36
Vendor's Offer _c is required that Offeror complete, sign and submit the original of this form to the City Procurement Office with the response offer. An unsigned "Vendor's Offer", late response and/or a materially incomplete response will be considered nonresponsive and rejected. Offeror is to type or legibly write in ink all information required below. Company Name: APS Energy Services Company, Inc. Company Mailing Address: 60 E. Rio Salado Parkway, Suite 1001 City: Tempe State: Arizona Zip: 85281 Contact Person: Todd Becker Title: Business Development Manager Phone No.: 602-744-5004 FAX: 602-744-5003 E-mail: Todd. [email protected] Company Tax Information: Arizona Transaction Privilege (Sales) Tax No.: 07584719-K or krizona Use Tax No.: Same as Above Federal I.D. No.: 86-0934176 City & State Where Sales Tax is Paid: Tempe, Arizona If a Tempe based firm, provide Tempe Transaction Privilege (Sales) Tax No.: 57399 THIS RESPONSE IS OFFERED BY Name of Authorized individual (TYPE OR PRINT IN INK) Robert Georgeoff Title of Authorized Individual (TYPE OF PRINT IN INK) Managing Director REQUIRED SIGNATURE OF AUTHORIZED OFFEROR (MUST SIGN IN INK) By signing this Response Offer, Offeror acknowledges acceptance of all terms and conditions contained herein and that prices offered were independently developed without consultation with any other Offeror or potential Offeror. In accordance with A.R.S. 3 5-39eLseq.,theQfferor hereby certifies that it does not have scrutinized business operations in Iran or51Kfic. - Failure to sign and re rn,this form with response offer will be considered nonresponsive and rei March 31, 2010 ) I - Signature of A ulliorized-Offeror --- Date Form 201-R (RFR) RFR #10-124 1

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Vendor's Offer

_c is required that Offeror complete, sign and submit the original of this form to the City Procurement Office with the response offer. An unsigned "Vendor's Offer", late response and/or a materially incomplete response will be considered nonresponsive and rejected.

Offeror is to type or legibly write in ink all information required below.

Company Name: APS Energy Services Company, Inc.

Company Mailing Address: 60 E. Rio Salado Parkway, Suite 1001

City: Tempe State: Arizona Zip: 85281

Contact Person: Todd Becker Title: Business Development Manager

Phone No.: 602-744-5004 FAX: 602-744-5003 E-mail: Todd. [email protected]

Company Tax Information:

Arizona Transaction Privilege (Sales) Tax No.: 07584719-K or

krizona Use Tax No.: Same as Above

Federal I.D. No.: 86-0934176

City & State Where Sales Tax is Paid: Tempe, Arizona

If a Tempe based firm, provide Tempe Transaction Privilege (Sales) Tax No.: 57399

THIS RESPONSE IS OFFERED BY

Name of Authorized individual (TYPE OR PRINT IN INK) Robert Georgeoff

Title of Authorized Individual (TYPE OF PRINT IN INK) Managing Director

REQUIRED SIGNATURE OF AUTHORIZED OFFEROR (MUST SIGN IN INK) By signing this Response Offer, Offeror acknowledges acceptance of all terms and conditions contained herein and that prices offered were independently developed without consultation with any other Offeror or potential Offeror. In accordance with A.R.S. 3 5-39eLseq.,theQfferor hereby certifies that it does not have scrutinized business operations in Iran or51Kfic. - Failure to sign and re rn,this form with response offer will be considered nonresponsive and rei

March 31, 2010 ) I -

Signature of A—ulliorized-Offeror--- Date

Form 201-R (RFR)

RFR #10-124 1

OF r$4,

74, 1 11110 ,7

RFR No, 10-124 Energy Performance Contracting April 1, 2010

QUESTIONNAFIE

1. Please provide the address of the facility that would provide services to the City of Tempe.

APS Energy Services' Corporate Headquarters will provide services to the City of Tempe. The address is 60 E. Rio Salado Parkway, Suite 1001; Tempe, AZ 85281

2. If you do not have a local facility, indicate how you intend to service the City of Tempe.

APS Energy Services' Corporate Headquarters is a local facility located in Tempe, Arizona.

3. Describe your company and its history.

APS Energy Services is the full-service energy performance contracting subsidiary of Pinnacle West Capital Corporation (NYSE:PNW) and provides self-funding innovative energy conservation and renewable solutions designed to manage risk and achieve the triple bottom line. Incorporated in 1998 and as part of the Pinnacle West family, APS Energy Services enjoys a strong relationship with the State of Arizona and has successfully implemented over $250 million in energy conservation and renewable energy projects for State public agencies, including K-12 School Districts, Municipalities and Higher Education Institutions. As an Arizona-based company, our employees live with a mission to make its State a better and healthier place to call home and

this intent is apparent in all the company does.

Headquartered in Tempe, Arizona, APS Energy Services has 39 full-time, local energy professionals that include more than 25 PEs, CEMs, CMVPs, PhD, MBAs and LEED' Accredited Professionals. No other energy services company in the State can match our resources, project track record and history of savings success that APS Energy Services has established.

4. State the number of years your firm has been involved in the energy-efficiency related business.

APS Energy Services has been involved in the energy-efficiency related business for 11 years.

5. State the number of years your firm has offered performance contracting services.

APS Energy Services has offered performance contracting services for 11 years.

6. Provide information on the staff that will service the City of Tempe.

APS Energy Services currently employs 39 full time personnel in various functions throughout the company to include engineering, project management, construction and administration. APS Energy Services hires only top quality energy industry professionals, with many of them bringing numerous years of experience in the industry, as well as, a wide range of industry certifications. Please see the following page for APS Energy Services' organizational chart indicating all of the individuals that will service the City of Tempe. Please keep in mind that these team members are subject to change. Detailed resumes for each team member can be found in the Appendix.

.........

APS energy SERVICES

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PROPRIETARY & CONFIDENTIAL

CII31.111111.1.3131.1111.1/.10.21:1[1.P.1131:700131.11.11,6

Phase III — Measurement & Verification .317001:11211.1210131131.11312171:11:1131.11,1.110121131.1131.117

.01 ■ 011, 4, ............ Todd Becker, CEM

Business Development Manager

0...oam000coonntancoparsoonanonoragran

Phase I — Project Development 0..... or outiotio.favolnutroormooucitlow r

Phase II - Construction

Ed Antone, CEM CEE Chief Consulting Engineer

Tom Corwin Construction Project Manager

oF a ?- 151 .44, 7

RFR No. 10-124 Energy Performance Contracting

April 1, 2010

APS Energy Services will be partnering with Carollo Engineers, a leading expert in the planning, design and construction management of water and wastewater projects for public agencies, municipalities, private developers and industrial and agribusiness companies. Their areas of expertise include: Water, Wastewater, Energy, Air Quality, Stornnwater, Water Reuse and Groundwater.

Carollo Engineers proposes Mark Gross as its Project Manager for the evaluation of water and wastewater facilities in support of APS Energy Services' performance contract with the City of Tempe. Mark is very familiar with the City of Tempe's business practices, utility staff and facilities. More importantly, he is a design engineer with more than 18 years of experience who is able to recognize opportunities for energy and cost savings through modified operations and equipment improvements. Mark will be supported by Guy Carpenter, who also has 18 years of experience, eight of which was working for a municipal utility in a role that included responsibility for water and wastewater facility maintenance and operational efficiency. Guy recently conducted an energy efficiency audit and energy "road map" for a utility in Arizona and will work with Mark and Carollo's process and electrical engineers to develop potential Energy Conservation Measures (ECMs) through operational changes and equipment modifications, as appropriate. The commitment of Carollo's resources for the success of this project will be reinforced by the presence and involvement of Bob Ardizzone, the Managing Partner of Carollo's Phoenix office. Mr. Ardizzone has intimate familiarity with the South Tempe Water Treatment Plant, as he has been the project manager for two design projects and the production of an interactive Operations & Maintenance Manual for the facility.

p ri e

I . j yaavicLa .. . .....

<

Steve Kessler

Senior Project Manager

I Joe Leichner, PE, CEM, CMVP Manager, Project

Development

I Narnir Saman, PE, CEM CMVP

Senior Project Engineer

******** APS energy LENELE;

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o rfel

RFR No. 10-124 Energy Performance Contracting April 1, 2010

7. List all areas of expertise related to potential energy and resource savings for facilities.

Over our 11 year history of performing Investment Grade Audits, APS Energy Services has had the

opportunity to work with multiple Municipalities, K-12 School Districts and Higher Education

institutions. In this capacity, we have performed work in all of the specialized functions that a

City setting would require for energy conservation, as well as, renewable energy generation

opportunities.

Our internal resources and energy conservation and generation consultants have had significant

experience with the energy and cost estimating analysis of the following technologies and

applications:

• Central Heating Plant

o Convert Electric Boiler to Gas Fired Boiler

o Hot Water Reset (According to Outdoor Air)

o Purchase Transportation Gas

o Purchase Interruptible Gas Service (Dual Fuel Burners Required)

o Sequence Multiple Boilers (Run Each to Full Capacity)

o Lead/Lag Load Boiler

o Install Low Load Boiler

o District Steam or Cogeneration Waste System

o DA Tank Replacement

o Underground Piping Installation

• Boilers

o Hot Water Reset to Reduce Overheating

o Reduce Steam Pressure

o Steam Pressure Reset

o Adjust Firing Rate to Building Load

o Preheat Combustion Air

o Duct Combustion Air

o Properly Size Combustion Chamber

o Interlock Combustion Air Intake with Burner Controls

o Repair Air Leaks in Combustion Chamber

o Adjust Burner Excess Air Settings

o Install Oxygen Trim

o Provide Dual Fuel Burners

o Install Oil Atomizing Burners

o Chemical Additives for Fuel Oil

o Reduce Stack Temperature with Baffles or Turbulators (Stack Temp > 260°F)

o Boiler and Burner Replacement

o Stack Heat Recovery (Stack Temp > 300°F)

..... APS e nergy SERVICES

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4, F rel."

rqj 9, h

RFR No. 10-124 Energy Performance Contracting April 1, 2010

o Seal Leaks in Natural Draft Stacks

o Automatic Stack Draft Dampers

o Reduce Burner Short Cycling

o Blow down Heat Recovery

• Hot Water Heating Systems

o Trim Pump Impeller

o Reduce Size of Oversized Motors

o Variable Speed Drive (Two-Way Valves)

o Pony Pump for Low Load Conditions

o Replace High Resistance Elements with Low Resistance

o Rebalance Systems to Minimize Overheating

o Reset How Water Temperature to Minimize Overheating

o Minimize System pressure (Drain Water Logged Expansion Tanks)

o Provide Air Control

• Domestic Hot Water Heating

o Reset Hot Water Temperature During Off-Peak

o Reduce Hot Water Usage (Flow Regulators-Showers, Faucets, etc.)

o Minimize System Thermal Losses (Insulate Tanks, Piping, etc.)

o Install Separate Water Heater Heaters (Avoid using Heating System Boiler)

o Install Temperature Boosters Heaters

o Install Summer Water Heater (Shut Down Heating System Boiler)

o Hot Gas Heat Recovery (Boiler Stack, Incinerator, etc.)

o Waste Water Heat Recovery (Laundry, Sterilizers, etc.)

o High Efficiency Water Heater

o Replace Cafeteria Booster Heater with Chemically Treated Low Temp System

o Convert Electric to Gas Fired

• Steam Systems

o Minimize Trip Blow-through

o Condensate Steam Recovery (High Pressure Steam Systems)

o Condensate Heat Recovery (District Steam Systems)

o Insulate Steam Lines

o Minimize Condensate Vent Steaming

o Install Zone Isolation Valves

o Inspect and Repair/Replace Steam Traps

........ APS energy SERVICES

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rqi ,T

'7 20'

RFR No. 10-124 Energy Performance Contracting April 1, 2010

• Central Cooling Plant

o Absorption Chillers (Depending Upon Waste Heat Available)

o Sequence Multiple Chillers (50 to 60% is Most Efficient-Consider Pumps)

o Direct Digital Control System

o Install Pony Chiller

o Chiller Replacements

o Chilled Water Reset

o Variable Frequency Drive (Turbo Modulator)

o Minimize Oil Migration

• Cooling Towers

o Condensing Water Reset

o Discharge Building Air to Towers

o Install Closed Loop Free Cooling System

o Install Refrigeration Migration Free Cooling System

o Plate Heat Exchanger Free Cooling System

o Strainer Cycle Free Cooling System (Not Usually Acceptable)

o Replace Air-Cooled Condensers with Water Cooled

o Install Venturi Stack (Reduce Static Pressure, Reduce Recirculation)

o Install Variable Speed or Tow Speed Cooling Tower Fan Motors

o Install Variable Pitch Blade Cooling Tower Fan

O Air Systems (General)

o Reduce Outdoor Air Volume Minimum (According to Local Code)

o Reduce Fan Motor Size

o Reduce Fan Supply Air Volume (According to Local Code)

o Install Outdoor Air Economizer (Dry-Bulb, Enthalpy, Ideal Dry-Bulb)

o Change Air Filters

o Energy Management System

• Single Duct Systems

o Reset Supply Air Temperatures

o Sequence Control Valves (Eliminate Heating and Cooling Overlap)

o Convert to VAV

O Terminal Reheat Systems

o Supply Air Reset (Minimize Reheat)

o Convert to VAV (Prevent Reheat Unit 50%)

o Install Isolation Dampers

....... APS e n e rg y SERVICES

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74'it 0

RFR No. 10-124 Energy Performance Contracting April 1, 2010

o Reduce Reheat Temperature

o Use Waste Heat for Reheat

• Multi-Zone Systems

o Install Individual Zone Coils

o Minimize Cold/Hot Deck Damper Leakage

o Hot/Cold Deck Temperatures Reset

o Blank Off Hot Deck and Concert to VAV with Reheat

• Dual Duct Low Velocity Systems

o Hot/Cold Duct Temperature Reset

o Install Splitters to Funnel Return Air to Hot Deck

• Dual Duct High Velocity Systems

o Replace High Pressure Mixing Boxes with Low Pressure

o Minimize Hot/Cold Duct Damper Leakage

o Convert to VAV (Install VAV Boxes and Fan Speed Controls)

• Variable Air Volume Systems

o Control Fan Speed for Constant Static Duct Pressure )

o Provide Supply Air Pressure (Most Extreme Load Fully Opened)

o Provide Hot Water and Chilled Water Reset

o Delay Reheat Until Airflow is at a Minimum

• Induction Systems

o Install Two-Speed Motors and Zone Dampers

o Reduce Primary Air Volume and Pressure

o Lower Primary Air Reheat Schedule

o Low Secondary Hot Water Temperature

o Reduce Secondary Water Flow Rate

o Raise Primary Air Cooling Temp-Lower Secondary Water Temp

o Reduce Secondary Water Temperature (Reduce Piping Losses)

o Reduced Primary Heating Air-Raise Secondary Hot Water Temp

o Eliminate Fan During Unoccupied (Increase Hot Water for Radiation Only)

• Return Air and Exhaust Duct Systems

o Match Exhaust Fan Volume with VAV Supply Fan

o Provide Toilet Exhaust Unoccupied Control

o Install Heat Recovery Makeup Air Units

......... APS e nergy SERVICES

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RFR No. 10-124 Energy Performance Contracting April 1, 2010

O Fan Coil and Unit Ventilator Systems

o Clean Coils and Change Filters

o Reduce Air Volume

o Convert 4-Pipe System to 2-Pipe

o Install Time Clocks

o Eliminate Fan During Unoccupied Hours

o Minimize Outdoor Air Usage

O Lighting

o Provide Unoccupied Time Clock

o Increase Light Delivered to the Task

o Reduce Light Levels Beyond Tasks

o Re-lamp with More Efficient Light Source

o Reposition Light Source Locations

o Install High Efficiency Ballasts

o Take Advantage of Daylight

o De-lamp and Install Reflectors

o Increase Reflectance by Painting Surfaces White

o Lower Fixture Mounting Height

o Provide Uniform Lighting

o Install Dimmer Switches

o Install Task Lighting

o Install Motion Detectors

o Provide Wall Switch "Save Energy" Signs

• Heat Recovery

o Install Heat Wheels (Exhaust Air to Outdoor Air)

o Install Heat Pipes (Exhaust Air to Outdoor Air)

o Utilize a Fixed Plate Heat Exchanger

o Utilize a Run-around Coil

o Install a Thermosiphon System

o Recover Heat from Industrial Heat Producing Systems and processes

o Recover Heat from Fume Removal Systems (Locker Room, Kitchen, etc.)

o Recover Heat from Process HVAC Systems (Evaporation, Drying, etc.)

o Recover Steam or Heat from Condensate

o Generate Heat Through Waste Incineration (Heavily Regulated)

.........

APS energy fEEVICES

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10

RFR No. 10424 Energy Performance Contracting

April 1, 2010

• Renewable Technologies

o Solar Photovoltaic Technologies

o Solar Thermal Technologies

o Geothermal Heat Pumps

o Anaerobic Digestion

o Wind.

o Fuel Cells

• Water to Air Heat Pumps

o Install One Larger Unit Rather Than Multiple Smaller Units

o See Condenser, Compressor, Fan, Pump, Piping and Ductwork Measures

• Air-to-Air Heat Pumps

o Direct Building Exhaust to Inlet of Heat Pump

o Install Time Clocks

o Replace Compressors with , EER Less Than 9 for Cooling

• Building Envelope

o Replace Window Glazing

o Apply Window Film

o Re-hang Misaligned Windows

o Repair Operable Window Seals/Latches

o Apply Window and Door Caulking and Weather Stripping

o Install Revolving Doors

o Build Vestibules

o Install Air Curtains for Larger Entries

o Install Automatic Door Closers

o Post a Sign ("Keep Door Closed")

o Insulated Walls, Roof, Floor, Soffit, Slab Edge, etc.

o Provide a Vapor Barrier for Walls, Roof, etc.

o Minimize Stack Effect (Close Stair Wells, Seal Elevators, etc.)

o Caulk Pipe Penetrations

o Seal Ceiling to Roof Gap

o Solar Radiation Reduction (Drapes, Blinds, Window Film, Overhangs, etc.)

o Apply Reflective Coating to Roof to Reduce Heat Gain

• Utility Service

o Convert Electric to Gas

o Purchase Transportation Gas

........ APS energy SERVICES

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11

• .. .. ... .

APS energy fELVICES

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vo F

RFR No. 10-124 Energy Performance Contracting April 1, 2010

o Purchase Interruptible Gas Service (Dual Fuel Burners Required)

o Reduce Consumption (kWh) / De-energize Equipment with Time Clocks

o Reduce Peak (kW) Loads

o Correct Power Factor (Increase Load Capability of Service)

o Investigate Utility Rebates or Site Grant Programs

o Install Separate Meters and Monitor Efficiency

o Rate Analysis

o Meter Consolidation

O Electric Distribution

o SES Installation

o Transformer Installation

o Hi-Pot Testing

o Utility Interconnect

o Trenching

O Utility Sub-metering

o Electric

o Natural Gas

o Digester Gas

o Chilled Water

o Hot Water

o Steam

o Condensate Return

o Renewables

O Water Conservation

o Low flow Valves and Showerheads

o Aerators

o Waterless Urinals

o Automatic Sensors

o High Efficiency Toilets and Urinals

o Xeriscaping

o Irrigation Control

o Cisterns or Rain Catchment

o Water Conditioning in Cooling Towers

o Reduce Cycles of Concentration

F

17'2/ i oj

RFR No. 10424 Energy Performance Contracting April 1, 2010

6 Thermal Energy Storage

o Calmac Ice Storage System

o Automate and Update Controls

O Building Recommissioning

o Cooling Systems

o Heating Systems

o Building Automation Systems

o Exhaust Systems

o Building Envelope

o Domestic Hot Water Systems

o Humidity Controls

o IAQ Monitoring

o Building Pressure Controls

O Other Measures

o Cogeneration (Induction or Synchronous)

o Install a Facilities Management System

o Install an Ice Storage System

o Generate Battery Reserves Off-Peak (Reduce Demand, Cost/kWh, etc.)

o Industrial Process Control and Heat Recovery

o Clean Room Temperature and Humidity Control

o Computer Room Temperature and Humidity Control

o Pool Covers and Pool Heat Recovery

o Upgrade Elevators/Escalators

o Avoided Maintenance

o Provide Predictive Maintenance (Sound or Vibration Analysis/Monitoring)

8. List all areas of expertise related to water processing plants and wells — provide detailed information.

Carollo Engineers is an environmental engineering firm focused to provide a complete range of services for water, wastewater and reclaimed water utilities. Their energy evaluation services can be provided on a facility-by-facility basis, or can be performed holistically such as in the case of a water treatment, production and distribution system. Carollo's reputation for Client service and continual commitment to quality has resulted in a 77-year history of satisfied, long-term Clients. They currently maintain 28 offices in North America, through which they have successfully completed more than 20,000 projects for public sector Clients. Carollo is currently ranked within Engineering News Record's (ENR) top 100 design firms. More importantly, ENR's annual Source Book ranks Carollo among the top firms for water and wastewater treatment plant design. Unlike their competitors, Carollo only provides water and wastewater engineering services. They recruit

........ APS e n ergy SERVICES

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OF T6.47

rfe -g -94, 1 110

RFR No, 10-124 Energy Performance Contracting April 1, 2010

nationwide and hire technical staff that have extensive background and training specific to this

field. For that reason, the quality and professional standing of their core group of water and

wastewater professionals equals or exceeds that provided by some of the largest engineering

firms in North America. They have recently completed or are performing ongoing water and

wastewater projects for many of the country's major municipalities or special districts.

Carollo has nearly 700 employees on staff including approximately 350 registered engineers.

They are a full-service company with the experience and qualified professionals to successfully

manage projects of any size. Their staff includes civil, sanitary, environmental, electrical,

mechanical, chemical, structural, control system and corrosion control engineers, as well as,

architects, planners and specialists in other areas. Their services cover all phases of municipal

water and wastewater projects, from studies and master plans, through facility and financial

planning, design, construction management and operations support. Carollo works with Clients

to develop optimal water, wastewater and infrastructure systems and facilities. By integrating

their Client's community values and goals with their knowledge of water resources, science-

based research, cutting edge technology, and their business-based decision and stakeholder

consensus building techniques, they provide Clients with comprehensive services that integrate

sustainability into their projects.

Through their experience with water and wastewater infrastructure design and the associated

relationships they develop with operators, engineers, and utility managers, they know that the

most important thing to Clients is the protection of public health and the environment through

compliance with applicable regulations and rules. They also know that this is followed in

importance by the service level a utility must provide to continually satisfy its customers. With

these priorities firmly in mind, Carollo will evaluate the City of Tempe South Water Treatment

Plant (and potentially other water and wastewater facilities) to provide recommended Energy

Conservation Measures (ECMs) that do not require a sacrifice in regulatory compliance or service

levels. This may seem an obvious responsibility, but energy efficiency evaluators who are not

well-versed in the operational requirements of water and wastewater facilities have a greater

potential to develop ECMs that are not implementable and therefore essentially meaningless.

Please see below and the following pages for the areas of expertise related to water processing

plants and wells. Please see the Appendix for more details on Carollo Engineers.

• Water

o Design of treatment facilities

o Design of transmission, distribution, and storage facilities

o Pilot plant/process simulation and optimization studies

o Ozone technology

o Alternative disinfection

o Membrane technology

o Chemical systems safety

o Water quality monitoring

o VOC removal

o Master planning

........

APS energy SERVICES

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roeuF T-%

-$74,1 cr) ,,T RFR No. 10-124 Energy Performance Contracting

April 1, 2010

o Watershed management

o Hydraulic modeling

o Water resources planning

o Surface and groundwater yield studies

o Exploratory studies

o Well site selection and design

o Groundwater recharge ICR monitoring

o D/DBP evaluations

Wastewater

o Treatment plant master planning/facilities planning

o Collection system planning and system modeling

o Design of conventional treatment facilities

o Design of advanced treatment facilities

o Design of collection and pumping facilities

o Pilot plant/process simulation and optimization studies

o Sludge treatment and disposal

o Biosolids management plans

o Nutrient removal

o Disinfection alternatives

o Wet weather systems

o Source control and pretreatment programs

o Effluent disposal

o Toxicity identification and reduction evaluations

o Site-specific water quality objectives and use attainability analyses

o Sewer replacement/rehabilitation

o Ocean outfalls

9. If you do not have experience/expertise in water plants, how do you intend to address the City of Tempe water treatment facilities and wells?

Please refer to answer #8 above.

......... APS e n e rg y SERVICES

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15

• OF

RFR No. 10-124 Energy Performance Contracting April 1, 2010

10. Describe the number and quality of staff you currently have to conduct technical analysis, engineering design, installation management, installation, training and post-contract monitoring.

Please see the following Table 10-0 for a listing of our staffing capabilities sorted by area of

expertise. APS Energy Services has a combined construction project management experience of

over 400 years with the focus of delivering energy efficiency.

Table 10-0. Staffing Capabilities

Task

Technical Analysis

Engineering Design

Installation Management

Installation

Training

Number of Staff

6

6

18

10

19

Post-Contract Monitoring 3

11. Describe the nature of work generally conducted by subcontractors.

APS Energy Services will maintain onsite full-time Construction Manager(s) throughout the entire

duration of the project. An important part of APS Energy Services' approach to providing solid project management and high-quality customer service is to establish a strong local presence for

every project. We manage subcontractors at the first tier level, avoiding unnecessary middlemen

and mark-ups. Typically, APS Energy Services hires only labor subcontractors preferring to utilize

buying power for equipment to achieve additional savings on behalf of our Clients. We anticipate

using labor subcontractors from the following trades: electrical, building control, mechanical,

plumbing, lighting and water conservation.

We will ask your team for the name of two or three contractors who have performed well for you

in the past for each of the trades. We will help the City of Tempe standardize installed equipment, helping to lower the cost to maintain your facilities. Additionally, APS Energy Services

will prepare specifications, scope and drawings to obtain subcontract work and materials for the

City.

APS Energy Services strongly believes in keeping its business in the communities where the

company is invited to work by using local companies as subcontractors as often as possible.

APS Energy Services will assume full responsibility for all project work and services performed by

our subcontractors. Our subcontractor team will adhere to all provisions and conditions in this

RFR.

......... APS en e rg y SERVICES

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16

Client

Arizona State University.

Arizona State University.

Califomia Department of Corrections and Rehab (CDCR), Tehachapi

Central Arizona College

City of Albuquerque, New Mexico

City of Flagstaff, Arizona

City of Flagstaff, Arizona

City of Nogales, Arizona

City of Reno, Nevada.

City of Reno, Nevada.

City of Rohnert Park, California

Colorado River Union High School District.

Lake Havasu Unified School District.

Lincoln County School District

Maricopa County.

Mineral County School District

Northern Nevada Correctional Center.

Payson Unified School District

Pima County

Prescott Unified School District.

Santa Cruz Valley Unified School District.

Santa Cruz Valley Union High School District.

Sausalito Marin City School District

Sedona-Oak Creek Unified School District.

Town of Florence

University of Arizona

Westem Nevada Community College (WNCC).

White Pine County School District

White Pine County, Nevada

Guaranteed Savings $ Completion Date

$3,309,372 October, 2004

$5,340,326 September, 2010

$301,753 December, 2007

$440,775 April, 2008

$74,628 December, 2007

$86,783 February, 2008

$299,171 March, 2007

$127,182 April, 2007

$117,594 March, 2010

$861,873 2010

$83,802 May, 2007

$197,892 December, 2008

$333,534 April, 2007

$24,620 December, 2005

$1,736,874 , 2012

$60,177 October, 2007

$349,060 June, 2007

$170,667 December, 2008

$13,641 January, 2010

$269,453 February, 2006

$59,836 July, 2006

$33,278 December, 2010

$43,236 August, 2005

$161,925 July, 2009

$224,741 July, 2007

$50,566 October, 2008

$4,490,000 December, 2005

$135,994 October, 2005

$192,527 February, 2005

$9,480 May, 2005

ro h rn

RFR No. 10-124 Energy Performance Contracting April 1, 2010

12. Indicate the number of energy savings audits you have performed for buildings for the past 5 years and the savings that were generated.

Energy Savings Audits - Past 5 Years

Project

Multi-Phased Energy Management & Conservation

Performance Contract, Including Solar Photovoltaic

Installation (30kW) Phase 1

Multi-Phased Energy Management & Conservation

Performance Contract Phase 2

Energy Conservation Services Agreement

Energy Management & Conservation Performance

Contract

Solar For Schools, Million Solar Roofs Project

Wildcat Cogeneration Wastewater Treatment Plant

(300kW)

Multi-Phased Energy Management & Conservation

Performance Contract, including Solar Photovoltaic

Installation (15kW)

Energy Project & Wastewater Treatment Plant

Energy Management & Conservation Performance

Contract Phase I

Energy Management & Conservation Performance

Contract Phase II

Energy Management & Conservation Performance

Contract, Including Solar Photovoltaic Installation

(30kW)

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract Phase I

Energy Management & Conservation Performance

Contract, Including Solar Photovoltaic Installation (10

kW)

Renewable Energy Center Project, Including Biomass

(1MW) and Solar Photovoltaic Installation (30kW)

Energy Management & Conservation Performance

Contract

Downtown Parking Garage Lighting Retrofit

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract, Including Solar Photovoltaic installation

(100kW)

State of Nevada, Department of Health and Human Services (DHHS). Energy Management & Conservation Performance

Contract

Energy Management & Conservation Performance

Contract

Multi-Phased Energy Management & Conservation

Performance Contract

Energy Management g( Conservation Performance

Contract

Energy Management & Conservation Performance

Contract, Including Woody Biomass Plant

Energy Management & Conservation Performance

Contract

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13. Indicate the number of energy savings audits you have performed for water treatment facilities and wells for the past 5 years and the savings that were generated.

Carollo Engineers has been involved in more than 20 projects in the past 5 years that have either

been specific to energy savings audits, or had an energy savings work element associated with

the project (such as for a facility master plan or optimization study). These projects have been

for water and wastewater facilities.

For the Olathe (Kansas) WTP 2 Expansion Project, which included a modified treatment train and

operations of Finished Water Pump Station, annual savings in chemical costs were $100,000, and

annual savings in energy costs were also $100,000.

For the City of Escondido (California), Carollo testing and modification of the dose control

algorithm has allowed a 4 mgd system to be expanded to 8 mgd without adding a single UV lamp.

This can be viewed as increased capacity, or as a 50% reduction in energy use per gallon of

treated water. Under current operations, the testing saves Escondido $50,000 per year in energy.

14. Is your firm accredited by NAESCO (National Association of Energy Service Companies)?

APS Energy Services is focused on the five southwestern US states. The expense of national

certification is not necessary given our goal of being a high quality, boutique Energy Services

Company focused on custom solutions for our select Clients. As such, APS Energy Services is not

an active member of NAESCO; however, APS Energy Services is on the Department of Energy's

Qualified List of Energy Service Companies.

15. Describe your general approach to auditing a facility for all levels of audits requested. Include, at a minimum: what is involved, how is customer involved, methodical approach, etc.

APS Energy Services views the audit process as a partnership between APS Energy Services and

the City of Tempe. Prior to the start of the audit process, APS Energy Services' personnel will

meet with the City of Tempe to determine the financial and technical goals, needs and

constraints. A plan is then developed for the Audit and implementation process to provide

effective solutions and strategies that meet the City of Tempe's goals and needs within the City's

schedule constraints. Following the development, the plan is discussed to ensure thatit meets all

of the City's expectations. Each project has assigned dedicated team that is involved in the project from the start. The team includes a sales representative, audit lead, project engineers,

energy auditors, contract specialist, construction project manager and administrative support.

Team members will be involved in different capacities in all aspects of the project from the start

of the Audit until the conclusion of construction. These team members, under the guidance of an

on-site Project Manager, will from time to time require the assistance of City Facilities personnel.

Listed below is the time-proven methodology APS Energy Services uses to develop baseline

operating costs and savings projections, as well as, measurement and verification methodology

to ensure program success. In an initial site survey or a preliminary audit, APS Energy Services

performs the following steps for each facility:

• Performs a utility analysis of the facility, using past energy and water history, to determine

the monthly energy, water and gas consumption and demand profiles, and to compare the

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energy use indices of the facility with similar facilities in the same geographic location. This

step will provide important preliminary information about the existing potential at the facility

and typically takes one to two days to accomplish, depending on the facility size and the

availability of the information.

• Review of available facility's blue prints and specifications to become familiar with the facility

systems and equipment. This step typically takes two to four days to accomplish depending

on the facility size and the availability of the information.

• Interview operating personnel and occupants to gain a better understanding of the building

systems and operations, and to discuss any issues or problems that must be addressed as part of the overall solutions that the audit presents. This step typically takes one to two days

to accomplish.

• Perform an initial walk through of the facility to become familiar with the building systems and equipment and compare the actual systems with the original design. The result of this

walk through is to develop a list of potential energy and water conservation measures and

engineering solutions to problems that were identified by the facility operators. This step

typically takes three to six days to accomplish depending on the facility size and the

availability of the information.

• Perform preliminary analysis of the feasibility of the potential measures. This step typically

takes three to six days to accomplish depending on the facility size and the availability of the

information.

• Prepare a preliminary report that includes financial and technical solutions that meet the

City's goals and objectives. Present the findings to the City for feedback and approval. This

step typically takes three to five days.

Upon completion of initial site survey, APS Energy Services would then initiate the following steps

in an Investment Grade Assessment for each facility included as part of the assessment:

• Complete a detailed field survey of the facility, which includes inspecting the building

equipment, operation, performance and issues. This step can involve short term or spot

monitoring of a statistically significant sample of equipment; collecting detailed data such as

counts of lighting fixtures and name plate data on equipment; and operational logs to

establish an accurate energy consumption baseline for the facility. This step typically takes

two to three weeks depending on the size of the facility and the complexity of the systems.

Please see Question # 7 for a list of systems that APS Energy Services surveys during the

audit.

• Perform detailed energy analysis for the facility using established engineering methodologies

and tools. The analysis starts by using the field collected data to establish an energy and

demand baseline for the facility. The calculated baseline is then compared to existing data,

such as billing history, for accuracy. The baseline is also used to develop end use breakdown for the facility to indicate the consumption of the individual systems to the total energy use

and demand. The proposed energy conservation measures are then analyzed using

established engineering software (e.g. DOE2.1E, VisualDOE, TRACE 700) or engineering

models (i.e. spreadsheets) to establish the potential savings of these measures. This step

typically takes five to seven weeks depending on the size of the facility and the complexity of

the systems.

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O Operational and maintenance (O&M) savings are determined much differently than energy savings. O&M savings require the complete support and buy-in of the facility management staff. APS Energy Services will guide the City's facility management staff to help find true O&M savings. However, the City must make the final determination regarding the inclusion of each operational savings component. The O&M savings are typically taken because of the reduction in the required maintenance for new equipment, and are not intended to reduce maintenance staff. This step typically takes three to five days depending on the size of the facility and the complexity of the systems.

O A conceptual design for the recommended measures will be developed. The design will include equipment selection, systems modifications and verification that all recommended measures meet all applicable codes and standards. This step typically takes one to two weeks depending on the size of the facility and the complexity of the systems.

• Implementation schedule and cost estimates for each measure is developed to verify the feasibility of the proposed measures. Measures that do not meet the City's financial and technical objectives are removed from the project. This step typically takes one to two weeks depending on the size of the facility and the complexity of the systems.

• A detailed report discussing the results of the audit is prepared and presented to the City. The report includes the financial and technical solutions and makes the technical and financial case for the implementation of the project. The report will include measures that are economically feasible and a list of those measures that are not economically feasible but considered for the project. This step typically takes one to two weeks depending on the size

of the facility and the complexity of the systems.

16. Describe your firm's approach to the technical design of this project.

Engineering design is a core competency of APS Energy Services. Our staff performs all mechanical, plumbing and electrical design. The mechanical and electrical engineers that will be responsible for the construction documents are licensed Professional Engineers in the State of

Arizona.

Sequence of Engineering Design Services

City of Tempe Selects Energy Conservation Measures (ECMs): After the City has reviewed the

Investment Grade Assessment Report and agreed to the ECMs for inclusion in the energy performance contract, we will prepare a design scope of work, schedule and list of deliverables.

Design Selected Energy Conservation Measures (ECMs): APS Energy Services will first develop a

schedule for the project design services and will submit this to the City for review and approval. APS Energy Services will then move forward with the preparation of AIA construction documents

for the selected ECMs. Construction documents will be prepared for each type of construction (i.e. lighting retrofits, energy management systems, HVAC retrofits, water conservation retrofits, etc.) This will allow us to bid projects separately to specific groups of City approved subcontractor bidders. We will provide the City with review sets at 75% and 100% completion for comments and concurrence with the design. Construction documents will not be issued to bidders until the City

has approved the documents.

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17. Describe standards of comfort and functionality that are generally used for light levels, space temperatures, ventilation rates, etc. in the intended facilities.

Lighting

Light levels will be maintained to Illuminating Engineers Society (IES) recommendations for each

type of space being improved. Light levels will be maintained by City of Tempe staff throughout

the contract by group cleaning and group relamping. In addition, the performance of newer lighting technologies (T-8 lamps and electronic ballasts) does not depreciate over time as fast as

the existing equipment (T-12 lamps and magnetic ballasts).

Space Temperatures & Ventilation Rates

Ventilation rates for the existing facilities will be evaluated to verify that they meet American

Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) Standard 62.1-2004.

In the event they do not meet the ASHRAE Standards, recommendations will be provided to the

City on how this can be accomplished. Space temperatures and ventilation rates will be

maintained to ASHRAE standards during the design and implementation phases. Space

temperatures and ventilation rates will be maintained throughout the life of the contract by City

of Tempe staff by performing preventative maintenance on air handlers and HVAC equipment

and also by monitoring conditions through the Energy Management Control System.

18. Describe in detail the methodology your firm normally uses to compute baseline of energy and water use as well as performance.

The process for baseline development that APS Energy Services adopts consists of a

comprehensive comparison between theoretical prediction and actual operation as determined

from equipment parameters and utility data. This process is based on established engineering

standards such as International Performance Measurement and Verification Protocol (IPMVP).

The process begins by collecting and reviewing at least two years of utility history for the audited

facilities to establish a base year for the analysis. This review is to ensure against the

misapplication of utility rates or an abnormal year's usage profile and to provide verification for

the analysis results. During the Audit, data is collected on the facility operation and the systems

in the facility. This data includes name plate data, short term monitoring, spot measurements,

and original construction documentation. The field collected data is then used to establish

baseline consumption at different levels. The baseline consumption may be developed for

individual measures or for the facility as a whole, depending on the considered measure and the analysis level that is used to calculate the energy savings. The baseline is established using

working models, such as DOE 2.1E or TRACE 700 or using spreadsheet models for individual

measures. The developed models are used not only to determine the baseline energy and water

consumption but also to evaluate the predicted savings for the recommended water and energy

conservation measures. The baseline that is established with the model is calibrated against the

base year that was established from the utility bill analysis. APS Energy Services will develop a

high degree of confidence in the baseline both internally and with the City before proceeding

with the analysis.

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19. Describe the method(s) used to adjust the energy, water and O&M baseline due to such factors as weather and facility use changes. Describe factors that would necessitate adjustment.

APS Energy Services will apply the IPMVP methodology for baseline adjustments. The IPMVP

defines two types of adjustments. The first type is called Routine Adjustments that include

changes in parameters that can be expected to happen throughout the post-retrofit period and

for which a relationship with energy use/demand can be identified. These changes are often cyclical, such as weather or occupancy variations. Routine adjustments are included in the basic

mathematical model and the model can be adjusted to recalculate the effects of these changes

on the energy and water savings. The second type is called Non-Routine Adjustments. These

adjustments include parameters that cannot be predicted and for which significant impact on

energy use/demand is expected. Such parameters include changes in the amount of conditioned

space, changes in the amount or use of equipment, changes in environmental conditions (lighting

levels, set point temperatures, etc.) for the sake of standard compliance, and changes in

schedule, occupancy or throughput.

20. List all procedures, formulas and methodologies including special metering or equipment, which your firm will use to calculate energy, water and O&M savings. Include assumptions made in the calculations.

Water and Energy Sayings

Our approach to the analysis of energy-using systems starts by analyzing the data collected

during the site survey. The analysis will help in evaluating the initial feasibility of the

recommended measures. Then, for those Energy Conservation Measures (ECMs) that require

further energy analysis, the analysis may include developing computer-based temperature bin analyses or building or system simulation models. The decision will be based on the number, size

and type of ECMs being considered.

The Technical Site Analysis will entail a thorough site survey to collect required data, followed by

the potential creation of a computer model of the facility's energy using systems. Input data to

this energy usage model will include an inventory of the major energy using systems, occupancy

and use profiles, hours of operation, and pertinent weather data. Key data input includes metered and/or measured equipment performance characteristics to help establish the baseline

criteria. The computer simulation will be calibrated against established billing history that is

developed from utility analysis. The calibrated model will be used to determine the feasibility of

installing specific ECMs. Evaluation of these ECMs will encompass measure costs, projected

savings, effects on system maintenance costs, secondary impacts on other water and energy

using systems and life cycle costing.

An hourly energy analysis software program, such as Trane Trace 700 or DOE 2.1E, may be used

where several ECMs are proposed within one building with interaction of the impacted systems.

All calculations shall conform to ASHRAE standards. Load impacting ECMs (building envelope,

lighting systems, etc.), system distribution load ECMs (air handling equipment, pumps, etc.) and

generation load ECMs (cooling system heating, etc.), will be developed and analyzed. APS Energy

Services also investigates the feasibility potential of alternative type measures such as solar and

cogeneration.

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Savings from lighting and water efficiency measures will be calculated using customized

spreadsheets. For some cases, a new lighting system may be proposed and may require

evaluation of a new layout. In this situation, quantity and type of fixtures and resulting light levels

will be calculated using lighting software. The interactions between the high efficiency lighting

system and the mechanical systems will also be calculated and included in the analysis.

0 & M Savings

APS Energy Services will guide the City facility management staff to help find true O&M savings.

However, the City of Tempe must make the final determination regarding the inclusion of each operational savings component.

Many times operational savings are found by reviewing past purchase orders for repair parts and

outside service contracts. Therefore, APS Energy Services will assist the City in reviewing cost

center records and budgets to locate potential operational cost savings that can be achieved by

replacing equipment under the performance contract, or by taking on maintenance and repair

responsibilities which are currently being performed by outside contractors.

APS Energy Services does not anticipate including City facility management labor reductions as an

operational savings category. It is assumed that the City will not be interested in reducing staff

because there are many other areas where staff can be reassigned if required maintenance tasks

are reduced or eliminated due to new equipment installed by APS Energy Services. Examples of

operational savings include the following: Annual dollars spent on lamps and ballasts, based on

consolidation of equipment types, new warranties, increased equipment life and reduction of

equipment components resulting from the comprehensive lighting retrofit; Average annual cost

the City spends on repair parts for a piece of equipment that will be replaced; Annual service

contract cost if contract can be discontinued due to the performance contract.

21. Describe the procedure to assign dollar values to the savings. Include energy savings as well as maintenance or material savings.

When evaluating current energy prices, the structure of the rate must be examined to determine

the consumption, demand and time-of-use characteristics. Using a simple blended $/kWh rate is

not always the most accurate method for determining the dollar savings associated with energy

conservation measures. For instance, control measures (i.e. energy management system or

occupancy sensors) may not reduce the utility-measured peak demand in a month. If a time-of-

use rate schedule is in effect, it must be included in the evaluation and could necessitate the

development of a building energy simulation model for accurate calculations. All of these factors must be considered when calculating dollar savings.

An estimate of the energy savings and cost savings will be determined using current energy

prices. The simple payback period, in years, a detailed project costing, project life and an

indication of any change in operation and maintenance costs will also be included. A cost analysis

of each project will incorporate these factors. Escalation, discount rate and other parameters

germane to this life-cycle analysis, if required, shall be submitted for approval prior to life-cycle

evaluation.

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22. Describe your firm's procedures and schedule for measuring financial performance of projects.

The method for calculating cost savings will vary slightly for each Energy Conservation Measure. The annual savings are guaranteed through a pre-defined measurement and verification protocol. The performance of the individual efficiency projects is measured at the completion of construction to validate the guaranteed savings. In accordance with Arizona State law, the measurement and verification process is repeated at the end of years 1, 4, 7 and 10. Reports will be submitted at these intervals. Any shortfalls in savings identified through this process, are either technically or financially resolved. APS Energy Services will perform a detailed investigation to determine all applicable adjustments to the baseline and energy savings calculations. This detailed investigation will include site visits and inspections to ensure all applicable equipment is in place, audit of all settings on equipment to determine operational changes from calculations of baseline and savings, and monitoring of appropriate services to determine adjustments in operations from stipulated or assumed values used in calculations of the baseline and savings.

A Registered Professional Engineer and Certified Measurement and Verification Professional shall perform all work necessary to determine appropriate savings adjustments and provide a final report outlining actual savings in accordance with the appropriate calculation of baseline and

savings.

23. Describe how the guarantee provisions work in the event that project results vary from projections. Also describe how excess savings can be documented.

In the event that the final M&V Report does not verify the expected energy savings in accordance with the M&V Plan, APS Energy Services shall repair or replace the Energy Conservation Measure that is not performing at the required level, as identified in the M&V Report.

If, after the opportunity to make corrections, the final M&V Report, as amended, indicates that energy savings are still less than expected energy savings for that year, APS Energy Services shall pay the City within thirty (30) days of receipt of the M&V Report, an amount equal to the sum of the present value of the difference between the Expected Energy Savings for each year in the payback period and the energy savings shown in the M&V Report.

24. Describe particular characteristics of how your firm approaches performance contracting.

There are many attributes of APS Energy Services and how we conduct ourselves that

differentiate us from our peers.

One of those attributes is the fact that our local headquarters is in Tempe, AZ on the south side of Tempe Town Lake on the corner of Rio Salado and Mill Ave. Having our office right here in Tempe allows us to have an intimate knowledge of the City of Tempe, its landscape, its challenges, and its successes. It also affords us the opportunity to participate in the local legislative process and to have an intimate knowledge of the local vendor community. Not only does APS Energy Services know the vendors, but we are also vendor and equipment neutral. Put another way, we do not own any proprietary technology or manufacturer of equipment which we might feel obligated to promote or sell as part of our performance contracting project.

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As a local member of the community, we take a great deal of pride in the fact that no other energy services company has done the amount of work that we have done in the state of Arizona. APS Energy Services has completed over $250 million in energy performance contracts in this state. APS Energy Services is also proud to claim sixty nine full time employees who are all exclusively energy focused and who all live in this community, including a dedicated Utility Rebate Department and Measurement and Verification Department.

Given the current economic times and the budgetary constraints the City of Tempe currently finds itself, engaging with an energy services company who knows and understand s the financial landscape and how to secure financing is crucial to the successful completion of a project of this type. APS Energy Services does not make money on money, i.e. finance the projects. However, APS Energy Services does enjoy a relationship with a party who has successfully blended many different bond programs to fund a multi-phase project for the City of Reno. APS Energy Services won the competitive process and earned the right to perform the work for the $18 million City of Reno project. But, without the creative and innovative financing the project would still be on the drawing board. APS Energy Services proudly enjoys a relationship with the party who made that financing happen for the City of Reno and looks forward to dedicating his services to this project for the City of Tempe if we are fortunate enough to win this competitive process.

25. Describe the structure of the financing arrangement including: projected interest rate, financing term, repayment schedule, equipment ownership, security interest required, the responsibilities and liabilities of each party, and any special terms and conditions that may be associated with the financing of this project.

Overview of Financing Structure

Securing financing is an integral part of any project. With the financing industry in turmoil, the only known factor is that things change. At the same time, there are a series of incentives for energy projects from the federal government. Some incentives are for public projects, such as tax credit bonds, while some incentives are for privately owned projects such as the 30% grant in lieu of tax credit for renewable energy, available only to taxpaying entities. APS Energy Services understands how important securing the appropriate financing has become and how complicated it can be as well. Lease-purchase is a structure that works very well for energy improvement projects and can be used with the incentive programs that follow.

Each project must be analyzed for available incentives as a public project and also as a private project. Each incentive has its own regulations which may include prevailing wage requirements or a Buy American stipulation. Some public projects may be structured to have a 3 rd party owner and become a privately owned project, if the incentives are compelling. APS Energy Services has the expertise to manage the analyses necessary to make informed decisions in today's financing climate.

Tax Credit Bonds

Tax credit bonds provide a subsidy for qualifying projects through 4 distinct programs. For each program the issuer must be a municipal entity issuing debt that would otherwise qualify to be tax-exempt. The debt issuance is taxable and the purchaser of the debt receives a tax credit designed to be in lieu of interest. On March 18, 2010 a change was signed into law which allows

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the issuer to receive an interest rate subsidy equal to either 70% or 100% of the tax credit rate set by the U.S. Treasury. What was a tax credit for investors has become a direct cash subsidy to the issuer. This new option will make these debt issuances more attractive to a wider variety of

investors since the debt will simply be a taxable debt investment.

The goal of this program was to create an interest free loan; however, this goal was very rarely met as the tax credit was not sufficient compensation to the purchaser and the issuer was usually required to pay an additional interest rate (typically 1-3%). The term and tax credit rates are set by formulas tied to current interest rates. The tax credit rates change daily and the term can

change monthly.

Tax credit bonds have been valuable tools for several projects, including a project APS Energy Services is implementing for the City of Reno, Nevada. A Clean Renewable Energy Bond was issued for $2.34 million at 1% interest.

The four distinct types of tax credit bonds are as follows:

• CREBs — Clean Renewable Energy Bonds

o New renewable energy projects, can be used for reimbursement

o Allocation has an application process

• QECBs — Qualified Energy Conservation Bonds

o Renewable energy and energy efficiency

o Allocation by formula

• QSCBs — Qualified School Construction Bonds

o Any capital project or land acquisition

o Allocation by State

• QZABs — Qualified Zone Academy Bonds

o May include energy projects; still requires 10% contribution

o Allocation by State

The last two, QSCBs and QZABs are only for K-12 schools. CREBs have an application process which has not been set for 2010. For QECBs the State has released their allocations by formula which can be seen here: http://www.azcommerce.com/doclib/financehecballocation.pdf . The

City of Tempe has received an allocation of $1,852,098 in QECB.

CREBs can be used for new, renewable energy projects. QECBs can be used for a series of qualified uses that include energy retrofits of buildings that achieve over 20% efficiency, green community programs, renewable energy projects and more. All 4 of the tax credit bonds require compliance with federal prevailing wage laws. QECBs and CREBs receive an incentive of 70% of the tax credit rate set by the U.S. Treasury. The tax credit rate for all 4 programs as of March 26, 2010 was 5.90% and the maximum term, which can change monthly, was 16 years.

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Build America Bonds and Recovery Zone Bonds

Build America Bonds provide a 35% subsidy on the interest paid on a taxable bond issue for projects that would otherwise qualify for tax exempt financing. There is no allocation process. If the project qualifies, it can simply be designated as a Build America Bond. Typically, both tax exempt and taxable rates are sought from underwriters so the issuer can compare both to insure that the most cost effective rate is chosen. Additionally, taxable interest rates have been less than 35% higher than tax exempt rates making Build America Bonds an attractive program. Prevailing wage requirements do exist and legal opinions can differ depending on the size and nature of the selected option. The method of issuance can be determined by the issuance (i.e. revenue bond, installment purchase, etc.)

The State of Arizona has received allocations in a federal bond program called Recovery Zone Bonds. These are very similar to Build America Bonds but they provide a more generous subsidy for municipal projects and the ability to issue them is allocated by the federal government. This program has two different categories: bonds for uses that would otherwise qualify for tax-exempt financing or Economic Development Bonds; and bonds that are for private activity or Facility Bonds.

Cities and counties ("Issuer") within the State have received direct allocations based on a formula created by the federal government. The formula is based on economic factors and is designed to provide targeted assistance. The debt must be issued before January 1, 2011 (unless an extension occurs). The term is not limited like tax credit bonds (CREBs, QECBs, etc.).

Economic Development Bonds are issued as taxable debt for municipal projects that would, in all other ways, qualify for tax exempt status. The U.S. Treasury provides the Issuer a 45% rebate on the interest rate paid by the Issuer. The rebate is paid in conjunction with scheduled debt service payments and the method of debt issuance can be of the Issuer's choosing (i.e. general obligation, revenue, or lease-purchase). The taxable market has attracted international investment, investment from pension funds and other taxable investors which have made the resultant interest rate for other Recovery Zone Economic Development Bonds quite attractive. These bonds require compliance with federal prevailing wage laws.

Facility Bonds simply pass on an interest rate that is tax-exempt to private activity projects that would otherwise be required to issue debt on a taxable basis. An Issuer would be required to issue the debt, which would not necessarily result in an obligation for repayment to the Issuer. There is no indication that Facility Bonds require compliance with prevailing wage laws.

If an Issuer chooses to utilize this program for energy improvements, the Economic Development Bonds could be used to finance the cost of the energy efficiency work on municipal buildings and the Facility Bonds could be used to finance a power purchase agreement for any solar projects in which the Issuer may wish to engage. In both instances, energy savings could be contracted to be sufficient to repay the debt service.

The Issuer would also be required to define the recovery zone. Other municipalities have done this by simply designating the entire city as a recovery zone through a resolution.

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The City of Tempe has received an allocation of $3,110,000 of the Economic Development Bonds and $4,665,000 of the Facility Bonds.

The City of Tempe has received an allocation of $3,110,000 of the Economic Development Bonds

and $4,665,000 of the Facility Bonds.

26. Describe the mechanics of the financing arrangement, including equipment ownership, responsibilities/liabilities of each party, security interest required and any special terms and conditions that may be associated with the financing this project.

Third Party Ownership

Many solar projects throughout the country have utilized 3 rd party ownership in the form of

Power Purchase Agreements (PPAs). A Special Purpose Entity ("SPE") is created to own and be a conduit for benefits. This can be a very powerful tool as it can allow a private party to realize the 30% Investment Tax Credit and accelerated depreciation on a project that provides power to a tax exempt entity that would normally not be able to utilize a tax credit. Currently the Investment Tax Credit can be realized in the form of a grant, making the incentive is much more

attractive.

Some common details of third party PPAs are as follows:

O The projects are net metered by the local utility

• The State regulates the PPA process

• Federal tax credits are available since the owner/PPA provider is a for-profit company

O The utility incentives can be realized and are to purchase the Renewable Energy Certificates (RECs), therefore an analysis of the value of the RECs in relation to the incentive is crucial

• The risk is borne by the owner/PPA provider, however, these PPA contracts can be written to deliver power as generated and not guarantee any level of generation

• The PPA provider is typically responsible for financing the project

O For assuming the risk and attaining the financing, the PPA provider realizes the benefits and passes them through to other participants as contracted by the terms of the power purchase

agreement

O The tax benefits may be utilized by the PPA provider or sold to tax equity investors

APS Energy Services is currently exploring the concept of utilizing the PPA structure to include energy efficiency in this type of financing which has been used primarily for renewable energy. Based on legal review and underwriter interest, we believe that we may be able to provide a very powerful solution that would take the task of financing away from a municipal Client completely.

Please see the response to question #25 for additional financing details.

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27. Please comment on how you would work with the City to utilize tax-exempt financing if appropriate, or other methods to keep financing costs to a minimum.

With tax revenues down across the State and across the nation, simply asking the City to issue a

tax-exempt bond or capital lease using general fund balances, revenue streams, or the security of

a general obligation is the last option to be considered. The incentives outlined in the previous

sections for energy projects will be considered first. At the same time, the benefit of the incentives will need to exceed the benefit provided by tax-exempt financing.

If tax exempt financing is determined to be necessary, the structure would most likely be lease-

purchase as this structure does not require the commitment of a revenue stream or general

obligation commitment and can utilize relatively standardized legal documentation.

APS Energy Services has contracted the services of a financial consultant with experience as an

underwriter and financial advisor. The consultant has the ability to act as the financial advisor on

debt issuance as tax exempt lease-purchase or any one of the incentivized programs listed above.

This could save the City the cost of paying for the services of a separate financial advisor. Please

contact APS Energy Services for more information about this additional service.

28. Describe any utility rebates or other incentives that you can potentially provide and/or facilitate.

In a typical year, APS Energy Services will secure for our Clients in excess of $5 Million in utility

incentives. Our dedicated Rebate Department is continually working with the public utilities to

keep abreast of the latest incentive program guidelines to help maximize the amount of

additional funding our Clients can expect to receive. We will research all options for the City of

Tempe to provide the maximum amount of rebates the City may qualify for.

In addition to the energy and operational savings that will occur through the implementation of a

program of this type, there are three additional sources of funding which APS Energy Services will

explore on behalf of the City of Tempe. They are as follows:

• Arizona Public Service (APS) Energy Study Incentives — Arizona Public Service (APS)

offers up to $10,000 to its business account customers to help fund energy audits. APS

Energy Services will complete the energy study incentive application on behalf of the City.

The City will review and sign the completed application which is then submitted to APS.

When approved, the incentive check goes directly to the City.

• Arizona Public Service (APS) Retrofit Incentives — Arizona Public Service (APS) offers

both prescriptive and custom incentive programs for the installation of qualifying energy

saving measures. It is important that the rules regarding these applications be followed

exactly. APS Energy Services has an excellent track record in securing these incentives and has a dedicated team that will complete the retrofit incentive applications. The City will then

review and sign the completed applications which are then submitted to APS for approval.

Once the retrofits are installed and the pre- and post inspections are completed, the

incentive checks go directly to the City. Based on our initial assessment of the City, APS

Energy Services estimates these incentives will exceed $1,565,666.

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• Federal Funding Opportunities — Various Federal programs such as Energy Efficiency

Conservation Block Grants (EECBG), American Reinvestment & Recovery Act (ARRA) and

Economic Recovery Bonds will be evaluated by APS Energy Services on behalf of the City.

29. Do you agree to open book pricing for your firm and any utilized sub contractor?

Yes, APS Energy Services agrees to and is willing to utilize open book pricing for our firm and any

of our sub contractors.

30. Describe your firm's capabilities in providing technical training for City personnel.

Initiating an energy performance contract begins a continual improvement process, rather than a

specific project that has a short term goal. Trained staff can make a difference between energy

performance contracting projects that exceed savings targets and those that require continuous

program resolution and extra staffing. To ensure the performance contracting process is

successful, the City of Tempe facilities staff and APS Energy Services' Team will work together as

partners with the common objective of protecting the performance contract investment while

optimizing savings. To this end, training will play a critical role in arming the individual City facility

operations staff with an understanding of every aspect of the program. This will help to maximize

savings through efficient operation of each Energy Conservation Measure. Likewise, we have

found that encouraging a sense of ownership by the City staff during the training can act as an

efficiency multiplier. This ownership will come from involving them in the diagnosis, design and

installation of improvements from the beginning.

APS Energy Services has developed the following four-step training approach:

1. Onsite classroom training in particular technologies using displays, practice modules and

O&M manuals prepared by manufacturers and from practical experience.

2. On-the-job nnentoring involving appropriate City personnel in obtaining ideas for efficiency improvements, considering the design issues involved, drawing the list of suppliers/

contractors for bids, reviewing the bids, supervising installation and commissioning the new

equipment by testing under load. The APS Energy Services Project Manager will form a

project team at the start that includes those who will have significant roles in operating, maintaining, and repairing the new equipment. As we learn the details of the actual facility,

who the key users are, and how they work, we will be better able to schedule project work

around critical occupants/staff needs.

3. Offsite training, usually provided by the manufacturers under APS Energy Services

supervision, includes certification training, plant visits, viewing equipment in actual operation

and participating in "lessons learned" forums.

4. Labeling of wiring, pipes, controls, and panels showing such information as circuit

identification, direction/volume of flow, calibration instructions, expected ranges of meter

readings under various conditions, proper switch and damper positions, etc.

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31. Describe your firm's approach to the performance guarantee.

APS Energy Services warrants for the term of contract following Substantial Completion (the "Guarantee Period") that the sites shall realize at least 100% of the savings detailed in the IGA that follow the schedules and maintain the comfort levels.

Measurement and Verification (M&V) is used to confirm that the new equipment and systems perform as projected and yield the projected savings.

Upon Substantial Completion of the work and at agreed upon intervals, APS Energy Services shall perform the M&V Plan for each Energy Conservation Measure (ECM) installed at each site to produce the M&V Report which will verify whether the ECMs are performing at a level that will support the Performance Guarantees.

In the event that the final M&V Report does not verify the expected energy savings in accordance with the M&V Plan, APS Energy Services shall repair or replace the ECM that is not performing at the required level, as identified in the M&V Report. APS Energy Services shall re-perform the relevant M&V work for the affected ECM and amend or supplement the M&V Report.

If the M&V Report demonstrates the work will achieve one hundred percent (100%) of the expected energy savings, then APS Energy Services shall have satisfied the energy performance guarantee obligations for the work under the Contract Documents.

If, after the opportunity to make corrections, the final M&V Report, as amended, indicates that energy savings for that period are less than expected energy savings for that year, APS Energy Services shall pay an amount equal to the sum of the present values of the difference between the expected energy savings for each year in the guarantee period and the energy savings shown for Year 1 in the final M&V Report. However, under no circumstances will the amount paid for the shortfall exceed the energy project cost.

This Guarantee is subject to the satisfactory performance by the City of its obligations including continued operation at the sites in accordance with the current scheduling information and maintenance of the facilities at the established comfort levels.

APS Energy Services offers guarantees that cover all program costs, including measurement and verification, as well as any maintenance contracting.

32. Does the guarantee cover the annual monitoring & verification and maintenance contract costs?

The guarantee can cover the costs that are included in the contract. APS Energy Services works with its Clients to customize our guarantee to their individual needs.

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33. Describe the methodology proposed for ongoing monitoring and savings verification of each recommended project's performance, including the frequency of such efforts.

Energy savings calculations also mirror the measurement and verification (M&V) process. An

M&V plan, which includes the parameters that will be measured, the measurement time period,

the energy savings calculation methodology, savings adjustment methodology, and the

measurement equipment, is established and developed to fit the specific energy conservation

measure that is being evaluated. Each plan must meet one of the International Performance

Measurement and Verification Protocol (IPMVP) options or the Federal Energy Management

Protocol (FEMP) option criteria. The M&V plan for each Energy Conservation Measure (ECM) is

chosen carefully to meet the IPMVP or FEMP requirements, and to establish an accurate

timeline.

Once each ECM is installed, required post measurements will be taken and compared to pre-

installation measurements. Monitoring equipment is installed and data is collected. The collected

data from the monitoring equipment is then analyzed, trended and used to evaluate and verify

the predicted energy savings. Statistical analysis methods are also used to ensure statistically

significant and accurate results. The results are then compared against the baseline energy and

the predicted energy savings to verify the accuracy of the calculations. Adjustment to the

engineering calculations may then be applied to account for any changes in the baseline

conditions.

The energy or demand savings are determined by comparing measured demand or energy used

before and after implementation of an energy savings program. According to the 2002 edition of

IPMVP, it states that:

• Energy Savings = Baseline Energy Use — Post-Retrofit Energy Use ± Adjustments

The "Adjustment" term in this equation brings the energy use in the two time periods to the

same set of conditions. The conditions that most commonly affect energy use include weather,

occupancy, operating hours, equipment counts and ratings, temperature setpoints and changes

in the facility area. These conditions could have a positive or negative adjustment associated

with them.

The baseline conditions will be well documented in the M&V plan for each energy conservation

measure. The method of tracking and reporting changes to these conditions will also be established in the M&V plan. Once changes in these conditions are established, the baseline will

be recalculated to reflect the new changes if these changes have an effect on the baseline. The

energy savings will also be recalculated to reflect the new changes.

M&V can also be used to track the savings and ensure savings persist for the life of the measure.

If the savings are not being achieved, M&V can be helpful as a diagnostic tool to find the reasons

for not meeting the savings and what can be done to rectify the problem.

The City of Tempe will have the opportunity to choose the M&V option that best suits the cost,

timeline and benefit threshold needed by the City. APS Energy Services is able to perform savings

calculations using the methods preferred by the City.

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The frequency of the M&V efforts will be determined by the most technically appropriate and cost-effective M&V approach agreed to by both City of Tempe and APS Energy Services and determined by the characteristics and applications of the technologies.

34. Briefly describe the maintenance responsibilities of your firm and City.

There are several aspects to long term maintenance services for energy savings persistence: assuring the equipment has the ability to perform its function to the best of its ability and then assuring that the equipment is being controlled in the most efficient manner. The ability to perform its function includes preventive maintenance services which includes alignment, lubrication, continuous power quality, and clean liquids and fluids to pass through the equipment. Clean heat transfer surfaces are also critical to the maintenance of energy savings. Predictive maintenance services can also be included to analyze vibrations that are an indicator of potential bearing failures. Most important to the energy savings is the continuous attention to how the device is controlled. It is only through periodic inspection that you can assure that the device is being controlled accurately and with the sequence of operations for the various modes of operation. APS Energy Services has several Client sites that we perform regular visits to confirm proper maintenance and energy persistence. Ongoing measurement and verification services are required by the State of Arizona and these will be in addition to the preventive and operating inspections as part APS Energy Services' offering.

35. Describe the types of services that can or must, be included in the maintenance contract. Comment on whether City's maintenance staff can perform these duties if desired, and describe any impact on the guarantee.

All Energy Conservation Measures are fully commissioned by trained professionals, followed by the delivery of specific Operational and Maintenance Manuals for all new and retrofitted equipment. All maintenance required would be dependent upon the type and complexity of equipment installed and/or retrofitted, and at the manufacturer's requirements for set intervals of maintenance. Assuming an adequate number of properly trained maintenance personnel on staff, the City of Tempe could perform these maintenance duties. Please note however, that failure to perform the scheduled maintenance on new and retrofitted equipment in accordance with the manufacturer's requirements may jeopardize equipment warranties and the City of Tempe's energy savings through reduced equipment efficiencies and service life.

36. Describe the required length of the maintenance contract if required and the relationship with the guarantee in the event that City chooses to terminate the maintenance contract prior to the end of the performance contract.

The required length of the maintenance contract is dependent upon the final decision of the City of Tempe. In most cases, the maintenance contract is structured to extend for the duration of the guarantee portion of the contract. If the contract does not define the guarantee or the City of Tempe determines a guarantee is not needed, the duration of the maintenance agreement may be based on yearly intervals or multiples of years, with the option to renew. If the City of Tempe decides to terminate the maintenance agreement prior to the end of the performance contract, and fails to provide scheduled maintenance in accordance with the manufacturer's

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requirements, the City of Tempe would be at risk of decreased equipment performance and

service life that may reduce the prescribed energy savings as identified within the Technical

Grade Audit document.

37. Describe your willingness and experience/capability to provide services and prepare an application to achieve the Energy Star Label/LEED Certification on retrofitted buildings.

APS Energy Services is an Energy Star Partner and can and will provide all of the services required

to achieve an Energy Star Label for qualified buildings. We also have 2 LEED certified employees

that can assist in the development and analysis of points necessary to become LEED certified. We

will work with our Business Partners who have the experience and capability to prepare the

appropriate LEED applications.

38. Describe your willingness and experience/capability to calculate and report emissions reductions.

Calculating and Reporting emissions reductions as a result of energy efficiency projects ,as well

as, renewable energy generation is a standard in all reports developed by APS Energy Services.

These calculations are completed based on local utility generation mix and are specific to our

Client's locations in an effort to report as accurately as possible.

39. Describe how your firm would work with the City's facility manager to coordinate installation and avoid conflicts with the building's operation and use.

Nearly all of APS Energy Services' Clients are located in publicly occupied facilities where specific

coordination is required with the Client, local utilities, subcontractors, equipment suppliers and

facility personnel to best accommodate the needs of the Client, its staff and visitors to cause

minimal, if any, disruption. APS Energy Services will work with the City to coordinate the

construction schedule to occur before or after occupied times. This scheduling allows the project

schedule to be maintained without having to disrupt workdays and APS Energy Services ensures

that its subcontractors and equipment suppliers will follow the established construction

schedule.

40. Who will control the purchase of parts and what procedures would be in place to guarantee the best value to the City?

APS Energy Services will control the purchase of parts and will competitively bid for best pricing

through approved vendors to supply parts as needed for the period of the maintenance

agreement, with any escalation established based on the maintenance period.

41. Describe your company's process to solicit bids on equipment/labor or to ensure price/cost competition and the best value for the City.

APS Energy Services will ask the City of Tempe for the name of two or three contractors who

have performed well for the City in the past for each of the trades. APS Energy Services will help

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the City of Tempe standardize installed equipment, thus helping to lower the cost to maintain City facilities. APS Energy Services will prepare specifications, scope and drawings to obtain subcontract work and materials for the City. APS Energy Services strongly believes in keeping its business in the communities where the company is invited to work by using local companies as subcontractors as often as possible.

APS Energy Services will assume full responsibility for all project work and services performed by our subcontractors. Our subcontractor team will adhere to all provisions and conditions in this RFR.

42. Describe any major changes in operations or maintenance of the facilities that your firm foresees based on the information provided.

Based upon the preliminary energy savings ideas presented in the Preliminary Energy Audit located in the Appendix, some of the final recommended energy conservation measures may include changes to operations and maintenance of the STWTP. This is where the value of Carollo Engineers as part of our team is significant, as they will be cognizant of how changes in operation have the potential to influence the primary objective of the STWTP, which is to provide safe drinking water at the service level Tempe's customers have come to expect. Specific examples of possible operational modifications include the following:

• Frequency and timing (optimization) of solids blowdown events.

• Slight modifications to sodium hypochlorite generation operations.

• Modify the UV dose control algorithm to preferentially operate at more efficient lamp power settings.

• Provide a new control algorithm for operation of the Finished Water Pump Station (FWPS), based upon automatic control of pump speed and on/off operation to maintain the desired operating setpoint discharge pressure.

• Modify the power control system to incorporate the use of an on-site biodiesel fueled turbine generator for peak power demand.

• Install and use a complete power monitoring system, and allow operators to make operational adjustments using the monitoring system feedback.

The greatest potential for energy and associated cost savings is at the FWPS. However, to develop fully implementable Energy Conservation Measures, it will be necessary to evaluate how changes to the operation of the FWPS affect the ability to provide appropriate pressure and flow throughout the distribution system. That is, modifications of the operation of the FWPS to achieve power savings at the STWTP will need to be matched with modifications to the operation of the distribution facilities. It is not known if this type of evaluation is anticipated or expected as part of the performance contract, but our recommendation is to provide you with a holistic analysis that will result in a response plan that balances total energy savings without sacrifice to the provision of safe drinking water.

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43. Can you comply with all governmental regulations related to the use of grant money through the EECBG program?

Yes, APS Energy Services has experience with a variety of grand funding requirements and can

comply with all governmental regulations related to the use of grant money through the

Department of Energy's EECBG program.

44. List at least three (3) government or large corporate references for which you have provided similar services.

Please see Table 44-0 for a listing of relevant projects where we have provided similar services.

Please see the Appendix for detailed case studies on each project.

irrn

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

APS Energy Services

Carollo Engineers

Carollo Engineers

Carollo Engineers

Carollo Engineers

Carollo Engineers

Carob Engineers

Project Contact Phone Number

City of Flagstaff, AZ Rebecca Sayers 928.779.7678

City of Reno, NV Jason Geddes 775.334.3311

City of Albuquerque, NM John Soladay . 505.768.2615

Town of Florence, AZ Lisa Garcia 520.868.7552

Pinal County, AZ

Arizona State University - Tempe, AZ

University of Arizona - Tucson, AZ

Central Arizona College - Coolidge, AZ

Colorado River Union High School District

Sedona - Oak Creek Unified School District

Lake Havasu Unified School District

Prescott Unified School District

City of Riverside, CA

San Jose/Santa Clara Water Pollution Control Plant - San Jose, CA Bhavani Yerrapotu 408.945.5321

South Tempe Water Treatment Plant - Tempe, AZ Don Hawkes 480.350.2660

Southeast Water Pollution Control Plant - San Francisco, CA Tatnerat Awetu 415.330.9279

Central Mann Sanitation Agency - Mann County, CA Jason Dow 415.459.1455

Mitchell Water Treatment Plant - Greensboro, NC Kevin Eason 336.373.2895

Tom Celaya 520.866.6235

David Brixen 480.965.1852

Al Tat-cola 520.621.1228

Susan Shaw 520.494.5283

Donna Roach 928.788.1405

Mike Aylstock 928.204.6801

Joe Stella 928.208.6457

Jay Collier 928.713.5691

Tom Boyd 951.826.5575

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