Space Savings Performance Contract Concept Brief

Space Savings Performance Contract Concept

Office of Federal High Performance Green BuildingsKevin Kampschroer - Brian Gilligan

IntroductionSpace Efficiency as an Energy Conservation Measure

• Employ workplace strategy to reconfigure space to house people and mission more efficienty; Space Savings Measures (SSMs) save energy by eliminating requirement for space and fixed energy loads

• OMB Memo M-12-21 requires meeting 4 tests to use ESPC authority:o Apply to a Federal Buildingo Improve energy efficiencyo Be life Cycle Cost Effectiveo Include permissible activities

• Pilot Project – GSA Staff Consolidation o Cost: $4.4M including ESPC costso 40% reduction in space yields 25% energy savingso Payback <25 years from energy and related operations cost savingso ~$30M (NPV) additional rent opportunity

IntroductionSpace efficiency - Alternative Workplace Strategies

• Consolidation of GSA functions

• 50,000SF Reduction in footprint

136,000 SF 83,000 SF

~40% Reduction in Space

Test 1Applied to Federal Space – Max Savings

• The project is a contraction within the JCK Federal Building:

o Space required at old space standards, less

o Space required at new space standards

o Equals total space reduced, multiplied by

o Energy and operating cost rate for JCK Bldg

o Maximum possible cost savings

136 KSF

83 KSF-

x $9.50/SF

= 53 KSF

= $503K / Year

Projected Total Energy UseEUI - Per SF Total Area Total Energy Energy Reduction

Scenario (kBTU/SF-Yr) (SF) (kBTU/Yr) (KBTU/Yr)

Current planning layout 77 136,000 10,472,000

Future planning layout 93 83,000 7,724,234 26%

Test 2 Improve Energy Efficiency in Federal Space

~26% Reduction in

Energy

Avoided capacity:• 53,000SF Space• Heating / Cooling • Lighting

That space may well be filled, but: • Savings for the base group

remain• New group is vacating space

somewhere

Test 2Efficiency – Space is an energy-consuming system

Test 2Efficiency – Space is an energy-consuming system

Bannister “Test Bed” Project, Kansas City, MO:• Doubled planning density & occupancy• Modeled energy with EnergyPlus v8.0• Per capita energy reduced 63%

M&V would use the same process in order to compare:

• Energy consumption at old space standards to

• Energy consumption at new space standards

• Estimate impacts of potential changes downstream

Test 3Life Cycle Cost Effective - Options to Reduce Risk

Full SSPC Alt 1 Alt 2 Alt 3100% Finance 90% Finance 75% Finance 50% Finance

Rent Revenue - NPV ($M) $30M $30M $30M $30M

Project Buydown $0M $0.5M $1.2M $2.2MDiscounted Payback 24 Years 20 Years 15 Years 9 Years

$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5

0 5 10 15 20 25

Mill

ions

Alt 1 (90%) Alt 2 (75%) Alt 3 (50%)

Test 4Permissible Activity

• Must involve energy conservation, may include:o cogeneration facilities, o renewable energy sources, o improvements in O&M efficiencies, or,o retrofit activities (retrofit of space as an energy-consuming system)

Conclusion

• We believe SSPC projects meet OMB’s tests, however, a proof of concept is required to be certain - GSA’s Administrator approved a pilot for 2015

• We have worked with DOE - Contracts and General Counsel staff to understand the conditions that must be addressed to:o Conduct a proof of concept pilot using the ESPC IDIQo Have DOE support in executing the pilot project

• We hope you will support a pilot:o Cons: Resistance to ESPCs generally, fear of abusing authorization

specifically; while it seems a good bet it is still uncertaino Pros: GSA succes with workplace strategies, OMB interest in ESPC

authority for PPP projects, ESPC challenge requires new project sources

• We recognize Portfolio must set the pace and terms for a pilot project