En CCI

Energy Efficiency Building Retrofits:
Contracting and Financing Best Practices

November 1, 2010
This is a working draft document created by the Clinton Climate Initiative (CCI) in
collaboration with Civic Exchange and the C40 as a tool for the C40 Workshop “Low
Carbon Cities for High Quality Living”, to be held in Hong Kong on November 5-6, 2010.
This event brings cities together to discuss the challenges and opportunities of creating
modern, low carbon, high quality, livable metropolitan centers, and includes a special
focus on retrofitting existing buildings and new-build best practice. The C40 Workshop is
organised by the Environmental Campaign Committee of the Hong Kong Special
Administrative Region (HK SAR) Government, Civic Exchange, and the C40, and is
sponsored by the HK SAR Government's Environment & Conservation Fund. This
document is meant to serve as a guide to city officials, building owners, and others
interested in implementing energy efficiency projects in their buildings. Following the
C40 Workshop, CCI will finalize this document and make it more widely available.
WORKING DRAFT DOCUMENT 1

The William J. Clinton Foundation launched the Clinton Climate Initiative (CCI) in 2006 to create
and advance solutions to the core issues driving climate change. Working with governments and
businesses around the world to tailor local solutions that are economically and environmentally
sustainable, CCI focuses on three strategic program areas: increasing energy efficiency in cities,
catalyzing the large-scale supply of clean energy, and working to measure and value the carbon
absorbed by forests. In each of these programs, CCI uses a holistic approach to address the
major sources of greenhouse gas emissions and the people, policies, and practices that impact
them. CCI is the delivery partner of the C40, an association of large cities around the world that
have pledged to accelerate their efforts to reduce greenhouse gas emissions. CCI has extended
the benefits of its cities programs to a number of additional public and private sector partners.
www.clintonfoundation.org/cci
Civic Exchange is a Hong Kong-based non-profit public policy think tank that was established in October
2000. It is an independent organization that has access to policy-makers, officials, businesses, media,
and NGOs—reaching across sectors and borders. Civic Exchange has solid experience in many areas,
including climate change research, air quality, energy, environment, urban planning, as well as
economics and governance issues. Work in these areas includes studying Asian and international climate
change negotiations, green buildings, shipping-related air pollution, and the health impacts of air
pollution in southern China, and books analysing the changes in Hong Kong’s environmental and air
quality policy since 1997. It hosts regular forums on energy policy, air quality, buildings, urban
transportation, and climate change.
www.civic-exchange.org
The C40 is a group of the world’s largest cities committed to tackling climate change. Cities have
a central role to play in reducing global greenhouse gas emissions. By fostering a sense of shared
purpose, the C40 network offers cities an effective forum in which to work together, share
information and demonstrate leadership. The current chair of the C40 is Mayor David Miller of
Toronto; the chair-elect of the C40 is Mayor Michael R. Bloomberg of New York.
www.c40cities.org

Table of Contents
Introduction................................................................................................................................................... 4
Why Buildings? .......................................................................................................................................... 4
The Need for Models................................................................................................................................. 4
Contracting Models ....................................................................................................................................... 5
Turnkey Holistic Retrofits .......................................................................................................................... 5
CCI Energy Efficiency Retrofit Best Practices ............................................................................................ 6
CCI Retrofitting Case Studies ..................................................................................................................... 9
Olympic Station – MTR .......................................................................................................................... 9
The Empire State Building ...................................................................................................................11
Citi........................................................................................................................................................14
Retro-Commissioning ..............................................................................................................................17
Retro-commissioning Case Study ............................................................................................................20
Henry Schein, Inc. ................................................................................................................................20
Financing Models ........................................................................................................................................ 22
Public funding models .............................................................................................................................22
Private Capital Funds ...............................................................................................................................25
Building Retrofit Technologies ....................................................................................................................28
CCI Building Technology Purchasing Alliance ..........................................................................................30
Purchasing Alliance Case Study ...............................................................................................................32
Unisource ............................................................................................................................................32
CCI Energy Efficiency Building Retrofit Program (EEBRP) ...........................................................................35
Appendix: Additional Case Studies..............................................................................................................37

Introduction
Why Buildings?
The built environment contributes 30-40 percent of total global energy use1 and more than 15 percent
of global greenhouse gas emissions2. In some cities, buildings can account for as much as 80 percent of
emissions, making existing buildings a critical part of the problem – and thus one of the solutions – to
climate change. The vast majority of buildings that will be around in 20, 30, and even 50 years from
now have already been built and are impacting our environment. Therefore to address climate change
we must focus on reducing the energy used by existing buildings. Most of today’s buildings were not
designed for energy efficiency, but by retrofitting with up-to-date technologies and systems and
operating effectively, a typical building can realize significant energy savings. Widespread action to
improve the energy efficiency of existing buildings would have a significant environmental and economic
impact, greatly reducing both greenhouse gas emissions and costs from energy use.
The Need for Models

Despite the enormous importance and potential for reducing energy use in buildings, there is insufficient
action taking place. Significant, persistent barriers prevent the growth of building energy efficiency
projects, including:
• Contracting: Lack of well-established, rigorous, standardized and replicable contracting models

for executing energy efficiency projects. In some places, a lack of qualified contractors in the
marketplace
• Finance: Little availability of competitively priced, long-term financing for energy efficiency
projects and therefore limited options for how to pay high up-front project costs
• Information: Information gaps, lack of commonly known examples of successful projects
• Policy: Lack of policies (incentives and mandates) to spur the market
While some solutions have been applied in small one-of-a kind pilots, very few widespread models have
been created for building energy efficiency and by extension, whole-building sustainability. CCI is
developing standardized models using globally applicable best practices for procurement, contracting,
project implementation, financing, and measurement that can be replicated around the world. CCI
works to accelerate the adoption of these models by helping building owners develop projects and find
contractors who can support them.
1
UNEP, “Buildings and Climate Change: Status, Challenges and Opportunities,” (2007) pg. V.
2
McKinsey and Company, “Pathways to a Low Carbon Economy” (2009) pg. 104.
Contracting Models
CCI focuses on two contracting methodologies: turnkey holistic multi-system retrofits and technical
retro-commissioning.
Turnkey Holistic Retrofits

CCI works with building owners to implement turnkey holistic retrofit projects that follow a series of
best practices that decrease project risk, promote transparency, protect the owners’ financial and
operational interests and encourage an atmosphere of open partnership and shared mission between
building owner and contractor. These best practices can be applied in contracting models including
energy performance contracting (EPC) by energy services companies (ESCOs) or by other arrangements
where the implementing firm(s) provide turnkey design, implementation and ongoing measurement
services. Some key aspects of this kind of building retrofit project include:
• A whole-building approach in which owners do not limit technical scope but encourage the
project team to address all possibilities and put forth the most holistic project possible.
Project teams should have the ability and willingness to consider a broad spectrum of energy
conservation measures.
• A single company (or team of companies) responsible for design, implementation and ongoing
monitoring of the project. Owner has one contractor-partner who is responsible for the success
of the project.
• Shared risk between owner and contractor during project development, with specific
commitments tied to goals and results at each stage of the process.
• Full engagement of owner in the project development process including:
o Defining clear environmental and financial goals and other metrics of success at project
outset
o Considering lifecycle cost analysis, operational and maintenance savings, synergies
between interventions, greenhouse gas reductions and risk mitigation when evaluating
cost effectiveness
o Transparent consumption baseline - It is impossible to calculate savings accurately or
confidently without a clear baseline. This baseline must be understood and agreed
upon by both the owner and the project team in order to facilitate project scoping and
avoid possible future disputes over savings calculations

CCI Energy Efficiency Retrofit Best Practices
Best Practices for Project Contractor Benefit to Building Owner
Fixed Investment Proposal
Guaranteed Savings
At the end of the audit process, the Fixed numbers for project costs and energy
contractor will provide the owner with a savings allows the owner to undertake a clear
fixed minimum guaranteed annual energy and complete investment analysis, budget and
savings, measured in kWh or other units of source capital.
energy consumption and converted to
currency based on an agreed-upon cost per A savings guarantee allows the building owner to
unit of energy. If the savings are not calculate the real return on the investment in
realized, the contractor will reimburse the the project, definitively model future cash flows
owner by paying for all savings shortfall. and create a financial model with confidence.
Performance assurance can be accomplished This guarantee can be used in certain financial
through bonding, energy savings insurance, products to support upfront financing for the
or more traditional performance guarantees. project.
Guaranteed Maximum Price (GMP)

At the end of the audit phase, the contractor The GMP is a standard construction concept that
will provide a GMP for the recommended allows the owner to make investment decisions
project. The owner and contractor will sign a with confidence and predict returns under
contract to implement a project with a different financing scenarios.
known, fixed maximum cost.
Transparent Pricing
For all services and materials, whether self- Project teams should be able and willing to
performed or sub-contracted. provide full transparency in pricing of materials,
equipment, soft costs and labor. Contractors
Contractors will use transparent pricing should identify any pieces of work that will be
methodology in the project as requested by self-performed, and demonstrate that pricing is
the building owner. Some examples of competitive by seeking multiple bids or through
transparent pricing methodologies include: another means acceptable to the owner.
• Total cost and savings by measure with
savings broken down by fuel type and (non- This allows owners to understand and negotiate
guaranteed) other savings, such as the cost structure of the project before agreeing
operational and capital savings to proceed, make confident investment
• Total materials costs, labor costs, and decisions, ensure value for money, confirm
margins for the whole project or inclusion of competitive products and prices and
breakdown of total labor costs, total enable gain sharing/cost reduction strategies.
material costs, labor margin and materials This provision can also be used to satisfy
margin by measure competitive bidding requirements of ownership.
• Breakdown of total soft costs (including
design, project management, profit) for
project, in percentages or fixed amounts

• Breakdown of final cost for each
intervention, as well as total amount of
soft costs and ESCO overhead and profit
• Additional information to ascertain that
competitive bidding and open sourcing
have been met
Robust Measurement & Verification (M&V)
Ongoing M&V in accordance with The owner should fund and plan for robust
international best practices, the ongoing measurements of project performance
International Performance Measurement & and ongoing commissioning in order to prevent
Verification Protocol (IPMVP). erosion of savings over time. This information
can be shared with tenants and other
stakeholders to celebrate successes and
encourage further improvement. Owners should
consider hiring an external provider if these
resources and skills are not available internally.
Vendor Neutrality and Open Protocol
Contractors should be “vendor neutral” in The contractor should evaluate any equipment
their assessment and selection of products recommended for upgrade/replacement without
and technologies, including products that bias towards a specific manufacturer so that the
the contractors themselves produce. owner can be confident that the most
Contractors should agree to consider appropriate and most cost-competitive
multiple vendors and products, including technologies are selected. Any controls of
specific vendor requests by the building software overlays installed should be open
owner, and justify product selection. source for service/maintenance flexibility.
Where available and favorable, contractors CCI has negotiated favorable pricing on over
will incorporate CCI negotiated building 1,000 energy efficient building technologies.
technology price discounts in their projects Contractors should incorporate and pass on
and pass these prices on to building owners. these prices where favorable to owners in order
to minimize project costs.
Thorough Commissioning
Of all new equipment/systems and retro- Too often new equipment is not properly
commissioning of all affected systems and commissioned, leading to sub-optimal design
sub-systems. performance and savings shortfalls. In order to
realize the full efficiency gain from the new
equipment, all building systems should be retro-
commissioned to ensure that new and existing
systems are working together efficiently.

CCI works with building owners and industry partners to follow these practices in project procurement,
development, implementation and monitoring. Many contractors around the world have agreed to
extend these terms and conditions to building owners who are undertaking an energy efficiency retrofit
project in partnership with CCI. Building owners should educate themselves about these terms and
conditions, and should specifically request them early in the project development process so they can be
included in the project contract.

CCI Retrofitting Case Studies
Olympic Station – MTR
HONG KONG
PROJECT OVERVIEW
MTR Corporation (MTR) worked with the Clinton Climate Initiative (CCI) to develop and implement a
best practices Energy Savings Performance Contracting project. A number of energy efficiency measures
were identified to reduce costs and improve environmental sustainability.
INITIAL ENGAGEMENT
MTR engaged with CCI to facilitate an energy efficiency project as part of their sustainability policy and
practices and as a way to develop a replicable model that could be rolled out across their other stations
in Hong Kong.
PROJECT AT A GLANCE
ESCO SELECTION
In line with MTR’s formal tender process, a competitive Project Size: 12,500 square meters
bidding process was used to select the final energy Project Cost: HK$1.5 million
services company (ESCO) to implement this project. It Implementing ESCO: Honeywell
began with a pre-qualification of ESCO’s with the Projected Annual Reductions:
requirement to submit an expression of interest Electricity: 40% (285 MWh)
document outlining basic qualifications, experience and Emissions: 159 metric tons CO2
local team capabilities. The pre-qualified ESCOs were then Simple Payback: 7 years
invited to undertake a preliminary site assessment and Construction Duration: 4 months
submit a report/proposal outlining energy savings
opportunities identified and estimated financial details
such as investment and simple payback periods. The final stage was to then engage a select group of
ESCOs to undertake an investment grade audit (IGA) according to specific financial and performance
criteria set by MTR. The final implementation contract and energy conservation measures (ECMs) to be
implemented were then negotiated with the selected ESCOs.
PROJECT TIMELINE
Initial Contact with CCI: February 2009
Expression of interest / selection process started: May 2009
ESCO Selected / IGA started: May 2010
ECMs approved: September 2010
Construction begun: November 2010
Construction complete (anticipated): March 2011
FINANCING
A pre-approved maximum budget and financial criteria for this energy efficiency project had been set
prior to the procurement process.
PROJECT CHALLENGES
• Adhering to a very competitive and well defined procurement process
• Coordinating internally within a team comprised of administration, procurement, finance, projects,
and technical staff
• Setting specific financial criteria to be met by each individual ECM and the project as a whole
• Setting requirements and standards for individual products relating to both technical performance
as well as safety
• Comparing and evaluating disparate ESCO submissions at all stages of the process
CCI ROLE
CCI provided support to MTR throughout the project development process, including:
• Introducing the concept of energy services performance contracting as a mechanism for
implementing large scale energy efficiency retrofits with limited/reduced risk.
• Helping design a procurement process and schedule that met internal procurement regulations and
incorporated CCI’s best practices in performance contracting.
• Identifying and selecting ESCOs that could support the project and deliver according to best
practices.
• Providing ongoing technical assistance and guidance for the project.
• Providing access to CCI’s purchasing alliance supplier partners to include discounted pricing on
energy efficient technologies.
KEY CONTACTS
MTR CORPORATION
CLINTON CLIMATE INITIATIVE Raymond Wong
Christopher Seeley raymondwong@mtr.com.hk
cseeley@clintonfoundation.org
www.clintonfoundation.org HONEYWELL
Mike Taylor
Mike.W.Taylor@honeywell.com

The Empire State Building
New York, NY
PROJECT OVERVIEW
The Empire State Building (ESB) is undergoing a whole-building energy efficiency retrofit that will
dramatically reduce energy use and costs and that can be replicated by other large commercial office
buildings around the world.
Tony Malkin, owner of the Empire State Building PROJECT AT A GLANCE

Company, worked with the Clinton Climate Initiative
Owner: Empire State Building Company
(CCI) to assemble a team of best-in-class consultants in
Project Team: CCI, Johnson Controls,
the fields of climate change, real estate sustainability,
Jones Lang LaSalle, Rocky Mountain
environmental design and energy savings. Over eight
Institute
months of intensive and consistent collaboration, a
Project Size: 2.8 million square feet
unique team - Empire State Building ownership, CCI,
Project Cost: $13 million
Rocky Mountain Institute, Jones Lang LaSalle (JLL) and
Projected Annual Reductions:
Johnson Controls, Inc. (JCI) - worked through a detailed
Electricity: 40% (52,086,502 kWh)
process to design an energy efficiency retrofit project
Steam: 35% (57,010,271 kBTU)
that would deliver the maximum economically viable
Total Savings: 38% ($4.4 million)
savings. Through an iterative process, over 60 potential
Emissions: 9,601 metric tons CO2
measures were considered and ultimately eight were
Simple Payback: 3.1 years (including
chosen. These measures will produce $4.4 million in
deductions and incentives)
cost savings annually and are designed to reduce
Construction Duration: 24 months
energy and operations costs by 38 percent. Half of the
measures will be implemented by December of 2010 and the remainder will be completed within five
years. This project will allow the building to attain an Energy Star score of 90 and a rating of LEED Gold
for existing buildings.
INITIAL ENGAGEMENT
CCI acted as convener and facilitator from the outset of the project. After an initial introduction to Tony
Malkin, owner of the Empire State Building Company (ESB), CCI arranged and participated in
prequalifying meetings with three energy service company (ESCO) partners and senior management of
ESB. CCI was instrumental in educating the ESB management team about the advantages and process of
a best practices energy performance contracting project. CCI also introduced its partner, the Rocky
Mountain Institute (RMI) in the early meetings. RMI and CCI were working together to find opportunities
with commercial building owners in New York City who would consider whole building retrofits in order
to demonstrate the benefits and increased energy savings achieved from a whole-building approach.
CONTRACTOR SELECTION
RMI facilitated a unique approach for the initial ESCO selection: a day-long design charrette, which took
place on January 31, 2008, and included stakeholders from all facets of the project such as building
facilities and operational staff, senior management of the ESB, lighting and window specialists and CCI
staff. Two ESCOs had been given eight weeks to perform a preliminary audit and deliver a proposal for
key energy conservation measures based on a self-funding energy performance contracting mechanism,
as well as to present their qualifications for undertaking such an ambitious project. After the proposal
presentation, ESB ownership selected JCI to execute the EPC retrofit.
PROJECT SCOPE
Since the ESB was already in the process of a major $550 million capital projects upgrade, there was a
challenge to coordinate the energy efficiency retrofit project with work already underway. The
integration of the capital team with the sustainability team allowed the latter to pursue a "whole-
building approach," modifying existing capital project strategies so that they worked with energy
efficiency opportunities. Expertise from the sustainability team suggested ways to lower the cost of
several capital projects while enhancing efficiency factors such as energy and water savings and
ventilation improvements. For example, the greatest cost savings came from the ability to retrofit the
chiller plant rather than replace it entirely. This was made possible by the reduction of the cooling load
by 1,600 tons. This load reduction resulted from the sustainability program's demand control ventilation
recommendation, which would reduce outside air infiltration, and the window light retrofit which would
reduce solar heat gain.
Energy Conservation Measures and contribution to total savings
Whole-Building Control System Upgrade
Upgrade of existing building control system to optimize HVAC operation as well as provide more 9%
detailed sub-metering information.
Tenant Lighting, Daylighting and Plug Upgrades
Introduction of improved lighting designs, daylighting controls, and plug load occupancy sensors in 6%
common areas and tenant spaces to reduce electricity costs and cooling loads.
Window Light Retrofit
Refurbishment of approximately 6,500 thermopane glass windows, using existing glass and sashes to
create triple-glazed insulated panels with new components that dramatically reduce both summer heat 5%
load and winter heat loss.
Air Handler Replacements
Replacement of air handling units with variable frequency drive fans to allow increased energy 5%
efficiency in operation while improving comfort for individual tenants.
Chiller Plant Retrofit
Reuse of existing chiller shells while removing and replacing “guts” to improve chiller efficiency and 5%
controllability, including the introduction of variable frequency drives.
Radiator Insulation Retrofit 3%
Added insulation behind radiators to reduce heat loss and more efficiently heat the building perimeter.
Tenant Energy Management Systems
Introduction of individualized, web-based power usage systems for each tenant to allow more efficient 3%
management of power usage
Ventilation Control Upgrade
Introduction of demand control ventilation in occupied spaces to improve air quality and reduce 2%
energy required to condition outside air.
Total Energy Savings 38%
PROJECT TIMELINE
Initial Contact with CCI: September 2007
RFQ/RFP/selection process started: October 2007
ESCO Selected: January 2008
Energy Performance Contract Signed: April 2009
Construction begun: May 2009
Construction complete (anticipated): December 2010*
* 50% of energy efficiency measures will be installed by this date and the rest over several years.

FINANCING SOLUTION
The ESB project is being self financed. The ESB ownership’s goal was to create a financing mechanism
that could be replicated by debt-constrained commercial office building owners. After investigation,
ownership discovered that achieving the goal would delay the implementation of the project, so decided
to self finance the retrofit while continuing to pursue replicable financing models.
PROJECT CHALLENGES
Challenges included:
1) Integration of the capital projects upgrade already underway with the energy efficiency
measures. Resolved with integrated collaboration between the project design teams.
2) Creating replicable third-party financing mechanisms. This has not been resolved but continues
to be investigated by CCI, ESB and others.
3) Designing a replicable energy performance contract. This was accomplished by starting with the
BOMA/CCI template EPC contract. CCI introduced a legal advisor to work with ESB ownership
and JCI which resulted in a new standard contract signed on April 6, 2009.
CCI ROLE
CCI played a wide range of roles during the course of project design and development, including
convener, facilitator, participant in project development and all design charrettes and workshops, and
advisor to ownership. In addition, CCI introduced RMI and legal and technical expertise at critical
junctures, led the finance design work, and is participating in outreach globally to share the ESB story
and process for other building owners to follow.
KEY CONTACTS
See project details, process and templates at: www.esbsustainability.com
CLINTON CLIMATE INITIATIVE JOHNSON CONTROLS, INC.

Arah Schuur Paul Rode
Energy Efficiency Building Retrofit Program Business Development Director, Building Efficiency
arah.schuur@clintonfoundation.org paul.rode@jci.com
JONES LANG LASALLE ROCKY MOUNTAIN INSTITUTE

Dana Schneider Victor Olgyay
Vice President, Sustainability Services Market Lead Commercial Retrofit Manager
Dana.Schneider@am.jll.com volgyay@rmi.org

Citi
Global
BACKGROUND
As part of its corporate sustainability program, global financial institution Citi made a public
commitment to reduce its direct greenhouse gas emissions by 10 percent on an absolute basis by the
end of 2011, relative to a 2005 baseline. To achieve this goal, Citi tasked its subsidiary Citi Realty
Services with reviewing its global real estate portfolio to identify projects that would reduce energy
consumption and costs, and integrate alternative and renewable energy technologies. Following the
protocols of the US Environmental Protection Agency (EPA) Climate Leaders and the World Resource
Institute, Citi committed to purchase green power, carbon credits, and/or offsets if the energy efficiency
retrofits did not deliver its 10 percent emissions reduction goal.
INITIAL ENGAGEMENT
Citi Realty Services had a decision to make: continue
carrying out “one-off” energy efficiency projects PROJECT AT A GLANCE
through regular procurement channels, or find a way
Project Size: 15.9 million square feet / 41
to accelerate implementation of energy efficiency
sites / 5 continents
projects, and drive scale economies across the global
Implementing Firms: Honeywell,
portfolio to execute projects in multiple regions
Chevron Energy Solutions, Evolve,
simultaneously. Citi approached CCI in August 2008
BesTech
for assistance in designing what would become a
Projected Annual Reductions:
global energy efficiency retrofit program.
Energy and Operational Costs: 15-30%
(varying by site)
TIMELINE
Total GHG Emissions: 43-60,000 metric
• Initial contact with CCI: August, 2008
tons (total)
• RFQ opened: November, 2008
Investment Criteria: Projects are net
• ESCOs Selected: April, 2009
operating income positive in year 1, and
• Budget approved: April, 2009 net present value positive over the life of
• Contract signed: July, 2009 the measure.
• Audit complete: November, 2009
• Construction begun: July, 2010
• Construction complete (anticipated): July, 2011 – July 2012
CONTRACTOR SELECTION
Working with CCI, Citi sought to identify global Energy Service Companies (ESCOs) with whom they could
form strategic alliances to expedite the ramp-up of their energy efficiency program. Citi moved quickly
after engaging CCI to issue a request for qualifications (RFQ) to five ESCOs in November, 2008.
As a publicly traded company, Citi had to follow certain internal protocols related to procurement of
professional services and competitive bidding of equipment purchases. Citi wanted to have a degree of
confidence in the project cost and savings numbers before it would commit to working with a given
ESCO, and required the ESCOs to perform preliminary assessments of the pilot sites as part of the RFQ
response. While this added considerable time to the ESCO selection process, Citi felt that it needed to
have a sense of each ESCO’s approach, cost structure, and proposed scope of work before choosing a
partner.
Once the preliminary assessments had been carried out, Citi interviewed each ESCO, using weighted
scoring matrices to evaluate their performance, with the goal of identifying the strongest firm(s) in each
geographic region. Citi’s leadership involved regional staff in the ESCO selection process in order to build
the site-level buy-in critical to the projects’ success.
PROGRAM DEVELOPMENT PROCESS

Citi began to test the building retrofit program with a group of five pilot sites – single or campuses of
buildings - in North America; soon thereafter Citi expanded the program to encompass 41 sites (15.9
million rentable square feet) in 32 cities around the globe. In each region where the company has a
strategic presence -- the US/Canada, Latin America, Asia Pacific, Europe, the Middle East and Africa --
Citi focused on key buildings that the company either owned or leased on a long-term basis.
To facilitate negotiations and approval of contracts beyond the pilot phase, Citi standardized contracts
and fee structures that would be used by all ESCOs so that Citi procurement could more easily evaluate
and approve projects for implementation. In addition to helping achieve its environmental goals, it was
also important to Citi that the projects help to lower the company’s overall operating expenses. Citi set
clear investment criteria to guide the ESCOs’ recommendations, requiring that in order to be approved,
projects must have a positive net present value over the life of the energy conservation measures
(ECMs) implemented, and be “cash-flow positive” in the first year. ECMs related to continuity of
business, safety, or replacement of equipment at the end of its useful life would be considered on an
individual basis.
PROJECT SCOPE
The ESCOs’ audits identified a large variety of ECMs at the facilities, delivering significantly more energy
savings than the Citi’s original infrastructure upgrade program. During the investment grade audit (IGA)
phase, as the savings potential of each ECM became clearer, Citi narrowed the scope of work in
accordance with its investment criteria. The majority of the resulting energy savings would come from
controls optimization, lighting upgrades, and improvements to the HVAC systems. In accordance with
CCI best practices, the ESCOs agreed to guarantee the project costs, the energy savings resulting from
the projects, and to measure and verify the savings in accordance with the International Performance
Measurement and Verification Protocol (IPMVP).
CCI ROLE
• Facilitated introductions to CCI Best Practice signatory ESCOs and advised Citi during the ESCO
selection process.
• Provided technical advice during the various contracting stages, sharing best practices and
facilitating negotiations between Citi and the ESCOs.3
• The BOMA/CCI Investment Grade Audit and Energy Performance Contracts served as the basis
for negotiations with the ESCOs, ensuring that the interests of Citi (and the ESCOs) were clearly
addressed.
• Provided access to the CCI Purchasing Alliance to bring down equipment costs and drive deeper
energy savings.
3
CCI recommends that clients always consult appropriate legal counsel before entering in to any contract. CCI is
available to assist in negotiations between parties, but does not provide professional legal advice.
PROGRESS TO DATE (as of September 2010):
• Program progressing in all four Citi Global Regions (North America, Latin America,
Europe/Middle East/Africa, and Asia Pacific)
• Preliminary assessments and IGAs underway in various stages in 14.1MM rsf
• 1.6MM rsf in construction / EPC stage (Tampa, FL and Las Colinas, TX)
NEXT STEPS
• Begin PAs in remaining 1.7MM rsf
• Begin global retail branch retrofit program
• Develop methods to expedite project approval processes
• Continue identification of additional sites and track progress
KEY CONTACTS
CLINTON CLIMATE INITIATIVE

David Hodgins
dhodgins@clintonfoundation.org

Retro-Commissioning
Commissioning is a process which makes a building’s equipment and systems work together efficiently
and which establishes the proper procedures to ensure that this continues. Retro-commissioning is the
term used to describe the application of the commissioning process to existing buildings that may or
may not have been commissioned when first built and occupied. In addition to inefficiencies arising
from latent design and construction deficiencies, buildings naturally tend to “drift” from their optimal
operating conditions over time. As space is reconfigured, tenants move in and out, ownership changes
hands, and new equipment is added, control systems and set points must be continually adjusted to
account for these changes. Because of the high degree of inter-dependency between building systems,
seemingly minor operational or maintenance issues can have a major impact on overall energy
efficiency.
With typical median savings of 16 percent and an average payback of just over one year4, retro-
commissioning is arguably the most cost-effective way to reduce energy consumption in existing
buildings. But despite the attractive returns on investment, significant informational and financial
barriers have prevented many buildings from undergoing retro-commissioning and fully realizing energy,
operational and environmental benefits.
Benefits of Retro-Commissioning
• Minimize waste of energy, water, and money
• Extended equipment life
• Identification, quantification, and prioritization of future capital needs
• Lower greenhouse gas emissions
• Improved indoor environmental quality and occupant comfort
• Improved operating and maintenance (O&M) staff training and performance and updated
procedures to reflect the building’s current actual use
1. “Technical” Retro-Commissioning rather than “Process” Retro-Commissioning: Retro-

commissioning firms or agents perform and document the work completed before the project is
brought to a close. Owners should verify that any firms being considered for a project are able to
provide technical rather than process retro-commissioning services. A technical retro-commissioning
agent must have a thorough understanding of the engineering principles involved in the project
design, detailed knowledge of the construction methods used in building the systems, and a deep
understanding of both the system controls and the testing and balancing process. The technical
retro-commissioning agent physically tests, observes and verifies that all systems are operating
optimally and, when the final report is completed, verifies all readings to ensure the system is
operating properly before closing the project.
4
Evan Mills, Building Commissioning, 2009. http://cx.lbl.gov/documents/2009-assessment/LBNL-Cx-Cost-
Benefit.pdf
By contrast, the role of the process retro-commissioning agent in a project is to collect
documentation of the field tests performed by the various contracting trades. The process retro-
commissioning agent does not necessarily need to possess detailed technical knowledge of the
project—the process retro-commissioning agent’s area of expertise is the commissioning process
itself.
2. Every retro-commissioning project should include the following scope of activities at a minimum:
Phase I – Preliminary Audit

o Analyses equivalent to American Society of Heating, Refrigerating and Air-Conditioning
Engineers (ASHRAE) Level I building energy audit guidelines
o Equipment and system assessment for general operating condition and overall performance
o Energy Star, or equivalent energy benchmarking system, analysis and goal-setting
o Review of building systems’ operations and present operating parameters
o Assess metering infrastructure and develop a preliminary M&V plan
o Preliminary recommendations for corrections including no-cost items and estimated costs,
savings, return on investment and simple paybacks for other opportunities identified
Phase II – Detailed Audit

o Analyses equivalent to ASHRAE Level II building energy audit guidelines
o Analyses of operational issues to determine the underlying causes and what measures that
can be taken to optimize the operation of the various building systems
o Clear financial analyses of proposed energy conservation measures with firm costs and
energy savings, factoring in incentives/programs from local utilities
o Assistance with refinement of O&M documents and databases
Phases III and IV - Retro-Commissioning Implementation and M&V

o Repair of system faults, adjustments of operating parameters, calibration of sensors and
elimination of deferred maintenance issues as approved by the owner
o Construction of corrections as approved by the owner
o Building systems’ functional resting and commissioning of corrections
o Mid- and long-term capital budgeting assistance
o M&V of completed systems
o Appropriate training of O&M staff according to scope of activities conducted during the
retro-commissioning process.
3. Capacity-building and training, both internal and external: The retro-commissioning process should
be a collaborative effort involving both building staff and existing contractors who are not directly
working on the project. The building staff knows the building better than anyone—they know what
the day to day “pains” are, and what systems are problematic. From the outset of the project, the
building staff should work with the retro-commissioning firm to be engaged in the project,
understand why changes are being proposed and gain new perspective on ways to handle
equipment malfunctions and other day-to-day issues. The retro-commissioning firm should also
work with relevant existing service contractors so that they may reliably service the systems being
addressed in the project. Both the service contactors and the building staff should be included in
the retro-commissioning process in order to enhance their ability to provide effective long-term
support for the optimized facilities. Existing/preferred vendors should also be included in the
process so that they may get an introduction to the cultural changes that are occurring within the
building operations team. To ensure the continued performance of the building after the project is
complete, it is critical that the retro-commissioning firm train building staff and service contractors
on all systems, not just those that were adjusted during the project.
4. Robust Measurement & Verification (M&V): M&V is critical to ensuring the continued efficient
performance of the building. At the outset of the project, the owner should articulate to the retro-
commissioning company what level of detail of measurement is desired. The owner should also
communicate which metrics should be tracked, (energy, CO2, greenhouse gas emissions, water), and
with what frequency (continuous or periodic). The retro-commissioning company should then
assess the ability of the current building systems to provide that information and develop a plan for
installing additional metering, sensors, and/or software as necessary. M&V infrastructure should be
installed early on in the process (Phase II) so that results can be documented in real time in Phase III
implementation. Energy and water savings should be measured and verified consistent with the
Efficiency Valuation Organization’s IMPVP, which provides standard measurement and verification
terminology and defines four M&V options to quantify energy and water savings (Options A, B, C or
D). Deciding which option is appropriate should be based upon the complexity of the energy
conservation measures implemented, the costs for the M&V services, building owner staff expertise,
and other practical considerations. The owner may choose to a have a third party provide the
M&V, or to have the implementing retro-commissioning firm provide M&V services. Owners may
also choose to handle the M&V in-house.

Retro-commissioning Case Study
Henry Schein, Inc.
Melville, New York
PROJECT OVERVIEW
The Clinton Climate Initiative (CCI) worked with healthcare products distributor Henry Schein, Inc. to
carry out a holistic retro-commissioning of Henry Schein’s two corporate headquarters buildings in
Melville, NY. This project to improve the buildings’ energy efficiency was an important step towards
Henry Schein’s goal of achieving LEED - Existing Buildings Operations and Maintenance certification for
the buildings.
RETRO-COMMISSIONING OVERVIEW
Retro-commissioning (RCx) is a collaborative process, wherein a qualified RCx firm works alongside
building staff to discover and correct issues that may be preventing building equipment and systems
from operating at peak efficiency. RCx focuses mainly on operational improvements that increase a
building’s energy efficiency without major construction. This project focused on the heating, ventilating
and air-conditioning (HVAC) and lighting systems.
INITIAL ENGAGEMENT
Seeking to improve their corporate sustainability program, Henry Schein approached CCI in March 2009
seeking advice on how best to further improve the energy and water efficiency of their real estate
assets. After learning about the buildings and the capital improvements that had already been made,
CCI recommended that Henry Schein undertake a thorough retro-commissioning to drive operational
efficiencies, identify additional opportunities, and get the optimal performance from the newer
equipment that had been installed.
CCI’S ROLE
CCI provided a sample RFP and project phasing approach for Henry Schein to use, made introductions to
qualified RCx firms, and assisted the company throughout the procurement process. CCI also helped
Henry Schein’s facilities manager explain the proposed project to senior management in order to secure
funding, and provided continued support throughout
the development of the project to ensure that Henry
Schein’s expectations were met. PROJECT AT A GLANCE
Contractor: Sebesta Blomberg
FIRM SELECTION Project Size: 288,000 sq feet, 2 buildings
Henry Schein issued a request for proposal (RRP) Project Cost: $222,100
using CCI’s best practices template to four qualified Projected Annual Savings:
retro-commissioning firms before short-listing two Total energy: 15%
firms, and ultimately choosing Sebesta Blomberg. Electricity: 851,800 kWh
Natural Gas: 5,700 Therms
RETRO-COMMISSIONING MEASURES IDENTIFIED Fuel Oil: 2,400 gallons
• Optimize lighting on/off schedules, controls, Cost: $105,100
and lamp types Emissions: 643 metric tons CO2 Simple
• Add insulation to existing heating water Payback: 2.1 years before factoring in
piping utility rebates, tax deductions, and
incentives

• Convert chilled water supply control to chiller head pressure control
• Optimize occupied/unoccupied schedules for HVAC
• Change sequence of control for pre-heat coil control valves
• Change schedule for shut down of well water pumps
• Implement reset for heating water serving pre-heat coils
• Retrofit and optimize controls for kitchen HVAC
• Convert chilled water systems to variable chilled water flow
• Convert hot water systems to variable chilled water flow
• Convert AHUs to single zone variable air volume (VAV)
• Revise perimeter fan coil unoccupied cycle
• Re-balance hydronic and air systems, clean heating and cooling coils,
• Modify supply air temperature set-points
PROJECT TIMELINE
Initial CCI Engagement: March 2009
Retro-commissioning firm selected: October 2009
Audit signed: May 2010
Construction started: June 2010
Construction completed (anticipated): June 2011
PROJECT HURDLES
Henry Schein management wanted assurance that implementing this RCx project would help the
company attain LEED certification -- a major goal. One of the buildings contains a data center, and
needed to make a substantial efficiency gain in order to reach the minimum energy efficiency
requirements for LEED. With CCI’s support, Sebesta Blomberg and Henry Schein’s staff were able to
develop a scope of work that addressed management’s concerns, and Henry Schein expects to receive
LEED certification at both buildings.
FINANCING SOLUTION
Henry Schein is financing the project out of its capital and operating budgets, and expects to receive
rebates and incentives from the Long Island Power Authority, as well as federal tax deductions through
the Energy Policy Act of 2005, § 179D of the Internal Revenue Code.
KEY CONTACTS
CLINTON CLIMATE INITATIVE
David Hodgins
dhodgins@clintonfoundation.org
HENRY SCHEIN
Jerry Kundla
gerald.kundla@henryschein.com
SEBESTA BLOMBERG
Jerry Bauers
jbauers@sebesta.com

Financing Models
One of the most commonly cited obstacles to retrofit projects is finance: building owners often have
several projects competing for internal funds; they may be restricted from increasing indebtedness; or
they may not be aware of the range of external funding sources available to them.
No single off-the-shelf financing solution exists for energy efficiency building retrofit projects. Financing
options vary according to many factors, including: the building sector, the project size, the geographic
location, and the building owner’s financial health and financial objectives.
In general, the energy efficiency building retrofit finance landscape can be broadly divided between: 1)
public funding models that typically rely on government funds, in part or in whole, to provide below-
market-rate financing; and 2) private financing models offered by the private sector including
commercial banks, credit unions, non-bank financial institutions such as leasing companies, international
finance institutions, and private equity firms. Funding from utilities is another potential source of
private funding.
Public funding models

Governments can use public funds to create low-cost sources of financing for energy efficiency building
retrofit projects. Some common structures that public financing programs take include:
Revolving Loan Funds – Revolving loan funds represent one mechanism that can be used to create a
replenishing pool of capital from which even more loans can be extended over time. Typically, grant
funds are required to initially capitalize a revolving loan fund; this is because as loans are paid back to
the fund they must not be retired but instead used to make additional loans. One potential benefit of
revolving loan fund programs is that they are often able to provide loans at more favorable rates and
terms than would be available in the market, thereby encouraging broader participation. Revolving loan
funds vary widely depending on the fund’s objective, size, eligibility and geographic criteria, interest
rate, and other loan parameters.
Interest Rate “Buy-Down” Programs – These programs use a source of capital to lower the interest rate
on a third-party loan to an energy efficiency building retrofit project, essentially paying the difference
between the market rate and the subsidized rate that the borrower receives. The benefit of an interest
rate buy-down program is that the financing becomes less costly for the borrower, which then
encourages broader market participation.
Loan Loss Reserve Funds – Loan loss reserve funds are typically established to serve as a credit
enhancement to decrease risk for third-party lenders, and thereby ideally lower the rate and/or improve
the terms by which borrowers can access capital. Loan loss reserve funds are typically set up to cover a
pre-specified amount of loan losses. For example, a loan loss reserve might cover a lender’s losses up to
a specified percentage of the total principal of a loan portfolio. The third-party lender may draw on the
fund in the event of a default, according the terms of its agreement with the entity that established the
fund.

In all cases, financing programs for energy efficiency projects must be tailored to the specific building
sector that is being targeted. The examples below demonstrate best practices from both the public and
private sector.
Public Funding Models

AUSTRALIA
Name: Environmental Upgrade Charge (1200 Buildings)
Regional Focus: City of Melbourne
Partners: City of Melbourne, State of Victoria, CCI
Sustainable Melbourne Fund (acting on behalf of CoM)
Type: Municipal rates finance
Project Focus: Retrofit of 1200 non-residential buildings within the City of
Melbourne
Market Inefficiency: Split incentives, lack of available capital for retrofit activity
Financial Instrument: Low-cost loans, revolving loan funds (leveraging effect of seed money), financial
institution investment
Mechanics: State government passes enabling legislation to allow retrofit activity to be
financed through a municipal special charge (equal to a property tax) under
guidance of Melbourne City Council. Private financial institutions forward
payments to the project and are repaid via the tax system
Value-Add: Mechanism enables charges to be shared with tenants – overcomes split
incentive; mechanism elevates collateral for lenders to senior priority; 100% off
balance sheet for Building Owners; reduced costs of funds create added
incentive
Amount: Estimated $1.3bn -$1.7bn of retrofit activity over 10 years
Capital Source: Commercial banks; city funds (seed money)
Timeline: July –Oct 2010 – legislation introduced and passed
July 2010 – Sustainable Melbourne Fund appointed as program administrator
August – December 2010 – Loan criteria and documentation created
December 2010 – March 2011 – first project funded
CCI Role: Identify and originate projects; help to shape underwriting criteria; assist in
program design; share best practices
UNITED STATES
Name: L.A. Commercial PACE Program
Regional Focus: City of Los Angeles
Partners: City of Los Angeles Community Redevelopment Agency, County of Los Angeles
Assessor’s Office
Type: Municipal tax district financing
Project Focus: Commercial buildings
Market Inefficiency: Mortgaged properties typically do not allow additional encumbrances –> retrofit
lenders left minimal security
Short hold-periods create a disincentive for owners to undertake deeper
projects
Financial Instrument: Contractual assessments executed between County and owner; municipal “1915
Act” bonds issued by county and backed by individual or pools of projects

Mechanics: Building owner voluntarily “opts-in” to PACE program; owner hires contractor to
scope and implement project; county records contractual assessment and
priority lien against property; county issues municipal bond and allocates
proceeds (less margin for administrative fees) to owner; county collects
assessment from owner over 5, 10, 20 year period
Value-Add: Gives commercial building owners a flexible method for financing longer
payback projects
PACE financing expected to command better pricing than would otherwise be
available to owners on a fully unsecured basis
Amount: $35-70mm [based on expected loan loss reserves of $3.5mm] or greater
Capital Sources: $3mm EECBGs / $5mm SEP Grant Funds / Private capital
Timeline: TBD - County of LA conducts judicial validation process
TBD – SEP grant funds made available to LA County and City of LA
TBD – Accept applications and disburse funds
March 2012 – deadline for expending SEP grant funds (ie. for loan loss reserve)
CCI Role: Program design; identifying projects and market need; engaging mortgage
lenders and retrofit investors to socialize investment opportunity
ASIA
Name: MFC Asset Management Energy Efficiency Fund (in process of being set up, not
yet available for investment)
Type: Private equity investment facility managed by MFC
Project Focus: Energy efficiency projects in any commercial building type
Regional Focus: Thailand initially; eventual regional expansion
Amount: $10-20 million USD
Min US$500,000 per project and up to 100% of total project cost, dependent on
project size
Up to 5 yrs payback
Partners: CCI, MFC
Mechanics: Invest into individual projects through Special Purpose vehicle and disburse
monies using existing funds
EPC contracting methodology is must or a general preference
Financial Instrument: Operating lease using ownership of project retrofit equipment as collateral
Timeline: 2010 - Development of the investment criteria, term sheet, structure, process
2011 - Funds available
CCI Role: Help to shape term sheet and underwriting criteria, application process,
educate MFC on performance contracting, qualification of ESCOs, use
of standard contract documents, help to identify projects
Market Inefficiency: Lack of off balance sheet financing for Credit worthy, yet credit constrained,
building owners for comprehensive building retrofit projects in Thailand
Project Team: No more than 3 people
Value-Added: Fund will provide building owners with the ability to finance building retrofit
projects with an operating lease structure thereby allowing creditworthy
building owners to move forward with projects in instances when they are not
interested in owning the equipment or cannot/do not want to take debt on
their balance sheet

Private Capital Funds
A number of different private capital sources exist and may be used for energy efficiency building
retrofit projects. An introduction to the landscape of private finance for projects is outlined below. It is
important to note, however, that the global financial crisis has adversely affected the availability and
cost of financing options; and, in many places and building sectors, the private capital markets for
retrofits are nascent. Lenders may be wary of financing energy efficiency projects for a variety of
reasons including insufficient collateral value in equipment, unfamiliar risk profiles of projects, and
difficulty in securing the energy savings stream as a means of providing significant credit support to the
project.
Private Debt Markets – In general, the private debt markets provide a number of different types of
financial products that might be used for energy efficiency building retrofit projects. These include
commercial leases, such as capital and operating leases, as well as municipal bonds. In some cases, it
may be possible for building owners with existing mortgages to refinance their mortgage to include a
loan for an energy efficiency building retrofit project.
Equity - A variety of institutional investors, including pension funds and life insurance companies have
been exploring the potential to invest in energy efficiency projects as a new investment class. Equity
funds typically require a new leveraged fund vehicle to be created in order to invest in projects, and will
need to identify a manager of sufficient expertise to manage the new leveraged fund.
International Financial Institutions – International financial institutions may offer financing products
and programs for energy efficiency projects, including flexible financing mechanisms, and/or credit
support for energy efficiency projects and programs. The availability of such products and programs
varies by the particular institution and geography.
LATIN AMERICA/ASIA
Name: International Financial (Development) Institution
Type: Soft loan fund
Project Focus: Energy efficiency projects in large private buildings (office, hotel, retail, hospital)
Amount: Multiple million Euros
Partners: CCI, International Financial Institution, local commercial bank (on-lender)
Mechanics: IFI will supply funds/extend credit facility and local commercial bank(s) will
assess and underwrite individual projects
Financial Instrument: Low-cost loans
Up to 10 yr payback
Min size US$500,000
Min target CO2/energy reduction [20%]
EPC likely a must
Timeline: 2010 - Development of the loan criteria, term sheet, structure
Early 2011 - Planned disbursement of monies
CCI Role: Identify and originate projects; help to shape underwriting criteria, market
opportunity assessment, capacity building for local commercial bank staff, use
of CCI’s standard contracting documents and best practices

Market Inefficiency: Lack of capital providers for comprehensive retrofit projects in private buildings
in for projects with long payback periods
Project Team: IFI team, local commercial bank team, CCI
Value-Add: Fund will provide private owners with the ability to more affordably finance
longer payback (and thus greater GHG-reducing) retrofit projects
Other: Likely add the most value b/c of the terms and the cost of capital
Private Utility Incentives - Utility rebates and incentives vary by geography and utility service area.
However, in many cases these sources of funds may be available at favorable rates and terms to cover a
portion of the project cost. In addition, utility on-bill finance programs may provide a source of funding
for commercial energy efficiency projects. These programs typically are operated by utilities and offer
building owners low- or no-cost loans to make energy efficiency improvements to their buildings; the
loans are then repaid on the utility bill.
Developing Approaches -- A number of approaches to privately financing energy efficiency building

retrofit projects are emerging, including shared savings agreements and energy savings agreements.
UNITED STATES
Name: Energy Services Agreements
Regional Focus: U.S.
Partners: Metrus Energy, Equilibrium Resource Mgmt.
Type: Independent developer; contracting methodology
Project Focus: Commercial, industrial, campus buildings
Market Inefficiency: Debt capacity issues for owners; split incentive problem; debt capital raise
difficult
Financial Instrument: Services agreement
Mechanics: Developer creates project SPV; contributes debt and equity to SPV; SPV owns
funds ESCO-implemented projects and delivers unspecified energy efficiency
services to host (e.g. per $kWh basis)
Value-Add: Paid from savings; off balance sheet treatment for owner
Amount: $1 million project minimums
Capital Source: Banks, institutional investors, equity investors in developer
Timeline: Identifying projects currently; EqRM still developing model; Metrus executing
already
CCI Role: Identify projects to show proof of concept
Identify potential sources of capital
Conduct research around potential roadblocks
Name: Managed Utility Service Contract

Regional Focus: U.S.
Partners: Transcend Equity (Dallas, TX)
Type: Independent developer; contracting methodology
Project Focus: Multi-tenant commercial; exploring universities
Market Inefficiency: Split incentive, collateral issues in mortgaged buildings, lack of security for
lender
Financial Instrument: Energy services agreement
Mechanics: Transcend develops, funds and implements retrofit project using own network
of contractors
Transcend charges owner avg. historical utility bill, then remits payment to
utility, investors, own profit margin and M&V expenses
Secures transaction through its power over utility bill and mortgagee remedies
Value-Add: Owner - No upfront cost financing; off-balance sheet; potential to avoid split
incentive issue (MESA payments “pass-through”); savings reduction potential
for owner during payback and after
Investor - Leverages utility bill to mitigate repayment risk
Amount: Minimum $1mm
Capital Source: Commercial debt (e.g. 9% @ 70% leverage), equity investment, Transcend funds
Timeline: Identifying projects currently
CCI Role: Identify projects to show proof of concept
Identify potential sources of capital
Conduct research around potential roadblocks

Building Retrofit Technologies
In some cases, a single technology or system needs to be replaced and there is opportunity to
incorporate greater efficiency by considering either more efficient replacement version of a technology,
such as fluorescent or LED lighting in place of incandescent lighting, or a completely new replacement
technology, such as solar cooling in lieu of traditional fossil-fuel driven cooling. In order to calculate the
true value of making such a switch, owners must consider the true lifetime cost of the technology –
including ingoing operating costs (such as reduced fuel or maintenance costs) – as well as the upfront
cost of the new technology (incorporating any incentives that might be available for efficient or
renewable products.) The following text highlights some key building technologies and systems that
may have opportunities for greater efficiency.
Building Envelope
The “building envelope” is the shell separating the interior and exterior of a building. The building
envelope should be well insulated, airtight, and reflect (rather than absorb) energy from the sun. The
composition of the building envelope directly impacts the amount of heating and cooling energy
required to maintain the climate inside a building and impacts the climate of the outside area
surrounding the building. Improving the building envelope through retrofitting windows and roofs is a
cost-effective approach to reducing energy consumption and costs.
Window Films: Window films are a laminate typically applied to the inside of windows. Window
films for energy efficiency purposes (rather than security or privacy) should maximize the use of
sunlight for lighting and block the wavelengths of the light spectrum felt as heat.
Roofing: A “cool” roof uses materials that are highly reflective and radiate absorbed heat, unlike
traditional roofs which are constructed using layers of tar and felt that absorb energy from the
sun and trap heat inside a building. Even if there is equipment on the roof, cool roofing
technologies can be applied over a pre-existing roof, extending its life by a decade or more, and
providing an average energy savings of 7 to 15 percent of total cooling costs.
Central Cooling
Building cooling is driven by a chiller, which uses a variety of mechanical and chemical processes to
collect excess heat from buildings, then removes that heat to cool the air. Cooling systems consume
more electricity by end-use than any other building system. Chiller options vary based on building type
and use, but always interact with other building systems, which impacts the chiller’s true lifecycle cost.
For example, if building lighting is changed from incandescent to LED, reducing the heat produced by the
lights, chiller size might be reduced as well.
Large Tonnage Chillers: Large tonnage chillers are the most common type of chiller for
industrial and commercial applications. These large-scale chillers are often the most cost-
effective way to meet demand in buildings that generate a large volume of heat (from people
and equipment) and require a large volume of cooling energy.

Modular Chillers: Modular units also are ideal for the chiller replacement market, especially in
high-density urban areas and for medium to large size applications, because their small size
lowers the cost of installation and allows projects to be accomplished without significantly
interrupting the building’s occupants. Modularity allows individual units to be turned off during
times of partial load, saving energy and machine wear and tear.
Absorption chillers: Absorption chillers use heat energy to drive a cooling system, unlike
traditional chillers which use electricity. The heat used can be “waste heat,” for example a
byproduct of HVAC equipment such as boilers, or can be generated by building-scale renewable
energy sources such as solar panels. Absorption chillers minimize electricity consumption and
optimize thermal storage using a chemical battery.
Building Scale Renewables

Generating heating and cooling energy at the building site using renewable resources such as the sun
can substantially reduce energy costs and avoid utility-related issues such as intermittent supply and
escalating prices.
Solar thermal: Solar thermal technologies use a reflective surface to capture thermal energy
from the sun. Capturing and storing heat is more efficient and less expensive than capturing
and storing electricity, as in solar photovoltaic applications. That heat energy can be converted
into cooling energy using an absorption chiller (see central cooling products above). The
payback period for solar thermal technologies ranges from 5-10 years depending on climate,
energy consumption, financial incentives and the efficiency of the technology.
Lighting
Lighting is a major contributor to energy use in buildings, accounting for over 20 percent of end-use
consumption. Lighting retrofits often have the shortest payback period of any energy intervention.
Lighting is a system comprised of lamps, controls, ballasts and fixtures. Key factors to consider with
each type of lighting system are electricity consumption, heat emissions, and quality and purpose of the
light produced.
Lamp Selection: Lighting systems and associated components should use high-intensity
discharge (HID), fluorescent, or light-emitting diode (LED) lamps. HID lamps are prevailingly
used in outdoor and industrial lighting applications, and are highly efficient compared to
incandescent lamps, lasting upward of 10 times longer. Fluorescent lamps are predominately
used in commercial buildings, and compared with incandescent lamps, fluorescent lamps last 10
to 20 times longer, produce two-thirds to three-quarters less heat, and provide a more diffuse
and physically larger light source. LED lamps provide more efficient use of light and energy,
while generating substantially less heat, than incandescent, HID or florescent lamps.

CCI Building Technology Purchasing Alliance
CCI’s Energy Efficiency Building Technology Purchasing Alliance (PA) works to accelerate the deployment
of energy efficient building technologies worldwide. CCI has developed agreements with suppliers
offering best-in-class efficiency technologies, which include preferential pricing and project support for
partners of CCI’s Energy Efficiency Building Retrofit Program. Through this program, CCI assists building
owners with technology selection, facilitates competitive bid processes, creates connections between
building owners and technology suppliers and provides third-party oversight on pricing.
Technology and Vendor Selection

CCI has negotiated discounted pricing with leading suppliers of a variety of energy efficient mechanical
and building envelope products. The technologies offered through this program were selected primarily
for their energy-saving and greenhouse gas reducing potential. Other factors include: under-
representation in the market, applicability to a critical mass of retrofit projects, and the needs of the
building owners with whom CCI partners.
Supplier Agreements
CCI negotiates price reductions on energy-saving technologies by leveraging the incremental purchasing
opportunity presented by CCI’s global partner base. These agreements set price ceilings that provide
the lowest possible starting point for procuring a particular product in a particular market from a
particular supplier. Suppliers unaffiliated with CCI may offer a comparable product at lower price. CCI
encourages competition between its supplier partners and other suppliers so that building owners arrive
at the most competitive price point while achieving the greatest possible energy savings.
Deployment
CCI’s supplier partners expect to work within existing bid processes. It is not CCI’s intention to elongate
or change existing bid processes, but to help owners arrive at the most competitive price point while
achieving the most energy savings possible. Owners can and should engage in competitive bid processes
which may result in lower prices than those in CCI’s agreements.
Building owners can take advantage of CCI negotiated pricing in two distinct ways: through their usual
product procurement process or through an energy performance contract (EPC) undertaken with an
energy service company (ESCO) partner. In both cases, CCI supports the owner as needed with
technology education, lifecycle cost analysis, and by providing connections with -- and oversight of --
suppliers.
CCI’s Role
CCI supports building owners, ESCOs and other partners in procuring energy efficient building
technologies in various ways. CCI serves as a resource to help building owners identify and implement
cutting-edge technologies in a supplier-agnostic manner. In addition to access to price discounts on
energy efficient technologies, CCI’s core services include technical and product information, purchasing
assistance, and project facilitation. In addition, CCI works with owners to verify price points and to

ensure suppliers have bid in accordance with the obligations of their CCI agreements. The only criterion
for accessing these services is that owners, contractors or organizations actively work with CCI on their
building retrofit project(s). CCI’s involvement in projects around the world enables it to maintain
sufficient scale to leverage global supplier agreements as well as share best practices across
international markets.
CCI Supplier Partners and Negotiated Discounts

Category Product Types Suppliers Discount Range
Solar Control Window

3M 15-30%
Film
Reflective Roof
Building Envelope Tremco 15-20%
Coatings
Products
Spray Foam Roofing BASF-PFE 25-35%
Thermal Barrier Paint Sci-Paint 20%
Large Tonnage Chillers Carrier 5-20%

Central Cooling
Products Modular Chillers Multistack 15-25%
Solar Cooling Climatewell 15-25%

GE
Fluorescent and HID Philips
5-40%
Lamps Osram Sylvania
Havells Sylvania
Lighting
Fixtures Acuity 5-20%
Cree
LED / Solid State Finelite 5-30%
Lemnis
Solar Thermal Kingspan
25-50%
Building Scale Collectors Solartron
Renewables Solar Photovoltaic
Solartron 25%
Systems
*availability may differ based on geography

Purchasing Alliance Case Study
Unisource
Toronto, Canada
PROJECT OVERVIEW
In 2009, distribution firm Unisource Canada, Inc. decided to make their Courtneypark facility more
energy efficient and lower its energy and maintenance costs. Unisource determined that a lighting
retrofit was the most appropriate energy conservation measure given their objectives. In addition to
reducing energy consumption, Unisource sought a lighting system that had a longer life, provided
increased light levels and better color rendition.
Unisource requested technical and product information as well as purchasing assistance from CCI and
CCI partner, Partners in Project Green (PPG), a local sustainability organization in the Greater Toronto
Area. Unisource considered offers from a number of lighting suppliers, and ultimately decided that
Osram Sylvania offered the best combination of price and quality for their project.
Thanks to their involvement with PPG and the partnership with CCI, Unisource received a product
discount from Osram Sylvania which enabled them to install a best-in-class energy efficient lighting
system. Their 400-watt high pressure sodium lamps were replaced with T-8 fluorescent lamps,
electronic ballasts, and motion sensors. Because of the partnership with CCI and PPG, Unisource
received pricing approximately 15 to 20 percent below market levels, as well free audit and survey
services. The simple payback period for the project was less than 10.4 months. The partnership was
such a tremendous success that Unisource decided to work with CCI, PPG and Osram Sylvania begin the
process to retrofit the remainder of their 18
warehouses across Canada.
PROJECT AT A GLANCE
INITIAL ENGAGEMENT Supplier: Osram Sylvania
Unisource engaged CCI through Partners in Project Project Size (square feet): 220,000
Green (PPG), which is based in Toronto. PPG is a Project Cost (USD): $132,400
community of businesses surrounding Toronto Annual Energy Savings: Electricity:
Pearson International Airport that work together to 600,000kWh/120KW load Cash savings:
improve their financial and environmental impacts. $70,000
CCI supports PPG through its work with the City of Total energy savings: 26-28%
Toronto and its partnership with the C40 cities. CO2 Reductions: 127 tons
Simple Payback: 10.4 months
SUPPLIER SELECTION
Unisource underwent a competitive bid process with
a number of lighting suppliers. In considering bids, key factors included lifecycle cost, energy savings,
and quality of light. Unisource selected Osram Sylvania as the supplier for this project because of their
high quality materials, access to expert installation and value. As a first step, Osram Sylvania performed
a complete audit of all lighting fixtures in the facility. That audit was provided for free as a result of CCI-
negotiated enhanced project support.

PROJECT TIMELINE
Unisource contacted PPG and CCI for support (July, 2009)
CCI and PPG provide supplier introductions (July, 2009)
Unisource selected Sylvania (Feb, 2010)
Contract finalized (March, 2010)
Tenders released to Sylvania-recommended electrical contractors
Osram-Sylvania Lighting Services was chosen as the contractor (April, 2010)
Installation (July, 2010)
RESULTS
Over 400 fixtures were retrofitted with Sylvania 2,540 Octron® XPS T8 fluorescent lamps and 434 high
efficiency electronic ballasts. Motion sensors were added for additional energy savings.
Since the installation of the Sylvania lamps and ballasts, Unisource has seen impressive results. The
retrofit project will provide them with an annual energy savings of 120KW load and 749,174 kWh,
resulting in a $74,917 reduction in energy costs each year. The company has also seen significant savings
in maintenance costs.
Beyond energy, greenhouse gas emissions and cost savings, there were significant ancillary benefits to
this project. Unisource developed an enduring relationship with Sylvania to provide lighting retrofits for
all 18 of their warehouses in Canada.
FINANCING
Unisource financed the majority of the project. Toronto’s Electricity Incentive Rebate Program (ERIP),
which provides generous rebates for energy efficient building technologies, also was a major source of
funding for this retrofit. The approved incentive amount was $56,120.00, which represents 40 percent
of the total project cost.
PROJECT CHALLENGES
All project challenges were limited and expected. Sylvania lighting had to complete the project in a very
limited timeframe, and over weekends, so as not to disrupt normal business operations at Unisource.
CCI ROLE
CCI assisted Unisource in determining the most economically and energy efficient lighting technologies
for their building, providing project development support throughout the duration of the project
including:
• Providing technology and purchasing insight
• Reviewing Unisource’s retrofit objectives
• Introducing Unisource to the appropriate personnel from a number of lighting technologies and
suppliers whose products matched Unisource’s needs and with whom CCI has negotiated pricing
• Assisting Unisource in beginning the procurement process
• Reviewing proposals from suppliers to ensure that Unisource received CCI’s negotiated prices
• Helping to develop contract language guaranteeing CCI-negotiated pricing and project support

KEY CONTACTS
JT McLain Doug Morgan
Coordinator: CCI Purchasing Alliance Facility Manager
Clinton Climate Initiative Unisource Canada Inc.
jtmclain@clintonfoundation.org dmorgan@unisource.ca
+1 310.428.0424 905.795.5093
Antoine Belaieff Roger Bibby

City Director – Toronto Sales Manager (Environmental Team Leader)
Clinton Climate Initiative Unisource Canada Inc.
abelaieff@clintonfoundation.org rbibby@unisource.ca
+1 416.777.0665 905.795.7509
Chris Rickett Steve DelFatti

Senior Project Manager Logistics manager
Partners in Project Green Unisource Canada Inc.
crickett@trca.on.ca sdelfatti@unisource.ca
416.661.6600 x 5316
Ed Evans
Account Manager
Sylvania Lighting Services
ed.evans@sylvania.com
905.836.5249

CCI Energy Efficiency Building Retrofit Program (EEBRP)
The CCI Energy Efficiency Building Retrofit Program (EEBRP) brings together many of the world’s largest
cities, private building owners, energy service and technology firms and financial institutions in a
landmark effort to reduce energy consumption in existing buildings. CCI works with industry, financial,
government and building partners to overcome market barriers and develop financially sound solutions
that accelerate the growth of the global building efficiency market.
CCI Role
CCI provides pro bono advisory support to building owners such as city governments, commercial
portfolio owners, schools and universities in identifying, designing, and implementing large-scale energy
efficiency retrofit projects and connects the owner with contracting and financial firms for
implementation. CCI works with its partners on different mechanisms for increasing building efficiency
including energy efficiency retrofit contracting, retro-commissioning, building technology procurement
and implementation. CCI’s services include:
Project Development Support and Access to CCI’s Tools

CCI offers assistance to its partners throughout the entire project development process in order to
design and implement a best-in-class energy efficiency project including: defining financial and other
project goals, incorporating best practices into project design and development, sharing lessons from
other projects, adapting contracting tools and templates for partner use and providing technical
assistance in review of supplier materials and proposals. In addition, CCI is an unbiased advisor through
the project development process to ensure that the owner’s goals are met and to monitor supplier
performance and commitment to CCI agreements. CCI has developed many tools to expedite each stage
of project development, including building assessment tools, sample expressions of interest, requests
for qualifications and proposals, supplier assessment tools, template audit and construction contracts,
proposal evaluation and financial modelling tools.
Access to the benefits of CCI’s industry and organizational partnerships

CCI has developed its best practice approach to building efficiency with global industry leaders. CCI works
with firms that can execute projects around the world using a unique set of best practice contracting
terms and conditions, including streamlined procurement, transparency in pricing, and other processes
that reduce project cost, development time, and business risk. These firms can often contractually
guarantee energy savings and maximum project costs to ensure that performance targets are reached. In
addition, CCI has negotiated discounted price ceilings with suppliers of best-in-class building technologies,
selected based on GHG reduction potential, energy efficiency impact, and product quality. Discounts
typically range from 5 - 40 percent off “best-customer” or prevailing prices, significantly bringing down
project costs and increasing the market competitiveness of state-of-the-art energy efficient technologies.
In addition to the discounted pricing, CCI and its supplier partners provide lifecycle cost analysis,
technology education and enhanced technical support to owners. CCI also works with financial
institutions and other providers of capital around the world to help owners procure financing for these
projects on competitive terms. CCI has relationships with organizations that influence the built

environment including real estate associations, political leaders, and other non-profits. CCI works with
these partners to bring expertise and resources to projects and to share best practices from around the
world.
Financial Advisory Assistance

At the project level, CCI can assist partners with financial modeling, assessing the appropriate finance
structure, soliciting interest from capital providers, reviewing proposals/term sheets and assisting,
where appropriate, in the negotiation process. At the programmatic level, CCI can assist institutions
(public and private) in developing sustainable, scalable and market-driven solutions for financing
retrofits across entire building market segments (e.g. commercial office, institutional, multi-family
residential). To this end, CCI typically assists in convening stakeholders, assessing market demand from
building owners and financial institutions, identifying legal and accounting related issues, and
developing and executing on a work plan.
Recognition
As part of its global mission, CCI seeks to shine a light on leading partners that have implemented energy
efficiency building retrofits that achieve measurable reductions in greenhouse gas emissions. CCI will
work with partners to create opportunities to highlight partner successes.
EEBRP by the Numbers

Since its launch in 2007, CCI’s EEBRP has helped initiate more than 200 retrofit projects encompassing
over 500 million sq ft of building space in more than 47 cities around the world. These include:
• Government buildings across six cities and states (Houston, London, Melbourne, Victoria and
Johannesburg)
• More than 20 schools and universities
• The two largest public housing organizations in North America
• Global commercial portfolios
• Iconic commercial buildings such as the Empire State Building, Mumbai’s Inorbit Mall, and the
Banyan Tree Hotel in Bangkok

Appendix: Additional Case Studies
More case studies from around the world can be found on the Clinton Climate Initiative website at:
http://clintonfoundation.com/what-we-do/clinton-climate-initiative/our-approach/cities/building-
retrofit
Government
Greater London Authority RE:FIT Retrofitting Framework, United Kingdom
City of Houston Building Retrofit Program, United States
Institutional/Education
The International School, Macau, China
University of Central Missouri, United States
Lee College, United States
Universidad Iberoamericana, Mexico City

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Energy Efficiency Building Retrofits:

Contracting and Financing Best Practices

WORKING DRAFT DOCUMENT 1

WORKING DRAFT DOCUMENT 2

Why Buildings? .......................................................................................................................................... 4

The Need for Models................................................................................................................................. 4

Contracting Models ....................................................................................................................................... 5

Turnkey Holistic Retrofits .......................................................................................................................... 5

CCI Energy Efficiency Retrofit Best Practices ............................................................................................ 6

CCI Retrofitting Case Studies ..................................................................................................................... 9

Olympic Station – MTR .......................................................................................................................... 9

The Empire State Building ...................................................................................................................11

Retro-commissioning Case Study ............................................................................................................20

Henry Schein, Inc. ................................................................................................................................20

Financing Models ........................................................................................................................................ 22

Public funding models .............................................................................................................................22

Private Capital Funds ...............................................................................................................................25

Building Retrofit Technologies ....................................................................................................................28

CCI Building Technology Purchasing Alliance ..........................................................................................30

Purchasing Alliance Case Study ...............................................................................................................32

CCI Energy Efficiency Building Retrofit Program (EEBRP) ...........................................................................35

Appendix: Additional Case Studies..............................................................................................................37

WORKING DRAFT DOCUMENT 3

The Need for Models

• Contracting: Lack of well-established, rigorous, standardized and replicable contracting models

Turnkey Holistic Retrofits

WORKING DRAFT DOCUMENT 5

Guaranteed Maximum Price (GMP)

WORKING DRAFT DOCUMENT 6

Robust Measurement & Verification (M&V)

Vendor Neutrality and Open Protocol

WORKING DRAFT DOCUMENT 7

WORKING DRAFT DOCUMENT 8

WORKING DRAFT DOCUMENT 10

Tony Malkin, owner of the Empire State Building PROJECT AT A GLANCE

WORKING DRAFT DOCUMENT 12

CLINTON CLIMATE INITIATIVE JOHNSON CONTROLS, INC.

JONES LANG LASALLE ROCKY MOUNTAIN INSTITUTE

WORKING DRAFT DOCUMENT 13

PROGRAM DEVELOPMENT PROCESS

CLINTON CLIMATE INITIATIVE

WORKING DRAFT DOCUMENT 16

1. “Technical” Retro-Commissioning rather than “Process” Retro-Commissioning: Retro-

Phase I – Preliminary Audit

Phase II – Detailed Audit

Phases III and IV - Retro-Commissioning Implementation and M&V

WORKING DRAFT DOCUMENT 19

WORKING DRAFT DOCUMENT 20

WORKING DRAFT DOCUMENT 21

Public funding models

WORKING DRAFT DOCUMENT 22

Public Funding Models

WORKING DRAFT DOCUMENT 23

WORKING DRAFT DOCUMENT 24

WORKING DRAFT DOCUMENT 25

Developing Approaches -- A number of approaches to privately financing energy efficiency building

Name: Managed Utility Service Contract