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Department of Information Technology
Reference: Budget Amendment for Energy Audit Contract with Honeywell
To: Mayor Richard N. McLean and Members of City Council
Through: Manuel Esquibel, City Manager
Prepared By: Margaret Brocklander
Date Prepared: 3-11-2015
PURPOSE
Approval of the Energy Performance Contract with Honeywell.
BACKGROUND
The Colorado Energy Office has pre-qualified Energy Services Companies (ESCO) to assist Colorado agencies in selection of a company for the purpose of entering into an Energy Performance Contract Program (EPC). The EPC is a contract between the contracting agency and a qualified energy service company for the identification, evaluation, recommendation, design and construction of energy conservation measures, including a design-build contract, that guarantee energy savings.
Honeywell Building Solutions is a Colorado Energy Office pre-qualified Energy Services Company. In 2014, Honeywell was selected through a competitive proposal process to analyze various energy efficiency projects for the City. They have been working closely with staff since September on the 1st level of a 4-level development and implementation process. The level 1 efforts were focused around understanding the City's facility, utility and infrastructure needs and developing a preliminary list of recommended measures that warranted further analysis. Honeywell worked closely with staff at no cost to the City to accomplish this, and the activities and deliverables generally included:
· Walkthrough assessment of city facilities, water system and wastewater system
· Interviews with staff
· Energy benchmarking
· Preliminary scoping and establishment of line item simple payback ranges
· Development of interactive financial modeling tool
· Prioritization of improvements & winnowing down of list of potential improvements based on needs & financial criteria
· Identification of sustainability management system/SMS plan components
An example of the sustainability measures identified in the level 1 efforts include:
· Lighting Upgrades
· Energy Management Systems
· Heating and Cooling Improvements
· Building Envelope Upgrades
· Utilities Process Optimization
· Meter Reading Automation
The next step in our Honeywell managed project/process, referred to as the level 2 development, will be to provide the City with line-item cost and savings calculations for potential Energy Conservation Measures (ECMs) that allows for line-item inclusion/exclusion in subsequent development and construction. Honeywell will provide staff with data in the form of level 2 scope narratives and a line-item interactive financial modeling tool so that we can further refine the proposed improvements and services based on how much savings can pay for, as well as the availability of other funding sources such as grants, and rebates.
Following the selection of energy conservation measures in the level 2 development effort, the cost and saving figures will be further refined through level 3 engineering. The cost and savings to be provided at the conclusion of Level 3 will be based on an adequate levels of Mechanical, Electrical, and Plumbing (MEP) schematic design (SD) and/or design development (DD) level plans and specifications, and other forms of acceptable competitive bidding to pre-qualified local and regional subcontractors and suppliers to allow for Honeywell to establish guaranteed maximum pricing ("GMP") or firm fixed pricing for each ECM and the overall project. Level 3 activities by Honeywell will also include sourcing of low interest loans, grants and rebates to fund construction, ensuring that guaranteed savings will cover any loan repayments - all of which combine to minimize or avoid City allocation or expenditure of available capital to implement staff-selected and Council approved sustainability improvements and services.
CRITERIA BY WHICH COUNCIL MUST CONSIDER THE ITEM
FINANCIAL IMPACT
The completion of Level 2 and 3 efforts will be completed for the not-to-exceed fee of $123,676 and follows the guidelines of Honeywell Building Solutions' contract with the State of Colorado's Energy Office. The project development amount is considered a "fee at risk" to the City because it is only due as a separate payment if Honeywell identifies an energy efficiency project with sufficient savings and the City chooses not to proceed with implementation of the project. Because there is a "fee at risk", a budget supplemental will be submitted along with the proposed contract.
ATTACHMENTS
Contract for Technical Energy Audit and Project Proposal