Johnson Controls Inc.
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Johnson Controls is a company focused on creating a more comfortable, safe and sustainable world. They provide energy and sustainability solutions for buildings, including best practices like bundling energy conservation measures (ECMs) and using financing tools. One best practice example is their work at Aberdeen Proving Ground, where they implemented $50 million in energy savings performance contracts that generate $7.2 million in annual savings. When contracting with the government, it is important to understand procurement processes and requirements. Current hot areas include a presidential memorandum prioritizing ECMs with high returns and $2 billion in performance-based building efficiency contracts.
Johnson Controls Inc.
- 1. Johnson Controls, Inc Creating “a more Comfortable, Safe and Sustainable World” Contract Connections: Energy & Sustainability Sandy MacMurtrie Federal Sales Manager 610-592-5377 Sandy.macmurtrie@jci.com
- 2. Agenda: Fastest 8 Minutes…. • Best Practices in the Energy and Sustainability Field • Lessons Learned in Contracting with the Government on Energy Projects • Industry Forecast: What‟s Hot? • Potential Areas of Collaboration Between Industry and Government 2 Johnson Controls
- 3. Best Practices • Take significant action • Bundle ECMs and project locations as much as possible • Use financing tools to maximum extent WHY???? 3 Johnson Controls
- 4. Buildings must become more energy efficient Buildings in the U.S.: Create Use 40% of the 38% raw materials of the for construction CO2 emissions Consume Use 14% 72% of the potable of the water electricity produced Source: U.S. Green Building Council 4
- 5. Best Practice – Aberdeen Proving Ground Situation: Solutions: •Aging steam infrastructure •Proactive leadership •Old, new and historic •Funded and financed buildings approach •Over 2000 bldgs, 13.7M sqft •Comprehensive bundled solutions •$50M annual utility expenditure across all •4 ESPCs ($50M) that commodities generate $7.2 M in guaranteed annual savings • 5 Johnson Controls
- 6. Lessons Learned When Contracting with the Federal Government When Contracting: •Ask yourself how does the government buy what I sell? • Ask yourself who buys it? • Determine if I am better suited as a prime contractor or a subcontractor? • Answer the mail – Be responsive • Understand the special requirements • Be timely • Evaluation factors are your friends • Have patience 6 Johnson Controls
- 7. What’s Hot? Presidential Memorandum on ESPC dtd December 2, 2011: (a)…Agencies shall prioritize ECMs with the greatest return on investment, leveraging both direct appropriations and performance contracting, consistent with guidance by the Office of Management and Budget (OMB). (b) The Federal Government shall enter into a minimum of $2 billion in performance-based contracts in Federal building energy efficiency within 24 months from the date of this memorandum. 7 Johnson Controls
- 8. Power Purchase Agreements The system Renewable generates energy PPA provider PPA Agreement energy system for your building owns, manages between you and installed by PPA for which you pay and maintains PPA provider provider a pre-determined system energy price 10-25 years fixed rate 8 Johnson Controls
- 9. Public Private Partnerships (P3): a construction funding model What is it? Maintenance-free green facility at a consistent, fixed cost With this model, you can leverage the expertise of a team of private sector companies to design, construct, finance and manage your building, while you enjoy an energy efficient and well-managed facility in which to work. The private sector team takes care of your facilities in exchange for guaranteed fixed monthly payment terms and service levels. Throughout term of the contract, the public sector continues to own the facility while paying a consistent, fixed cost. Private sector Public sector Procurement consortium identifies new selection designs, constr Public sector owned or updated process ucts and Private sector run facility need operates facility Public sector leverages knowledge of private sector partners while benefitting from a sustainable, productive and efficient facility. 9
- 10. Collaboration: The convergence of the challenges and the solutions “The ESPC model remains one of “The brand value from being the most effective ways to finance „green‟ is increasingly valuable energy efficiency projects” among environmentally -Pike Research report, 2012 conscious consumers” “The solution to the climate -McKinsey Global Institute, 2010 crisis… is in the buildings we inhabit, our civic “Proponents of PACE estimate this “Energy behavior programs in the infrastructure, and the way method of financing might unlock workplace that didn‟t get we organize our lives.” hundreds of millions of dollars in leadership support are unlikely new investment with little risk” to succeed” Bill Clinton, 2011 ACEEE, Behavior Report, 2012 -Pike Research report, 2012 10
- 11. Contact Information Sandy MacMurtrie Federal Sales Manager 610-592-5377 Sandy.macmurtrie@jci.com 11 Johnson Controls