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STEPS TO SUCCESS WITH FCIP

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.

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STEPS TO SUCCESS WITH FCIP

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  1. STEPS TO SUCCESS WITH FCIP Ryan Freed Kansas Energy Office

  2. 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

  3. 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 guaranteesperformance of project

  4. 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

  5. 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

  6. What is the FCIP? • Legislative Authority (KSA 75-37,125) • Streamlined State Contract • Pre-approved ESCOs • Technical, legal, financial oversight • Customer representation throughout process

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

  8. Who Can Participate? • Any Public Agency • State, County, City • Statute allows any “Political Subdivision” • Non-Profit Organizations

  9. What is the Process? • Four Main Steps • Preliminary Audit • Investment Grade Audit • Energy Performance Contract • Measurement & Verification

  10. 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

  11. 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

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

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

  14. 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

  15. 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

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

  17. Any Questions? Ryan Freed Kansas Energy Office 785-271-3152 r.freed@kcc.ks.gov

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