July 12, 2001
Isiah and Rich:
I want to share some additional information that came largely from Dale Sartor, who is head of Facilities Energy Conservation at Lawrence Berkeley Laboratory. I shared with him the critiques that I have sent to you, and here are his comments:
· Given the limited information provided, I agree with your reaction.
· Choice of an ESCO should be at least as careful as selecting an architecture-engineering team.
· * Further, their methods of implementing the work, including subcontracting, pricing, mark-ups, details of guarantees (how will savings be determined) and cost of funds (if they will be providing financing) should be spelled out and be part of the selection process.
· Sample contract documents are available via the Rebuild America Program
· ESCO’s need not be as bad as you make them out to be. Most offer a menu of services that you should carefully select from. Guaranteed or shared savings depends on measurement and verification and care should be given to not over pay for such services. If the retrofits are technically unsophisticated, and the City has independently evaluated the savings potential (perhaps with a third party consultant), a bid to spec (cash purchase or lease purchase) may be the most cost effective vs. a “performance” contract.
· Some ESCO’s are tied into Utility incentive programs - that could be a help.
· Don’t skimp on commissioning and performance tracking no matter how the project is implemented (make sure the improvements meet design intent and that savings persist). You may want this work done independently as well.
· Try to keep the measuring and verification in the hands of a third party; don’t have the same contractor providing both financing and measurement and verification.
Some independent consultants Dale mentioned are ERA (Jim Waltz at 925/447-1141) www.eraenergy.com and NEXTON, a Bechtel Subsidiary, (formerly Schiller Consulting) Steve Schiller at 510/444-6500 www.schiller.com
Finally you can go to the Rebuild America website at http://www.rebuild.org/community/doeregion.asp?DOERegionID=SE. for a list of cities and public agencies that are members. Rebuild America is a free consultant funded by the U.S. Department of Energy. We really should be a member of Rebuild America. Many cities (and the WCCUSD) already are.
Our contact at Rebuild America would be:
DandridgePartnership Customer Service Representative
I talked to Cyan today, and she says that she can start helping us now. She actually talked to Willie Haywood a week ago, but he never called her back. Cyan said that she and her technical team can advise us as we work through this process. I recommend we get her on board ASAP.
For us to select and negotiate with an ESCO without skilled technical assistance would be folly.