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The PPESCO Process


A comprehensive energy audit of the project sets the baseline from which to measure actual energy savings from the energy improvements.

There are three levels of energy audit that PPESCOs should be prepared to undertake. They are industry standard audit levels as set forth by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) for commercial buildings.

  • Level 1: Walk-through to identify opportunities (funded by the PPESCO)
  • Level 2: Research and proposed energy performance improvements, with expected costs and savings (funded by the client, generally through the financing package for the recommended improvements)
  • Level 3: Detailed analysis of capital-intensive modifications (funded by the client, generally through the financing package for the recommended improvements)
Type of Audit Highlights
Level1 Rapid assessment of building energy systems
Building energy benchmarking
Definition of opportunities for optimizing energy systems
Outline of applicable incentive programs
Level2 Detailed survey of building systems and operations
Identification of energy sources(s) and end uses
Identification of appropriate energy improvement measures for each energy system
Expected range of energy savings from the energy improvement measures and their costs
Spotlight on operational systems problems, if any
Outline of priorities for limited resources, next steps, and identification of energy efficiency measures requiring more thorough data collection and analysis
Level3 Data collection and analysis of historical energy performance
Whole-building computer simulation calibrated with field and utility data
Accurate modeling of energy improvement measures
Bid-level construction cost estimating
Decision-making support

Source: ASHRAE, Procedures for Commercial Building Energy Audits, Second Edition.

Once fact-finding from the walk-through (Level 1) audit is complete and it is clear the client can work with the PPESCO and would likely benefit from its services, the PPESCO schedules a Level 2 audit. The main purpose of this audit is to produce an estimate of the potential energy savings from recommended building energy improvement measures. A standardized form can be used to derive this estimate.

The sequence of audits allows the PPESCO to evaluate the size of the facility for services and to examine the occupancy schedule of the building, thermal shell (exterior wall) details, existing HVAC and refrigeration equipment and controls, interior and exterior lighting, and the building’s other operating equipment. The PPESCO can use this information and the utility history to scope the project and its savings potential. This information will help the client make a go / no-go decision informed by savings potential and cash flow estimates.

The Level 1 audit does not involve sufficient detail to require a fee from the client. A technically competent individual has the skill to complete this work; it does not require the skill of an engineer. The data gathered from this evaluation can be entered into an energy evaluation tool with other assumptions to develop a preliminary project scope and savings estimate.

It is important to note that a Level 3 audit is not always necessary. A comprehensive audit contains a great amount of detail and is typically performed prior to a comprehensive building energy improvement project requiring a high level of investment and engineering support. This audit will provide the PPESCO and the client with a detailed estimate of the work scope and energy savings that will form the basis for the financing plan.

Audits can be performed with in-house resources or through a subcontractor, depending on the PPESCO’s capacity. In either case, confidentiality agreements should be in place to allow the PPESCO access to utility records and to provide building owners and tenants with confidence that personal and / or competitively sensitive information will be kept private.

The audit establishes the baseline of energy consumption, occupancy / operating hours, and “standards of comfort” in the building. This information will become the point of comparison from which energy savings will be measured. The baseline also establishes key reference points for the energy performance contract between the client and the PPESCO.