ESCO A win-win for counties. IS IT RIGHT FOR YOU? Presented by: - PowerPoint PPT Presentation

ESCO A win-win for counties. IS IT RIGHT FOR YOU? Presented by: Bill Dempsey Houston County CAO

WHAT DOES EACH OF THESE HOUSTON COUNTY BUILDINGS HAVE IN COMMON?

All have energy systems that are: Old and worn out Energy HOGS INEFFICIENT COSTLY

The equipment is dying, we are running out of time and don’t have the money for replacement. What do we do? Nope. Too Let’s just keep repairing expensive. Besides, everything. It’s gonna die anyway. Who can we trust to come up …and how the heck with the best can we afford it ? engineering solutions? Somebody WHAT IS AN mentioned an ESCO… ESCO?????

WHAT IS AN ESCO? Energy Service Company There are about 95 Energy Service Companies in the U.S.

So, what is an ESCO’s CLAIM- TO-FAME? An ESCO will guarantee that if you install their recommended equipment, the savings in energy, maintenance and repair costs will pay for the new equipment.

REALLY??? Well, how does this thing work? What do I do? Do two things: First Read the brochure entitled Alabama Energy Performance Contracting Guide.

And ……. What else? Second Follow the step ‐ by ‐ step process that will identify the: A) Feasibility of entering into an ESCO contract. B) Method for selecting the best company. C) Determining exactly what can, and can not, be included in your project

“SO, TELL ME MORE ABOUT THE STEP ‐ BY ‐ STEP PROCESS.”

5 steps for entering into an ESCO project 1) Select a short-list of potential ESCO candidates. 2) Request each candidate to perform a no-charge “Feasibility Study”. Each candidate will determine if they feel an ESCO project is feasible. This study will not cost the county any money. 3) Select the candidate that you want to do the job: A) Get references and call people for whom each candidate has done work. B) Develop a list of what you expect from a vendor and make sure each will comply. C) Form an internal interview team and develop a list of questions for each candidate. D) Interview each candidate face-to-face and objectively score each candidate. 4) Once the candidate is selected, enter into an Investment Grade Audit contract with your selected ESCO company. Note: This is the real-deal audit. It will take several months and will determine what can and can’t be done and will determine the best engineering solution. If at the end of the audit you do not choose to enter into an ESCO contract, you must pay for the Investment Grade Audit. However, if you enter into an ESCO contract, the Investment Grade Audit cost is included in the final contract price. 5) Obtain financing and enter into the final contract.

Ok, ok, ok… so what’s the REAL downside??? Well, actually, some folks may not consider some of these as bad things! 1. You are going to have contractual temperature settings in your buildings and the energy usage in these buildings will be monitored by the ESCO. 2. You may also see changes in other energy usage areas such as water and gas. 3. You may see changes to lighting intensity in your offices. 4. The process for entering into an ESCO contract can be lengthy and require a lot of work from the county staff. 5. You will probably enter into a twenty year pay-back financial agreement. 6. Making building modifications and conducting county business at the same time has some challenges. (Have you ever remodeled your home?) 7. It is a long-term partnership between you and the energy company. As your energy needs may change, (new lights, water heaters, etc..), you must notify the ESCO company. As your energy needs change the guarantee contract may be adjusted .

Well GREAT! I’m all in! Can you m ake any recom m endations??? YES !!! Before you do anything else, you, your Commission Chairman and your Maintenance Manager should go visit someone face-to-face that has completed an ESCO project. Lean on them for support. They can guide you step-by-step through the process and talk about any hurdles that you may encounter.

Houston County began our ESCO project in January 2012 by talking face-to-face with a school system that had entered into a $7 million ESCO project. In October 2013 Houston County entered into a $5.2 million contract with an Energy Service Company and work began shortly afterwards. The final equipment will be installed by October 2014.

Bill Dempsey CAO Houston County 334-677-4743 wjdempsey@houstoncounty.org