Medford Township Public Schools 137 Hartford Road Medford, NJ Request for Proposals (RFP): Third Party Review of Energy Savings Plan

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1 Medford Township Public Schools 137 Hartford Road Medford, NJ Request for Proposals (RFP): Third Party Review of Energy Savings Plan Proposal due no later than end of business day: Tuesday, March 24, 2015

2 Medford Township Public Schools (District) is soliciting proposals for a third party review of a proposed Energy Savings Plan authored by the District s selected Energy Services Company, Schneider Electric (SE). The Local Government Energy Audit is included for informational purposes. As described under Chapter 4 of the laws of 2009, the Energy Savings Improvement Program law, and Local Finance Notice , the requirements of this third party review are as follows: Task 1 Energy Savings Plan Review Upon completion of the Energy Savings Plan by SE, the third party reviewer will work with the Project Team to perform the following: 1. Review the ESP information supplied by SE to become familiar with the project requirements. 2. Provide the professional services required to certify that the ESP proposed by SE is developed and executed in accordance with the DCA guidelines and BPU protocols and as dictated in Local Finance Notice and associated BPU rules and regulations. 3. Provide a certification stating ESP savings were properly calculated and all required elements of the law were covered. 4. Review must be completed within ten (10) business days of receiving notice award. Task 2 Energy Savings Plan Standards Verification Upon completion of construction or in conjunction with the commissioning process, the third party reviewer in coordination with the District and SE will provide the following services to support the required third party verification: 1. Verification that the installed equipment and/or systems meet efficiency and performance criteria as specified in the ESP. 2. Verification that the installed energy conservation measures meet the operational intent specified in the ESP. 3. Verification to ensure the savings projected in the energy savings plan shall be achieved. 4. Identification of non-compliance and magnitude between installed energy conservation measure conditions and ESP intended requirements. 5. Provide a document detailing results of verification for each facility included in the ESP. The District reserves the right to award this contract for ONLY for Task 1, or for Task 1 AND Task 2. Proposals are due no later than end of business day Tuesday, March 24, Late submissions will not be accepted. All submissions must be sent to Mr. Chad Fires, School Business Administrator, at the contact address listed below. Please provide one (1) original, 4 copies, and one electronic copy on a USB. The following documents MUST be submitted with your proposal: 1. Valid New Jersey Business Registration Certificate (NJBRC) MTPS - RFP for 3rd Party IGEA Review Page 1 of 56

3 2. Current completed W-9 Form 3. Proof of DPMC qualifications to perform this review ( Energy Auditor ) 4. List of prior ESP third party reviews performed by your organization 5. Any additional information relevant to your organization s qualifications and experience Appendices: A. Local Finance Notice B. Executive Energy Report from the Local Government Energy Audit (LGEA) completed by Concord Engineering Group (CEG). Building reports can be furnished electronically by request. Contact Information: For administrative information: Chad Fires Business Administrator Medford Township Public Schools 137 Hartford Road Medford, New Jersey cfires@medford.k12.nj.us extension 8045 For technical information: Bunty Dharamsi Schneider Electric 6800 Paragon Place, Suite 470 Richmond, VA bunty.dharamsi@schneider-electric.com (cell) VENDOR QUESTIONS AND/OR CLARIFICATION It is the responsibility of the bidder to inquire about any part of the proposal package that is not clearly understood. All communications and/or questions are to be documented and submitted in person, by fax to , or via , cfires@medford.k12.nj.us. MTPS - RFP for 3rd Party IGEA Review Page 2 of 56

4 EVALUATION CRITERIA The District reserves the right to consider the following factors: 1. Past performance; 2. Whether the vendor s proposal demonstrated a clear understanding of the scope of work and related objectives; 3. Whether the vendor s proposal is complete and responsive to the public notice and specifications; 4. Whether the vendor s past performance of the same or similar services has been documented; 5. History and experience of the vendor in performing the work, including whether the vendor is able to document a record of reliability; 6. Whether the vendor has a record of honesty and moral integrity; 7. Availability of the vendor s personnel, facilities and other resources, including proximity to project location; 8. The qualifications and experience of the vendor s staff; MTPS - RFP for 3rd Party IGEA Review Page 3 of 56

5 Appendix A: Local Finance Notice MTPS - RFP for 3rd Party IGEA Review Page 4 of 56

6 Appendix B: Abbreviated Phase I Investment Grade (IGEA) Audit Report Full Report May Be Obtained by ing: Mr. Chad Fires cfires@medford.k12.nj.us MTPS - RFP for 3rd Party IGEA Review Page 5 of 56

7 Appendix C: Executive Summary Report from the Local Government Energy Audit (LGEA) completed by Concord Engineering Group (CEG). An Electronic Copy of Building Reports May Be Obtained By ing: Mr. Chad Fires MEDFORD TOWNSHIP PUBLIC SCHOOLS ENERGY SAVINGS PLAN THIRD PARTY REVIEW PROPOSAL SUBMISSION CHECKLIST MTPS - RFP for 3rd Party IGEA Review Page 6 of 56

8 Submitted with Proposal Proposer s Initials Valid New Jersey Business Registration Certificate Current completed W-9 Form Proof of DPMC qualifications to perform this review ( Energy Auditor ) List of prior ESP third party reviews performed by your organization Any additional information relevant to your organization s qualifications and experience MEDFORD TOWNSHIP PUBLIC SCHOOLS ENERGY SAVINGS PLAN THIRD PARTY REVIEW PROPOSAL FORM Due End of Business Day Tuesday, March 24, 2015 MTPS - RFP for 3rd Party IGEA Review Page 7 of 56

9 Corporate Name of Proposer Date Address Print Name of Person Preparing Proposal Address Title City, State, Zip Code Name of Authorized Company Agent/Officer Phone Number Title Fax Number Authorized Signature Task Proposal Action Proposal Cost One Energy Saving Plan Review Two Energy Savings Plan Standards Verification MTPS - RFP for 3rd Party IGEA Review Page 8 of 56

10 Appendix B: Abbreviated Phase I Investment Grade (IGEA) Audit Report Full Report May Be Obtained by ing: Mr. Chad Fires cfires@medford.k12.nj.us MTPS - RFP for 3rd Party IGEA Review Page 9 of 56

11 LFN June 12, 2009 Jon S. Corzine Governor Joseph V. Doria Commissioner Susan Jacobucci Director Contact Information Director's Office V F Local Government Research V F Financial Regulation and Assistance V F Local Finance Board V F Local Management Services V F Authority Regulation V F Mail and Delivery 101 South Broad St. PO Box 803 Trenton, New Jersey Web: Distribution Municipal and Freeholder Clerks Municipal and County Chief Financial Officers Local Procurement Officials Authority Executive Directors School Business Officials Fire District Boards of Commissioners Implementing an Energy Savings Improvement Program P.L. 2009, c.4 A new State law allows government agencies to make energy related improvements to their facilities and pay for the costs using the value of energy savings that result from the improvements. Under the recently enacted Chapter 4 of the Laws of 2009 (the law), the Energy Savings Improvement Program (ESIP), provides all government agencies in New Jersey with a flexible tool to improve and reduce energy usage with minimal expenditure of new financial resources. This Local Finance Notice outlines how local units (all entities falling under either the Local Public Contracts Law or Public School Contracts Law) can develop and implement an ESIP for their facilities. ESIP also affects county colleges, though they do not have options related to competitive contracting, have different financing options and will receive guidance from the State s Higher Education Facility Financing Authority. The ESIP law grants similar authority to State agencies and while they follow the same general model, they will receive implementation guidance from the Department of Treasury. The ESIP approach may not be appropriate for all energy conservation and efficiency improvements. Local units should carefully consider all alternatives to develop an approach that best meets their needs. Local units considering an ESIP should carefully review this Notice, the law, and consult with qualified professionals to determine how they should approach the task. The Notice provides both guidance and direction for local units and is divided into the following sections: I. Energy Savings Improvement Plan Basics II. Developing and Implementing an ESIP A. The Energy Audit B. Development and Approval of an Energy Savings Plan C. Role of Energy Services Companies D. Design, Installation and Verification of Improvements E. Financing the ESIP III. ESIP Related Directives IV. Conclusion MTPS - RFP for 3rd Party IGEA Review Page 10 of 56

12 Local Finance Notice June 12, 2009 Page 2 The law is organized into several sections, each addressing different government agency contracting laws (i.e., Public Schools Contracting, Local Public Contracting, etc.). Within each section, the ESIP process is generally the same; the differences are found in financing procedures. Regulations codifying various elements are being developed and will follow shortly. Until the regulations are adopted this Notice serves as directive in nature. The Division of Local Government Services is working with the Board of Public Utilities (BPU) to develop a best practices handbook, and model contracting documents. These will be developed and distributed over the next few months. Local officials should also be aware that the BPU, though its Office of Clean Energy (OCE) Commercial and Industrial program offers a wide range of energy efficiency and renewable incentive programs, some of which can be integrated with an ESIP. These include the Local Government Energy Audit Program, the CleanPower Community Partners Program, and other incentives described on the OCE website. In addition, the new Sustainable Jersey Program provides support and information on energy conservation and efficiency programs to municipal governments. Recipients are asked to share this Notice with appropriate staff in their organization. I. Energy Savings Improvement Program Basics The ESIP allows local units to use energy savings obligations to pay for the capital costs of energy improvements to their facilities, and paying for annual costs of the obligations with the savings from reduced energy costs. Energy savings obligations are not considered new general obligation debt of a local unit and do not count against debt limits or require voter approval. They may be issued as refunding bonds or leases. This is covered in greater detail in Section II-E. The law provides the framework to use energy savings obligations to finance energy improvements. The provisions of the law can only be used when energy savings obligations are used to finance improvements. Nothing in the law prevents a local unit from designing, implementing, and financing energy improvements through traditional contracting and debt authorization procedures. There are three general issues that are important to developing and implementing an ESIP; public bidding of construction work, developing of an energy services plan, and use of state approved contractors for all ESIP work. Each of these is discussed below. The first issue is that all ESIP work that meets the traditional definition of public work contracting (N.J.S.A. 34: ) is subject to prevailing wages and public bidding. This 1 N.J.S.A. 34: Public work means any construction, reconstruction, demolition, alteration or repair work, or maintenance work including painting and decorating, done under contract and paid for in whole or in part out of the funds of the public body, except work performed under a rehabilitation program. Public work also means construction, reconstruction, demolition, alteration, or repair work done on any property or premises, whether or not the work is paid from public funds, if at the time of entering into the contract: 1. Not less than 55% of the property or premises is leased by a public body, or is subject to an agreement to be subsequently leased by the public body; and 2. The portion of the property or premises that is leased or subject to an agreement to be subsequently leased by the public body measures more than 20,000 square feet. MTPS - RFP for 3rd Party IGEA Review Page 11 of 56

13 Local Finance Notice June 12, 2009 Page 3 includes the usual requirements that follow a public works contract, such as bid specifications, listing of required subcontractors, surety bonding, public works contractor registration, and award to the lowest responsible bidder, etc. The second issue is how a local unit develops and implements an ESIP. The key element is the preparation of an energy savings plan (ESP). The content of the ESP is covered in Section B-2. Subject to the framework of the law, a local unit has flexibility to use a model that best fits its needs. There are three primary ways an ESP can be developed: 1) Through the use of an energy services company, commonly known as an ESCO. 2) Through the use of independent engineers and other specialists, or using the local unit s own staff to provide and manage the individual functions that make up an ESP. 3) Through a hybrid model, where an ESCO may be hired for some purposes (i.e., the development of the ESP) and the local unit s engineer may prepare bid specifications. ESCOs are commercial entities that are qualified to develop and implement an energy savings plan. Traditionally an ESCO can develop the ESP, design the improvements, manage the construction, and oversee the startup ( commissioning ) of the improvements. ESCOs may also provide a guarantee of energy savings. Several ESCOs also manufacture energy systems (i.e., boilers, chillers, ventilating systems) and the controls that run the system. The law has special procedures concerning ESCO guarantees and controls, Section E discusses them in detail. When using its own resources or contracting for individual services, a local unit would use professional service contracting as appropriate, and hire construction contractors pursuant to traditional public bidding contracting laws and procedures. Under the hybrid model, either an ESCO or the local unit s design professional could be responsible for project management, specification development, or other elements of the work. Local units are also reminded that neither the Local Public Contracts Law or the Public School Contracts Law permit mandatory bidder meetings for competitive contracting or for public bidding. These meetings may be advisory in nature and recommended, but potential proposers or bidders cannot be penalized or prohibited from submitting proposals or bids if they fail to attend such a meeting. Finally, the law requires that all contractors (at any level) performing ESIP work must be listed or qualified by the State Division of Property Management and Construction (DPMC). This DPMC procedure is already required for all public school and State construction work, and is required for any government agency using the ESIP procedure. DPMC recently expanded their trade/discipline listings to include ESCOs and firms qualified to perform measurement and verification (both energy auditing and building commissioning firms). Government agencies that contract for engineering or architectural services should ensure that their consultants have properly filed with the DPMC and have a proof of approval. DPMC listed construction trade contractors and prequalified professional services consultants meet specific qualification and experience standards. They are also evaluated on the dollar volume of MTPS - RFP for 3rd Party IGEA Review Page 12 of 56

14 Local Finance Notice June 12, 2009 Page 4 contracts in which they can engage and provided with a dollar rating for the services they are approved to provide. Details on the DPMC process and practices are available on their website. To summarize, all ESIP-based bid or RFP specifications related to the qualifications of contractors and sub-contractors (at any level) must require DPMC contractor classification listing or consultant prequalification approval as a prerequisite. A. The Energy Audit II. Developing and Implementing an ESIP The first step in developing an ESIP is to conduct an energy audit. The energy audit shall identify the current energy use of any or all facilities and energy conservation measures that can be implemented to realize and maximize energy savings and energy efficiency. The statutory definition of energy conservation measures reads: an improvement that results in reduced energy use, including, but not limited to, installation of energy efficient equipment; demand response equipment; combined heat and power systems; facilities for the production of renewable energy; water conservation measures fixtures or facilities; building envelope improvements that are part of an energy savings improvement program; and related control systems for each of the foregoing. (See Appendix A for detailed examples of energy conservation measures). Note that the definition includes water conservation measures which, in turn is defined as an alteration to a facility or equipment that reduces water consumption, maximizes the efficiency of water use, or reduces water loss. For the purposes of ESIPs, water conservation is included in references to energy savings. Other important elements of the energy audit include Energy Audit Standards, Contracting for Auditors, and Open and Transparent Competition. Each of these is discussed below. Energy Audit Standards There are several types of industry-standard energy audits: Level 1 - Walk-through Assessment A walk-through assessment involves assessing a building s energy cost and efficiency by analyzing energy bills and conducting a brief survey of the building. A Level 1 energy analysis will identify and provide a savings and cost analysis of low-cost/nocost measures. It will also provide a listing of potential capital improvements that merit further consideration, along with an initial judgment of potential costs and savings. Level II - Energy Survey and Analysis An Energy Survey and Analysis includes a more detailed building survey and energy analysis. A breakdown of energy use within the building is provided. A Level II energy analysis identifies and provides the savings and cost analysis of all practical measures that meet the owner s constraints and economic criteria, along with a discussion of any effect on operation and maintenance procedures. It also provides a listing of potential capital-intensive improvements that require more thorough data MTPS - RFP for 3rd Party IGEA Review Page 13 of 56

15 Local Finance Notice June 12, 2009 Page 5 collections and analysis, along with an initial judgment of potential costs and savings. This level of analysis will be adequate for most buildings and measures. Level III - Detailed Analysis of Capital-Intensive Modifications A Detailed Analysis focuses on potential capital-intensive projects identified during Level II and involves more detailed field data gathering and engineering analysis. It provides detailed project cost and savings information with a high level of confidence sufficient for major capital investment decisions. It is also known as an investment grade audit. The standards of the BPU Local Government Energy Audit Program serve as the requirements for the type of audit conducted as part of an ESIP. A Level 1 audit will not provide adequate information for informed decision making. Under the BPU model, a Level III audit is required for lighting efficiency improvement projects, and a Level II for all other potential energy conservation measures. In circumstances where the local unit has its own qualified staff to conduct the audit, those individuals may participate in the preparation of the ESP otherwise the local unit must contract for audit services. Contracted audits services can be performed by an independent contractor, but cannot be performed by an ESCO that will be contracted to perform other ESIP services. Contracting for Auditors The DLGS has determined that the energy audit service does not meet the standard of a professional service under the contracting laws, but does fall under the provisions of competitive contracting. Local units can contract for energy audit services through competitive contracting, public bidding, or use the State contract (T-2545). The professional services exception cannot be used to hire an energy auditor, even if those services are provided by a professional engineer. Any auditor hired as part of an ESIP must be prequalified by the DPMC. At this time, the BPU audit program provides a 75 percent grant for the cost of the audit and the local unit must provide the remaining 25 percent as matching funds. The BPU will reimburse the 25 percent match when improvements that offset that cost are implemented. 2 The audits are conducted under common standards by vendors chosen through a State contract. Subject to laws affecting a local unit, matching funds can be appropriated outside of budget caps (appropriation and levy) through appropriations for, or from capital improvement funds, or as preliminary expenses of a bond ordinance that may be used to fund the improvements. Details on the Local Government Energy Audit Program are available at the Office of Clean Energy website. Open and Transparent Competition The law provides that an ESCO engaged to prepare the Energy Savings Plan cannot conduct the energy audit. This requirement ensures that the audit will be prepared by an independent third party to provide the local unit with information concerning the range of potential energy conservation measures. This approach ensures a level playing field, so that vendors competing to develop the Energy Savings Plan have an independent document on which to base their proposals. 2 The BPU can change the requirements for matches and other program elements. The most recent information is available on the Clean Energy website. MTPS - RFP for 3rd Party IGEA Review Page 14 of 56

16 Local Finance Notice June 12, 2009 Page 6 Consistent with the principles of open competition, equity, and transparency, an auditor who performed an audit for a local unit cannot be hired by an ESCO that is subsequently contracted to do work for the same local unit. Individuals who worked on the audit would have special information about the project which could unfairly affect competition among ESCO vendors and could lead to unethical or inappropriate business practices. These principles also mean that all vendors considering submitting a response to an RFP for an ESCO must have a level playing field and equal access to the results of the audit. Generally, the audit must be completed prior to issuing a competitive contracting RFP for an ESCO. In order for ESIPs to move expeditiously, but be consistent with State law, there is room for a modified approach that can save time and comply with the law when the services of an ESCO are planned. The Division is authorizing an alternative, compressed-timeframe approach to support an expedited process. This permits the ESCO RFP process to begin (RFP advertised), but without the completed (but underway) audit in hand. The process must then be timed in such a way that all potential bidders are provided the audit and are then given the minimum 20 days required under a competitive contract to submit proposals. This requires the local unit to ensure that it has contact information of the parties that receive copies of the RFP and to forward a copy of the audit once it is received. It may also require that due dates be changed. In addition, when this compressed-timeframe is used, the local unit should include any scope of work documents that were provided to the audit firm as part of the RFP documents. This will also facilitate the process by providing useful information to the interested parties. B. Development and Approval of an Energy Savings Plan The Energy Savings Plan is the core of the ESIP process. It describes the energy conservation measures that are planned and the cost calculations that support how the plan will pay for itself in reduced energy costs. Under the law, the ESP must address the following elements: the results of the energy audit; a description of the energy conservation measures that will comprise the program; an estimate of greenhouse gas reductions resulting from those energy savings; identification of all design and compliance issues and identification of who will provide these services; an assessment of risks involved in the successful implementation of the plan; identify the eligibility for, and costs and revenues associated with the PJM Independent System Operator for demand response and curtailable service activities; schedules showing calculations of all costs of implementing the proposed energy conservation measures and the projected energy savings; maintenance requirements necessary to ensure continued energy savings, and describe how they will be provided; and if developed by an ESCO, a description of, and cost estimates of a proposed energy savings guarantee. The ESP requires several other important elements: MTPS - RFP for 3rd Party IGEA Review Page 15 of 56

17 Local Finance Notice June 12, 2009 Page 7 1. The calculations of energy savings must be made in accordance with protocols for their calculation adopted by the BPU. The calculation shall include all applicable State and federal rebates and tax credits, but shall not include the cost of an energy audit and the cost of verifying energy savings. The protocols are expected to be adopted by the BPU shortly. 2. An independent third party must review the plan and certify that the plan savings were properly calculated pursuant to the BPU protocols. 3. If an ESCO is used to prepare the plan, the ESCO must provide an estimate of the cost of a guarantee of energy savings. When adopting the plan, the local unit must decide whether or not to accept the guarantee (covered below). 4. If an ESCO is not used, the technical nature of the plan allows use of the bid exception for professional services contracting when the work to be performed meets the definition of professional services under the relevant contracting law. 5. The plan must be verified by an independent third party to ensure that the calculations were made in accordance with the BPU standards and that all required elements of the ESP are covered. 6. After verification is completed, the governing body must formally adopt the plan. At that point, the plan must be submitted to the Board of Public Utilities where it will be posted on the BPU website. BPU approval is not required. If the contracting unit maintains its own website, the plan must also be posted on that site. 7. The BPU is authorized to receive periodic reporting concerning the implementation of the Energy Savings Plan. This requirement has not yet been implemented. The law defines energy savings as a measured reduction in fuel, energy operating or maintenance costs resulting from the implementation of one or more energy conservation measures when compared with an established baseline of previous fuel, energy, operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed as part of an energy savings plan. Note that the next to the last clause of the definition above allows for replacement of an element (i.e., a boiler) that may not have yet reached its end of service, but if other things are being replaced, the law provides a method to discount the energy savings that result from that replacement at the same time other work is being done. The law also recognizes there may be cases where making some energy improvements may lead to a desire to make improvements that do not reduce energy use. An example may be an older school building that can have its boiler and ventilating system replaced, and have a digital control system installed. While these may reduce energy use, the Board of Education may also want to add air conditioning, an improvement that does not reduce energy use, but may be a useful and efficient improvement for the facility. In this example, the law permits energy-related capital improvements that do not reduce energy usage to be included in an energy savings improvement program. The cost of the improvements, however, cannot be financed through energy savings obligations, but must be paid for through other appropriations (i.e., bonds or capital improvement funds). It is not the intent of the law to prevent financing of such capital improvements through otherwise authorized means. MTPS - RFP for 3rd Party IGEA Review Page 16 of 56

18 Local Finance Notice June 12, 2009 Page 8 C. Role of Energy Services Companies ESCOs can play an important role in ESIPs. They can provide a local unit a full soup-to-nuts approach, assuming responsibility for the entire process, from preparation of the Energy Savings Plan, to design and preparation of construction plan documents and bid specifications, to serving as a general contractor by contracting with and overseeing subcontractors hired through the bidding process, to providing an energy savings guarantee, or provide any of the individual elements. When preparing a competitive contracting RFP, the local unit should carefully consider the role it wants the ESCO to play, particularly with regard to the role of other agency professionals. As such, the law addresses several provisions regarding the unique nature of ESCOs. Some of these provisions are different from ESCO laws in other states. First (and discussed above), is that an ESCO cannot prepare the initial energy audit. This is to preserve the independence of the process and to ensure that the audit covers all energy conservation measures, not just the expertise possessed by an individual ESCO. Second, ESCOs shall be hired through the competitive contracting process and cannot be hired through the professional services exception. In preparing a competitive contracting RFP for ESCO services, the local unit should provide the energy audit and ensure that qualifications and experience of an ESCO are addressed in terms of the items recommended in the audit. As long as the ESCO retains ultimate responsibility for the work, they may rely on subcontractors this is a common industry practice. ESCOs and their subcontractors must also be pre-qualified or listed with the DPMC. The competitive contracting process requires the local unit to identify criteria to serve as the basis of an award to an ESCO. These criteria should reflect local needs, but would normally include experience with the type of ECMs that are recommended in the audit, scope of services they propose, price of the services the ESCO will provide, and initial estimates of savings. Third, an ESCO is required to provide a cost estimate of a energy savings guarantee, and then enter into a guarantee agreement if the local unit determines it useful. When the ESCO concept was developed and originally implemented in other states over 20 years ago, a guarantee was considered essential to ensure that the system would perform as specified and that the promised savings would accrue. At the same time, guarantees required that the owner maintain the system in accordance with the manufacturer s specifications, that adjustments would be made to reflect change in energy use from the initial baseline, and that specialized monitoring systems would be installed to monitor the system s performance at added cost to the owner. Since that time, the technology of energy systems has evolved to the point that in many cases a guarantee may not be required. Key elements of this change include the international standards (the basis for the BPU protocols) for calculating energy savings, lower cost monitoring systems, and the requirement that the plan is verified three ways: 1) with savings being calculated in accordance with the BPU protocols, 2) that the system was installed properly ( commissioning ), and, most importantly, 3) that the system operator maintains the system in accordance with specifications. If these elements are in place, the energy savings will accrue without the need for a guarantee. Local units should carefully consider the need for a guarantee and measure its cost, given the verification requirements that are part of the process. With or without an ESCO guarantee, ongoing maintenance as recommended by an ESCO or manufacturer specifications is required to achieve the projected energy savings. Maintenance should also include a periodic verification of the system to make sure the maintenance is properly conducted and the system is meeting the original specifications and design. If the owner fails to maintain the system, an ESCO guarantee may be voided and added energy costs will be incurred. If there is no ESCO guarantee and the owner fails to properly maintain the system, savings will be lost MTPS - RFP for 3rd Party IGEA Review Page 17 of 56

19 Local Finance Notice June 12, 2009 Page 9 and the local unit will incur additional energy costs, as they will continue to pay for the improvements and more for energy that did not need to be consumed. If a guarantee is used, the law requires a third party (not the ESCO) perform the calculations necessary to see if the guarantee is met, and the periodic cost of the calculations cannot be financed through energy savings obligations. A guarantee can be for any length of time; it does not have to be for the useful life of the improvement. In some cases, a guarantee for a limited period of time may be appropriate and cost-effective. Fourth, an ESCO can serve in various capacities in an ESIP. The cost of ESCO services must be absorbed as part of the overall calculation of energy savings. In this role, the ESCO can perform any or all of the following activities: Prepare the energy savings plan; Prepare construction plans and specifications (assuming the ESCO uses a licensed architect or engineer as appropriate to the work); Serve as the general contractor of the project, and following the laws and requirements of the owner by publicly bidding and public works contracting, employ subcontractors, and perform other duties traditionally performed by a general contractor; Serve as project manager, and on behalf of the owner, be responsible for and oversee project schedules, supervise subcontractors and installation work, oversee performance and quality of the work, approve payment of subcontractors, project completion, commissioning, and savings implementation; except that a subsidiary or wholly-owned or partially-owned affiliate of an ESCO cannot serve as a contractor or subcontractor; Handle allocation of State and federal rebates and tax credits; Handle the financing of energy savings obligations (usually leases); and, Any other provisions deemed necessary by the parties. Fifth, for projects guaranteed by an ESCO that manufactures its own digital energy control system, the ESCO can specify its own equipment as part of the construction bid specifications. Under the law, these direct digital controls (DDC) are declared to be proprietary in nature, which permits their specification in lieu of any other manufacturer s products. When bidding, the specifications shall provide an allowance amount for the cost of the DDC; meaning that the cost of the DDC equipment shall not be a part of the determination of the lowest responsible bidder. The allowance is a fixed amount set by the ESCO and is used by all bidders. The ESCO has the incentive to keep the cost low to ensure that the overall savings are not jeopardized. The cost of installing DDC, however, is part of the bid calculation. Non-DDC items that are manufactured by an ESCO must be specified as an or equal or be based on industry standards and LPCL rules (N.J.A.C. 5: and 9.2), and cannot be restricted to the ESCO, unless all requirements of proprietary goods and services rule are met. Sixth, when an ESIP mixes ESCOs and other services, there is the potential for professional or monetary conflicts of interests. Local units should ensure that contracting relationships do not create conflicts of interest or provide potential monetary incentives that go beyond the contract with the local unit. For example, if the local unit s architect or engineer is determined to be the best qualified to prepare design specifications and plans based on an energy savings plan prepared by an ESCO, the local unit must hire and pay the professional; the professional cannot be hired by and be contractually responsible to an ESCO. Finally, an agreement with an ESCO must contain a requirement that the savings that are achieved by energy conservation measures will be verified upon commissioning of the improvements. MTPS - RFP for 3rd Party IGEA Review Page 18 of 56

20 Local Finance Notice June 12, 2009 Page 10 D. Design, Installation and Verification of Improvements Once an Energy Savings Plan has been verified by an independent third party, approved by the local unit governing body, and filed with the BPU, the project becomes a routine public works project. Design of construction plans and preparation of specifications follow, with contracts for the necessary professionals being executed by the governing body or provided through the contract with an ESCO. The law is very specific about how improvements are made or implemented. As discussed in Section I, the routine public works construction contracting procedures of the local unit are followed, whether or not an ESCO is used. This includes requirements regarding public bidding, bid security, performance guarantees, insurance, and other requirements that are applicable to public works contracts. Once plans and bid specifications are prepared, the governing body advertises for bids, and the usual course of contracting is followed. If the ESCO or project engineer is engaged as a project manager, they may have a role in reviewing and recommending award of contracts. The role of all professionals and an ESCO must be clearly defined in its contractual arrangements, in bidding documents, and with its professionals or ESCO. When construction is completed, most energy improvement projects require commissioning; the process of starting, testing, and adjusting the improvements to make sure they are working in accordance with the design and meeting the projected energy savings. In many cases, specialized service providers known as commissioning agents serve this role. The DPMC also has a listing of prequalified Building Commissioning firms approved to provide commissioning services. In addition, local staff must be trained in the use of the system and be taught how to perform routine maintenance unless maintenance will be performed under a separately procured service contract (service contracts are not part of the ESIP process and are subject to the local unit s procurement laws). Training requirements should be explicitly required in bid documents or ESCO contracts. Contract documents should also ensure that there is sufficient retainage of contractor funds to ensure that the contractor is not fully paid until the system is successfully commissioned. The law requires that once commissioning is completed, an independent third party must review the system to make sure the standards set by the Energy Savings Plan are met that the system is meeting the requirements of the plan. This party could be the commissioning agent if independent from other contractors (and an ESCO), or could be the original auditor or Energy Savings Plan verifier. If this is successfully completed, the local unit can be assured, that with proper maintenance, the system will perform as planned, and energy savings goals realized. Finally, if the project involves an ESCO guarantee, contracts should be executed with a third party to conduct a periodic review of energy use on the agreed upon guarantee schedule. The costs to conduct the review are paid from the local unit s annual budget, and are not part of the energy savings calculation. E. Financing the ESIP An ESIP can be financed through energy savings obligations. The term refers to the two primary financing tools, debt and lease-purchase instruments. Each of these options is discussed below. MTPS - RFP for 3rd Party IGEA Review Page 19 of 56

21 Local Finance Notice June 12, 2009 Page 11 Financing an ESIP is based on the principle, that with certain exceptions (i.e., audit and verification costs), the cost of the improvements (including planning, design, engineering, construction, etc.) will be paid through the value of reduced energy costs. Using the BPU protocols for calculating savings, energy costs, and inflation as standards across all local units is a critical component of the ESIP. Energy savings obligations shall not be used to finance maintenance, guarantees, or the required third party verification of energy conservation measures guarantees. Energy saving obligations, however, may include the costs of an energy audit and the cost of verification of energy savings as part of adopting an energy savings plan or upon commissioning. While the audit and verification costs may be financed, they are not counted in the energy savings plan as a cost to be offset with savings. In all cases, the maturity schedules for energy savings obligations must not exceed the estimated useful life of the individual energy conservation measure. An ESIP can also include installation of renewable energy facilities, such as solar panels. Under an energy savings plan, solar panels can be installed, and the reduced cost of energy reflected as savings. Alternatively, a power purchase agreement that is executed pursuant to Chapter 83 of P.L can be included in the calculations of energy savings. Local Finance Notice reviews renewable Power Purchase Agreements contracting under Chapter 83. Since the ESIP legislation amended parts of Chapter 83, readers should be sure to refer to the most recent statutory references when reviewing the laws. The law also provides that the cost of energy saving obligations may be treated as an element of the local unit s utility budget, as it replaces energy costs. The Division of Local Government Services and Department of Education are currently reviewing the mechanics of this process in light of budget cap and disclosure issues and will provide guidance on budgeting of energy saving obligations. Debt Issuance The law specifically authorizes municipalities, school districts, counties, and fire districts to issue refunding bonds as a general obligation, backed with full faith and credit of the local unit to finance the ESIP. Because an ESIP does not effectively authorize new costs or taxpayer obligations, the refunding bond is appropriate and proper, as it does not affect debt limits, or in the case of a board of education, voter approval. The routine procedures for refunding bonds found in the Local Bond Law and Public School Bond Law would be followed for issuance of debt, along with any required Bond Anticipation Notes as authorized pursuant to law. With regard to bonds for public schools, the Department of Education (DoE) has concluded that debt financed ESIP projects are not covered by State aid for debt service or a Section 15 EFFCA Grant as there is no new local debt being authorized. State debt service aid will be available for those portions of an ESIP that includes other non-energy savings improvements that will be paid through voter-approved debt. As a refunding bond, however, school energy savings obligations are eligible for coverage under the school bond reserve fund. Finally, projects funded under an ESIP program require DoE Other Capital Project approval. Additional information on school debt issues can be found at MTPS - RFP for 3rd Party IGEA Review Page 20 of 56

22 Local Finance Notice June 12, 2009 Page 12 Lease Purchase Financing The use of lease-purchase financing has been used by ESCOs since the concept was created in the 1980s. The use of lease purchase financing eliminated the need of a local unit to issue debt and in the case of public schools, to obtain voter approval. A local unit can enter into a lease-purchase agreement to implement an ESIP with a single investor lease or certificates of participation. The agreement can be entered into directly by the local unit, with ESCO, other private financing party, or through a county improvement authority or the New Jersey Economic Development Authority. When a local unit enters into a lease with a private party that is not a governmental entity, or with the ESCO it has selected through competitive contracting, it must be done in accordance with a competitive process as required under the local unit's procurement law. The following additional requirements affect ESIP leasing: i. Ownership of the energy savings equipment or improvements shall remain with the third party financing entity until all lease payments have been made or other requirements of the financing documents for the satisfaction of the obligation are met. If improvements are made to facilities owned by the local unit, the local unit will have to enter into a ground lease of the facilities to be leased back to the local unit. ii. The duration of a lease-purchase agreement shall not exceed 15 years, except that the duration of a lease purchase agreement for a combined heat and power (CHP) or cogeneration project shall not exceed 20 years. CHP and cogeneration facilities are specialized types of energy conservation measures. The law supersedes the existing 5 year limit on lease-purchase financing for these types of projects. iii. Any lease purchase agreement may contain a clause making it subject to the availability of sufficient funds as may be required to meet the extended obligation; or a nonsubstitution clause maintaining that if the agreement is terminated for non-appropriation, the contracting unit may not replace the leased equipment. While normal for these types of leases, the optional nature in the law permits the transaction attorney to negotiate them as terms of a lease agreement. III. Summary of ESIP Related Directives The law authorizes the Division to adopt expedited rules to implement ESIP related issues. Until that process is completed, the Division is authorizing several implementation directives to permit ESIP work to begin. In addition, there are several statutory inconsistencies in two sections of law that when read without context are contrary to the intent of the law. Specifically, this refers to the third and fourth sentences in paragraph (c)(4) of sections 1 and 6 of the law. To be consistent with the statute, both of these sections should be read as follows (deletions shown as bold strikeouts, new text, bold, underlined). Notwithstanding any law to the contrary, lease-purchase agreements and energy savings certificates obligations shall not be excepted from any budget or tax levy limitation otherwise provided by law. Maturity schedules of lease-purchase agreements or energy savings obligations must not exceed the estimated useful life of the individual energy conservation measures. MTPS - RFP for 3rd Party IGEA Review Page 21 of 56

23 Local Finance Notice June 12, 2009 Page 13 Combining all elements in this Notice together, the following matters shall be treated as directive in nature pending adoption as a rule: A. The competitive contracting process (N.J.S.A. 40A: et seq and 18A:18A-4.1 et seq and rules at N.J.A.C. 5: et seq.) may be used by local units to procure ESCO services. B. The energy audit for a facility must be completed prior to issuing a Request for Proposals for an ESCO and must be made available to firms as part of an RFP. C. Organizations involved in an energy audit cannot be hired by an ESCO to assist in the development or implementation of an ESIP. They can be hired by the local unit to verify the Energy Savings Plan or verify commissioning. D. Approval is granted for a compressed Request for Proposals process for ESCO services, where the RFP is advertised without the required energy audit being available at the outset, but the due date for submission of proposals shall not be sooner than at least 20 days from the time the audit is made available; and that as soon as the audit is available, it shall be provided to all potential proposers. E. The third and fourth sentences of paragraph (c)(4) of sections 1 and 6 of Chapter 4, [N.J.S.A. 18A:18A-4.6(c)(4) and 40A:11-4.6(c)(4)] shall be read as follows: Notwithstanding any law to the contrary, lease-purchase agreements and energy savings obligations shall be excepted from any budget or tax levy limitation otherwise provided by law. Maturity schedules of lease-purchase agreements or energy savings obligations must not exceed the estimated useful life of the individual energy conservation measures. IV. Conclusion New Jersey s approach to paying for capital intensive energy improvements through savings is different from other states. It takes into account international standards, independent verification, and provides the do-it-yourself alternative to the traditional ESCO approach, as well as taking into account the State s public works construction environment. This approach provides local units more flexibility in considering how to undertake energy and water conservation improvements to their facilities. Local units should carefully consider their options and not make a decision based on one vendor s representation. Due diligence, backed up by a reliable energy audit, a competitive vendor procurement process, and a commitment to maintaining the system once it is installed are keys to maximizing energy efficiency and keeping costs low and energy savings high. Local officials should take advantage of seminars and the forthcoming model documents to assist in planning their conservation efforts and keep aware of ongoing changes and developments in the field. Approved: Susan Jacobucci, Director Table of Web Links Page Shortcut text Internet Address 2 BPU Local Government Energy Audit Program 2 BPU CleanPower Community Partners Program 2 Sustainable Jersey Program 2 Office of Clean Energy 3 State Division of Property Management and Construction 4 NJ Division of Property Management & Construction MTPS - RFP for 3rd Party IGEA Review Page 22 of 56

24 Local Finance Notice June 12, 2009 Page 14 5 Muni/Local Gov Energy Audit Program Contract T Office of Clean Energy website 11 Local Finance Notice School Debt Issues MTPS - RFP for 3rd Party IGEA Review Page 23 of 56

25 Local Finance Notice June 12, 2009 Page 15 APPENDIX A TYPES OF ENERGY CONSERVATION MEASURES (ECMs) 1. Boiler Plant Improvements, such as, but not limited to boiler control improvements upgrade of natural-gas-fired boilers with new controls 2. Chiller Plant Improvements, such as, but not limited to chiller retrofits or replacements 3. Building Automation Systems / Energy Management Control Systems (EMCS), such as, but not limited to: HVAC upgrade from pneumatics to Direct Digital Control Upgrade or replacement of existing EMCS systems 4. Heating, Ventilating, and Air Conditioning (HVAC, not including boilers, chillers, and BAS/EMCS) such as, but not limited to: packaged air conditioning unit replacements HVAC damper and controller repair or replacement replacement of air conditioning and heating units with heat pumps window air conditioning replacement with high efficiency units cooling tower retrofits or replacements economizer installation fans and pump replacement or impeller trimming thermal energy storage variable air volume (VAV) retrofit 5. Lighting Improvements, such as, but not limited to interior and exterior lighting replacements lighting control improvements, occupancy sensors installation, LED exit sign installation, daylighting. 6. Building Envelope Modifications, such as, but not limited to insulation installation, weatherization window replacement, and reflective solar window tinting 7. Chilled Water, Hot Water, and Steam Distribution Systems, such as, but not limited to piping insulation installation, hot water heater repair and replacement steam trap repair and replacement 8. Electric Motors and Drives, such as, but not limited to motor replacement with high efficiency motors variable speed motors or drives 9. Refrigeration, such as, but not limited to replacement of ice/refrigeration equipment with high efficiency units 10. Distributed Generation such as, but not limited to cogeneration systems installation microturbines installation, fuel cells installation 11. Renewable Energy Systems, such as, but not limited to photovoltaic system installation, solar hot water system installation, wind energy system installation, passive solar heating installation, alternatively fueled vehicle refueling station installation 12. Energy/Utility Distribution Systems, such as, but not limited to transformers installation power quality upgrades power factor correction, and gas distribution systems installation 13. Water and Sewer Conservation Systems, such as, but not limited to installation of low-flow showerheads, installation of low-flow plumbing equipment, installation of water efficient irrigation, and installation of on-site sewer treatment systems 14. Electrical Peak Shaving/Load Shifting, such as, but not limited to thermal energy storage, gas cooling 15. Energy Cost Reduction Through Rate Adjustments, such as, but not limited to recommendations for change to more favorable rate schedule, recommendations for Government negotiation of MTPS - RFP for 3rd Party IGEA Review Page 24 of 56

26 Local Finance Notice June 12, 2009 Page 16 lower rates, same supplier, or recommendations for lower energy cost supplier(s) (where applicable) energy service billing and meter auditing recommendations 16. Energy Related Process Improvements, such as, but not limited to production and/or manufacturing improvements recycling and other waste stream reductions 17. Commissioning, such as but not limited to retro-commissioning services continuous commissioning services MTPS - RFP for 3rd Party IGEA Review Page 25 of 56

27 Appendix C: Executive Summary Report from the Local Government Energy Audit (LGEA) completed by Concord Engineering Group (CEG). An Electronic Copy of Building Reports May Be Obtained By ing: Mr. Chad Fires MTPS - RFP for 3rd Party IGEA Review Page 26 of 56

28 LOCAL GOVERNMENT ENERGY AUDIT PROGRAM: ENERGY AUDIT REPORT PREPARED FOR: MEDFORD TOWNSHIP SCHOOL DISTRICT 137 HARFORD ROAD MEDFORD, NJ ATTN: CHAD FIRES BUSINESS ADMINISTRATOR JOSEPH BILUCK DIRECTOR OF OPERATIONS PREPARED BY: CONCORD ENGINEERING GROUP 520 S. BURNT MILL ROAD VOORHEES, NJ TELEPHONE: (856) FACSIMILE: (856) CEG CONTACT: KEVIN BLANKENBUEHLER PROJECT MANAGER REPORT ISSUANCE: FINAL, MARCH 3, 2014 PROJECT NO: 1C13328 MTPS - RFP for 3rd Party IGEA Review Page 27 of 56

29 TABLE OF CONTENTS I. EXECUTIVE SUMMARY... 3 II. INTRODUCTION... 6 III. METHOD OF ANALYSIS... 8 IV. HISTORIC ENERGY CONSUMPTION/COST A. ENERGY USAGE B. ENERGY USE INDEX (EUI) C. EPA ENERGY BENCHMARKING SYSTEM V. RENEWABLE/DISTRIBUTED ENERGY MEASURES VI. ENERGY PURCHASING AND PROCUREMENT STRATEGY VII. INSTALLATION FUNDING OPTIONS A. INCENTIVE PROGRAMS: B. FINANCING OPTIONS: VIII. ENERGY AUDIT ASSUMPTIONS Enclosures: Document 1 Memorial Middle School Energy Report Document 2 Milton H. Allen Elementary School Energy Report Document 3 Kirby s Mill Elementary School Energy Report Document 4 Chairville Elementary School Energy Report Document 5 Maurice & Everett Haines 6 th Grade Center Energy Report Document 6 Cranberry Pines Elementary School Energy Report Document 7 Taunton Forge Elementary School Energy Report Document 8 Transportation & operations Center Energy Report MTPS - RFP for 3rd Party IGEA Review Page 28 of 56

30 REPORT DISCLAIMER The information contained within this report, including any attachment(s), is intended solely for use by the named addressee(s). If you are not the intended recipient, or a person designated as responsible for delivering such messages to the intended recipient, you are not authorized to disclose, copy, distribute or retain this report, in whole or in part, without written authorization from Concord Engineering Group, Inc., 520 S. Burnt Mill Road, Voorhees, NJ This report may contain proprietary, confidential or privileged information. If you have received this report in error, please notify the sender immediately. Thank you for your anticipated cooperation. MTPS - RFP for 3rd Party IGEA Review Page 29 of 56

31 I. EXECUTIVE SUMMARY This report presents the findings of the energy audit conducted for: Entity: Facilities: Medford Township Public Schools Memorial Middle School Milton H. Allen Elementary School Kirby s Mill Elementary School Chairville Elementary School Maurice & Everett Haines Sixth Grade Center Cranberry Pines Elementary School Taunton Forge Elementary School Transportation & Operations Center District Contact Person: Facility Contact Person: Chad Fires, Business Administrator Joseph Biluck, Jr., Director of Operations & Technology This audit is performed in connection with the New Jersey Clean Energy - Local Government Energy Audit Program for Medford Township School District facilities. The purpose of this analysis is to provide the district insight into the energy savings potential that exists within their facilities. Energy Efficiency changes and upgrades requires support from the building occupants, operations personnel and the administrators of the district in order to maximize the savings and overall benefit. The efficiency improvement of public buildings provides a benefit for the environment and the residents of New Jersey. MTPS - RFP for 3rd Party IGEA Review Page 30 of 56

32 Overall Assessment: Overall, the Medford School District is operating more efficient comparable to the average Source Energy Intensity of 144 kbtu/square-foot/year for K-12 schools in New Jersey. The District is also paying an average in cost of energy at $1.50 per square-foot below the average costs of $2.00 per square-foot. The District s efficiency level can be attributed to its enacted energy efficient policies, maintenance practices, and investment in energy efficient systems as part of its standards for new construction and renovations. On the whole, Concord Engineering recommends the District review and be familiar with all measures presented in the report prior to making a decision on which projects to move forward with. This will enable the District to effectively align report recommendations with those outlined in their mid/long range facility plans and financial plans. The District should also review all conventional and unconventional funding, along with all NJCEP funding opportunities for these projects and determine which options fit the District s budget most positively in the short and long term. The combination of this information will enable the District to put together an effective Energy Savings Improvement Strategy that maximizes the received benefits of the selected projects. Other Considerations: Renewable Energy Conservation Measures: Renewable Energy Measures (REMs) were also reviewed for implementation at the Medford Township District Schools. The District currently has already maximized its solar potential through a Power Purchase Agreement with Nautilus Solar, and further solar installations are not recommended at this time. The potential for wind generation was also reviewed for the District; however based on historical wind speed data, make it not a viable option. Energy Procurement Recommendations: The District is currently contracted with a third party supplier for electric and gas, Concord Engineering recommends they continue to purchase their electric and gas commodity through a third party supplier once the current contract has expired. Furthermore when entering into a new contract it is important the District aggregate all of their facilities into one contract for electric supply and one for natural gas supply in order to maximize commodity price savings. The district should also be aware that its current solar power purchase agreement will likely impact pricing for electric from 3 rd party suppliers Maintenance and Operational Recommendations: In addition to the ECMs and REMs, there are maintenance and operational measures that can provide significant energy savings and provide immediate benefit, many of which the District are already performing. The ECMs listed above represent investments that can be made to the facility which are justified by the savings seen over time. However, the maintenance items and small operational improvements below are typically achievable with on-site staff or maintenance MTPS - RFP for 3rd Party IGEA Review Page 31 of 56

33 contractors and in turn have the potential to provide substantial operational savings compared to the costs associated. The following are recommendations which should be considered a priority in achieving an energy efficient building, further recommendations per building our provided in the building reports: 1. Chemically clean the condenser and evaporator coils periodically to optimize efficiency. Poorly maintained heat transfer surfaces can reduce efficiency 5-10%. 2. Maintain all weather stripping on windows and doors. 3. Clean all light fixtures to maximize light output. 4. Provide more frequent air filter changes to decrease overall system power usage and maintain better IAQ. 5. Verify all control systems are utilizing setback and scheduling capabilities. 6. Replacement of older CRT style monitors with newer LCD/LED style monitors. Older CRT style monitors use up to four times more energy than LCD/LED monitor types. 7. Remind Staff to turn off Classroom Televisions after use and at the end of the day. 8. The District should consider the installation of advances power strips in classrooms that can be used to charge tablet and laptop computers in order to reduce the amount of idle power draw from these devices. (Smart Power Strips Model LPG3, Price ~$30) 9. Educate staff and students on awareness of wasteful energy practices such as leaving lights on unnecessarily, leaving on of non-essential computer and/or equipment at the end of the day, leaving of outside doors/windows open as a means to control room temperature, etc. MTPS - RFP for 3rd Party IGEA Review Page 32 of 56

34 II. INTRODUCTION The comprehensive energy audit covers the following buildings in Medford Township School District: ENERGY AUDIT FACILITY SUMMARY FACILITY AREA (SQ-FT) ADDRESS Medford Memorial Middle School 118, Mill Street, Medford, NJ Milton H. Allen Elementary School 59, Allen Avenue, Medford, NJ Kirby's Mill Elementary School 66, Hartford Road, Medford, NJ Chairville Elementary School 64, Chairville Road, Medford, NJ Maurice & Everett Haines Sixth Grade Center 50, Stokes Road, Medford, NJ Cranberry Pines Elementary School 52, Fairview Road, Medford, NJ Taunton Forge Elementary School 42, Evergreen Trail, Medford, NJ Transportation & Operations Center 9, Branin Road, Medford, NJ This audit is performed in connection with the New Jersey Clean Energy - Local Government Energy Audit Program. The energy audit is conducted to promote the mission of the office of Clean Energy, which is to use innovation and technology to solve energy and environmental problems in a way that improves the State s economy. This can be achieved through the wiser and more efficient use of energy. Electrical and natural gas utility information is collected and analyzed for one full year s energy use of each building. The utility information allows for analysis of the building s operational characteristics; calculate energy benchmarks for comparison to industry averages, estimated savings potential, and baseline usage/cost to monitor the effectiveness of implemented measures. A computer spreadsheet is used to calculate benchmarks and to graph utility information (see the utility profiles below). The Energy Use Index (EUI) is established for the building. Energy Use Index (EUI) is expressed in British Thermal Units/square foot/year (BTU/ft 2 /yr), which is used to compare energy consumption to similar building types or to track consumption from year to year in the same building. The EUI is calculated by converting the annual consumption of all energy sources to BTU s and dividing by the area (gross square footage) of the building. Blueprints MTPS - RFP for 3rd Party IGEA Review Page 33 of 56

35 (where available) are utilized to verify the gross area of the facility. The EUI is a good indicator of the relative potential for energy savings. A low EUI indicates less potential for energy savings, while a high EUI indicates poor building performance therefore a high potential for energy savings. Existing building architectural and engineering drawings (where available) are utilized for additional background information. The building envelope, lighting systems, HVAC equipment, and controls information gathered from building drawings allow for a more accurate and detailed review of the building. The information is compared to the energy usage profiles developed from utility data. Through the review of the architectural and engineering drawings a building profile can be defined that documents building age, type, usage, major energy consuming equipment or systems, etc. The preliminary audit information is gathered in preparation for the site survey. The site survey provides critical information in deciphering where energy is spent and opportunities exist within a facility. The entire site is surveyed to inventory the following to gain an understanding of how each facility operates: Building envelope (roof, windows, etc.) Heating, ventilation, and air conditioning equipment (HVAC) Lighting systems and controls Facility-specific equipment The building site visit is performed to survey all major building components and systems. The site visit includes detailed inspection of energy consuming components. Summary of building occupancy schedules, operating and maintenance practices, and energy management programs provided by the building manager are collected along with the system and components to determine a more accurate impact on energy consumption. MTPS - RFP for 3rd Party IGEA Review Page 34 of 56

36 III. METHOD OF ANALYSIS This audit is consistent with an ASHRAE level 2 audit. The cost and savings for each measure is ± 20%. The evaluations are based on engineering estimations and industry standard calculation methods. More detailed analyses would require engineering simulation models, hard equipment specifications, and contractor bid pricing. Post site visit work includes evaluation of the information gathered, researching possible conservation opportunities, organizing the audit into a comprehensive report, and making recommendations on HVAC, lighting and building envelope improvements. Data collected is processed using energy engineering calculations to anticipate energy usage for each of the proposed energy conservation measures (ECMs). The actual building s energy usage is entered directly from the utility bills provided by the owner. The anticipated energy usage is compared to the historical data to determine energy savings for the proposed ECMs. It is pertinent to note, that the savings noted in this report are not additive. The savings for each recommendation is calculated as standalone energy conservation measures. Implementation of more than one ECM may in some cases affect the savings of each ECM. The savings may in some cases be relatively higher if an individual ECM is implemented in lieu of multiple recommended ECMs. For example implementing reduced operating schedules for inefficient lighting will result in a greater relative savings. Implementing reduced operating schedules for newly installed efficient lighting will result in a lower relative savings, because there is less energy to be saved. The project / Entity summary tables are based on the implementation of multiple measures. The analysis is reviewed and determined if the nature of the ECMs will cause a major conflict of the overall savings. When additive measures do not cause a major effect on the overall savings the ECMs are included. Where a major conflict is identified, the combined savings is evaluated appropriately to ensure the overall estimates are ± 20%. ECMs are determined by identifying the building s unique properties and deciphering the most beneficial energy saving measures available that meet the specific needs of the facility. The building construction type, function, operational schedule, existing conditions, and foreseen future plans are critical in the evaluation and final recommendations. Energy savings are calculated base on industry standard methods and engineering estimations. Energy consumption is calculated based on manufacturer s cataloged information when new equipment is proposed. Cost savings are calculated based on the actual historical energy costs for the facility. Installation costs include labor and equipment costs to estimate the full up-front investment required to implement a change. Costs are derived from Means Cost Data, industry publications, and local contractors and equipment suppliers. The NJ Smart Start Building program incentives savings (where applicable) are included for the appropriate ECM s and subtracted from the installed cost. Maintenance savings are calculated where applicable and added to the energy savings for each ECM. The life-time for each ECM is estimated based on the typical life of the equipment being replaced or altered. The costs and savings are applied and a simple payback, simple lifetime savings, and simple return on investment are calculated. See below for calculation methods: MTPS - RFP for 3rd Party IGEA Review Page 35 of 56

37 ECM Calculation Equations: Simple Payback Net Cost = Yearly Savings ( Yearly Savings ECM Lifetime) Simple Lifetime Savings = Simple Lifetime ROI (Simple Lifetime Savings Net Cost) = Net Cost ( Yearly Maintenance Savings ECM Lifetime) Lifetime Maintenance Savings = Internal Rate of Return = N n= 0 Cash Flow of ( 1 + IRR) Period n Net Present Value = N n= 0 Cash Flow of ( 1+ DR) Period n Net Present Value calculations are based on Discount Rate of 3%. MTPS - RFP for 3rd Party IGEA Review Page 36 of 56

38 IV. HISTORIC ENERGY CONSUMPTION/COST A. Energy Usage The energy usage for the facilities is tabulated and plotted in graph form as depicted within each facility report (see the individual facility energy audit reports for details). Each energy source has been identified and monthly consumption and cost noted per the information provided by the Owner. The electric and natural gas utilities are shown below in Table 2 & 3 for all facilities: Table 2 Electric Utility Summary ELECTRIC UTILITY USAGE PER FACILITY FACILITY ANNUAL ELECTRIC UTILITY DESCRIPTION USAGE (KWH) COST ($) AVE RATE ($/KWH) Medford Memorial Middle School 1,232,042 $154,779 $0.126 Milton H. Allen Elementary School 477,906 $60,083 $0.126 Kirby's Mill Elementary School 727,231 $96,739 $0.133 Chairville Elementary School 621,177 $88,863 $0.143 Maurice & Everett Haines Sixth Grade Center 455,627 $62,968 $0.138 Cranberry Pines Elementary School 400,746 $48,409 $0.121 Taunton Forge Elementary School 653,800 $90,582 $0.139 Transportation & Operations Center 173,448 $20,865 $0.120 Total 4,741,976 $623,287 $0.131 MTPS - RFP for 3rd Party IGEA Review Page 37 of 56

39 Table 3 Natural Gas Summary NATURAL GAS UTILTY USAGE PER FACILITY FACILITY ANNUAL NATURAL GAS UTILITY DESCRIPTION USAGE (THERMS) COST ($) AVE RATE ($/THERM) Medford Memorial Middle School 23,709 $24,051 $1.01 Milton H. Allen Elementary School 17,415 $15,853 $0.91 Kirby's Mill Elementary School 2,131 $2,061 $0.97 Chairville Elementary School 1,948 $2,101 $1.08 Maurice & Everett Haines Sixth Grade Center 24,931 $25,425 $1.02 Cranberry Pines Elementary School 0 $0 - Taunton Forge Elementary School 0 $0 - Transportation & Operations Center 3,415 $3,462 $1.01 Total 73,549 $72,952 $0.99 MTPS - RFP for 3rd Party IGEA Review Page 38 of 56

40 B. Energy Use Index (EUI) Energy Use Index (EUI) is a measure of a building s annual energy utilization per square foot of building. This calculation is completed by converting all utility usage consumed by a building for one year, to British Thermal Units (BTU) and dividing this number by the building square footage. EUI is a good measure of a building s energy use and is utilized regularly for comparison of energy performance for similar building types. The Oak Ridge National Laboratory (ORNL) Buildings Technology Center under a contract with the U.S. Department of Energy maintains a Benchmarking Building Energy Performance Program. The ORNL website determines how a building s energy use compares with similar facilities throughout the U.S. and in a specific region or state. Source use differs from site usage when comparing a building s energy consumption with the national average. Site energy use is the energy consumed by the building at the building site only. Source energy use includes the site energy use as well as all of the losses to create and distribute the energy to the building. Source energy represents the total amount of raw fuel that is required to operate the building. It incorporates all transmission, delivery, and production losses, which allows for a complete assessment of energy efficiency in a building. The type of utility purchased has a substantial impact on the source energy use of a building. The EPA has determined that source energy is the most comparable unit for evaluation purposes and overall global impact. Both the site and source EUI ratings for the building are provided to understand and compare the differences in energy use. The site and source EUI for this facility is calculated as follows: Building Site EUI (Electric Usage in kbtu + Gas Usage in kbtu) = Building Square Footage Building Source EUI (Electric Usage in kbtu X SS Ratio + Gas Usage in kbtu = Building Square Footage X SS Ratio) MTPS - RFP for 3rd Party IGEA Review Page 39 of 56

41 Table 4 Energy Use Index Summary ENERGY USE INDEX PER FACILITY FACILITY BUILDING AREA ENERGY USE INDEX DESCRIPTION Figure 1 below depicts a national EUI grading for the source energy use of various building types similar to the buildings at Medford School District. (SF) SITE (KBTU/SF/YR) SOURCE (KBTU/SF/YR) Medford Memorial Middle School 118, Milton H. Allen Elementary School 59, Kirby's Mill Elementary School 66, Chairville Elementary School 64, Maurice & Everett Haines Sixth Grade Center 50, Cranberry Pines Elementary School 52, Taunton Forge Elementary School 42, Transportation & Operations Center 9, Total 463, See the Appendix C - Statement of Energy Performance for comparason to other facilities MTPS - RFP for 3rd Party IGEA Review Page 40 of 56

42 Figure 1 Source Energy Use Intensity Distributions: Elementary Schools Nat l Avg EUI kbtu/sf Cranberry Chairville Milton Memorial Haines Taunton Kirby s For the Transportation and Operations Center the closest building type is a Service (Vehicle, Repair/Service) Facility Type. The average national source EUI for this facility is 150 kbtu/sf. The Transportation and Operations Center has a source EUI above the national average, however it should be noted additional energy usage for the site lighting and bus block heaters that would not be typical of these facilities. MTPS - RFP for 3rd Party IGEA Review Page 41 of 56

43 C. EPA Energy Benchmarking System The United States Environmental Protection Agency (EPA) in an effort to promote energy management has created a system for benchmarking energy use amongst various end users. The benchmarking tool utilized for this analysis is entitled Portfolio Manager. The Portfolio Manager tool allows tracking and assessment of energy consumption via the template forms located on the ENERGY STAR website ( The importance of benchmarking for local government municipalities is becoming more important as utility costs continue to increase and emphasis is being placed on carbon reduction, greenhouse gas emissions and other environmental impacts. Based on information gathered from the ENERGY STAR website, Government agencies spend more than $10 billion a year on energy to provide public services and meet constituent needs. Furthermore, energy use in commercial buildings and industrial facilities is responsible for more than 50 percent of U.S. carbon dioxide emissions. It is vital that local government municipalities assess facility energy usage, benchmark energy usage utilizing Portfolio Manager, set priorities and goals to lessen energy usage and move forward with priorities and goals. In accordance with the Local Government Energy Audit Program, CEG has created an ENERGY STAR account for the municipality to access and monitoring the facility s yearly energy usage as it compares to facilities of similar type. The login page for the account can be accessed at the following web address; the username and password are also listed below: User Name: Password: MedfordTwpSD Lgeaceg2013 Security Question #1: What city were you born in? Security Answer #1: Medford Security Question #2: In what city/town was your first job? Security Answer #2: Medford The utility bills and other information gathered during the energy audit process are entered into the Portfolio Manager. The following is a summary of the results for the facility: MTPS - RFP for 3rd Party IGEA Review Page 42 of 56

44 Table 5 Energy Star Performance Summary ENERGY STAR PERFORMANCE RATING PER FACILITY FACILITY ENERGY STAR PERFORMANCE RATING DESCRIPTION SCORE AVERAGE POTENTIAL CERTIFICATIONS Medford Memorial Middle School No Milton H. Allen Elementary School No Kirby's Mill Elementary School No Chairville Elementary School Yes Maurice & Everett Haines Sixth Grade Center No Cranberry Pines Elementary School Yes Taunton Forge Elementary School No Transportation & Operations Center N/A 50 No See the Appendix C - Statement of Energy Performance for comparative facilities Score: "N/A" represents facility that could not receive a rating. See Energy Star website for details. Refer to Statement of Energy Performance Appendix for the detailed energy summary for each facility. Facilities that do not have a rating is a result of one of the following issues: Note: Energy Star currently does not provide a rating for Service facility types. MTPS - RFP for 3rd Party IGEA Review Page 43 of 56

45 V. RENEWABLE/DISTRIBUTED ENERGY MEASURES Globally, renewable energy has become a priority affecting international and domestic energy policy. The State of New Jersey has taken a proactive approach, and has recently adopted in its Energy Master Plan a goal of 30% renewable energy by To help reach this goal New Jersey created the Office of Clean Energy under the direction of the Board of Public Utilities and instituted a Renewable Energy Incentive Program to provide additional funding to private and public entities for installing qualified renewable technologies. A renewable energy source can greatly reduce a building s operating expenses while producing clean environmentally friendly energy. Solar Generation The District in 2011 entered into a Power Purchase Agreement that installed Solar Systems at all of their facilities, except for Taunton Forge Elementary. The systems were installed on facility roofs, parking lots, and ground space. The onsite generation currently accounts for 78% of the electric used by district facilities with installed systems. As the District has already maximized its solar potential, Concord does not recommended additional solar at this time. Wind Generation In addition to evaluating solar, Concord also conducted a review of the applicability of wind energy for the District. Wind energy production is another option available through the Renewable Energy Incentive Program. Wind turbines of various types can be utilized to produce clean energy on a per building basis. Cash incentives are available per kwh of electric usage. Concord investigated the potential for smaller building mountable wind turbines, and horizontal turbines to maximize the available free space. In order to be economically viable a site requires a minimum average wind speed of 6 meters per second (13.5 mph). Based on the obtained wind data shown in Figure 3 for Marlton the annual average wind speed is 9.4 mph with a peak of mph, making this area unattractive for wind development. Therefore, wind energy is not a viable option to implement. MTPS - RFP for 3rd Party IGEA Review Page 44 of 56

46 Figure 3: Monthly Wind Speed (Marlton, New Jersey) MTPS - RFP for 3rd Party IGEA Review Page 45 of 56