PowerPoint Presentation (updated 9/8/2023)
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Performance Based Contracts - Update September 12th, 2023 Overview 2 Staff will be requesting enter into two separate agreements with Midstate Energy and McKinstry Essention Energy Saving Performance Contracts Process 3 Performance Contract Construction/CIP Projects Investment Grade Audit Measures identified, quantified Preliminary Assessment Identifies locations, systems, measures Council approval in June of 2021 Council Approval Required We Are Here Council approval in September of 2018 Background 4 • On September 25th, 2018, council voted to enter a linking agreement with Midstate Energy for Energy Performance Contracting Services • On October 8th, 2019, council voted to enter a linking agreement with McKinstry for Energy Performance Contracting Services • On March 23rd, 2021, council discussed the benefit of Performance Based Contracting and preliminary assessments. • On June 8th, 2021, authorized staff to proceed with investment grade audits for Energy Performance Contracting Services with Midstate Energy and McKinstry LLC • On October 25th, 2022, council discussed the investment grade audit results and project scopes. • On December 13th, 2022, council gave consensus to develop contract(s) an provide an overview in a future workshop Follow Up from December 2022 6 Contract Overview • Length of each contract • Measurement & Verification • Maintenance Plan • All rebates come back to the City 7 Total Performance Based Contract Summary Preliminary Assessment 2021 Investment Grade Audit 2022 Investment Grade Audit Update (2023) Project 1 and 2 total cost $7,965,255 $10,042,479 $12,945,153* Total Average Annual Energy Saving $527,066 $478,487 $633,170* Total Capital Contribution FY23 $2,175,000 $1,976,617 $1,976,617 Total Project Cost minus Capital Contribution $5,790,255 $8,065,862 $10,968,536 * These numbers are from March 1st, 2023 8 Total Performance Based Contract Summary Investment Grade Audit Update FY23 Total Payback Years Updated in FY24 Project 1 and 2 total cost $12,945,153 20.4 years $12,945,153 Total Capital Contribution $-1,976,617 $-12,123,383 Total Project Cost minus Capital Contribution $10,968,536 17.3 years $821,770 Total Estimated Rebates $-70,000 $-70,000 Total Estimated Solar Investment Tax Credit $-1,164,869 $-1,164,869 Total Estimated cost after deducting rebates, Tax Credits, and Capital Contribution $9,733,667 15.4 years $413,099 Project Contingency 9 Consensus Proceed with Midstate Energy and McKinstry Essention