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Financing
Utility Programs to Promote Advanced Energy
Moderated By: Jack Laverty Columbia Gas of Ohio
Panelists:
Paul Racher Existing Buildings Project Manager Columbia Gas of Ohio
John Seryak Founder/CEO Go Sustainable Energy
Nicole Stika Senior Director of Energy Services Council of Smaller Enterprises
Jon Williams Manager, Energy Efficiency & Demand Response, AEP Ohio
Paul Racher Existing Buildings Project Manager
Columbia Gas of Ohio
Jump Start your Financing with Innovative Energy Solutions
October 2013
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What is Innovative Energy Solutions?
• An energy efficiency program for commercial and industrial customers of Columbia Gas of Ohio
• Provides rebates and incentives for a variety of energy efficiency projects
• 2 Tiers of Eligibility – Annual Usage >=3000 Ccf (300 Mcf) of natural gas
• Custom program
– Annual usage <3000 Ccf • Prescriptive program
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What kinds of custom projects are eligible?
• Energy Audits to determine cost effectiveness of energy efficiency measures – Up to $5,000; matching $ preferred
• Energy Efficiency/Conservation Measures – Up to $100,000 for a cost effective project – Technologies that reduce the use of natural gas
• High efficiency heating systems, insulation, ventilation control, thermostatic controls, building automation systems, cooking, and process improvements, for instance
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What other kinds of custom projects are eligible?
• Research and Demonstration • Experimental Technologies • Building Recommissioning • Evaluation, Measurement and Verification
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How to apply? • Download, complete and submit Energy Audit Application
form – Internal team review for approval within 1 week – Internal team review final energy audit report for accuracy
• For EEMs (after energy audit approved), download, complete and submit Energy Conservation Measure (ECM) Application form – Requires approved energy audit; project application approval – Projects>$50,000 require 3rd party review/approval
• Other projects have separate application form • Complete approved work and submit payment form • www.columbiagasohio.com/ies
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Additional Information
• ~$2.5MM available through end of 2016 • Program being contracted out to DNV KEMA • Partner with AEP rebate programs when possible • Customers who commit to do more than an energy
audit more likely to be funded
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Program Contact Information
Columbia Gas of Ohio Demand Side Management Paul Racher, Existing Buildings Program Manager [email protected] W: (614) 460-4630 C: (614) 357-9194
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Thank you!
Jon Williams Manager, Energy Efficiency
& Demand Response AEP Ohio
Discussion Points
• Business Programs - Focus on Buying Down Capital Cost
• Case Studies • Our Financing Experience to Date: Capital
Acquisition for Energy Efficiency Projects • New Program Opportunity and Implications
for Ohio’s Energy Efficient Future
AEP Ohio EE Business Programs • Prescriptive • Custom • New Construction • Small Business Express • Self Direct • Retrocommissioning (RCx) • Data Centers • Continuous Energy Improvement
Efficient Measures (Prescriptive and Custom)
• Per lamp, horsepower, watts reduced, ton, etc. – Lighting – HVAC – Refrigeration – Motors – VSDs – Compressed Air
Measures • Custom measures
New Construction/Major Renovation: Whole Building
• Construction – Based on 10% efficiency over
ASHRAE 90.1-2007 • Owner incentives
– $0.08 to $0.12/kWh – Based on 10% efficiency over
ASHRAE 90.1-2007 standard
Express Program for Small Business • For AEP Ohio Customers who use
200,000 kWh or less in the last 12 months of usage history
• Small Business Owners receive: – Free Energy Audit with proposal
including recommendations, savings, cost, and payback
– Incentives that cover zero to 80 percent of the total project cost
– 12 months interest-free financing is available
• Registered Express Contractors install recommended measures
Retrocommissioning • Tuning up buildings’ existing systems to bring
them back into an efficient state of operation • RCx will not replace your chiller, but ensure it
is operating efficiently – O&M measures rather than capital investments
• Typical Measures: – Controls upgrade, demand controlled ventilation,
chilled water temperature reset, many more!
Data Center Program
• Data centers are up to 200x more energy intensive than
typical work environments • Any size of IT load is eligible (co-location facility, server
room or server closet) • Incentives are performance-based: greater rewards for
greater energy savings
• Includes new construction or relocation of data center
Continuous Energy Improvement (CEI) • A Strategic Management Approach to Achieving Low/No-Cost
Energy Savings at Industrial Sites • 4 Clusters (cohorts) of industrial sites within AEP Ohio service
territory • Currently 36 large industrial companies across Ohio are
engaged in CEI • Total combined electrical energy usage < 1,000 GWh/year • Program savings goal = 50+ million kWh/year
from low/no-cost initiatives • Program savings to date = 15,500,000 kWh
Case Study -Self Direct Incentives, Savings Fund Future Projects
2010 Library received
approx. $4,000 in SD funds for
previous lighting upgrade
Used $ for additional EE projects
2013 Library received
approx. $20,000 in prescriptive
incentives for broader energy
efficiency improvements
Case Study-Delco Water Measures Implemented
Efficient Lighting & VFD’s
Project Cost $16,885
Annual kWh savings 105,492 kWh
AEP Ohio Incentive $7,375
Payback without Incentive
Approximately 2.0 years
Payback with Incentive Approximately 1.15 years
Program types Efficient Lighting/Motors
Payback calculated at $0.08 per kWh
Case Study - Custom (Office Building project #7359)
Measures= Air handler retrofits, VFD’s run at half speed flow
Project Cost $64,756
Annual kWh savings 179,021 kWh
AEP Ohio Incentive $18,595
Payback without Incentive
4.5 years
Payback with Incentive
3.2 years
Program types Custom
Payback calculated at $0.08 per kWh
Capital for EE Projects; i.e., Capital to Grow/Sustain Your Business
• Financing – Is It a Deal Breaker? Yes and No • Our Financing Experience to Date: Capital
Acquisition for Energy Efficiency Projects • The Fight for Capital – Is a 25%+ ROI Bad? • Utility Funded Customer Incentives Limited
– Financing and Other Strategies are Critical
NEW AEP Ohio Bid to Win Progam • What is Bid to Win?
- Consists of a series of online reverse auctions for financial incentives.
- Pre-qualified Customers and Solution Providers submit bids to deliver energy savings at a price per kilowatt hour.
• Who is eligible for the Bid to Win Program? Customers and Solution Providers
• Goal – Provide competitively bid funding to meet customers’ IRR and capital planning schedules.
Thank You
Jon Williams Manager
Energy Efficiency/Demand Response [email protected]
Web: www.AEPOhio.com/Solutions
John Seryak Founder/CEO
Go Sustainable Energy
Thank you!
Nicole Stika Senior Director of Energy Services
Council of Smaller Enterprises (COSE)
Ohio’s Energy Future
Financing Solutions to Achieve
Energy Efficiency Goals
October 31, 2013
Council of Smaller Enterprises Mission We help small businesses be more successful
by… Saving them money on the cost of doing
business Connect them to the resources and people
they need to succeed Serve as the voice of small business at local,
state and federal levels
Complete turnkey, energy
solutions customized to
meet the needs of the
business
Overcoming Barriers • Despite its potential, there are barriers to pursuing EE
measures: – High upfront costs, with uncertain benefits realized over
many years – Current financing mechanisms rely on public funding and
are insufficient in scale and standardization to effectively address EE
– Lack of widespread access to low-cost financing – Many property owners constrained from borrowing due to
little to no equity, first mortgage – Incentives are often misaligned (owner/tenant)
Providing a Pathway to Capital
Commercial Bank Financing
• Bankable at typical standards • Any size project cost
Enhance Credit
• COSE Energy Loan Guarantee • Not bankable at
typical standards • Up to $35,000 total
project cost guarantee
Alternative Funding
• Ohio Efficiency Fund • Mid-Market Business;
off balance sheet • $100,000 - $1,000,000
total project cost
Delivering an Integrated Solution
Efficiency Services Agreement OERF covers 100% of project cost. Customer repayment based on avoided energy use and reduced operating expense.
Project Installation ESCO designs and installs the EE project and provides long-term maintenance.
Efficiency Services Performance Contract (ESPC) Agreement OERF and ESCO/Contractor enter into a turnkey project installation and
maintenance contract, backed by a performance guarantee.
Project Origination and Support COSE provides customer support throughout
all aspects of the program and assists in project development.
Introduction to Metrus Metrus’ ESA Structure Value Proposition Case Study Questions / Appendix
CONTRACTOR
CUSTOMER
Project Transactions • Fund
– Sign efficiency services agreement with customers – Enter into key project-level contracts with trade
contractors – Mitigate key investment risks – Utilize low-cost sources of capital to enable
customers to implement projects that would otherwise go undone
• Customer – Enter into the ESA; provide facility access to trade
contractors to install & maintain EE project – Reduces energy usage; continue utility service – Make ESA payments to the Fund based on realized
energy savings
• Efficiency Services Contractor – Enters into EPC, O&M, M&V agreements with Fund – Provides performance guarantee on energy savings
FUND
CONTRACTOR CUSTOMER
Efficiency Services
Agreement
Efficiency Services
Performance Contract
• Scope: Lighting retrofit RTU/Split Replacement Compressed Air Upgrade On-Demand DHW HVAC Controls Cooling Add/Waste Heat Recovery
• $453,488 million project costs • $44,237 in total annual savings • Y1 utility incentive = $18,056
• ESA contract term of 10 years
• Existing Utility Rates:
• Electric (kWh) = $0.069/kWh
• Electric (kW) = $10.68/kW
• Thermal (mmBTU) = $6.69/mmBTU
• Utility Escalation: 3%
• ESA Rates: 100% of existing rate
• ESA Escalation: 3%
Project Characteristics ESA Terms
Proposed Project: Preliminary Terms
40
Introduction to Metrus Metrus’ ESA Structure Value Proposition Case Study Questions / Appendix
Nicole Stika Senior Director, Energy Services
W: 216.592.2338 C: 216.258.2548 [email protected] cose.org/energy
Thank you!
Q & A
