Established in April 1997, the Building Energy Conservation Initiative (BECI) program analyzes State buildings for energy and resource conservation opportunities. BECI utilizes a "paid from savings" procedure known as "Performance Contracting." This allows agencies to perform energy retrofits and building upgrades that would otherwise not be funded through capital appropriations, provided the energy savings can pay for the project cost as outlined in RSA 21-I.
The Office of Energy and Planning (OEP) institutes the study, along with the individual state agencies whose buildings are being evaluated. This is done through a two-phase process.
First, a Request For Proposal (RFP) is issued to a pre-qualified group of Energy Service Companies (ESCO) asking them to submit proposals based on a predetermined list of Energy Conservation Measures (ECM). The selected ESCO is then contracted to perform a Detailed Feasibility Study (DFS).
The second phase of the BECI procedure, the actual construction project, is based on the subsequent detailed feasibility study and guarantee included in that study. This phase is negotiated with the contractor until the ten year payback can be accomplished.
What type of work will be performed under BECI?
BECI is designed specifically for energy improving measures. A sample of those improvements may include lighting upgrades, HVAC upgrades, domestic hot water systems, energy management controls, water conservation measures, building envelope improvements, and miscellaneous projects which the ESCO can prove are feasible within BECI. See the descriptions of these several energy conservation measures.
How is the ESCO selected?
OEP and the state agency evaluate the proposals using a point system and choose the best plan for their specific needs. Each ESCO may have a different approach to achieve the energy savings requested, but all proposals must show a positive cash flow within ten years.
The evaluation team scores each proposal using a point system based on six selection criteria and creates a short list of three contractors to be interviewed. Once the evaluation team selects the successful ESCO, the Interagency Energy Efficiency Committee (IEEC) must review and approve the proposal.
A Detailed Feasibility Study (DFS) is then prepared through negotiation and discussions between the ESCO and the evaluation team. The final DFS and contract approval must then come from IEEC and funding ultimately approved by the Governor and Executive Council. Upon G & C approval, the contract and associated financing becomes binding.
How is the BECI program financed?
In May 2002, the State Treasurer secured a second financing package for this program for up to $10 million, which will allow the State to undertake upcoming projects and draw monies from that account as each RFP is completed.
The Master Lease Program (MLP) payments are then carried as line items in each agency’s utility budget. Since each actual utility cost has decreased, these savings provide the funds for the new line item account. Under the current arrangement, savings that exceed loan payments will revert to the state’s general fund. The Treasury does not consider a master lease additional debt; therefore, it has no negative impact on the State’s credit rating.
How are the BECI savings verified?
Each contract includes instructions on the procedure needed to verify the savings generated by these energy improvements. Since various buildings may include some, but not all, of the suggested measures, a procedure of Measurement and Verification (M & V) is unique to each energy improvement. The most common M & V procedures are "Stipulated Savings," which are calculated upfront, and "Measured Savings" which involve metering and submetering.
OEP has asked the selected ESCO to provide separate pricing to perform these tasks based on the International Performance Measurement and Verification Protocol (IPMVP). If savings fall short of the "guaranteed savings" promised by the ESCO, they reimburse the State that shortfall. The State agency can’t lose!