Measuring and Verifying Energy Cost Savings in EnergyCAP

©2013 EnergyCAP, Inc. @energycap www.EnergyCAP.com
Analysis Track
Measuring and Verifying
Energy and Cost Savings
Presented by Steve Heinz, PE, CEM

Quiz
In 2010 we spent $3M on electric bills. We hired
an Energy Manager on 1/1/2011 who implemented
a comprehensive energy management program.
In 2011 we spent $4M.
We should:
A. Fire our Energy Manager
B. Praise our Energy Manager
C. We need more information before making a
decision

In 2010 we spent $3M on electric bills. We hired an
Energy Manager on 1/1/2011 who implemented a
comprehensive energy management program. In 2011
we spent $4M.
But we also added 75,000 sq ft, increased enrollment by
7%, increased community rentals by 9% and absorbed
a 5% electric price increase. Oh, and we had a record-
setting hot summer.
We should:
A. Fire our Energy Manager
B. Praise our Energy Manager
C. We need more information before making a decision

In 2010 we spent $3M on electric bills. We hired an
Energy Manager on 1/1/2011 who implemented a
comprehensive energy management program.
In 2011 we spent $4M. But we also added 75,000 sq
ft, increased enrollment by 7%, increased community
rentals by 9% and absorbed a 5% electric price increase.
Oh, and we had a record-setting hot summer.
Based on the 2010 baseline, our EnergyCAP software
calculated that without our energy management program
we would have spent $4.8M in 2011. It looks like we
avoided a cost of $800,000 in 2011.
We should:
A. Praise our Energy Manager

©2013 EnergyCAP, Inc. @energycap www.EnergyCAP.com©2013 EnergyCAP, Inc. @energycap www.EnergyCAP.com
M&V Fundamentals

“Measurement and verification” of
energy savings
Necessary because you can’t simply
compare year-to-year out of pocket
expenditures
www.EnergyCAP.com/products/energycap-enterprise-
videos/why-cost-avoidance-matters

IPMVP
The U.S. Department of Energy and
other impartial agencies funded the
development of the IPMVP (The
International Performance
Measurement and Verification Protocol)

IPMVP (continued)
Today it is managed by an
international nonprofit agency called
The Efficiency Valuation Organization
www.EVO-World.org
The Federal Government uses a
version of it to value the savings for all
Federal energy projects.

www.EVO-World.org

IPMVP Options for M&V
A. Retrofit isolation. Estimate it.
B. Retrofit isolation. Submeter it.
C. Compare before/after utility bills.
D. Computer modeling.

IPMVP Option C
1. Establish a baseline year
2. Adjust the baseline year to current
conditions. This is an estimate of what
you would have used without an energy
management program in place. BATCC–
Baseline adjusted to Current Conditions
3. Compare today’s actual bills with the
BATCC adjusted baseline

IPMVP Option C
Cost Avoidance=BATCC Cost–Current
Cost
Baseline cost: $1,000 KWH: 10,000
Current cost: $1,200 KWH: 8,000
BATCC cost: $1,500 (10,000 x .15)
Cost avoidance: $300

Adjust the baseline to current conditions
Degree days imported from AccuWeather®
Energy unit price
Floor area
Changes in length of billing period
Enrollment, occupancy
New equipment

Savings Reports can be:
1. Ongoing. Calculate and report savings
periodically throughout the life of the
contract or program. EnergyCAP
approach.
2. One-Time Stipulated. All parties agree to a
one-time calculation; no further reporting is
needed. This approach is favored by most
ESCOs for most retrofit projects.

Savings: adjusted baseline minus
today’s actual bill

With weather adjustment, $78 savings

Without weather adjustment (for
unusually mild winter), $352 savings

EnergyCAP’s Cost Avoidance M&V
module:
Adheres to the calculation
requirements of IPMVP
Has been used with essentially the
same format & calculations since 1985
Cost avoidance has been calculated
for tens of thousands of buildings

All calculation formulas are documented
and flow charted

Vs. Normalization, Only Cost
Avoidance has:
Special adjustments to baseline
“No loss/no gain” treatment of missing
bills, new accounts, inactive accounts
Fuel switch and dual fuel scenarios
Calculation: valuation of avoided
usage using today’s pricing

Only Cost Avoidance has: (continued)
“Tuning” of weather regression results
Manual calculation of savings when
needed due to unique circumstances
Meter-by-meter configuration of
baseline period and savings start date

Limitations of Option C M&V
When you have implemented several
projects, it’s difficult to discern the
results of each individually.
The further back the base year, the
less reliable the calculations due to
many changes in occupancy,
equipment, etc.

Limitations of Option C M&V
When peak demand charges are a
major cost driver, there are valuation
complexities.

If Your Job is M&V:
Become a member of EVO ($100/yr)
Take the Association of Energy
Engineers “Certified M&V
Professional” course
A less-intensive alternative is the AEE
“Business Energy Professional”
course

Questions
Visit the Ace Place to learn more!

Measuring and Verifying Energy Cost Savings in EnergyCAP

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