Health and Human Services Commission

PROGRESS REPORT

Energy Conservation Measure Implementation

The last of the extensive energy conservation measures implemented through the LoanSTAR Program were completed in the spring of 2000. These energy conservation measures included energy-efficient lighting, air conditioning and heating equipment, motors and energy management control systems. An additional LoanSTAR Program project was recently completed at the Rio Grande State Center and is in the second year of savings accrual. This facility was not originally included as part of the energy savings performance contract and was performed in-house through an engineering consultant.

The largest portion of the utility savings measures were implemented through an energy savings performance contract beginning in 2004 through a 15-year savings guaranteed contract. The program is achieving approximately $8 million in annual cost savings and is regularly exceeding savings expectations. The total project cost was $75 million with the savings being used to repay the debt service.

Energy and water conservation projects at living centers and state hospitals continue to reduce the consumption of electrical power, natural gas, water and associated costs. A cost baseline was established using historical information. The reported cost savings were developed using the historical data, the cost of retrofits for the energy and water conservation measures and the estimated savings from those retrofits. The savings identified and reported provide the funding source to secure the performance contracts to pay for the retrofits. The savings are guaranteed through performance contracts with the contractors involved.

Commissioning

Extended commissioning services were provided over the course of fiscal 2002 to the Terrell State Hospital by the Energy Systems Laboratory (ESL), a division of the Texas Engineering Experiment Station at Texas A&M University. ESL engineers worked closely with hospital personnel in solving problems and complaints, providing comfort in buildings, improving system operations and saving energy usage. Based on measurements, simulations and the utility bills, the commissioning efforts saved $120,253 in annual utility costs ($60,939 in electricity and $59,314 in gas) from July 2001 to June 2002.

The agency is including commissioning of all existing energy-consuming HVAC equipment through performance contracting that is not to be replaced by energy savings performance contracting.

Retrofit Commissioning and Design Review

In fiscal 2002, the agency implemented a policy of employing the ESL to commission all energy-consuming HVAC equipment replacements, accomplished as part of the capital construction program, to ensure energy-efficient operation. Additionally, we have initiated a review by ESL of the replacement design to ensure the selection of appropriate energy-efficient equipment.

Current and future commissioning projects are in the implementation stages through Rider 17.11 of House Bill (HB) No. 1, General Appropriations Act, 86th Legislature and are intended to be funded through either the LoanSTAR Program or the Master Lease Purchase Program. To date, all HHSC facilities received preliminary remote audits, and two are currently in the detailed audit phase for a pending LoanSTAR loan.

Energy Efficient Construction Improvements

In response to the State Energy Conservation Office’s new construction design guideline, improvements from capital construction have resulted in the installation of more energy-efficient equipment. The guideline mandates that any newly installed equipment or replaced equipment will be more energy efficient. The agency spends several million dollars on construction annually at its facilities. Some of these improvements, although not commissioned by ESL, result in reduced energy consumption, such as replacement of deteriorated exterior windows, added roof insulation, replacement of small HVAC equipment and replacement of motors.

Current and future retrofit projects are in the implementation stages and are intended to be funded through either the LoanSTAR Program or the Master Lease Purchase Program. To date, five HHSC facilities received preliminary audits and are currently in the detailed audit phase for a pending LoanSTAR loan.

Operational Energy Conservation

The agency has incorporated various energy conservation requirements in the current edition of its Operating Procedures for Plant Maintenance 417.3. Included are specific requirements related to the operation of heating and air conditioning equipment, such as temperature set points, relative humidity and hours of operation. The current energy and water-related design requirements and guidelines are included. It is anticipated that additional requirements will be generated as the agency progresses through the performance contracting process and identifies appropriate measures.

GOALS

The vision of the agency is: Making a positive difference in the lives of the people we serve.

The utility reduction goals of the agency indicated below are in support of the agency’s Vision, Mission and Goals, particularly Goal One regarding efficiency of infrastructure.

Goal One

Determine and implement system-wide cost-effective energy conservation measures that are compatible with the needs of the clients we serve through improving infrastructure of state facilities to efficiently manage the assets and infrastructure of state facilities.

Since 2003, the agency has used energy savings performance contracting as the primary means of implementing energy and water conservation measures (ECMs) by selecting an energy services company (ESCO) to provide energy savings performance contracting services. Prior to selecting Schneider Electric as the ESCO, representative preliminary energy assessments (PEAs) were performed at two facilities that confirmed the potential for significant utility consumption reduction and related cost. The ESCO completed both the PEA effort that included all agency facilities and the development of investment-grade detailed utility audits (DUA), design, construction, commissioning and savings monitoring/verification. Now fully implemented, this initiative generates approximately $8 million in annual savings to the utility expenditures.

The first phase of the DUA process began with the Austin State Hospital. Phase I included the Austin State Hospital, Austin State Supported Living Center (SSLC), San Antonio State Hospital, San Antonio SSLC and Kerrville State Hospital. The detailed audit was completed in August 2004, and the contract was signed shortly thereafter to implement the retrofits. The Phase II detailed audits were complete in January 2005. Phase II included Lubbock SSLC, Abilene SSLC, Big Spring State Hospital, San Angelo SSLC and El Paso SSLC.

The Phase III DUA was completed in September 2005. The sites in Phase III included Denton SSLC, Mexia SSLC, Waco Center for Youth and the North Texas State Hospital campuses in Wichita Falls and Vernon. Phase IV sites included Brenham SSLC, Corpus Christi SSLC and Richmond SSLC. Phase V sites included Lufkin SSLC, Rusk State Hospital and Terrell State Hospital. Phase VII sites included additional utility conservation work at San Antonio SSLC, San Antonio State Hospital and the Texas Center for Infectious Disease.

Phase VI, which includes laundry consolidation efforts, was added as a stand-alone phase. The DUA was completed in January 2005. The sites that will be laundry centers in Phase VI include Abilene SSLC, Mexia SSLC, Richmond SSLC and North Texas State Hospital – Wichita Falls.

The agency goal is to maintain previously achieved energy and water consumption reductions, and further reduce consumption on average for state hospitals and state supported living centers by 2 percent per year, with a total reduction of 15 percent to 20 percent by end of fiscal 2029. We believe this goal can be achieved through infrastructure and technological improvement strategies, scheduling and daily efforts of all staff.

Goal Two

Develop and implement system-wide effective utility conservation staff awareness. To achieve the implemented energy conservation measures (ECM) savings and to recognize additional opportunities for energy conservation, each staff member must be appropriately aware and informed. Various avenues will be used to develop a Utility Awareness Plan, including partnering with the ESCO providing performance contracting, developing universal conservation educational items in a multi-agency effort through the State Energy Conservation Office and benchmarking with other private and public organizations.

STRATEGY FOR ACHIEVING GOALS

Monitoring Strategy

The agency’s energy manager is the primary point of contact with the performance contractor. The energy manager monitors the ESCO’s performance and provides routine status reports to executive management. The energy manager also handles the agency’s responses to the ESCO throughout all phases of the performance contracting effort.

As specific facility activities and requirements are developed, particularly ongoing repetitive tasks, they will be incorporated into the appropriate operating instructions and into Health and Specialty Care System Annual Management Plans. Monitoring for compliance will be accomplished through the agency’s various monitoring systems that exist for compliance with a host of regulatory and other important agency requirements. In the event additional monitoring is required for energy conservation compliance, an appropriate method will be developed.

The agency determined various measurement and verification (M&V) applications appropriate to and commensurate with the variety of ECMs that are implemented to confirm the resulting consumption reductions and related costs savings. By utilizing measurements to determine energy savings over the years of the contract, all parties are better assured of a successful project.

The primary document used for M&V is the International Performance Measurement and Verification Protocol (IPMVP-2001) published by the Department of Energy in 2001. The IPMVP’s four protocols are:

• Partial measurements (Option A).
• Retrofit isolation measurements (Option B).
• Whole building energy measurements (Option C).
• Calibrated simulation (Option D).

Depending upon the specific retrofit or combination of retrofits, the agency may select Option A, B or C for the M&V process. Option D is usually quite costly because of the in-depth simulation and calibration requirements.

The agency balanced cost of obtaining the measurements and performing the calculations with the benefit that is produced. Generally, the M&V should not cost more than approximately 10 percent of the savings. However, in low-risk ECMs this percentage may be reduced and in high-risk ECMs this percentage may be increased.

The agency reviews the specific needs of each ECM installation when making decisions on what M&V to apply. The agency also specifies installation acceptance requirements and functional performance requirements for each installation.

To efficiently maintain accurate utility consumption and related costs, an energy management software system that is compatible with the agency’s enterprise computer-aided facility management system is needed. The agency has begun an investigation to determine the appropriate system for procurement and implementation. This system will allow for system-wide uniform data entry regarding utility consumption and cost at the facility level. It will provide facility and agency senior management with timely utility cost information, including costs versus budgets and consumption comparisons and trends.

Preliminary Energy Audits

Retro commissioning of energy-related equipment was not included in the current performance contract. Therefore, the agency will commission buildings as required. For these reasons, as well as increased technological advances, the agency has embarked on a plan for the development of PEAs at each of its facilities to be followed by investment-grade detailed audits necessary for ECM implementation.

It is anticipated the agency will procure engineered investment-grade energy audits of each of its facilities and implement a majority of the resulting energy conservation measures through either the LoanSTAR Program or the Master Lease Purchase Program once the results of all the facilities are complete under Rider 17.11. These audits will be limited to those items that would conform to the allowable payback periods at that time, which were significantly shorter than those available today.

IMPLEMENTATION SCHEDULE

As performance contracting in conformance with applicable state law is the agency’s essential vehicle for identifying and implementing energy conservation measures, the schedule regarding performance contracting is our current focus.

AGENCY FINANCE STRATEGY

The primary financing strategy for the identification and implementation of ECMs through performance contracting is the Master Lease Purchase Program administered by the Texas Public Finance Authority, and/or the Texas LoanSTAR Program administered by SECO.

The secondary financing strategy for the identification and implementation of energy conservation measures is the aggressive solicitation and negotiation of cash rebates from utility providers to be earned from consumption reduction to secure all possible rebates.

While the agency anticipates the likely provision by SECO of some common utility awareness curriculum and graphics, the balance of the Utility Awareness Plan is ongoing and included in the agency’s overall training program. Technical training for the proper operation of energy related equipment is incorporated in the performance contract(s).

EMPLOYEE AWARENESS PLAN

The agency maintains both direct and indirect awareness as in the development of its employee awareness plan. It anticipates and support the resource efficient multi-agency development through SECO of common elements of utility awareness that would have broad application, particularly those regarding direct awareness.

To the maximum extent reasonable, we developed the agency-specific direct and indirect elements of the awareness plan, through our partnership with the ESCO providing performance contracting services. Indeed, improvements such as automatic activating sensors on plumbing and lighting fixtures that indirectly increase and enhance staff energy conservation awareness will be implemented through performance contracting.

The intent of the direct awareness is to bring about an appropriate culture change whereby informed staff not only act in prescribed ways to conserve energy, but also become encouraged and facilitated to be proactive in their own ongoing discovery of new energy conservation opportunities. Various means to foster and reward this incentive will be explored, including appropriate forms of recognition.

A component of the EAP is the dynamic identification of best practices regarding energy conservation awareness through the ongoing monitoring and benchmarking of models of excellence. In concert with this is another element of the EAP that provides a means of distributing applicable best practices to all the agency facilities, regardless of whether the source is internal or external. Pockets of excellence must be shared, so that exceptional practice becomes common practice. An Energy and Water Conservation Program was developed and distributed to the agency’s regional facilities for conservation guidelines.