Municipalities are dealing with numerous financial constraints, and trying to improve or expand systems is often trumped by maintaining deteriorating assets. Discover the potential benefits of Performance Contracting (PC). PC is an alternate delivery method to the traditional CIP process for the implementation of operational cost saving and energy saving projects. While the PC process has been used extensively in municipal buildings for decades -- primarily for HVAC and lighting improvements -- it has only recently begun to be used by water and wastewater utilities for process-centric improvements to treatment plants, pump/lift stations and other assets.

1. Funding Infrastructure Investments
with Guaranteed Performance
Kevin Bell
Kimberly Albertson
Schneider Electric
August 21, 2013

2. Water & Wastewater
Alternative Project Delivery Option (PC)
Leverage
Guaranteed Savings with Risk Transfer

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The challenge is to sustain water quality
and cut operating costs…
Energy consumption is the single largest variable
expenditure item in water and wastewater treatment
It is also the largest opportunity to scale down operating
costs by scaling up energy efficiency
EPA Challenges, Consent Decrees, Energy Neutrality Goals
25%
Just making real-time
energy intelligence
available to operators
and managers can help
to cut operating costs
by as much 25%.
30%
On average, energy
consumption accounts for
up to 30% of a water
plant’s operating costs.
3
87%
Pumping can account for
up to 87% of a water
system’s total energy
costs.

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Challenges
Capital Dollar Competition - Internal
Property values down, sales tax revenue down, etc
Escalating Energy Costs
Increasing over the next 20 year horizon
Staff Attrition – Voluntary or Directed
Less personnel required to accomplish more
Regulatory Impacts
Unfunded mandates, consent decrees, complex
technologies
Operational Efficiencies & Performance Enhancement
Do more with less with aged infrastructure

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Our Solutions
Capital Dollar
Competition – Internal on
- Internal
Tax revenue receipts are
down – Systems must
operate and provide
service
PC offers opportunity to
generate savings to offset
capital needs
Staff Attrition – Voluntary or
Directed
Do more with less Solutions that employ
technology and automation
to achieve results
Escalating Energy Costs
Absence of long term power
purchase agreements
Solutions reduce energy
costs – 20 – 40% over
status quo
Regulatory Impacts
Unfunded mandates and
system corrections
Solutions mitigate regulatory
impacts
Operational Efficiencies &
Performance Enhancement
Systems aged – inability to
extract operational efficiency
and performance
enhancement
Implementation of
technology and automation

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How to Overcome Challenges?
• Alternative Project Delivery Mode – Performance Contracting
• Legislatively Approved and Regulated
• Significant National Precedence in Water Sector
• 15 to 30% Efficient ($) in Contrast to Traditional Procurement
• 20 to 40% Operational Cost Savings through Solutions
• Owner Protected through Solution Risk Transfer
• Guaranteed Savings Supported by ESCO Balance Sheet

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Definitions:
•ESPC – Energy Savings Performance
Contract
A partnership between a Municipality or
Water Wastewater (W/WW) District and
an ESCO to accomplish energy savings
projects without up-front capital costs.
•ESCO – Energy Services Company
A company that develops, installs and
arranges financing for projects to improve
energy efficiency and reduce operation
and maintenance costs at a Municipality
or W/WW facilities with guaranteed
results.

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Facility / Plant improvement & infrastructure renewal program
Energy savings created by: Energy Conservation Measures (ECM’s) = installing efficient
pumps, motors, blowers, drives, process optimization, automation, energy
monitoring, self generation of power including renewables and CHP, aeration & oxygen
transfer, solids stream management, etc.
Savings are guaranteed by Energy Services Company
What is Energy Savings Performance Contracting?
Reductions
From:
•Less Electricity
•Less Chemicals
•Less
Maintenance
•Biogas Reuse
•Less Natural
Gas

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Long Payback
Cost Savings
Quick Payback
Cost Savings
A comprehensive approach
•Fine Bubble Diffusers
•SCADA System
•VFDs
•Aeration System
Optimization
•Biogas for CHP
•Optimize Digester
Performance

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Energy Bill
Energy Efficiency Improvements
Reliability Improvements
Equipment Replacements / Repairs
Goal = Budget Neutrality
After performance contracting, the budget remains the same or less, and
energy savings pay for the facility improvements.
Example of Annual Energy Budget:

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• Develop, design and arrange financing for projects
• Install and maintain the energy efficient equipment
• Typically works with preferred consulting engineers
• Measure, monitor and verify the project’s energy savings
• Guarantees both the maximum project cost and the projected
energy savings
What does the ESCO provide?

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Capital Investment – Leveraging
Financial Options
General Obligation Bonds
Capital Lease Purchase Agreement
Revenue Pledge – Enterprise Fund Pledge
Performance Contracting allows for attractive financing options –
Customer’s investment back into the Customer’s water enterprise
Turnkey energy efficiency solutions
Performance Risk assumed by ESCO
Fixed price contract
Payment and Performance Bonds
Savings Guarantee by ESCO
● ESCO provides flexibility for Customer to choose budget neutral results OR
Customer to focus on much –needed improvements that could not
previously been paid for except for the blend of measures that provide net
savings available.

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Water Distribution Energy Conservation
Measures (ECMs)
1
 The primary ECM is for
improving the efficiency of
water booster or high
service pumps
 SCADA
 Leak Detection & Repair
 Water Meters – AMR/AMI

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Water Treatment ECMs
 Pump Optimization and Control
 Power Conditioning, Power Factor Correction
 Lighting, HVAC, Solar Power
 Water Conservation, Smart Irrigation, Reclaimed
Water
 Demand Monitoring and Control Improvements
 Motor Efficiency Upgrades
 VFDs and Motor Controls
1

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Water ECM Metrics – Save 10-20%
Water Treatment Plants Energy Saving
Increase Pumping Efficiency (Optimization) 5-10%
Replace Inefficient Motors and Install VFDs 5-10%
Optimize Pump Efficiency 5-10%
Demand Monitoring and Control Optimization 3-5%
Power Factor, Harmonics, Power Quality 3-5%
Water Distribution System
Reduce Water Loss (AMI/AMR/ Leak Management) 10-15%
Reduce water flow resistance in pipes 10%
Increase Pumping Efficiency at High Services Pumps 5-10%
Replace Inefficient Motors and Install VFDs 5-10%
Optimize Pump Efficiency 5-10%
Demand Monitoring and Control Optimization 3-5%

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Wastewater Collections ECMs
 Wastewater collection systems primarily lift
water, therefore, VFDs have limited application
for energy efficiency.
 Lift Station optimization is under development
 SCADA, MCCs and pumps controls can be
evaluated on a case by case basis.
 Pump and Motor efficiency
1

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Potential ECMs – Wastewater Treatment
 Aeration Improvements (Blowers, DO, Diffusers)
 Digester Improvements (Mixing, FOG, HS Waste)
 Cogeneration (CHP)
 Demand Monitoring and Control Improvements
 Power Conditioning, Power Factor Correction
 Motor, Pump Efficiency, VFDs and Controls
 Lighting, HVAC, Solar Power
 Low Energy Mixing, CEPT
 Water Conservation, Smart Irrigation, Reclaimed Water
1

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Wastewater ECM Metrics – Save 30-50%
Wastewater Treatment Plants Energy Savings
Optimize Pump Efficiency 5-10%
Replace Inefficient Motors and Install VFDs 5-10%
Aerobic (HE Blowers, Fine Bubble, DO Control, Mixing) 25-35%
Demand Monitoring and Control 3-5%
Power Factor, Harmonics, Power Quaility 3-5%
Anaerobic (Cogeneration, HSW, FOG, LE Mixing) 30-70%
Wastewater Collection System
Replace inefficient motors and Install VFDs 5-10%
Optimize Pump Efficiency 5-10%
Optimize Operating Schedule 5-10%

19. Schneider Electric – Buildings Business 191 Johnson Controls
Aeration
 Diffuser Upgrade
 Aeration Blower Upgrade
 Dissolved Oxygen Control &
Aeration Blower Control

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DIGESTER GAS TO
ENERGY

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Solar PV
 Solar PV mounted on carport, roofs, available acreage
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Wind Turbines
 Wind has a real impact on power generation at a site
and reduction in amount of power to be purchased
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Denison, TX population 25K, MGD plant operating at 3 MGD
Project Cost
7,943,747
Guaranteed Annual Savings
$217,727
Projected One-Time Rebate
$195,000
• Lighting, EMS, HVAC
• Improvements to their Aeration Basin & Aerobic Digester including new fine bubble
diffusion grids
• Replacement of 750 hp of blowers and 400 hp of pumps
• Replacement of 3 old switchgear/MCC’s
Project Scope
Project Enablers
• Existing relationship with City Manager
• Proposed improvements were already known issues
• Budget $ already set aside for some improvements
City of Denison Case Study

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Slow Water and sewer rate increases
Redirect funds already being spent on utilities
A solution with multiple benefits
Guarantee performance and financials so that you are assured this is
a good decision
Legislative mandates
Reach energy requirements and defer mandates
Facility improvement & infrastructure renewal
Tackle deferred maintenance Issues with no capital funding source
Energy Performance Contracts have
helped Cities & Special Districts
Reach sustainability goals
Reduce carbon footprint and provide GHG reporting

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Thank you!
Contact Information:
Kevin Bell
Program Manager
Schneider Electric – Professional Services
Phone: 916-508-0535
Email: kevin.bell@schneider-electric.com
Meet Our
Specialists at
WEFTEC 2013
October 7 – 9, 2013 McCormick Place South
Chicago, IL
Booth 3019