Sustainable Building Technical Manual - Etn-presco.net

City of Oakland—Energy Performance-Based ExampleA new 450,000-square-foot building in Oakland, California, provides an innovativeexample of energy-performance-based contracting.1 4 The design/build project set abaseline standard of exceeding California’s Title 24 Energy Code by 20 percent. Theperformance data will be analyzed after two years of building operations. If the buildingperforms better than the baseline goal, the design/build team will receive thesum of five years’ worth of energy savings. In the event that the building’s performanceis below the baseline, the team is liable for fifteen years’ worth of the shortfall.Both the potential bonus and downside liability are capped at a maximum of$250,000. A DOE-2 energy simulation model was used to determine the baseline figures.The design team was allowed to develop its own design approach and equipmentselections to achieve the energy goals. The energy-related improvements areprojected to result in other benefits, including a quality environment with improvedcomfort, indoor air quality, and satisfaction among building occupants.Under the traditional practice, design and construction fees are usually based on a percentageof building costs. This provides a disincentive for efficient design since a superefficientscheme that results in significant downsizing of a building’s mechanical systemwould lower the professionals’ fees. In contrast, performance-based contracts are an innovativeway for a building owner to share the investment risk and associated energy savingswith the design/construction team. In some cases, the design team will finance thecost of the additional energy efficiency measures via a shared savings approach (see alsoChapter 24, “Local Government Financing”).Remanufacturing and Product LeasingRemanufacturing is a process in which worn-out products are restored to “like-new” condition.Remanufacturing is estimated to use one-fifth the energy and one-tenth the rawmaterials needed to make a product using virgin materials. The process is labor-intensive,which leads to higher employment levels, as opposed to higher levels of resource consumption.15 Purchasing of remanufactured products such as furniture or light fixtures canyield substantial cost savings compared to the purchase of new products.The emergence of environmentally based equipment and product leases is another newdevelopment. In these leases, manufacturers provide for the full installation, operation,and removal of their equipment or products. Given the totality of these responsibilities,the manufacturer is likely to ensure that the product or equipment operates at the highestlevel of efficiency over its life. Since the manufacturer is also responsible for the ultimatedisposal of the product, the firm will likely attempt to obtain the lowest disposalcosts. This creates incentives for reuse and/or recycling of the product. These leasing conceptsare now just emerging in the carpet and mechanical equipment fields. Over time, itis anticipated that they will carry over to other building products such as ceiling tile andsystems furniture.Leasing arrangements can also involve mechanical and utility companies providing “conditioned”air to building owners. In lieu of having to purchase and maintain their ownmechanical systems, building owners pay fixed monthly fees in exchange for receivingconditioned air within a certain comfort range. This monthly payment is analogous topayment for utility and telephone services. In these cases, the user does not need toworry about the mechanism or costs for providing the service, but only whether or notthe service is received as expected.