Custom Rebates Help Fund CapEx Efficiency InvestmentsFebruary 11, 2014

Presenters: Mike Bailey PE, Director Facility Engineering and Kyle Barton, Senior Energy Rebate Analyst with EcovaRobert Brimicombe, Corporate Technology with Verizon

Agenda

Energy Efficiency Opportunity

What Are Rebates & Utility Programs?

Trends in Energy Efficiency Rebates

Eligible Technologies

Energy Rebate Management Process

Challenges

Ecova Solutions

Summary

Q&A

Energy Efficiency?

According to the DOE $180 billion annually is spent on energy in commercial buildings

LEDs save 80% or more of the energy and last 10X longer – typical 12-18 month payback after rebate

$37 billionwould be saved each year with

improved energy efficienciesfor commercial buildings

Data Centers Are Hidden Energy Hogs

Data CenterTotal Office

BuildingData Center as % of Building Total

Area 3,000 sq ft 350,000 sq ft 0.8%

Average Monthly Real Demand

189 kW 1,889 kW 10%

Average Monthly Consumption

140,000 kWh 701,300 kWh 20%

Energy Survey of 21 Story Office Building

– Typical mix of open and private office

Evaluated Energy Use of Internal Data Center / Computer Rooms

Data Centers – Large Potential Savings

Established and proven technologies and design approach have resulted in over 80% demonstrated energy savings

Requires paradigm shift and close coordination

– IT Management

– Facilities

– Finance

Key Opportunities

- Equipment refresh

- IT Virtualization

- Outside air cooling

- Cloud computing

What is a Rebate?

An incentive (or 'rebate') is financial assistance provided to customers to help offset the incremental costs of installing an energy efficiency measure

Mandated by:

– Legislation & Regulation

Why:

- Lowest cost resource

- Public service

- Customer relations

More Opportunity Than Ever

Projected Utility Customer Funding for Electric & Gas EE Programs

Typical Rebate Programs

Prescriptive / Standard

– What is it?

• Equipment upgrades and retrofits

• Common measures such as lighting

Custom

– What is it?

• Complex or unique

• New and emerging technologies

• Measurement & verification coordination

New Construction

– Based on how much more efficient the technologies are above local building codes

Utility Measure Rebate

Utility #1 Standard Lighting $15-$140 per fixture

Utility #2 Custom Lighting $0.05/kWh + $50/kW saved

Utility #3 T5/T8 Lamp & Ballast $10 - $100 per bulb

Utility #4 Lamp Only Upgrades $0.025/watt saved

T12 lighting rebates/incentives are being phased out.

Funding may be limited and bonuses could be available.

Each Utility Program is Unique

A Few Typical Eligible Technologies

Building Envelope Whole Building

Approach Windows Roofs Insulation

HVAC Heat Pumps A/C units High-Efficiency Gas Variable Frequency

Drives Controls

Lighting Fluorescent LED Automatic Sensors Parking Lots Industrial & Office

Kitchen Equipment Refrigeration Holding Cabinets Fryers Combo Ovens Griddles Steamers Ice machines

Verizon’s Facility & Capital Project Types

Verizon Communications: GFE&C Network Technology

Central Office and Data Center facilities – 1500+ Network locations

– Telecom data center/server room controls

– Building EMS/BMS systems

– Rectifiers

– VFDs

– HVAC replacements

• Large and Small scale

Wireless: Retail Locations

– Lighting (interior & exterior)

– HVAC replacement

Capturing Verizon’s Rebates

Internal Rebate Management:

– Global Facilities Engineering & Construction – Network Technology

– Property Management Groups

– Global Real Estate Working Groups

• New York & Washington DC Telecom Controls

• EMS & HVAC

– Internal Rebate Availability Program

External Rebate Resourced:

– Telecom Projects Outside of NY & DC

• Controls (2013-14)

• Rectifiers (2014)

• HVAC Related (2014)

• Retroactive Rebates (2014)

Verizon-Ecova Rebate Partnership

Rebate Processing

– Rebate Prioritization

– Completing Utility Documents for Pre-approval & Final Submittal

– Utility Advocacy to Justify Energy Savings & Address Free Ridership Issues

– Organize & Complete Utility Measurement & Verification Requirements

– Onsite Utility Verification Coordination

– Check Disbursement

Reporting

– Regular Progress Reports

– Rebate Availability From Approved List of Projects

Meeting Corporate Goals: Return On Investment

Corporate Strategy– Prospective projects needs to have a simple payback of 3 or less years

– $1 million in utility rebates

Telecom Control Rebates– The typical custom rebate ROI was calculated between 15 to 30% of

the total installation cost (up to 50% in some cases)

– Rebate checks ranged in between $5K to $100K

– Actual first year kWh savings ranged in between 73K to 1.1 Million

Lessons Learned

Varies Greatly by Utility & Project

– Rebate capped at 50% of project costs - First Energy Ohio

– Unable to claim interactive savings - California

– Rebate rate is based on entire potential portfolio rather than specific project (up to $0.18 per kWh saved) - Massachusetts

– Rebate amount is based upon estimated savings rather than actual system performance - Seattle

Lessons Learned cont…

Typically utilities need to build the case that they have influenced the project prior to implementation

Documentation of the existing equipment is key to the rebate process

Texas has strict Measurement & Verification utility requirements

Newly installed technology can conflict with existing systems

Challenges Pursuing Incentives

Can be overwhelming for multi-site operators

Program implementation vary by state, utility and measure type

Offerings change frequently

– New technologies roll out

– Funding availability limited

Overcoming the Challenges

Where are my facilities? What does my capital budget look like? Are energy audits needed to identify efficiency opportunities? What projects are feasible?

Build a Rebate / Incentive Strategy

Pre approval processes Timing of inspections Rebate paperwork deadlines

Does Timeliness Matter for My Initiatives?

Who pays the utility bills? Is the facility leased or owned?

What Other Factors Are There?

How Can Ecova Help You?

Customizable Solutions

Incentive Opportunity Research

– Project prioritization based on return

Engineering Services

– Energy and water site audits

– Custom project evaluation

Project Incentive Analysis & Processing

– Strategic and Tactical approaches

– Budgeted capital improvement projects

– Centralized tracking and reporting

Summary

Identification & Fulfillment of Energy Rebates through a Centralized Service

Take the Time-intensive Administrative Tasks Off Your Plate & Report Back on Savings

Why Ecova?

Upcoming Ecova Webinars

INSIDE ENERGY & SUSTAINABILITY• Custom Rebates Fund CapEx Efficiency Investments Encore -

2.13.14 at 11am PST• Accelerating ROI with Real Time and Historic Data – 2.26.14 at

11am PST• 2014 Energy Survey – 3.6.14 at 11am PST• Energy Market Intelligence: What’s Happening Q1 – 3.11.14 at

1pm PST

DIAL IN THE SAVINGS SERIES• 3 Telecom Power Moves to Rock 2014 Savings & Performance –

2.19.14 at 11am PST

Questions, comments, suggestions? webinars@ecova.com

Q&A

Thank you!