Carbon Improving Existing Assets Energy Usage Data Building Documents Financing & Design Upgrade Building Systems Improve Tenant Comfort Staff & Tenant Discussion Capital Replacement Budget Project Implementation Building Energy Assessments: Aligning Goals with Information

10. What’s Included in a Building Energy Assessment? • Review building utility bills • Conduct site walkthough and equipment inventory • Identify potential energy efficiency measures • Calculate energy and cost savings • Analyze economics and return on investment • Consider incentives and tax credit opportunities • Determine measure costs and economics Program Process and Steps

11. ENERGY BASELINE SCHEDULING/ENABLING CONTROLS PROBLEMS ECONOMIZER/OUTSIDE AIR LOADS ENERGY USE EQUIPMENT EFFICIENCY IMPROVEMENTS PLANT OPTIMIZATION SYSTEM / ZONE OPTIMIZATION TOTAL ENERGY SAVINGS (Average 25-35%) Reference LBNL IMPLEMENTATION COST Typical Building Energy Assessment Results Program Process and Steps

12. ENERGY BASELINE RETURN ON INVESTMENT avg = 3 Years SCHEDULING/ENABLING CONTROLS PROBLEMS ECONOMIZER/OUTSIDE AIR LOADS ENERGY USE EQUIPMENT EFFICIENCY IMPROVEMENTS PLANT OPTIMIZATION SYSTEM / ZONE OPTIMIZATION DIMINISHING RETURNS TOTAL ENERGY SAVINGS (Average 25-35%) Reference LBNL IMPLEMENTATION COST Typical Building Energy Assessment Results Program Process and Steps

13. Go forward with EE Projects? Preliminary Assessment Review of Opportunities Investment Grade Audit Financing and Design Project Implementation Program Process and Steps Building Energy Assessments – The Process

14. Preliminary Assessment • What is It? • What can we typically finance? • What types of financing are available? • Considerations and risks • Typical Results Review Opportunities Investment Grade Audit Financing & Design Project Implementation Program Process & Steps Energy Project Financing

15. What is it for? • Approach for financing capital cost of energy efficiency retrofit projects • How does it work? • Energy cost savings provide a cashflow to repay the loan • What to Finance? • Energy Efficiency Measures (can include water) • What types available? • Grants • Incentives (especially utility and State) • Banks/Lenders • Energy Service Companies • Self-Funded Energy Project Financing

16. Grants – typically lower amounts to fund pilots, research, or seed money – limited with great effort • Incentives – Typically retroactive from Utilities, and Local, State, and Federal Government tax breaks • Self-Funding – Savings from early investments that have quickest payback (< 1 yr) fund additional efficiency investments • Bank/Lender Funding – Borrow money at standard interest rates to invest in energy measures • ESCO – Loans money for investment, manages implementation, paid for by energy savings Energy Project Financing Types of Energy Project Funding

17. Self Funded $25M Investment @ 25 - 35% Savings $75 Million Cumulative Savings in 13 Years Energy Project Financing Typical Savings with Energy Efficiency Investments

18. One stop shop for funding and implementation • Contract based, with payments and profit from utility cost savings • Traditionally focused on “low hanging fruit” • Early ESCO (90s) contracts were heavily slanted towards ESCO and along with above tendency created a poor impression and reduced savings • ESCO work with the government has forced contracts to be more fair • Pro-active third party audits and consulting can also improve ESCO results Energy Project Financing ESCOs (Energy Service Companies)

19. Energy Efficiency Benefits for the Building Owner • Extended Equipment Life----Lower Repair and Maintenance Costs • Increased Thermal Comfort----for (happier) Tenants • Improved Indoor Air Quality----for (happier) Tenants • Reduced Operating/Energy Costs • Increased Safety/Reduced Liability • Greater Building/Asset Value • Pre-requisite to Renewable Energy Energy demand reduction Efficient supply Renewable energy Owner Opportunities and Benefits

20. Case Study: UCSF Mt Zion Research Center Arup’s energy consultants reduced energy usage at UCSF’s most energy intensive research laboratory, bringing it into line with similar facilities and saving $354,573 per year, a 36% reduction in annual energy costs, and a simple project payback of 0.6 years. Awarded UC’s “best practice” award in 2009. Case Study

21. Case Study: Time Equities, Inc. – Audit Arup’s energy audit for Time Equities, Inc. highlights how improving energy efficiency not only reduces a building’s operational costs but also enables corporations to achieve their sustainability related goals, such as reducing their carbon footprint. Case Study

22. Case Study: Pfizer Global R&D Campus Arup’s energy consultants conducted a major energy assessment for Pfizer. As a result of the study, Arup identified and managed implementation of energy efficiency measures, resulting in savings of over $1 million per year with a simple payback period of less than 6 months and reduction of 5,000 tons of CO2 annually. Case Study

23. How do you get started? • Contact WCBID or Arup to request your FREE Building Energy Assessment • If your building is selected, we’ll schedule a meeting and site visit with you • We’ll evaluate your building and then meet to discuss results and future options • If appropriate, conduct the IGA. • Arrange Project Financing • Install energy efficiency measures • Receive cost savings and other benefits! Next Steps

24. Discussion and Questions

25. THANK YOU Caroline Sim CRA/LA – 213.368.0651 – csim@cra.lacity.org Doug Nordham Arup – 310.578.4400 – douglas.nordham@arup.com Gary Russell WCBIC – 213.487.7003 – gary@wilshirecenter.com Christine Magar Greenform – 323.464.2002 – cmagar@greenform.net David Hodgins Clinton Climate Initiative - dhodgins@clintonfoundation.org