Public Housing Authority
Lack of funding for essential capital improvements and energy conservation measures
Used a self-managed energy performance contract (EPC) to minimize up-front project costs and soft costs, increase project scope, and achieve greater energy savings
The EPC has served as a vehicle for major capital improvements, facility upgrades, and in-unit energy upgrades resulting in $2.6 million in utility savings annually
Self-Managed Energy Performance Contracting
The Housing Authority of the City and County of Denver (DHA) completed a traditional energy performance contract (EPC) in 2007 which was administered by an Energy Services Company (ESCo). Based on the success of this Phase 1 EPC, DHA decided to undertake a second phase to generate additional savings and finance additional capital improvements. For Phase 2, DHA elected to use a self-managed HUD-approved model, which is a variation of the traditional EPC financing model used in Phase 1. DHA partnered with engineering and financial consultants and a general contractor to orchestrate the project design and financing, HUD approval, construction, and measurement and verification. The Process section below covers details on DHA’s self-managed EPC, including energy efficient upgrades, operations and maintenance, and resident impact.
DHA’s policy regarding energy and water conservation has established the agency as an industry leader in green building design, construction, and retrofitting. DHA’s policy is to develop and manage sustainable housing with initiatives including:
In addition to the sustainable development of new communities, DHA emphasizes improving the energy performance of its existing building stock. One tool DHA leverages is the HUD-approved EPC program. DHA approached HUD’s EPC program using the traditional ESCO model in Phase I and undertook a less common approach, self-managed, in Phase 2 of its EPC.
Phase 1 – ESCo Model
Launched in 2007 in partnership with an energy services company, DHA began its housing rehabilitation process by conducting a portfolio-wide energy audit. Once a conservation program was designed and available energy rebates were identified, the fund request was submitted and successfully approved. The initial phase of EPC funding resulted in $9 million of energy conservation measures installed at 18 DHA public housing properties that included upgrades of:
Phase 2 – Self-Managed Model
Recognizing the substantial benefits that could be achieved by moving from contracting with an ESCo to developing an in-house, self-managed EPC model, DHA made the transition in 2011. Among other things, the self-managed model allowed DHA to:
An energy performance contract consists of three distinct phases: project design, construction, and measurement and verification (M&V). Included here is an overview of all three phases that the Housing Authority and its team completed. The phases are explained in detail in Part A below. Part B addresses how DHA handled the process of implementing energy efficiency upgrades, the effect on established operations and maintenance schedules, and the impact on their residents.
Part A: Managing Development, Construction, and M&V
Investment Grade Audit
DHA procured a Professional Engineering (PE) firm and hired an EPC Consultant to conduct the following scope of services:
Procure Architectural and Engineering ("A&E") Firm
DHA procured an A&E firm to perform the following scope of services:
Procure General Contractor ("GC")
DHA procured a GC to perform the following scope of services:
Finalize HUD Submittal Documentation
Under the guidance and support of the A&E firm and the EPC consultant, DHA submitted the following items as a package for HUD approval and financing:
DHA’s primary responsibilities during the construction phase were as follows:
3. Measurement and Verification (M&V)
Once the construction phase was completed, DHA and the M&V contractor assumed responsibility for developing and submitting an annual M&V report to ensure adequate utility savings are achieved moving forward; if this is not the case, the M&V firm will recommend strategies to improve savings.
Part B: Managing EE Upgrades, O&M and Resident Engagement
Energy Efficient Upgrades
With EPC financing in hand, the Denver Housing Authority invested $14 million in capital improvements and energy conservation measures (ECMs). Working with general contractor Pinkard Construction, DHA was able to install all ECM measures within 18 months of the project launch. ECMs were prioritized and selected to maximize energy conservation and make DHA homes more sustainable and comfortable for residents. Measures included several capital improvement strategies such as smart irrigation systems, roof and attic insulation replacements, and high-efficiency water heater installations. The aggregate projected payback period for the portfolio is just under 15 years, enabling all EPC debt payments to be made from ECM-related utility savings.
Operations and Maintenance Impact
The self-managed EPC has allowed DHA maintenance staff to develop expertise in a range of state-of-the-art, energy-efficient technologies. DHA’s suppliers hold frequent staff trainings on ECM technologies such as occupancy sensors, furnaces, and boilers to keep DHA technicians at the cutting edge. The ability to leverage an in-house maintenance team is a considerable advantage of the self-managed EPC. The team has also assisted and educated residents as they have adapted to the new technologies in their homes.
By choosing the self-managed EPC approach, DHA:
Additional benefits DHA realized through a self-managed EPC in lieu of a traditional ESCO approach include:
Portfolio-wide improvements in DHA’s self-managed EPC Phase 2 included:
DHA, with the assistance of their M&V contractor, is responsible for developing and submitting an annual M&V report to demonstrate adequate utility savings. As mentioned previously, the M&V firm will suggest strategies to improve energy performance if DHA does not achieve its target savings. A sample of the agency’s M&V report is below:
There are currently no tools for this implementation model.