Orem, with a population of almost 90,000 (according to the 2010 census), is the fifth largest city in Utah. An ongoing project has grown from street light replacements to encompass a wide variety of energy upgrades and retrofits.
The city’s initial goal was to replace 5,128 street lights. Before the issuance of a request for proposals, however, the project was enlarged to cover a far wider variety of energy and related needs. Four companies – including McKinstry, Siemens Building Technologies Division, Opterra (which was part of Chevron at the time) and Ameresco – responded to the RFP, which was issued in the autumn of 2014.
Taggart Bowen, the city’s Senior Engineer said that the responses were similar at a high level. The city created a rating system and judged based on the number of similar projects in the candidate has done in Utah, financial parameters, personnel parameters, the proposed management planning, pricing and projected cost savings. Siemens ended up with the highest cumulative score and was chosen, Bowen said.
It is not surprising that the city ended up doing more than originally planned. Needed projects fall down the priority list and accumulate. This was an opportunity to clear that backlog. “The city struggles with the fact that there is so much to maintain and upgrade and to keep top of the line with little budget,” Bowen said. “We tried to lump in other projects for which we could use savings from street light. Elevator upgrades, for instance. Some of the elevators really were in bad shape.”
It ended up being quite a list. There were 17 parts to the project beyond the street lights and elevators that touch many of the elements of various facilities and other properties controlled by the municipality. They include increasing HVAC cooling capacity; boiler replacements; solar shading; boiler room air barriers; a building automation system upgrade and expansion; a pool evaporator control; a variable frequency drive for the pool circulation pump; a one-site hypochlorite generator; a leisure pool pump switch; hot air containment for the data center; a switch from Circular volute to variable voltage pumping; variable frequency drive fan speed control for the HVAC; building light controls; building envelope and mechanical insulation; retro-commission; de-stratification fans and motor replacement.
Tthe final number of projects actually was pared down from the mid-twenties. A key was open and consistent communications between Orem and Siemens. Mark Cram, the Siemens account executive who worked on the project, said that there were numerous meetings. The most important were the “30 percent, 60 percent and 90 percent” meetings.The first focused on discussing the pros and cons of each potential addition to the projects. The second refined the list and gave cost estimates to plus or minus 10 percent on each element. The final meeting nailed down pricing and savings guarantees to the extent, Cram said, that the city had enough information “to actually go to the bank.”
The work Siemens is doing for Orem is being financed under an energy performance savings contract (EPSC). Siemens Financial Services is the lending institution. It has put money in escrow and is sent invoices by Siemens Building Technologies Division. They are paid out if they are approved by Orem. Once the project is completed, the savings that the project generated is used to pay back the loan.
Cram says that it is done by “stream.” For instance, the money that is saved from upgrading the electric infrastructure is used to pay the bank for elements of the project that concern electricity. Likewise, savings from natural gas and water elements of the project pay back parts of the loan that touch those services. Part of the agreement is that joint measurement and verification assessments are performed. If performance doesn’t meet agreed to expectations, Siemens will compensate Orem.
It could be a relationship in which everybody wins: The residents get a better performing more comfortable and efficient city. Siemens, of course, gets a city full of happy customers. The bottom line is that it is important for all parties to communicate, educate each other and work towards a common goal. “The biggest takeaway for me is how critical it is to have staff that are advocates of this approach,” Cram said. “What was very beneficial in my mind is sitting together at the table, Orem and Siemens, and making joint presentation to the executive staff. They see it as a team effort.”