By Dianne Twinam, Senior Vice President
BOMA International recently leveraged the knowledge of an advisory board of sustainability experts, including Cushman & Wakefield Vice President of Sustainability, Allison Porter, to roll out an updated Energy Performance Contracting Model (BEPC). The model may be used by building owners in an effort to reduce the indecisiveness and risk associated with performing deep retrofits. Deep retrofits differ from conventional retrofits in that they achieve much greater energy efficiency, sometimes by over 30%, by addressing many building systems all at once rather than focusing on individual system upgrades to lighting or HVAC equipment, for example. Deep retrofits are more economical when a building has an overall poor efficiency performance or has multiple mechanical systems nearing the end of their useful life.
The result of the advisory board’s hard work produced the new BEPC. The toolkit, which can be found here, is a terrific (and free!) resource for owners and managers as they seek to increase the value of their assets, improve operational efficiencies and establish their commitment to sustainability.
The BEPC delivers a framework from which ownerships may develop and execute energy efficiency retrofits and seek to instill confidence that their project will meet their stated goals.
How Does It Work?
- Owner’s investment criterion determines project scope.
- Contractor provides turn-key solutions to meet or exceed owner’s investment criteria.
- Utility and operational savings pay for the project over time.
- Using owner’s preferred contractors provides flexibility.
- Contractors are not strictly required to provide performance guarantees.
With regard to the last point, Porter says, “One interesting trend in the evolution of performance contracting over the years is the shift away from guaranteed-savings models. Many early performance contracts included these guarantees as a way for the building owner to avoid risk. However, they tended to create an adversarial relationship between the building owner and contractor, and a lot of finger-pointing if things didn’t go as planned. They also necessitated complicated baseline energy usage calculations and burdensome measurement and verification (M&V) requirements. Now, most major performance contractors avoid such guarantees. The new BEPC model is designed to accommodate a variety of risk-sharing mechanisms to adapt to this market shift.”
What does the Toolkit include?
The Toolkit includes the following editable documents:
- Energy performance contract template
- Combined Request for Qualification (RFQ) and Request for Proposal (RFP) template
- Investment grade audit contract template
All of the provided templates are negotiable and easy to use. In addition, if an owner would like to use his or her own contract template, the BEPC language, principles and exhibits can be incorporated into his or her own standard contract.
What are the key goals for the updated BEPC?
- High level of flexibility: The model provides measurement and verification (M&V) as a separate agreement to allow for cancellation after one year or anytime thereafter, which lowers costs and maximizes flexibility.
- Financing “Agnostic”: The model will work regardless of how it will be funded. Possible funding sources include Property Assessed Clean Energy programs, self-financing or funding provided through an Energy Service Company (ESCO) or third party.
With the economic recovery well underway, building owners are once again willing to consider deep retrofit opportunities. The new BEPC with its updated best practices may be just the tool your owner needs to gain confidence and move ahead on crucial projects at your building!
Dianne joined Cushman & Wakefield’s Property Management team in 2010 and brings over 11 years of Property Management experience. As Vice President, Dianne is responsible for the successful transition of properties to our managed portfolio. She also provides formal training sessions to our property management teams on a regular basis and serves as a quality control resource to review budgets, re-forecasts and monthly reporting tasks specific to each client’s set of policies and procedures.