A111D2 S22t3H

NBS

NATL INST OF STANDARDS &TEC^^ 222 PUBLICATIONS

s«^?&«lll§k^v-j Guide to the

Federal Building Life-Cycle Cost

(FBLCC) Computer Program

Stephen R. Petersen

United States Department of Commerce

National Bureau of Standards

Preoared for States Department of Energy

Energy Management Program

U5753

No. 1222 ' 1986

C.2

^ENERGY

EFFICIENCy
"f* '#•'

National Bureau of Standards' was established by an act of Congress on March 3, 1901. The

Bureau's overall goal is to strengthen and advance the nation's science and technology and facilitate their effective application for public benefit. To this end, the Bureau conducts research and provides: (1) a

basis for the nation's physical measurement system, (2) scientific and technological services for industry and

go\ernment, (3) a technical basis for equity in trade, and (4) technical services to promote public safety.

The Bureau's technical work is performed by the National Measurement Laboratory, the National

Engineering Laboratory, the Institute for Computer Sciences and Technology, and the Institute for Materials

Science and Engineering

.

The National Measurement Laboratory

Provides the national system of physical and chemical measurement;

coordinates the system with measurement systems of other nations and

furnishes essentia] services leading to accurate and uniform physical and

chemical measurement throughout the Nation's scientific community, in- dustry, and commerce; provides advisory and research services to other Government agencies; conducts physical and chemical research; develops,

produces, and distributes Standard Reference Materials; and provides

calibration services. The Laboratory consists of the following centers:

• Basic Standards^

• Radiation Research

• Chemical Physics

• Analytical Chemistry

The National Engineering Laboratory

Provides technology and technical services to the public and private sectors to address national needs and to solve national problems; conducts research in engineering and applied science in support of these efforts; builds and maintains competence in the necessary disciplines required to carry out this research and technical service; develops engineering data and measurement

capabilities; provides engineering measurement traceability services; develops

test methods and proposes engineering standards and code changes; develops

and proposes new engineering practices; and develops and improves

mechanisms to transfer results of its research to the ultimate user. The

Laboratory consists of the following centers:

Applied Mathematics

Electronics and Electrical Engineering"^

Manufacturing Engineering

Building Technology

Fire Research

Chemical Engineering^

77?^ Institute for Computer Sciences and Technology

Conducts research and provides scientific and technical services to aid Federal agencies in the selection, acquisition, application, and use of computer technology to improve effectiveness and economy in Government

operations in accordance with Public Law 89-306 (40 U.S.C. 759), relevant Executive Orders, and other directives; carries out this mission by managing

the Federal Information Processing Standards Program, developing Federal ADP standards guidelines, and managing Federal participation in ADP

voluntary standardization activities; provides scientific and technological advisory services and assistance to Federal agencies; and provides the technical foundation for computer-related policies of the Federal Goverrunent. The Institute consists o' the following centers:

• Programming Science and

Technology

• Computer Systems

Engineering

The Institute for Materials Science and Engineering

Conducts research and provides measurements, data, standards, reference

materials, quantitative understanding and other technical information fundamental to the processing, structure, properties and performance of materials; addresses the scientific basis for new advanced materials technologies; plans

research around cross-country scientific themes such as nondestructive

evaluation and phase diagram development; oversees Bureau-wide technical programs in nuclear reactor radiation research and nondestructive evaluation; and broadly disseminates generic technical information resulting from

its programs. The Institute consists of the following Divisions:

• Ceramics

• Fracture and Deformation ^

• Polymers

• Metallurgy

• Reactor Radiation

Headquarters and Laboratories at Gaithersburg, MD, unless otherwise noted; mailing address

Ciailhcrsburg. MD 20899, 'Some divisions within the center are located at Boulder, CO 80303. 'Locaied at Boulder, CO. with some elements at Ciaiihcrsburg, Ml).
NBS

RESEARCH (KFOfMATKM

A User's Guide to the ^""^ Federal Building Life-Cycle Cost q^^^^

(FBLCC) Computer Program M<^nc^

no. )9-^>

Stephen R. Petersen

Mathematical Analysis Division

Center for Applied Mathematics

National Engineering Laboratory

National Bureau of Standards

Gaithersburg, MD 20899

Prepared for Federal Programs Office

Office of the Assistant Secretary for

Conservation and Renewable Energy

U.S. Department of Eriergy

Washington, DC 20585

Issued May 1986

^^T OF c^Oy,

U.S. DEPARTMENT OF COMMERCE, Malcolm Baldrige, Secretary

NATIONAL BUREAU OF STANDARDS, Ernest Ambler, Director
National Bureau of Standards Technical Note 1222

Natl. Bur. Stand. (U.S.), Tech Note 1222, 89 pages (May 1986)

CODEN: NBTNAE

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1986

For sale by the Superintendent of Documents, U.S. Governnnent Printing Office, Washington, DC 20402
ABSTRACT

The FBLCC Computer Program and this User's Guide provide computational tools

and energy price data for performing life-cycle cost (LCC) analyses of

Federal buildings and related subsystems. Two kinds of Federal building

projects can be evaluated with FBLCC: (1) LCC analysis of projects directly

related to energy conservation and renewable energy, and (2) LCC analysis of

projects not directly concerned with energy conservation or renewable energy.

The methods and procedures used in these LCC analyses are based on the rules

set forth by the U.S. Department of Energy's Federal Energy Management Program

and the U.S. Office of Management and Budget in Circular A-94, respectively.

The FBLCC conq)uter program and DoE energy price data are contained on a 5 1/4

inch diskette formatted for use on microcomputers with an MS-DOS operating

system. A comparative LCC analysis of alternative building or subsystem

designs can be performed by FBLCC in order to determine whether the additional

costs of design improvements or retrofits to a Federal building are cost

effective in terms of reductions in future operating-related costs when

evaluated in present value dollars.

ill
PREFACE

The FBLCC Computer Program and User's Guide have been prepared as an aid to

implementing life-cycle cost (LCC) evaluations of energy conservation and

renewable energy projects in new and existing Federal buildings. It is the

third of a three-volume set of reports which together provide a comprehensive

set of methods, data, and computational tools for Federal LCC analysis of

energy projects.

Included in the three-volume set are the following:

(1) Life-Cycle Cost Manual for the Federal Energy Management Program

(National Bureau of Standards, HB 135 (to be revised in 1986))

The manual is a guide to understanding the LCC method. It describes the

required procedures and assumptions, defines and explains how to apply

economic performance measures, gives examples of Federal decision problems and

their solutions, and provides worksheets and other computational aids and

instructions for calculating the required measures.

(2) Energy Prices and Discount Factors for Life-Cycle Cost Analysis

(National Bureau of Standards, NBSIR 85-3273 (revised annually))

This report, which is updated annually, gives the energy price and discount

factor multipliers needed to estimate the present value of energy and other

future costs. The data are based on energy price projections developed by the

Energy Information Administration of the U.S. Department of Energy.

(3) A User's Guide to the FBLCC Computer Program

(National Bureau of Standards, NBS TN #### (revised annually))

FBLCC, designed to run on an IBM PC/XT/AT or compatible microcomputer, can be

used to calculate the life-cyle costs, net benefits, and savings-to-investraent

ratios of Federal energy projects, consistent with the procedures and

assumptions described in Handbook 135 (see #1 above) and incorporating the

energy price data of NBSIR 85-3273 (see #2 above). FBLCC generates reports

which summarize the assumptions and output in tabular form.

The above three-volume set of reports can be used to perform two kinds of

Federal project evaluations:

(a) LCC evaluations of Federal building projects which are classified as energy conservation or renewable energy projects, and, hence, are subject to

Subpart A of Part 436 of Title 10 of the Code of Federal Regulations (10

CFR Part 436) entitled "Federal Energy Management and Planning Programs;" and

(b) LCC evaluations of Federal building projects which have an energy cost

component, but which are not primarily energy conservation or renewable energy

projects, and, hence, are subject to U.S. Office of Management and Budget

(0MB) Circular A-94, "Discount Rates to be used in Evaluating Time Distributed

Costs and Benefits," dated March 27, 1972 (unless specifically exempted).

Iv
Note to U.S. Department of Defense (DoD) users of FEMP methods: The U.S. Army

Corps of Engineers is developing a computer program, Life-Cycle Cost in Design

(LCCID), intended for use in evaluating DoD building projects. For more

information on the LCCID program, contact the program developer, Ms. Linda

Lawrie, U.S. Army Construction Engineering Laboratory (CERL), telephone

(217) 352-6511.

IMPORTANT NOTICE

The FBLCC program and supporting files are provided to the user "AS IS". The

United States Government makes no warranty, express or implied, concerning the

accuracy, completeness, reliability, usability, or suitability for any

particular purpose of the information and data contained in the FBLCC program

and supporting files or as to any results generated through their use. Therefore, the user assumes the entire risk as to the results and performance

of this software.

The FBLCC program was developed for the U.S. Department of Energy by the

National Bureau of Standards and is the property of the United States

Government. The programs and files on the FBLCC disk may be copied in

unlimited numbers. Copies made for distribution to others should be carefully

marked to identify the date and version of the program. The FBLCC program and

the information on the FBLCC diskette is not subject to copyright.

The accuracy of this program is largely dependent on the user-supplied input

data. It is the user' s responsibility to understand how the input data

affects the program output and to use the output data only as intended.

It is essential that the user return the FBLCC registration form on page vii.

Only by completing and returning this form will the U.S. Department of Energy

be able to inform the user of coding or data changes that may be announced

from time to time as needed to ensure proper execution of the program. If the

registration card has been removed from this document, please send your name,

affiliation, and address, along with the words "FBLCC REGISTRATION", to:

U.S. Department of Energy

Office of the Assistant Secretary for Conservation and

Renewable Energy

Federal Energy Management Program

CE 10.1

Washington, D.C. 20585
DISKETTE AVAILABILITY

The FBLCC program aad related files are contaiaed on a single 5-1/4 inch

diskette in MS-DOS format. A limited number of diskettes have been

distributed to agencies of the United States Government for distribution

within those agencies. These diskettes can be duplicated for distribution by

using the DISKCOPY utility on a MS-DOS-compatible microcomputer. If you

require a copy of the FBLCC diskette, it can be ordered from:

National Technical Information Service

U.S. Department of Commerce

5285 Port Royal Road

Springfield, VA 22161

Inquiries to NTIS about the availability and price of this disk should

Include the diskette name:

"Federal Building Life-Cycle Cost

(FBLCC) Program Diskette"

For a list of alternative sources of the FBLCC diskette, see the loose

Insert in this document or write to:

U.S. Department of Energy

Office of the Assistant Secretary for Conservation and

Renewable Energy

Federal Energy Management Program

CE 10.1

Washington, D.C. 20585

vi
All FBLCC users should complete and return this registration form to the

address shown below. Only through this registration process will the U.S.

Department of Energy be able to inform users of important coding, data, or procedural changes to the FBLCC program and supporting files.

FBLCC REGISTRATION FORM

NAME

AFFILIATION

ADDRESS

FBLCC VERSION

Please send to:

U.S. Department of Energy

Office of the Assistant Secretary for Conservation and

Renewable Energy

Federal Energy Management Program

CE 10.1

Washington, D.C 20585

vii

ACKNOWLEDGMENTS

The author wishes to thank Mr. William Bethea, Head of the Federal Programs

Office of the U.S. Department of Energy, and Mr. K. Dean Devine, also of the

Federal Programs Office, for their valuable support of the FBLCC program

development project.

Credit is also due to Dr. Harold Marshall, Group Leader of the Applied

Economics Group, to Rosalie Ruegg and Barbara Lippfatt, members of the Applied

Economics Group, and to Patricia Christopher of the Computer Services

Division, for their review of this User's Guide and the FBLCC computer

program.

The author also wishes to thank Laurene Linsenmayer for her care in preparing

this User's Guide for publication.

Ix
Table of Contents

Page

ABSTRACT ill

PREFACE iv

DISKETTE AVAILABILITY vi

FBLCC REGISTRATION FORM vil

ACKNOWLEDGMENTS Ix

LIST OF TABLES xi

LIST OF FIGURES xl

1

.

INTRODUCTION TO FBLCC 1 1.1 Description of FBLCC Program Package 1 1.2 Organization of this User's Guide 5

2

.

MICROCOMPUTER REQUIREMENTS 7

3

.

INSTALLING AND STARTING THE FBLCC PROGRAMS 8

4

.

RUNNING THE FBLCC SUBPROGRAMS 12

4 .

1

LCCDATA 12

4 .

2

PRINTBCF 18

4 .

3

LCCMAIN 18

4.4 PRINTLCC 21

4.5 COMPARE 23

4.6 Sequence of FBLCC Subprogram Operations 26

4.7 File Storage 27

4.8 Backup Copies of Files 30

5

.

FBLCC DATA REQUIREMENTS 31

6. FBLCC REPORTS 47

6.1 FBLCC Report Types 47

6.2 Further Examples of FBLCC Reports 49

7

.

THE DISCOUNT PROGRAM 62

REFERENCES 65

APPENDIX A. Key Variables in the FBLCC Program 66

APPENDIX B. Key Equations used in the LCCMAIN and COMPARE

Subp rog rams 70

INDEX 75

Notice: Neither the Department of Energy nor the Department of Commerce/

National Bureau of Standards assumes any liability resulting from errors or omissions in this manual or in the FBLCC program itself, or from the use of

the information obtained therein.
LIST OF TABLES

Page

1. LCC Guidellaes for Federal Energy Conservation and Renewable

Energy Projects Included in FBLCC Program 2

2. FBLCC Assumptions and Options for Non-Energy-Related

Projects in Federal Buildings 4

3. Building Characteristics File for Building A (Example) 19

4. Detailed LCC Report for Building A (Example) 22

5. Comparative LCC Analysis for Buildings A and B (Example) 24

6. Generalized Format for Building Characteristics File 32

7. Building Characteristics File for Base Case Federal Office Building

to be Used in Economic Evaluation of Alternative Design with

Reduced O&M Costs 51

8. Detailed LCC Analysis of Base Case Federal Office Building to be

Used in Economic Evaluation of Alternative Design with Reduced

O&M Costs 53

9. Comparative LCC Analysis of a Base Case and Alternative Federal

Office Building Design with Reduced O&M Costs 55

10. Building Characteristics File for R-O Attic Insulation in a Federal

Building (Example) 57

11. Detailed LCC Analysis for R-O Attic Insulation in a Federal Building

(Example) 58

12. Detailed LCC Analysis for R-19 Attic Insulation in a Federal

Building (Example) 59

13. Detailed LCC Analysis for R-30 Attic Insulation in a Federal

Building (Example) 60

14. Comparative LCC Analysis: R-30 Over R-19 Attic Insulation in a Federal Building (Example) 61

LIST OF FIGURES

1

.

General Order of FBLCC Subprogram Execution 28

2. Alternative Order of FBLCC Subprogram Execution 29

3. Main Menu from the DISCOUNT Program 63

4. Definitions Menu from the DISCOUNT Program 63

xi

1. INTRODUCTION TO FBLCC

1.1 Description of FBLCC Program Package

FBLCC is the Federal buildings version of BLCC, the Building Life-Cycle Cost

computer program developed at the National Bureau of Standards.^ FBLCC performs

comprehensive life-cycle cost (LCC) analyses of Federal buildings and related

subsystems and compares the present-value LCC of alternative building or subsystem designs to determine which is the most cost effective in a given

application. FBLCC was developed to evaluate alternative building or subsystem designs which have higher initial costs but lower operating and

maintenance costs (including energy-related costs) over their life than a

corresponding base-case design. Federal guidelines for calculating the cost

effectiveness of both energy-and non-energy-related projects are built into

FBLCC. In addition, FBLCC directly accesses DoE long-term (i.e., 25-year) energy

price projections included with the program.

The FBLCC program is primarily intended to provide computational support for NBS

Handbook 135, Life-Cycle Cost Manual for the Federal Energy Management Program .^

Handbook 135 provides specific guidelines for the LCC analysis of energy

conservation and renewable energy projects in Federal buildings in accordance

with rules set forth in the Code of Federal Regulations.^ Table 1 outlines those

guidelines from Handbook 135 which are built Into the FBLCC program. (Handbook

135 guidelines which refer to investments in leased buildings are not explicitly

^Petersen, S. R., A User's Guide to the Building Life-Cycle Cost (BLCC) Computer Program, American Society of Testing and Materials, Philadephia, PA, 1985.

^The tax and financing-related algorithms contained in the BLCC program are not

relevant to Federal buildings and have therefore been removed from the FBLCC

version.

'Ruegg, R. T., Life-Cycle Cost Manual for the Federal Energy Management Program , NBS Handbook 135 (revised) (DE820717356) , U.S. Department of Commerce, National

Bureau of Standards, Gaithersburg, MD, 1986.

^10 Code of Federal Regulations, Revised, Sec. 436 (1985).
Table 1. LCC Guidelines for Federal Energy Conservation and Renewable Energy

Projects^ Included in FBLCC Program

o Base Year = Current Year

o Discount Rate = 7% Real (i.e., net of general price inflation)

o Maxiraura Study Period = 25 years

o Initial Project Costs, including the costs of design, engineering,

purchase, and installation (but excluding sunk costs) occur as lump-sum

present-value costs at the beginning of the base year.

o Initial Conservation-Related Costs are adjusted to 90 percent of actual

cost, i.e., reduced by 10%.

o All Future Costs are estimated in Constant Base-Year Dollars.

o Purchased Energy quantities are specified at the building boundary.

o Actual Energy Prices to the agency are used in the analysis, or DOE baseyear Energy Prices are substituted if the former are not available.

o DOE projected Energy Price Escalation Rates are used in the analysis

unless specifically excepted.

o Energy and Non-Fuel Operating, Maintenance, and Replacement Costs and

Resale (Salvage) Values occur at the end of the year in which they are

estimated to occur.

^Ruegg, R. T., Life-Cycle Cost Manual for the Federal Energy Management Program , NBS Handbook 135 (revised) (DE820717356) , U.S. Department of Commerce, National

Bureau of Standards, Gaithersburg, MD, 1986.
included in the FBLCC program. However, these investments can be evaluated with

FBLCC provided that the user is familiar with these guidelines.)

The FBLCC program can also be used to calculate the LCC of Federal projects which

are not directly related to energy conservation or renewable energy projects, but

are instead subject to the provisions of the Office of Management and Budget

(0MB) Circular k-9h.^ Table 2 summarizes the LCC analysis assumptions and

options that are incorporated into the FBLCC program for use in evaluating such

projects. These projects will be referred to as "non-energy-related" projects in

this User's Guide, even though they may have some energy usage. All of the

options in Table 2 are consistent with, although not necessarily required by, 0MB

Circular A-94.

The FBLCC program and related data files are contained on one 5-1/4 inch "floppy"

disk in MS-DOS format. ^ Current (1985) Department of Energy (DOE) energy price

forecasts for the 10 DOE regions and United States average are also stored on the

disk and are automatically retrieved as appropriate by the LCCDATA subprogram.

These price forecasts (in constant base-year dollars) extend to the year 2009,

and vary both by end-use energy form and building type. (These forecasts are

usually updated annually in the fall by DoE. It is currently anticipated that

DoE will make available shortly thereafter an updated FBLCC disk.) Also

^U.S. Office of Management and Budget, "Circular A-94: Discount Rate to be Used

in Evalauting Time-Distributed Costs and Benefits," March 27, 1972.

^This product identification does not imply a recommendation nor endorsement by

the National Bureau of Standards nor the U.S. Department of Energy, nor does it

imply that the products identified are necessarily the most suitable for the

purpose used.
Table 2. FBLCC Assumptions and Options for Non-Energy-Related Projects in

Federal Buildings

o Base Year = Current Year

o Discount Rate = 10% Real (i.e., net of general inflation)^

o The Study Period can be as long as 50 years.

o A Planning/Construction Period of up to 10 years can be specified

before the Occupancy Year and planning, design and construction costs can

be phased in over any part of this period or on the Date of Occupancy.

o All Future Costs are entered in Constant Base-Year Dollars but can be

adjusted for changes in relative price levels where there is a reasonable

basis for estimating such changes.^

o Base-Year Energy Prices to the agency can be used, or the DOE base-year

Energy Prices can be used if the former are not available.

o The use of DOE Energy Price Escalation Rates is optional; user can enter

other escalation rates or modify DOE rates if there is a reasonable basis

for estimating such changes.

o Energy and Non-Fuel Operating, Maintenance, and Replacement Costs and

Resale (Salvage) Values occur at the end of the year in which they are

estimated to occur.

^Assumptions specifically related to 0MB Circular A-94.
contained on the FBLCC disk is a stand-alone discounting program called DISCOUNT,

a worksheet-generating program called BCFFORM, and a number of files containing

the data and assumptions used in the examples in this User's Guide.

The FBLCC program itself is user-oriented in that it prompts the user for all

relevant data and assumptions, advises the user when these appear to be improper,

permits the user to save and make changes to the input data file quickly and

easily, and allows the user to move freely from subprogram to subprogram by menu

selection. All entries are made from the microcomputer keyboard; the video

monitor pronqjts the user and displays input data and summary output data. A

printer is needed to print out the three types of reports generated by the FBLCC

program and the worksheet. The DISCOUNT program uses the video monitor for both

input and output data display.

1.2 Organization of this User's Guide

This User's Guide provides instructions for running FBLCC, explains the purpose

of each of the subprograms, defines all of the input data to be entered by the

user, assists the user in interpreting the three reports printed by the FBLCC

subprograms, and documents the structure and underlying computational algorithms

of the FBLCC program. In addition, it explains the use of the "DISCOUNT" program

for stand-alone discounting operations.

This User's Guide is organized to help the user get started running the FBLCC

program before the various subprograms and input requirements are discussed. The

user who is anxious to get started may want to try running the FBLCC program
immediately after reading Chapter 2 (Microcomputer Requirements) and Chapter 3

(Installing and Starting the FBLCC Programs) and refer to the following chapters

as needed. The interactive nature of the FBLCC subprograms will provide the user

with much of the information needed to proceed through a LCC analysis. However,

it is recommended that the user read Chapter 4 (Ruftning the FBLCC Subprograms) to

get a better understanding of the nature of each of the five subprograms and

their logical sequence of use before actually trying to perform a LCC analysis.

Chapter 5 (FBLCC Data Requirements) provides definitions of all of the variables

to be entered by the user. These definitions give the user a better understanding of what is being asked for when using the LCCDATA subprogram. The three

types of FBLCC reports are discussed in Chapter 6 (FBLCC Reports) along with a

further example of a FBLCC analysis. Chapter 7 explains the use of the DISCOUNT

program. For very simple LCC problems, the user may want to use the DISCOUNT

program to perform discounting operations rather than set up a comprehensive

FBLCC analysis.

The two appendices provide detailed information on the FBLCC subprograms.

Appendix A lists the key variable names that are used in the subprograms.

Appendix B documents the computational algorithms used in the LCCMAIN and

COMPARE programs. The equations in Appendix B show how the results in the

detailed LCC report and the comparative LCC report were calculated. Listings of

the BASIC code for FBLCC and its subprograms can be made directly from the FBLCC

disk at the "OK" prompt in BASIC.
2. MICROCOMPUTER REQUIREMENTS

The FBLCC program is intended for use on microcomputers with an MS-DOS operating

system, such as the IBM-PC and compatibles.^ Either a standard or wide carriage

line printer can be used to print the three reports and data collection worksheets. Ordinarily, two disk drives are required. Once the FBLCC subprograms

are copied onto a disk containing the disk operating system (DOS) and BASIC

interpreter, only one disk drive is needed. However, this will greatly reduce

storage space for the data files generated when using FBLCC. The program itself

can be run on some other microcomputers in BASIC with only minor modifications.

Some versions of BASIC may use different sjonbols for exponentiation and printfield declarations and may not recognize the clear screen command (CLS).

Approximately 50K of free Random Access Memory (RAM) is needed to run the

program after BASIC is loaded.

A limitation Imposed by the use of BASIC with single precision variables

is that only the first seven digits in a larger number are significant, and

the last of these is rounded; e.g. 1,234,567,890 is printed as 1,234,568,000.

Any dollar amount between $1,000,000 and $10,000,000 will be rounded to the

nearest ten dollars; e.g., $1,000,004 will be rounded to $1,000,000 and

$1,000,005 will be rounded to $1,000,010. Any number between $10,000,000, and

$100,000,000 will be rounded to the nearest $100, etc. Seven significant

digits provide sufficient accuracy for LCC analysis purposes, which is

limited more by assumptions regarding future costs than by significant digits.

^This product identification does not imply a recommendation nor endorsement by

the National Bureau of Standards nor the U.S. Department of Energy, nor does it

imply that the products identified are necessarily the most suitable for the

purpose used.
3. INSTALLING AND STARTING THE FBLCC PROGRAMS

All of the programs and files needed to run the FBLCC program are contained on

the FBLCC diskette. Rather than use the original diskette, it is recommended

that you copy these programs onto your own formatted diskette (along with the

disk operating system files and BASIC interpreter) or hard disk. The following

installation instructions are for an IBM-PC (or compatible microcomputer) with

two disk drives. Consult your computer operating guide for copying these

files on a single-drive or hard-disk systems.

INSTALLATION

Step 1. Insert your own formatted diskette with operating system and BASIC in

drive A. It is best if there are no other files on this disk. Insert

the FBLCC disk in drive B. Always insert the diskette with the label

side up. Close the doors to the disk drives.

Step 2. If your computer is off, switch on the printer, video monitor, and then

the computer.

Step 3. If you do not see the DOS prompt (A>), press the System Reset keys

(Ctrl> plus <Alt> plus <Del>).

Step 4. If you are prompted for the date, enter the current date (e.g.,

MM/DD/YY). Otherwise type DATE at the A> and enter the date. It is

important that you enter the correct year because the base year used in

the FBLCC program is taken from the internal clock.

Step 5. Copy all of the files from the FBLCC disk in drive B to the system disk

in drive A as follows: At the A> type COPY B;*.* A; . The following

files will be copied over to your disk in drive A:
BASIC

Files

Building Characteristics Files

LCC Output

Files

DoE Energy

Price Files

FBLCC.BAS FEUl.BCF FEUl.LCC ENCOSTXX.SEQ

L CO)ATA. BAS FEU2.BCF FEy2.LCC ENCOSTFL.RAN

PRINTBCF.BAS FED3.BCF FED3.LCC

LCCMAIN.BAS FEU4.BCF FED4.LCC

PRINTLCC.BAS FED5.BCF FEDS. LCC

COMPARE.BAS FED6.BCF FED6.LCC

BCFFORM.BAS FED7.BCF FED7.LCC

DISCOUNT.BAS

The building characteristics files and LCC output files listed here contain data

and calculations used in the examples discussed in this User's Guide and are not

integral to the FBLCC program package. You may delete them when you no longer

need them.

Step 6. Remove the FBLCC disk and store it for safekeeping. Installation is

complete.

STARTING FBLCC

The following instructions for running the FBLCC program are based on the

installation instructions shown above.

Step 1. Insert your diskette containing BASIC and FBLCC files in drive A.

If you want to save the files that you create on another disk,

enter a formatted disk for this purpose in drive B.
Step 2. Follow steps 2, 3, and 4 of the installation instructions above as

necessary.

Step 3. At the A>, type: BASIC F8LCC /S;156 . (The /S:156 is needed to

allocate space for the random access files used to retrieve the DoE

energy price projections. Some microcomputers use other names for

BASIC, e.g., GWBASIC, MBASIC.) The following messages will appear

on the video monitor:

k-kic-fck^'kieiffc-k-kitieic-kidfkieick'kidfk-ifk'k F B L C C *******************************

FBLCC computes the LIFE-CYCLE COST (LCC) of Federal buildings (or

related subsystems) and COMPARES the LCC of alternative building (or

subsystem) designs having the same purpose. An FBLCC analysis is most

useful in the evaluation of first cost—future cost tradeoffs, i.e.,

increases in initial design or construction costs which reduce future

operating- related costs (e.g., energy costs) but do not affect other

requirements of the building design (e.g., the total rentable floor

area) .

The computational rules for a LCC analysis of a Federal project depend

on the purpose of that project:

(1) For ENERGY CONSERVATION or RENEWABLE ENERGY PROJECTS, LCC

computations are based on NBS Handbook 135, Life-Cycle Cost Manual

for the Federal Energy Management Program , (revised 1982).

(2) For other evaluations requiring an analysis of first cost—future

cost tradeoffs, LCC computations are based on OMB Circular A-94,

"Discount Rate to be Used in Evaluating Time-Distributed Costs and

Benefits," March 27, 1972.

FBLCC consists of 5 subprograms, each with a distinct function:

(1) LCCDATA - A user-interactive program for creating or modifying a BUILDING CHARACTERISTICS FILE (BCF) for a particular building or subsystem design. The BCF is a complete list of all the data

and assumptions for that design.

(2) PRINTBCF - Prints the BCF created or modified by (1).

(3) LCCMAIN - Computes the LCC for a building or subsystem, based on its BCF.

(4) PRINTLCC - Prints a detailed LCC REPORT based on the results of (3).

(5) COMPARE - Computes and prints a COMPARATIVE LCC ANALYSIS of two

alternative building or subsystem designs.

You must create a BUILDING CHARACTERISTICS FILE for a project with LCCDATA

before running PRINTBCF or LCCMAIN. You must compute the LCC of the project with LCCMAIN before running PRINTLCC. You must run LCCMAIN for a base case and at least one alternative design before running COMPARE.

Enter subprogram code to proceed:

10
Step 4. Type the aaraber correspoadlng to the first subprogram to be used and

proceed as directed by Instructloas on the video monitor. Each of these

five subprograms and their Input requirements are described In the

following section. If you wish to stop the execution of the FBLCC program

at this point, press the <ENTER> key. Execution of this program or any of

the other subprograms can be stopped at any point by pressing <CTKL>

<BREAK>.

Step 5. Turn on <caps lock>. All alphabetic entries must be entered In upper

case letters.

11
4. RUNNING THE FBLCC SUBPROGRAMS

The FBLCC program is divided into an introductory module (FBLCC) and five major

subprograms, each with its own specific function. As indicated above, the FBLCC

module provides a few brief instructions to the user and provides a menu which

allows the user to proceed to any one of the subprograms. After the start-up

sequence, the FBLCC module itself is no longer needed. This chapter describes

the five major subprograms of FBLCC and the recommended sequence of subprogram

operation. All of these subprograms use the video monitor to prompt the user for

data entries.

4.1 LCCDATA - This first subprogram works in an interactive mode with the user

to create or modify a building characteristics file for the project to be

evaluated. A building characteristics file must be created and saved with

LCCDATA before any of the other subprograms can be run. The building

characteristics files contain a cor^lete list of the data and assumptions

used in the actual LCC calculations. A complete listing and description of

these data and assumptions are provided in Chapter 5, "FBLCC Data Requirements."

The building characteristics file is divided into five sections:

(1) project title,

(2) basic LCC analysis assumptions,

(3) capital component and replacement cost data,

(4) operating and maintenance cost data, and

(5) energy cost data.

12
Each time LCCDATA is Initiated, It asks the user If a build lag

characteristics file Is to be created or modified:

ENTKK C TO CRIiATK NKW KILK OR M TO MODIFY /iXISTlMG FII.K?

Enter C for create or M for modify. Simply pressing <KNTKR/' in

response to this question displays a menu which allows tlie user to

move to the other subprograms or stop.

If a new file is to be created, the user will be prompted for the file name

under which this file will be saved:

NAME OF NEW FILE?

A valid file name must be entered. A valid file name begins with a

letter and has no more than eight alpha or numeric characters, e.g.,

HOUSEl . (No quotations or other punctuation should be used.) All

building characteristic files are automatically provided with the suffix

".BCF"; this suffix will appear when listing the directory of files but is

not needed when running the program.

The disk drive designator to store the new file must also be entered:

WHICH DISK TO STORE filename (A, B, C)?

If you designate the drive in which the FBLCC disk is located (usually A)

the BCF file will be saved on that disk. If you designate the other drive

(usually B) you must have a formatted disk in that drive on which to save

the BCF files.

See "File Storage" below in this chapter for suggested procedures for

storing files.

13
In the file creation mode, corrections cannot be made once the <ENTER>

(i.e., carriage return) key is pressed for each entry. All corrections

are made in the file modification mode. If you wish to make a correction

before entering additional data, you can move to the file modification

mode by pressing <ENTER> for each query, defaulting to the value shown at

each point, until the modification menu appears. (At several points, you

may need to specify a value within the limits displayed on the screen.)

Once in the modification mode you can change entries in each section of

the building characteristics file (see below). Alternatively, you can

press the <Ctrl> <BREAK> and start over by typing RUN. In this latter

case, however, you will lose all data entered up to that point.

In general, if a new building characteristics file will be at all

similar to an existing building characteristics file, it is much

easier to modify the existing file than to create a new one. If a

previously created file is to be modified, LCCDATA asks for the name

of the existing file to be modified and a new file name for saving the

modified file:

NAME OF EXISTING FILE TO BE MODIFIED?

WHICH DRIVE TO FIND filename (A, B, C)? •

NAME OF NEW FILE?

WHICH DISK TO STORE filename (A, B, C)?

If the modified file is to replace the existing file, save the new file

under the old file name. Important: if the name designated for any new

file is the same as that for any existing building characteristics file on

the disk, the modified file will replace that existing file. The user

would be wise to keep a log of all data files created and saved on the

14
disks. Data files which are no longer needed can be deleted from disk

storage using the appropriate "erase" or "kill" command. (Remember to

include the suffix when deleting a file.)

LCCDATA prompts the user for all data required to run the LCCMAIN program,

Entries which are illegal or illogical are rejected. When an improper

entry is made, the allowable range for that value is displayed and the

user is asked to reenter the data requested.

Here are a few important "do's and don'ts" when setting up a building

characteristics file:

° Do press the <ENTER> key after each complete response.

" Do enter all percentages as whole numbers, not decimals;

e.g., 50% is entered as 50, not 0.50.

° If more than one entry is required on a line, do separate each

entry with a comma (,); e.g.: 50,5,10.

Do not enter $ or % signs with any number.

In cases where more than one variable is requested at a time, separated

by commas, but the user fails to make all of the required entries, a

"redo from start" prompt appears, requiring that the entire ILne of data

be reentered. (This does not mean that you have to start from the

beginning of the file again.)

When creating a new building characteristics file, all relevant data must

be entered sequentially as requested. Each of these data requirements

15
are described in Chapter 5, "FBLCC Data Requiremeats. " In both the

creation and modification modes, a default value will be shown for most data

entries as they are requested. By pressing the <ENTER> key for any request,

the default value is automatically entered into the new file. In the file

creation mode, many of the default values are set at zero; some of these

zeros must be changed to correspond to the range of values displayed in the

prompt message (e.g., the expected life of a building component). If the

response is invalid, the exact range of valid responses is displayed. In

the file modification mode, the values in the existing file automatically

become the default values for the new file.

After completing the file creation sequence, LCCDATA moves into the file

modification mode. This allows the user to make corrections to this file

before saving it. In the file modification mode, the user can move to

any section of the building characteristics file in order to change one

or more data entries in that section. The following menu is displayed

in order to permit the user to move into the section where the change is

to be made:

WHAT DO YOU WANT TO DO NOW?

(1) MODIFY PROJECT TITLE.

(2) MODIFY BASIC LCC ANALYSIS ASSUMPTIONS.

(3) MODIFY CAPITAL COMPONENT AND REPLACEMENT COST DATA.

(4) MODIFY OPERATING & MAINTENANCE COST DATA.

(5) MODIFY ENERGY COST DATA.

(6) SAVE NEW FILE.

(7) STOP.

ENTER CODE NUMBER...? .

When modifying an existing file, the user can move very quickly through

any section of that file by pressing the <ENTER> key (i.e., defaulting to

the value shown) for all but those entries to be changed. The user must

16
move through the entire section selected for modification In order to

return to the menu.

After the desired modifications (if any) are made, the file must be saved

before creating/modifying another building characteristics file or before

moving to the next subprogram. The file save command is executed by

designating the appropriate menu selection (6) . The file is saved on the

diskette, under the name specified at the outset of the file creation/

modification sequence, with the ".BCF" suffix added.

Once the file has been saved, an expanded menu is displayed:

WHAT DO YOU WANT TO DO NOW?

(1) MODIFY PROJECT TITLE.

(2) MODIFY BASIC LCC ANALYSIS ASSUMPTIONS.

(3) MODIFY CAPITAL COMPONENT AND REPLACEMENT COST DATA.

(4) MODIFY OPERATING & MAINTENANCE COST DATA.

(5) MODIFY ENERGY COST DATA.

(6) SAVE NEW FILE.

(7) STOP.

(8) CREATE/MODIFY ANOTHER BLDG CHARACTERISTICS FILE.

(9) PRINT BLDG CHAR'STICS FILE (GO TO 'PRINTBCF' PROGRAM).

(10) CALCULATE LCC (GO TO 'LCCMAIN' PROGRAM).

(11) PRINT LCC ANALYSIS (GO TO 'PRINTLCC PROGRAM).

(12) COMPARE LCC OF TWO BUILDINGS (GO TO 'COMPARE' PROGRAM).

ENTER CODE NUMBER...?

This expanded menu allows the user to make more changes to the building

characteristics file just created or modified (1-5), to resave the file

(6), to stop (7), to create or modify another building characteristics

file (8), or to move to another subprogram operation (9-12). The proper

sequence of subprogram operations is described below in section 4.6.

17
4.2 PRINTBCF - This subprogram prints out a summary of a building

characteristics file that has been previously created (or modified) by

111' LCCDATA and saved on the disk. The user must specify the name and location

of the file to be printed (Do not include the ".BCF" suffix.):

NAME OF BLDG CHAEIACTERISTICS FILE TO BE PRINTED?

WHICH DRIVE TO FIND filename (A, B, C)?

An example of the file summary printed by PRINTBCF is shown in Table 3.

The file is divided into the five sections referenced in LCCDATA. This

printed summary of the building characteristics file contains a complete

listing of the input variable values used to run the LCCMAIN subprogram

(described below) for the designated project.

Once the file has been printed out, a menu is displayed which allows

the user to print out another building characteristics file or move to

another subprogram operation.

4.3 LCCMAIN - This is the "core" subprogram of the overall FBLCC program.

LCCMAIN computes the present value and annualized value of all costs

incurred over the study period. When running the LCCMAIN subprogram, the

name of the building characteristics file for the project to be evaluated

must be entered (without the ".BCF" suffix):

ENTER BLDG CHARACTERISTICS FILE NAME?

WHICH DISK TO FIND filename (A, B, C)?

After the LCC analysis is completed, the LCC computations are saved in a

LCC output file named by the user:

ENTER LCC OUTPUT FILE NAME TO STORE RESULTS OF THIS LCC ANALYSIS?

WHICH DISK TO STORE filename (A, B, C)?

18
Table 3. Building Characteristics File for Building A (Example)

This example represents the base-case data file for the LCC analysis of a Federal office building for which an energy-conserving alternative is to be

evaluated.

BUILDING CHARACTERISTICS FILE

FILE NAME: FEDK.BCF)

FILE LAST MODIFIED ON 02-01-1986 01:20:15

PROJECT TITLE: BUILDING A

BASIC LCC ANALYSIS ASSUMPTIONS:

ANALYSIS TYPE: NBS HANDBOOK 135

BASE DATE FOR LCC ANALYSIS: 1985

STUDY PERIOD: 20 YEARS

OCCUPANCY DATE: 1985

DISCOUNT RATE (REAL) = 7.00V. BUILDING TYPE = 2 COMMERCIAL

DOE REGION = 1 CAPITAL COMPONENT AND REPLACEMENT COST DATA: NUMBER OF CAPITAL COMPONENTS: 2 CAPITAL COMPONENT DATA: COMPONENT NAME

INITIAL COMPONENT COST

INIT. CONSERVATION-RELATED COST

EXPECTED COMPONENT LIFE(YRS)

AV6 PRICE ESC RT DURING CONST.

AVG PRICE ESC RT DURING QCC.

RESALE VALUE FACTOR

NUMBER OF REPLACEMENTS

fcOST-PHASING SCHEDULE BY YEAR OF CONSTRUCTION AND AT OCCUPANCY:

AT OCCUPANCY 100.007. lOO.OOX

REPLACEMENTS TO CAPITAL COMPONENTS:

REPLACEMENTS TO EQUIPMENT:

REPLACEMENT NUMBER 1 YEAR OF REPLACEMENT 15

COST OF REPLACEMENT 25000

EXPECTED REPL. LIFE (YRS) 15

RESALE VALUE FACTOR O.OOX

OPERATING AND MAINTENANCE COST DATA:

STRUCTURE EQUIPMENT

500000 lOOOOO

50 20

0.007. 0.007.

0.007. 0.007.

50.007. 25.007.

1

ANNUAL RECURRING O AND M COST = * 10000

ANNUAL RATE OF INCREASE FOR A.R.C. = 0.007. NUMBER OF NON-ANNUAL RECURRING O AND M COSTS = 5

ANNUAL RATE OF INCREASE FOR N. A.R.C. COSTS = 0.07. NON-ANNUAL RECURRING D&M COSTS:

« YEAR AMOUNT

1 5 $20000

2 8 * 10000

3 12 *20000

4 16 *ioooo

5 18 *15000

19
Table 3. Building Characteristics File for Building A (Example) (Continued)

ENERGY COST DATA:

NUMBER OF ENERGY TYPES = 2

ENERGY TYPE NO. 1 = ELECTRICITY

AVG ANNUAL CONSUMPTION = 1000.0 MILLION BTU

PRICE PER MILLION BTU =*26.03

ANNUAL DEMAND (AND/ OR OTHER CHARGE) = *0

ESCALATION RATE METHOD = 2 YEAR RATE YEAR RATE

1985 0.96-/. 1995 1.317. 19B6 3.35X 1996 1 . 337. 1987 4.35"/. 1997 1.317. 19BB -2.097. 199B 1 . 337. 19B9 -0.22y. 1999 1.317. 1990 -0.377. 2000 0.B47.

1991 -0. 15X 2001 0,B37.

1992 2. IBX 2002 O.B37.

1993 -1.297. 2003 0.B57.

1994 0.007. 2004 O.B17.

ENERGY TYPE NO. 2 = DISTILLATE OIL

AVG ANNUAL CONSUMPTION = lOOO.O MILLION BTU

PRICE PER MILLION BTU = *6.a5

ANNUAL DEMAND (AND/OR OTHER CHARGE) = *0

ESCALATION RATE METHOD = 2 YEAR RATE YEAR RATE

1985 -2.277. 1995 3.927.

1986 0.317. 1996 3.9B7.

1987 3.247. 1997 3.937.

1988 3.297. 199B 3.987.

1989 3.477. 1999 3.927.

1990 5.597. 2000 3.237.

1991 5.437. 2001 3.227.

1992 5.037. 2002 3.297.

1993 4.907. 2003 3. 1B7. 1994 4.6B7. 2004 3.247.

20
This file name can be the same as the name used for the building

characteristics file used in calculating the life-cycle cost, or it can be

different. A ".LCC" suffix is automatically added to this LCC output file

name. (If you make several runs for the same project with different discount rates, you might want to use different names for the LCC output

file.) The LCC output file is the basis of the comprehensive LCC report

printed out later using PRINTLCC and the conq)arative economic analysis made

by COMPARE. As with building characteristics files, it is wise to keep a

log of all the LCC output files created by LCCMAIN.

After the LCC computations have been convicted and the LCC output file

saved, a menu is displayed which allows the user to perform another LCC

analysis using a different building characteristics file or to move to

another subprogram operation.

4.4 PRINTLCC - This subprogram prints out a detailed life-cycle cost

report for a designated building, using the LCC output file for that

building created by LCCMAIN. Table 4 shows an example of this

report. When running PRINTLCC, the user must enter the name of the

LCC output file when asked (without the ".LCC" suffix):

ENTER NAME OF LCC OUTPUT FILE TO BE PRINTED?

WHICH DISK TO FIND filename (A, B, C)?

After the report is printed, a menu is displayed which allows the

user to print a life-cycle cost report for another building or move

to another subprogram operation.

21
Table 4. Detailed LCC Report for Building A (Example)

This example represents the base-case LCC analysis for a Federal office building

for which an energy-conserving alternative is to be evaluated.

* • • « FBLCCANALYSIB •

PART I - INITIAL ASSUMPTIONS AND COST DATA

PROJECT NAME: BUILDING A RUN DATE: 03-05-1 986 01:288 43

BLDG. CHAR. FILE NAME: FEDl.BCF, LAST MODIFIED 02-01-1986 OllZOilS

LCC OUTPUT FILE NAME: FEDl.LCC, CREATED 02-03-1986 13t48i42

LCC ANALYSIS TYPE: NBS HANDBOOK 135

STUDY PERIOD: 20 YEARS <1985 TO 2005)

DISCOUNT RATE: 7.0%

BUILDING TYPE: COMMERCIAL

DOE REGION: 1 INITIAL CAPITAL COMPONENT COSTS (NOT DISCOUNTED)

TOTAL FOR STRUCTURE

TOTAL FOR EQUIPMENT

TOTAL PROJECT COST (ACTUAL)

LESS FEDERAL CONSERVATION CREDIT (a)

TOTAL ADJUSTED PROJECT COST

INITIAL COST

*500,000

*100,000

*600,000

»0

*600 , 000

ENERGY-RELATED COSTS

ENERGY

TYPE

MMBTU/

YEAR

PRICE

(*/MMBTU)

DEMAND

COST

ELECTRICITY

DISTILLATE

1000.0

1000.

O

*26.03

»6.B5

*o

*0

UPW*

FACTOR

11.48

13.82

TOTAL

P.V. COST

*29a738

*94763

(a) TO REFLECT 10% FIRST COST ADJUSTMENT RULE IN NBS HANDBOOK 135.

PART II LIFE-CYCLE COST ANALYSIS: DISCOUNT RATE = 7.0%

PROJECT NAME: BUILDING A RUN DATE: 03-05-1986/01:28:43

PRESENT VALUE

(1985 DOLLARS)

ANNUAL VALUE

(1985 DOLLARS)

A. INITIAL INVESTMENT REQUIREMENTS

B. OPERATING, MAINTENANCE & RELATED COSTS:

ANNUALLY RECURRING COSTS (NON-ENERGY)

NON-ANNUALLY RECURRING COSTS

ENERGY COSTS

SUBTOTAL

C. REPLACEMENTS TO CAPITAL COMPONENTS

LESS: REMAINING VALUE AT END OF

STUDY PERIOD

£. TOTAL LIFE-CYCLE PROJECT COST

*600 , OOO

*105,940

*36,7B5

*393,501

*536 , 227

*9,061

-*71 ,065

*1, 074,223

$56,636

10,000

*3,472

*37,144

*50,616

S855

-*6 , 708

»101,399

• »»•»»**»»»*»»»•»»»»»»»«»»»»*»»»*

22
4.5 COMPARE - This subprogram performs a comparative LCG analysis of two

building or system designs (a "base case" and "alternative") once the LCC

output files have been created by LCCMAIN for both. An example of such a

comparative analysis is shown in Table 5 for a new building design problem.

Two alternative building designs are compared in this example to determine

which has the lower LCC.

Individual design modifications can also be evaluated at the component

level (e.g., storm windows over existing single-pane windows), without

performing a comprehensive analysis of the entire building. In this latter

type of analysis, the base case can be set up as a "do-nothing" case with

zero initial cost, while the alternative case may include the initial cost

(and replacement costs, if any) of the modification. In addition, those

future cost items related to the component modification (e.g., maintenance

and energy costs) must be specified for both cases (i.e., before and after

the modification is made) . The COMPARE program will then determine whether

the design modification is cost effective on a LCC basis. An example of

the use of the FBLCC program for the analysis of an individual building

component (attic insulation) is provided in Chapter 6.

A comparative analysis requires that the study period, discount rate, and

other basic LCC analysis assumptions be the same for both designs. In

addition, the alternative building design must have a higher initial cost

and lower future costs (e.g., operating, maintenance, or energy costs) than

the base case design. (If an alternative design has both a lower initial

cost and lower future costs than the base case, no analysis is needed to

23
Table 5. Comparative LCC Analysis for Buildings A and B (Example)

This example shows the comparison of LCC costs for a base-case and alternative

(energy-conserving) Federal office building.

» »

»• * * *

• * » • FBLCC: COMPARATIVE LCC ANALYSIS

BASE CASE >= BUILDING A

ALTERNATIVE -= BUILDING B PRINCIPAL STUDY PARAMETERS:

LCC ANALYSIS TYPE: NBS HANDBOOK 135

BASE YEAR: 1985

STUDY PERIOD: 20 YEARS

DISCOUNT RATE: 7. OX

FED. CONSERVATION CREDIT: lOX

DOE REGION: 1 BUILDING TYPE: 2 (COMMERCIAL)

BASE CASE FILES: FEDl.BCF

ALTERNATIVE CASE FILES: FED2.BCF

RUN DATE: 03-05-1986 01:55:50

FED 1. LCC

FED2.LCC

COMPARISON OF PRESENT-VALUE COSTS

BASE CASE:

BUILDING A

(1)

ALTERNATIVE:

BUILDING B

(2)

SAVINGS

FROM ALT. (3)=(l)-(2)

INVESTMENT-RELATED COSTS:

INITIAL INVEST. (AS OF OCCUPANCY)

REPLACEMENTS TO CAPITAL COMPONENT

LESS: RESALE VALUE

SUBTOTAL

OPERATING AND MAINTENANCE-RELATED COSTS:

AN. AND NON-AN. O&M COSTS

ENERGY EXPENDITURES

SUBTOTAL

*600,000

*9,061

-*7 1,065

*537,996

*142,726

*393,501

*536,227

*654,000

*10,873

-*7B,172

*586,702

$132,132

*256,498

»388 , 630

-*54 , OOO

-*1,812

*7,107

-*4a,706

*10,594

*137,003

*147,597

TOTAL P.V. LIFE-CYCLE COST 1,074,223 *975,331 *9B,892

COMPUTATION OF NET SAVINGS FOR ALTERNATIVE

NET SAVINGS = P.V. OF O&M-RELATED SAVINGS

LESS ADD'L INVEST. -RELATED COSTS

147,597

-*48 , 706

*9B,B92

COMPUTATION OF SAV I NGS-TO- INVESTMENT RATIO (SIR) FOR ALTERNATIVE

SIR = P.V. OF 08tM-ELATED SAVINGS

P.V. OF ADD'L INVEST. -RELATED COST

* 147597

*4B706

3.03

24
show that the alternative design has the lower life-cycle cost.) If the

alternative building design has a lower initial cost and higher future

costs than the base-case design, COMPARE allows the user to switch the base

case and alternative case designators.

In general, a comparative analysis of two alternative building designs

requires that they both have the same general purpose and provide

approximately the same level of ammenities. The FBLCC program does not

compute benefits from building projects which cannot be directly expressed

in terms of changes in owning and operating costs (e.g., increased

rental revenues) . If the level of ammenities is expected to change

significantly as the result of a design change (e.g., the use of a passive

solar atrium), the non-energy related benefits can be incorporated into the

LCC analysis by subtracting them from annually (or non-annually) recurring

operating and maintenance costs.

The present-value net savings and savings-to-investment ratio (SIR) are

both computed for the alternative building design in the comparative

analysis. The SIR for the alternative design is based on its additional

investment requirements relative to the base case. When a planning/

construction period is included in the LCC analysis (this is only allowed

for a non-energy-related building project) all costs incurred during the

planning/construction period and on the date of occupancy are considered to

be initial investment costs.

25
When the comparative analysis is completed, a menu is displayed which

allows the user to perform another comparative analysis or to move to

any other subprogram operation.

A senstivity analysis of the cou^arative LCC measures (net savings and

savings-to-investraent ratio) is strongly encouraged when there is considerable uncertainty about the appropriate values to use in performing the

evaluation of Federal building- re la ted projects. For example, uncertainty

about the life of the project, the quantity of energy it will save, and/or

its future replacement costs may raise doubts about its cost effectiveness.

To assess the likely range of possible outcomes, several evaluations of the

project can be made, based on alternative values of the parameters in

question. In no case, however, should the appropriate discount rate be

changed in performing a sensitivity analysis of Federal building- related

projects.

4.6 Sequence of FBLCC Subprogram Operations

Usually the FBLCC subprogram sequence is started with the creation of a

building characteristics file, since the other subprograms cannot be run

until such a file has been created. Thus a "1" is normally entered when the

main FBLCC menu is displayed. This loads and starts the LCCDATA subprogram.

After completion of the LCCDATA file creation or modification session, or

any other subprogram task, a menu will appear which allows the user to

rerun that subprogram or execute another subprogram. If a new subprogram

is specified, it is automatically loaded and initiated. If, for any

reason, the execution of a subprogram is terminated by a menu command, an

26
error, or the <Ctrl> <BREAK> command, the same subprogram can be restarted

by typing RUN . In some cases, after an error message or a <Ctrl> <BREAK>

command, a subprogram can be continued rather than restarted by typing

CONT <ENTER> (or pressing function key <F5>). Any subprogram can be

started at the "OK" or "READY" prompt by typing RUN "NAME" , where where NAME

is the name (not the number) of the subprogram to be executed. (Quotation

marks must be entered as shown.)

The flow chart in Figure 1 gives the user an overview of the typical

sequence of operations for the five major LCC subprograms. However, this

sequence is not entirely mandatory. For example, printing the building

characteristics file with PRINTBCF does not need to be done before

computing the LCC with LCCMAIN. Similarly, once the LCC analyses have been

completed for two design alternatives, the comparative analysis can be made

using COMPARE without printing the detailed LCC report using PRINTLCC. If

a comparison of two design alternatives is required, it is usually faster

to run LCCDATA, PRINTBCF, LCCMAIN, and PRINTLCC for both the base and

alternative cases before moving on to the next subprogram in the sequence,

as shown in Figure 2. This saves subprogram loading time for the second set

of calculations.

4.7 File Storage

The building characteristics files and LCC output files created and saved

during a FBLCC session can be stored on either the FBLCC disk Itself or on

a second formatted disk in another disk drive. In general it is better to

save these files on a second disk because the FBLCC disk has limited

additional storage capacity and therefore may fill up. If the disk fills

27
Figure 1. General Order of FBLCC Subprogram Execution

START UP

(FBLCC)

CREATE ALTERNATIVE

BLDG. CHAR. FILE

(LCCDATA)

PRINT OUT

ALTERNATIVE

BLDG. CHAR. FILE

(PRINTBCF)

COMPUTE LCC OF

DESIGN ALTERNATIVE,

CREATE LCC OUTPUT

FILE

(LCCMAIN)

PRINT OUT

LCC REPORT FOR

ALTERNATIVE BLDG.

(PRINTLCC)

COMPARE LCC

OF BASE CASE

AND ALT. CASE

(COMPARE)

28
Figure 2. Alternative Order of FBLCC Subprogram Execution

START UP

(FBLCC)

i

CREATE BLDG.

CHAR. FILE

(LCCDATA)

CREATE ALTERNATIVE

BLDG. CHAR. FILE

(LCCDATA)

PRINTOUT

BLDG. CHAR. FILE

(PRINTBCF)

PRINT OUT

ALTERNATIVE

BLDG. CHAR. FILE

(PRINTBCF)

' ' COMPUTE LCC OF

DESIGN ALTERNATIVE.

CREATE LCC OUTPUT

FILE

(LCCMAIN)

COMPUTE LCC.

CREATE LCC OUTPUT

FI

(LCC^

LE

^AIN)

'

1 PRINT OUT

LCC REPORT FOR

ALTERNATIVE BLDG.

(PRINTLCC)

PRINT OUT

LCC REPORT

(PRINTLCC)

COMPARE LCC

OF BASE CASE

AND ALT. CASE

(COMPARE)

29
up in the process of saving a file, this can cause an error which will

terminate the run. The disk drive designator Is always requested when

reading from or writing to a disk file.

4.8 Backup Copies of Files

After conqjletlng the FBLCC analyses, you may want to make backup copies of

any building characteristics files or LCC files that were created during

that session. You can use your computer's "COPY" utility to copy these

files to a formatted disk kept for this purpose, or the "DISKCOPY" utility

to make a copy of the entire contents of the disk containing these files.

Most microcomputers require that you return to the "SYSTEM" mode before you

copy or backup the contents of a disk.

30
5. FBLCC DATA REQUIREMENTS

All of the data required to perform a LCC analysis for a particular project are

contained in the building characteristics file assigned to that project. The

LCCDATA subprogram is used to set up or modify a building characteristics file.

LCCDATA uses the video display to prompt the user for data entries from the

keyboard. Note that all costs are entered in base-year dollars (i.e., today's

costs) and that all price escalation rates are entered in real terms (i.e., net

of general inflation.)^

A generalized worksheet that can be used to collect and organize the data

necessary for the creation of a building characteristics file is shown in

Table 6. This worksheet can be printed out by running the utility program called

"BCFFORM". BCFFORM is not an integral FBLCC subprogram; it should be run

separately from the FBLCC analysis session. To run BCFFORM in BASIC, type

RUN "BCFFORM" . Each of the variables listed in this file format is defined

bel<w. The user should be familiar with these definitions, and be prepared with

the data needed to set up a building characteristics file, before running the

LCCDATA subprogram.

^To adjust a price escalation rate in nominal terms (i.e., including general

inflation) to real terms (i.e., net of general inflation), use the following

formula:

E = (1 + E)/(l + GI) -1

where E' is the escalation rate in real terms (decimal equivalent),

E is the escalation rate in nominal terms (decimal equivalent) , and

GI is the rate of general inflation (decimal equivalent)

.

Thus, for example, if E = 10% and GI = 6%, E' = 1.1/1.06 -1 = 0.0377, or 3.77%

31
Table 6. Generalized Format for Building Characteristics File

GENERALIZED FORMAT FOR BUILDING CHARACTERISTICS FILE

SECTION 1. PROJECT TITLE:

SECTION 2. BASIC LCC ANALYSIS ASSUMPTIONS:

STUDY PERIOD (YRS)

OCCUPANCY YEAR

LCC ANALYSIS TYPE

DOE REGION

BUILDING TYPE CODE

SECTION 3. CAPITAL COMPONENT AND REPLACEMENT COST DATA:

NO. OF CAPITAL COMPONENTS:

COMPONENT NO. COMPONENT NAME

INITIAL COST

INITIAL CONSER. -RELATED COST

EXPECTED COMP. LIFE (YRS)

+AV6. PRICE ESC. DURING P/C

+AVG. PRICE ESC. DURING OCC.

RESALE VALUE FACTOR C/.) NUMBER OF REPLACEMENTS

+COST-PHASING SCHEDULE BY YEAR OF PLANNING/CONSTRUCTION PERIOD AND AT OCCUPANCY

PLANNING/CONSTRUCTION YEAR 1 PLANNING/CONSTRUCTION YEAR 2 PLANNING/CONSTRUCTION YEAR 3

PLANNING/CONSTRUCTION YEAR 4 PLANNING/CONSTRUCTION YEAR 5

AT OCCUPANCY

COMPONENT NO. COMPONENT NAME

INITIAL COST

INITIAL CONSER. -RELATED COST

EXPECTED COMP. LIFE (YRS)

+AVG. PRICE ESC. DURING P/C

+AVG. PRICE ESC. DURING OCC.

RESALE VALUE FACTOR C/.) NUMBER OF REPLACEMENTS

+COST-PHASING SCHEDULE BY YEAR OF PLANNING/CONSTRUCTION PERIOD AND AT OCCUPANCY

PLANNING/CONSTRUCTION YEAR 1 PLANNING/CONSTRUCTION YEAR 2 PLANNING/CONSTRUCTION YEAR 3

PLANNING/CONSTRUCTION YEAR 4 PLANNING/CONSTRUCTION YEAR 5 AT OCCUPANCY

USED ONLY FOR ENERGY RELATED PROJECTS (LCC ANALYSIS TYPE 1) USED ONLY FOR NON-ENERGY RELATED PROJECTS (LCC ANALYSIS TYPE 2)

32
Table 6. Generalized Format for Building Characteristics File (continued)

REPLACEMENTS TO CAPITAL COMPONENTS

COMPONENT NO. 1

YEAR OF REPLACEMENT

INIT. COST OF REPLACEMENT (UNADJ).

EXPECTED REPLACEMENT LIFE (YRS)

RESALE VALUE (X OF INT COST)

COMPONENT NO. 2

2 3

YEAR OF REPLACEMENT

INIT. COST OF REPLACEMENT (UNADJ),

EXPECTED REPLACEMENT LIFE (YRS)

RESALE VALUE (X OF INT COST)

COMPONENT NO. 3

2 3

YEAR OF REPLACEMENT

INIT. COST OF REPLACEMENT (UNADJ)

EXPECTED REPLACEMENT LIFE (YRS)

RESALE VALUE (% OF INT COST)

COMPONENT NO. 4

2 3

YEAR OF REPLACEMENT

INIT. COST OF REPLACEMENT (UNADJ)

EXPECTED REPLACEMENT LIFE (YRS)

RESALE VALUE (7. OF INT COST)

COMPONENT NO. 5

2 3

YEAR OF REPLACEMENT

INIT. COST OF REPLACEMENT (UNADJ)

EXPECTED REPLACEMENT LIFE (YRS)

RESALE VALUE (7. OF INT COST)

COMPONENT NO. 6

2 3

YEAR OF REPLACEMENT

INIT. COST OF REPLACEMENT (UNADJ)

EXPECTED REPLACEMENT LIFE (YRS)

RESALE VALUE (7. OF INT COST)

33
Table 6. Generalized Format for Building Characteristics File (continued)

SECTION 4. OPERATING AND MAINTENANCE COST DATAi

ANNUAL RECURRING COST (BASE-YEAR »'S)

+AVG. AN. RATE OF INCREASE, ARC

NO. OF NON-AN RECURRING COSTS (NARC'S)

+AVG. AN. RATE OF INCREASE, NARC'S

NDN-ANNUALLY RECURRING COSTS (BASE-YEAR DOLLARS)

(NOTE: YEARS BEGIN WITH OCCUPANCY; E.G., 1,2, ,50)

NO. YEAR AMOUNT NO. YE

1 14 . .. 2 ..... 15 . . . 3 16 ... 4 17 . . . 5 IB ... 6 ..... 19 . . . 7 20 ... a ..... 21 ... 9 22 ... lO ..... 23 . . . 11 24 . .. 12 ..... 25 . . . 13 Zb ... SECTION :5. ENERGY COST DATA

AMOUNT NO. YEAR AMOUNT NO

27 40

28 41 29 42

30 43

31 44

32 45

33 46

34 47

35 48

36 49

37 50

3B

39

YEAR AMOUNT

NUMBER OF ENERGY TYPES

•CUMULATIVE GENERAL INFLATION FROM MID-YEAR 1985 TO DATE

ENERGY TYPE

ENERGY TYPE CODE

ANNUAL CONSUMP. (MIL. BTU)

**PRICE PER MILLION BTU * DEMAND (OR OTHER) CHARGE * **AVG. AN. RATE OF INCREASE

DURING PLAN/CONSTRUCTION 7. +PRICE ESCALATION METHOD

+»»PRICE INCREASES DURING OCCUPANCY (NET OF GENERAL INFLATION):

NO. OF DISCRETE TIME INTERVALS

NO.

12

3

4

5

6

7

8

9

lO

DUR.

(YRS) AN. RATE

NO.

7. 1

•/. 2

7, 3

7. 4

7. 5

7. 6

7. 7

7. 8

7. 9

7. 10

DUR.

(YRS)

AN. RATE

NO. DUR.

(YRS)

. .'/. 1

. .'f. 2

. .'/. 3

. .7. 4

. .•/. 5

. .•/. 6

. .7. 7

. .7. B

..•/. 9

. .7. 10

AN. RATE

+ USED ONLY FOR NON-ENERGY RELATED PROJECTS (LCC ANALYSIS TYPE 2)

•NEEDED ONLY WHEN DEFAULTING TO DOE ENERGY PRICE PROJECTIONS ON DISK

•NOT NEEDED WHEN DEFAULTING TO DOE ENERGY PRICE PROJECTIONS

. .7.

. .7. ..7.

. .7.

. .7.

. .7.

. .7.

. .7.

. .•/ ..7.

34
The foUowing definitions of LCC-related variables are presented in the

order in which they appear in the building characteristics file:

Section 1 - Project Title

o Project title - The user can supply any name desired to identify the

project to be evaluated. Up to 12 characters can be used. A distinct

project title should be assigned to each variation in building or subsystem design to be evaluated.

Section 2 - Basic LCC Analysis Assumptions

o Study Period - The number of years over which project costs will be

summed. For analyses based on Handbook 135, the study period is limited to

25 years, and begins with the current year. For other analyses, study

periods of up to 50 years can be evaluated, including a planning/

construction period of up to 10 years. In both cases, all costs

are discounted back to the current year.

o Occupancy Year - The calendar year in which occupancy is expected to

begin. Operating and maintenance costs, including energy costs, are not

assumed to be incurred until occupancy begins. For LCC analyses based on

Handbook 135, occupancy is assumed to begin at the start of the study

period. For non-energy -related projects, the occupancy year can be

specified in a later year (up to 10 years after the base year) . The years

prior to occupancy are referred to as the planning/construction period,

o Analysis Type: Choose either of the following LCC evaluation methods for

Federal buildings:

1 - LCC evaluation of energy conservation or renewable energy projects

based on NBS Handbook 135 (see Table 1), or

2 - LCC evaluation of non-energy-related projects consistent with the

provisions of 0MB Circular A-94 (see Table 2).

35
o DoE Region - This Is the Doe Region in which the project is located. The

following codes are used to enter the region:

1 - DoE Region 1 (ME, NH, MA, VT, CT, RI)

2 - DoE Region 2 (NY, NJ, PR, VI)

3 - DoE Region 3 (PA, MD, WV, VA, DC, DE)

4 - DoE Region 4 (KY, TN, NC, SC, MS, AL, GA, FL, CZ)

5 - DoE Region 5 (MN, WI, MI, IL, IN, OH)

6 - DoE Region 6 (TX, NM, OK, AR, LA)

7 - DoE Region 7 (KS, MO, lA, NE)

8 - DoE Region 8 (MT, ND, SD, WY, UT, CO)

9 - DoE Region 9 (CA, NV, AZ, Trust Ter. of the Pacific Islands, Guam)

10 - DoE Region 10 (WA, OR, ID, AK)

11 - United States Average

o Building Type Code - The building type is used in the LCCDATA program when

accessing the DoE energy price projections from the ENCOSTFL file on the

FBLCC disk. This building type designation refers to the appropriate

energy rate schedule for the building, rather than to the actual building

purpose. Use one of the following codes to enter the building type:

1 - Residential

2 - Commercial

3 - Industrial

Section 3 - Capital Component and Replacement Cost Data

o Number of Capital Components - The project can be divided into as many as

six major capital con5)onents (e.g., land, structure, and equipment). For

each component, the variables described in this section must be specified

separately. Major components with different expected lives are usually

specified separately. If one component is of particular interest—for

example, the roof construction—this component can be also specified

separately. A capital con5)onent which has a shorter life than the study

period and must therefore be replaced should be set up as a separate

component. Replacements to capital components are discussed below.

36
The following variables are to be specified for each capital component where

appropriate:

o Component Name - Use a descriptive term with maximum of 10 characters.

o Initial Component Cost - The total installed cost of the component, in

constant base-year dollars. For energy-related projects, this cost is

assumed to be incurred as a lump sum at the beginning of the study period.

For non-energy related projects, this cost can be phased in over the

planning/construction period. If a planning/construction period of one year

or more is assumed, the Average Price Escalation Rate During Planning/

Construction Period (below) can be used to adjust component costs incurred

in each year of construction and at occupancy to reflect price changes net

of general inflation, if any.

o Initial Conservation-Related Cost - The dollar amount (part or all) of the

Initial cost of this coiiq)onent subject to the 10% adjustment factor for

conservation-related projects. (LCC analyses of energy-conservation and

renewable energy projects only.)

o Cost Phasing Schedule (for each year of the planning/construction period and

at occupancy, %) - Applies to non-energy-related projects only: If a

planning/construction period prior to the occupancy year is assumed, a

schedule to phase in component acquisition costs must be entered. For each

year of the planning/construction period, specify the percent of the initial

component cost (in constant base-year dollars) that is incurred in that year

(the incremental amount only). All costs phased in during any planning/

construction year are assumed to be incurred at the beginning of that year.

Any costs not phased in during the planning/construction period are automatically assigned to the first day of the occupancy period.

37
o Expected Component Life - The useful life of the component (in years)

anticipated by the Federal agency making the analysis. (This is intended to

be a realistic assessment of the component life.) Use an integer between 2

and 100; use 999 for land. (Code 999 locks out the capital replacement

algorithm.)

o Average Price Escalation Rate During Planning/Construction Period (%) -

Applies to non-energy-related projects only: This is the average annual

rate at which the cost of this component is expected to change (net of

general inflation) during the planning/construction period, if any. No

adjustment is made to conqponent costs phased in during the first year of

construction since component costs are assumed to be incurred on the first

day of the assigned year. All component costs phased in after the first

year of the planning/construction p.eriod are adjusted using this rate. If

component costs are expected to increase at the same rate as general

inflation during the planning/construction period, this entry will be

bypassed. If component costs are expected to increase approximately 2%

faster than general inflation over this same period, enter a 2.

o Average Price Escalation Rate During Occupancy (%) - Applies to non-energyrelated projects only: This is the average annual rate at which the cost

of similar building components is expected to change during the occupancy

period (net of general inflation) . lis variable is used in calculating

future replacement costs, and in establishing the resale value of the

component after adjustments for wear, deterioration, or obsolescence. (See

Resale Value Factor below.) If these costs are expected to increase at

approximately the same rate as general price Ir "lation, this entry will be

bypassed.

38
o Resale Value Factor (percent of initial component cost) - This is the

percent of the initial component cost which remains at the end of the study

period (or at the end of the component life, if this comes first), in

constant base-year dollars. This factor is intended to reflect a decrease in

real value due to wear, deterioration, or obsolescence. The resale value is

treated as a negative cost element in the life-cycle cost equation. Even if

the Federal government does not intend to dispose of the property at the end

of the study period, the "resale value" may be used to reflect residual value

from the project. For non-energy-related projects, FBLCC uses the Average

Price Escalation Rate During Planning/Occupancy Period for a component to

adjust the resale value of that conq)onent for any changes in price levels

(net of general inflation) during the occupancy period.

o Number of Replacements - Replacements for a capital component should only be

specified if the actual life of the component is shorter than the study

period and the component is entirely replaced. It is best to include the

cost of a partial replacement in the non-annually-recurring cost schedule

(see below). A maximum of four capital replacements can be specified for

each component.

For each replacement to a con5)onent the following variables must be

specified:

o Year of Replacement - The year of occupancy in which the replacement is made,

counting from the start of occupancy. Use an integer between 2 and last

year of study period. Replacements are assumed to be made on the last day

of the year of replacement,

o Initial Cost of Replacement - The installed cost of the replacement, in

constant base-year dollars. For non-energy-related projects, the

39
replacement cost will be calculated using the Average Price Escalation Rate

during Planning/Construction Period and the Average Price Escalation Rate

during Occupancy specified for the original component, if these are different

than zero.

o Expected Life of Replacement (years) - The useful life of the replacement

anticipated by the investor. Use integer between 2 and 100.

o Resale Value Factor (percent of initial replacement cost) - This is the

percent of the initial replacement cost remaining at the end of the study

period (or at the end of the replacement life if this comes first), in

constant base-year dollars.

Section 4 - Operating and Maintenance Cost Data (other than Energy Costs)

o There are two types of operating and maintenance costs (including repairs)

treated in the FBLCC program: annually recurring costs (ARC's) and nonannually recurring costs (NARC's). The ARC and all NARC's are incurred

during occupancy years only, and are assumed to be paid at the end of each

year in which they occur. The values for the ARC and all NARC's are to be

specified in constant base-year dollars.

o Annually Recurring Costs (ARC) - The ARC includes all O&M-related costs

(except energy costs) which recur in approximately the same amount every

year. In the case of non-energy-related projects, the ARC may increase from

year to year at a constant rate (see next definition).

o Average Annual Rate of Increase, ARC (%) - Applies to non-energy-related

projects only. This is the average annual rate at which the ARC is assumed

to increase over the entire study period (net of general inflation).

o Non-Annually Recurring Costs. The non-annually recurring costs (NARC's) do

not follow a regular pattern. They must be specified individually for each

40
occurrence. (More than one occurrence per year is permitted.) The

following variables must be specified:

o Number of NARC's to be entered. (Integer between and 50), and

o Average Annual Rate of Increase, NARC's (%) - Applies to non-energy-related

projects only. See "Average Annual Rate of Increase, ARC". This one rate

applies to all NARC's.

For each NARC, the following two variables must be entered together,

separated by a comma:

o Year of Occurrence. Year designation begins with the occupany year,

year 1. (Integer between 1 and 50.)

o Non-Annually Recurring Costs. Amount, in constant base-year dollars.

Section 5 - Energy cost data

Annual energy costs are treated like non-energy annually recurring

costs except that up to three different energy types may be specified in

each analysis, and the rate of price change does not have to be constant

over the entire study period. Annual consumption of each energy type is

assumed to be the same in every year during occupancy. (Energy costs are

not calculated during the planning/construction period, if any.) Annual

energy costs consist of direct energy costs (i.e., those costs computed

directly from annual energy consumption in million Btu) and indirect costs

(e.g., demand-related or other energy costs that cannot be computed

directly from the amount of annual energy consumption in Btu).

Base year energy prices, in dollars per million Btu, can be entered by the

user for each energy type, based on local energy prices at the building

site. Alternatively, DoE average energy prices for the DoE region and

41
building type specified can be automatically accessed from the energy price

data file (ENCOSTFL) stored on the FBLCC disk. However, the former method

is preferred. The indirect annual energy cost, if any, for each energy

type must be entered directly by the user. All energy prices and indirect

energy costs must be in constant base-year dollars.

The DoE energy price projections on the FBLCC disk may be in a different

year's dollars than that needed for the LCC analysis. In such case, the

program will automatically ask the user for the appropriate conversion

factor (e.g., the cumulative amount of general inflation from the middle of

the year in which the DoE prices are denominated to the current date.)

For energy-related projects in Federal buildings, DoE energy price

escalation rates (net of general inflation) for each year of the study

period are automatically accessed from the disk for each energy type (based

on the region and building type) and entered into the building

characteristics file. For Federal projects not directly related to energy

conservation or renewable energy resources, but containing an energy use

component, the DoE energy price escalation rates can be used, or price

escalation rates for each energy type from an alternative source can be

entered directly by the user for discrete time intervals over the occupancy

period. In this latter case, the average escalation rate for each energy

type over the planning/construction period (if any) must also be entered.

Energy-related variables are entered as follows:

Number of Energy Types - This is the number of specific energy types used

in the building or affected by the project. (Integer between and 3.)

42
For each energy type, specify the following variables:

o Energy Type Code - The type of energy is designated by the following codes:

1 - Electricity

2 - Distillate Fuel Oil

3 - Residual Fuel Oil

4 - Natural Gas

5 - Liquified Petroleum Gas (LPG)

6 - Coal (Steam Coal)

o Annual Energy Consumption (million Btu/yr) - This represents the average

annual energy consumption related to this project in each of the

occupancy years. The DoE price estimates are based on the following

conversion factors: '

1 kWh = 0.003412 million Btu or 1 million Btu = 293.1 kWh.

1 gallon of distillate = 0.13869 million Btu or 1 million Btu = 7.21 gallons of distillate

1 gallon of residual = 0.14969 million Btu or 1 million Btu = 6.68 gallons of residual

1 therm of natural gas = 0.10 million Btu or 1 million Btu = 10 therms of natural gas

1 gallon LPG = 0.0955 million Btu or 1 million Btu = 10.471 gallons

of LPG

1 ton steam coal = 0.0225 million Btu or 1 million Btu = 44.44 tons

of steam coal

o Energy price ($/mlllion Btu) - The price per million Btu to be used in

calculating direct energy costs for the project. This price should be

entered in constant base-year dollars. The base-year DoE energy price for

the appropriate energy type, building type, and DoE region will be

automatically entered here if the user so specifies. (Pressing <ENTER>

at this point defaults to the DoE energy price.)

^Source: NBS Handbook 135, p. 134.

43
o Annual Demand (or other) Energy Charge ($/yr) - Annual costs related to

energy consumption not directly accounted for in the energy prices used to

compute direct energy costs. Example: Charges for peak kilowatt-hour

demand, summed over the entire year. This cost should be entered in

constant base-year dollars. This cost is assumed to increase annually

at the same escalation rate specified for the energy price.

o Energy Price Escalation Methods - For energy conservation and renewable energy

projects, escalation rates are automatically entered from the DoE energy price

data base, but the rate in any year during the study period can be changed by

the user if the user has a documented basis for such a change (e.g., a shortterm forecast from the local utility). For projects not directly related to

energy conservation of renewable energy resources, the following two methods

are available to input energy price escalation rates:

1 - Escalation rates are entered by the user.

2 - Escalation rates are automatically retrieved from the DoE energy

price data base on the FBLCC disk.

Regardless of the method used to input energy price escalation rates, the same

method and rates must be used for any given energy type in both the base case

and alternative case in order to run a comparative analysis.

If escalation rates are to be entered by the user, the following variables

must be specified:

o Number of Discrete Time Intervals - This is the number of discrete energy

price escalation rates that are to be specified over the occupancy

period. (Integer between 1 and 50.) See Duration and Annual Rate of Energy

Price Increase below.

44
For each discrete time Interval, specify the following two variables,

separated by a comma:

o Duration (years) - The number of years over which a given energy price

escalation rate remains constant (occupancy period only). Note: For each

energy type, the sum of these intervals must equal or exceed the occupancy

period,

o Energy Price Escalation Rate (%) - This is the average annual rate

of price increase of this energy type during the corresponding time

interval. These rates must be entered in real terms, i.e., net of

general inflation.

In addition, if a planning/construction period is used in the analysis,

the following variable must be specified by the user for each energy type:

o Energy Price Escalation Rate During Planning/Construction Period (%) - The

average rate at which the price of this energy type is expected to change over

the planning/construction period, relative to general inflation. (Only needed

when the user is entering escalation rates for the study period.)

For example, energy price escalation rates for an occupancy period of 25

years might be entered as follows:

Number of Discrete Time Intervals: 3

Duration, Rate:

10,2

10,1

5,0

45
In this example, for the first 10 years the price of the designated energy

type is expected to increase at 2 percent per year above general inflation,

for the next 10 years at 1 percent above inflation, and for the last 5

years at the same rate as general inflation.

46
6. FBLCC REPORTS

6.1 FBLCC Report Types

A report of a life-cycle cost analysis of a building or building system should

specify both the major elements of the LCC computations and the key

assumptions used in the analysis. A report of a comparative LCC analysis of

alternative building designs or systems should provide key measures of their

relative economic performance. Three different LCC-related reports can be

printed at various stages of the FBLCC analysis to satisfy these requirements:

(1) a building characteristics file, (2) a detailed LCC analysis report, and

(3) a comparative LCC analysis for two design alternatives. Users should refer

to NBS Handbook 135 for assistance in interpreting the measures of economic

performance which are provided by FBLCC.

(1) The building characteristics file is printed by subprogram PRINTBCF.

This file provides a comprehensive listing of all the data and assumptions

used by the LCCMAIN subprogram in the analysis of a given building. It is

divided into five sections:

1. Project title

2. Basic LCC assumptions

3. Capital component and replacement cost data

4. Operating and maintenance cost data

5. Energy cost data

An example of a building characteristics file for use as a base case in

evaluating alternative energy-conserving designs for a Federal office building

is shown in Table 3.

47
(2) The detailed LCC analysis report is printed by the PRINTLCC subprogram,

based on the LCC output file created and saved on the disk by LCCMAIN, An

example of this report for the base-case Federal office building design is shown

in Table 4. This report is divided into two parts: Part I lists the key

assumptions used in the LCC computations; the initial capital component costs

(before discounting), their time phasing during the construction period, if any;

and a detailed analysis of the energy costs. Part II shows the major elements

of the LCC computations and the total LCC.

The LCC elements are presented both in present value terms as of the base date

specified in the analysis, and in annual value terms. The annual value is a

uniform annual amount which is equivalent to the corresponding present-value

amount when taking into account the discount rate throughout the study period.

This means that the present value of that uniform annual amount over the entire

study period is equal to the corresponding present value amount.

The major elements of the LCC computations are divided into four sections.

A. Initial Investment Requirements

B. Operating, Maintenance, and Related Costs

C. Replacements to Capital Components

D. Remaining Value at End of Study Period (Salvage Value)

(3) The comparative LCC analysis report for two alternative building designs is

computed and printed by the COMPARE subprogram, based on their LCC output files.

An example of this con^arative analysis for a hypothetical base case and energy

conserving alternative office building design is shown in Table 5. The

48
comparative LCC analysis report lists the major elements of the LCC computations

for two buildings or building systems: a base case design (Building A) with a

lower initial cost and higher op era ting- re la ted costs, and an alternative design

(Building B) with a higher initial cost and lower operating-related costs. The

difference between the cost of the alternative and base cases Is reported for

each major element of the LCC as the savings attributable to the alternative.

Also Included are the present-value LCC cost of each design, the present value

net savings (or. If negative, the present-value net losses) attributable to tKe

alternative design, and the savlngs-to-lnvestment ratio (SIR) for the additional

investment required by the alternative design.

6.2 Further Examples of FBLCC Reports

Tables 3, 4, and 5 In chapter 4 of this User's Guide provide examples of the

three FBLCC reports needed for a comprehensive economic analysis of a Federal

energy conservation project. Additional examples are provided here for (1) the

LCC analysis of a non-energy-related Federal building project, and (2) for the

LCC analysis of an energy conservation project at the subsystem level rather

for the entire building. These examples are hypothetical and are only

presented to demonstrate the use of the FBLCC program.

Example of Non-Energy-Re la ted Federal Building Project

Table 7 shows the building characteristics file for the same hypothetical

Federal office building described In table 3. This Is the base-case design to

be used In the evaluation of an alternative building design with higher

Initial costs but reduced operating and maintenance (O&M) costs over the

occupancy period. In this example a two year planning/construction period Is

49
added^ and the study period has been extended by two years so that the

occupancy period is the same in both cases (20 years) . A cost-phasing

schedule is shown in Table 7 for each of the three components; this costphasing schedule includes the two years of the planning/construction period

plus the first day of occupancy. All of the land acquisition costs are

Incurred in the first year; half the structure costs are incurred in the first

year and half in the second; and half the equipment costs are incurred

in the second year and half at occupancy. This schedule is defined by the

user when creating/modifying the building characteristics file with LCCDATA.

Costs are phased in incrementally using this schedule, and are always

assumed to be incurred at the beginning of each year. All costs entries in

Table 7 are the same as in Table 3 since costs must be entered in constant

dollars as of the beginning of the study period (1985 in both cases). However,

for the purpose of illustration, the component and replacement costs and the the

O&M-related costs in this new example are assumed to increase at an annual rate

of one percent above general price inflation. Also for the purpose of

illustration, energy price escalation rates in this example are entered by the

user from a (hypothetical) non^-DoE source, using the method based on discrete

time intervals. (See Energy Price Escalation Methods on page 44.)

Table 8 shows the LCC analysis for the building described in Table 7. This

analysis is similar to that in Table 4, except that the initial component

costs are now phased in over the two year construction period, and the 10 percent

^The use of a planning/construction period here is for demonstration purposes

only. This is not required in the analysis of non-energy- re la ted Federal

projects, but allows for a more rigorous analysis of buildings that are still

in the early planning or construction phase.

50
Table 7. Building Characteristics File for Base Case Federal Office

Building to be Used in Economic Evaluation of Alternative

Design with Reduced O&M Costs

BUILDING CHARACTERISTICS FILE

FILE NAME I FED3(.BCF)

FILE LAST MODIFIED ON 02-03-1986 16(26:21

PROJECT TITLE: BUILDING A

BASIC LCC ANALYSIS ASSUMPTIONS:

ANALYSIS TYPE: 0MB CIRCULAR A-94

BASE DATE FOR LCC ANALYSIS: 1985

STUDY PERIOD: 22 YEARS

OCCUPANCY DATE: 1987

DISCOUNT RATE (REAL) = 10.007.

BUILDING TYPE = 2 COMMERCIAL

DOE REGION = 1 CAPITAL COMPONENT AND REPLACEMENT COST DATA: NUMBER OF CAPITAL COMPONENTS: 2

CAPITAL COMPONENT DATA: COMPONENT NAME

INITIAL COMPONENT COST

EXPECTED COMPONENT LIFE(YRS)

AVG PRICE ESC RT DURING CONST.

AVG PRICE ESC RT DURING OCC.

RESALE VALUE FACTOR

NUMBER OF REPLACEMENTS

COST-PHASING SCHEDULE BY YEAR OF CONSTRUCTION AND AT OCCUPANCY:

1 40.00V. 0.007. 2 40.007. 50.007. AT OCCUPANCY 20.007. 50.007.

REPLACEMENTS TO CAPITAL COMPONENTS:

REPLACEMENTS TO EQUIPMENT:

REPLACEMENT NUMBER 1 YEAR OF REPLACEMENT 15

COST OF REPLACEMENT 25000

EXPECTED REPL. LIFE <YRS) 15

RESALE VALUE FACTOR O.O07.

OPERATING AND MAINTENANCE COST DATA:

STRUCTURE EQUIPMENT

5OO0O0 100000

50 20

1 . 007. 1 . 007.

1 . 007. 1 . 007. 50.00% 25.007.

1

ANNUAL RECURRING D AND M COST = lOOOO

ANNUAL RATE OF INCREASE FOR A.R.C. = 1 . 007. NUMBER OF NON-ANNUAL RECURRING AND M COSTS = 5

ANNUAL RATE OF INCREASE FOR N. A.R.C. COSTS = 1.07. NON-ANNUAL RECURRING 0&M COSTS:

« YEAR AMOUNT

1 5 *20000

2 8 * 10000

3 12 *20000

4 16 * 10000

5 18 *15000

51
Table 7. Building Characteristics File for Base Case Federal Office

Building to be Used in Economic Evaluation of Alternative

Design with Reduced O&M Costs (Continued)

ENERGY COST DATA: NUMBER OF ENERGY TYPES - 2

ENERGY TYPE NO. 1 - ELECTRICITY

AVe ANNUAL CONSUMPTION -= lOOO.O MILLION BTU

PRICE PER MILLION BTU =»26.03

ANNUAL DEMAND (AND/OR OTHER CHARGE) = »0

ESCALATION RATE METHOD = 1 ANNUAL RATE OF PRICE INCREASE DURING CONSTRUCTION = 1 OX PRICE INCREASES DURING OCCUPANCY:

NUMBER OF DISCRETE TIME INTERVALS = 3

# DURATION ANNUAL

(YEARS) RATE

1 10 2.07. 2 5 1.0%

3 5 O.OX

ENERGY TYPE NO. 2 = DISTILLATE OIL

AVG ANNUAL CONSUMPTION = lOOO.O MILLION BTU

PRICE PER MILLION BTU = *6.85

ANNUAL DEMAND (AND/OR OTHER CHARGE) = ©

ESCALATION RATE METHOD = 1 ANNUAL RATE OF PRICE INCREASE DURING CONSTRUCTION = 2 07. PRICE INCREASES DURING OCCUPANCY:

NUMBER OF DISCRETE TIME INTERVALS = 3 » DURATION ANNUAL

(YEARS) RATE

1 10 4.07. 2 5 3.07. 3 5 2.07.

52
Table 8. Detailed LCC Analysis of Base Case Federal Office Building

to be Used in Economic Evaluation of Alternative Design

with Reduced O&M Costs

» FBLCC ANALYSIS « •«

PART I - INITIAL ASSUMPTIONS AND COST DATA

PROJECT NAME: BUILDING A RUN DATEt03-05- 1986 01 :31c 26

BLDG. CHAR. FILE NAME: FED3.BCF, LAST MODIFIED 02-03-1986 16i26l21

LCC OUTPUT FILE NAME: FED3.LCC, CREATED 02-03-1986 16:31:43

LCC ANALYSIS TYPE: 0MB CIRCULAR A-94

STUDY PERIOD: 22 YEARS <1985 TO 2007)

CONSTRUCTION PERIOD: 2 YEARS (1985 TO 1987)

OCCUPANCY PERIOD: 20 YEARS (1987 TO 2007)

DISCOUNT RATE: 10.0%

BUILDING TYPE: COMMERCIAL

DOE REGION: 1 INITIAL CAPITAL COMPONENT COSTS (NOT DISCOUNTED)

INVESTMENT CATEGORY YEAR COST PHASING ACTUAL COST

STRUCTURE 1985 40. OX

STRUCTURE 1986 40.07.

STRUCTURE 1987 20. 07. TOTAL FOR STRUCTURE

EQUIPMENT 1986 50. 07. EQUIPMENT 1987 50.07.

TOTAL FOR EQUIPMENT

TOTAL PROJECT COST (ACTUAL)

*200,000

*202 , 000

*102,010

*5O,5O0

*51,005

*504,010

*101,505

*605,515

PART II - LIFE-CYCLE COST ANALYSIS: DISCOUNT RATE = 10.07. PROJECT NAME: BUILDING A RUN DATE: 03-05-1986/01:31:27

PRESENT VALUE

(1985 DOLLARS)

ANNUAL VALUE

(1985 DOLLARS)

A. INITIAL INVESTMENT REQUIREMENTS:

DURING CONSTRUCTION

AT OCCUPANCY

SUBTOTAL

B. OPERATING, MAINTENANCE & RELATED COSTS:

ANNUALLY RECURRING COSTS (NON-ENERGY)

NON-ANNUALLY RECURRING COSTS

ENERGY COSTS

SUBTOTAL

C. REPLACEMENTS TO CAPITAL COMPONENTS

D. LESS: REMAINING VALUE AT END OF

STUDY PERIOD

E. TOTAL LIFE-CYCLE PROJECT COST

*****************

*429,546

*126,459

*556 , 004

77, 450

$26,188

*28 1,442

«385,081

*5 , 858

-*4 1,578

*905,364

48,970

14,417

63, 387

8,830

2,986

32,086

43,901

668

-4,740

103,216

**********************

53
first cost adjustmeat factor for energy conservation and renewable resource

projects is not used. Table 9 shows the comparative analysis of the alternative

building design with higher initial cost but reduced O&M costs. In this

example, the present-value savings attributable to the design improvements are

$39,725; however the initial costs increase by $52,614', Thus this alternative

design, with negative net savings and an SIR less than 1.0, is not cost

effective.

Example of Energy-Related Subsystem Analysis

For many problems, only the cost effectiveness of a single design modification

or component retrofit may be required. In such cases, it is neither necessary

nor desirable to perform a comprehensive LCC analysis of the overall building.

Instead, the analysis should be directed at only those components and costs that

are directly affected by the change. As an example, consider the installation

of attic insulation in a residential building owned by the Federal government.

The base case may be no insulation, and several alternatives may be set up in

order to determine the "optimal" level of insulation, i.e., that level which

minimizes the total LCC related to insulation and energy use. The base case

will have no initial investment cost, but the annual energy use attributable to

attic heat loss for this base case will be higher than for an insulated attic.

As insulation is added to increasingly higher resistance (R) levels, the initial

investment cost will increase but the annual energy use will decrease

accordingly. LCCDATA can be used to create the building characteristics files

for each case, and LCCMAIN can be used to determine the corresponding total LCC.

The COMPARE program is not needed to determine which alternative has the lowest

LCC; this can be done by simple inspection of the LCC reports printed by

PRINTLCC. However, the COMPARE program can be used to provide measures of

54
Table 9. Comparative LCC Analysis of a Base Case aad Alternative

Federal Office Building Desiga with Reduced O&M Costs

FBLCCt COMPARATIVE LCC ANALYSIS

BASE CASE <= BUILDING A ALTERNATIVE = BUILDING B PRINCIPAL STUDY PARAMETERS:

LCC ANALYSIS TYPEt 0MB CIRCULAR A-94

BASE YEAR: 1985

STUDY PERIOD: 22 YEARS

PLANNING/CONSTRUCTION PERIOD: 2 YEAR(S)

OCCUPANCY YEAR: 1987

OCCUPANCY PERIOD: 20 YEARS

DISCOUNT RATE: 10.07. DOE REGION: 1 BUILDING TYPE: 2 (COMMERCIAL)

BASE CASE FILES: FED3.BCF FED3.LCC

ALTERNATIVE CASE FILES: FED4.BCF FED4.LCC

RUN DATE; 03-05-1986 01:58:11

COMPARISON OF PRESENT-VALUE COSTS

INVESTMENT-RELATED COSTS:

INITIAL INVEST. (AS OF OCCUPANCY)

REPLACEMENTS TO CAPITAL COMPONENT

LESS: RESALE VALUE

SUBTOTAL

OPERATING AND MAINTENANCE-RELATED COSTS

AN. AND NON-AN. O&M COSTS

ENERGY EXPENDITURES

SUBTOTAL

TOTAL P.V. LIFE-CYCLE COST

BASE CASE:

BUILDING A ALTERNATIVE:BUILDING B SAVINGS

FROM ALT.

(1) (2) (3)=(l)-(2)

*556,004

*5,85a

-*41,578

*61 1,605

*7 , 029

-*45,736

-*55,601

-*1,172

*4,158

*520,2B4

S: $103,638

*28 1,442

$572,898

*63,913

*28 1,442

-*52,614

*39,725

*0

*385,081 *345,356 $39,725

*905,364 *9ia,254 -$12,889

COMPUTATION OF NET SAVINGS FOR ALTERNATIVE

NET SAVINGS = P.V. OF O&M-RELATED SAVINGS

LESS ADD'L INVEST. -RELATED COSTS

$39,725

-$52,614

-$12,889

COMPUTATION OF SAV I NGS-TO- INVESTMENT RATIO (SIR) FOR ALTERNATIVE

SIR = 0.76

P.V. OF D&M-RELATED SAVINGS $39725

P.V. OF ADD'L INVEST. -RELATED COST $52614 »»«»»«»*»*»»**«-«*****•***

55
cost effectiveness for each level of insulation—the Net Benefits (NB) and the

Savings to Investment Ratio (SIR) —either incrementally (i.e., relative to the

next lower level) or in total (i.e., relative to the uninsulated case).^

Table 10 shows the building characteristics file for the uninsulated case, with

a 25-year study period, zero initial cost, and energy use (natural gas)

attributable to attic heat loss of 20.0 million Btu/year. This insulation

analysis is based on NBS Handbook 135 guidelines because it is a Federal project

directly concerned with energy conservation. Table 11 shows the LCC analysis

for the uninsulated case. Tables 12 and 13 show the LCC analysis for the same

building with R-19 and R-30 attic insulation, with energy use reduced to 5.0 and

3.5 million Btu/year, respectively. In all three cases, the 10 percent flrstcost-adjustment factor for Federal energy conservation projects is used, as

required by the Federal LCC methodology. The alternative with the lowest LCC

shown here is the R-30 insulation level ($895). Table 14 shows the COMPARE

analysis of the cost effectiveness of R-30 compared to R-19 insulation. In this

example net benefits are $75 and the SIR is 1.55.. Further analysis with other

levels of insulation in the same attic could be used to find the Insulation

level which has the lowest possible LCC.

^ See NBS Handbook 135 for assistance in interpreting these measures of cost

effectiveness.

56
Table 10. Building Characteristics File for R-0 Attic Insulation in a Federal Building (Example)

BUILDING CHARACTERISTICS FILE

FILE NAME: FED5(.BCF)

FILE LAST MODIFIED ON 02-01-1986 01t24E40

PROJECT TITLE! R-0 INSULATION

BASIC LCC ANALYSIS ASSUMPTIONS:

ANALYSIS TYPE: NBS HANDBOOK 135

BASE DATE FOR LCC ANALYSIS: 1985

STUDY PERIOD: 25 YEARS

OCCUPANCY DATE: 1985

DISCOUNT RATE (REAL) «= 7. OCX

BUILDING TYPE = 1 RESIDENTIAL

DOE REGION = 1 CAPITAL COMPONENT AND REPLACEMENT COST DATA: NUMBER OF CAPITAL COMPONENTS: 1 CAPITAL COMPONENT DATA: COMPONENT NAME INSULATION

INITIAL COMPONENT COST o

I NIT. CONSERVATION-RELATED COST O

EXPECTED COMPONENT HFE(YRS) 25

AVG PRICE ESC RT DURING CONST. O. COX

AVG PRICE ESC RT DURING OCC. O. OCX

RESALE VALUE FACTOR O. 007. NUMBER OF REPLACEMENTS o COST-PHASING SCHEDULE BY YEAR OF CONSTRUCTION AND AT OCCUPANCYAT OCCUPANCY 1 GO. 007. NO REPLACEMENTS TO ANY CAPITAL COMPONENTS

OPERATING AND MAINTENANCE COST DATA: ANNUAL RECURRING O AND M COST = *0

ANNUAL RATE OF INCREASE FOR A.R.C. - O.OOX

NUMBER OF NON-ANNUAL RECURRING AND M COSTS = O

ANNUAL RATE OF INCREASE FOR N. A.R.C. COSTS = O OX

ENERGY COST DATA: NUMBER OF ENERGY TYPES = 1 ENERGY TYPE NO. 1 = NATURAL GAS

AVG ANNUAL CONSUMPTION = 20.0 MILLION BTU

PRICE PER MILLION BTU = *7.90

ANNUAL DEMAND < AND/OR OTHER CHARGE) = »0

ESCALATION RATE METHOD = 2

YEAR RATE YEAR RATE

1985 -0.26X 1998 3.83X

1986 4.34X 1999 3.91X

1987 4.54X 2000 3. 4 IX 1988 5.67X 2001 3.44X

19B9 5.48X 2002 3.39X

1990 4.98X 2003 3.47X

1991 5.77X 2004 3.42X

1992 4.58X 2005 3.60X

1993 4.57X 2006 3.65X

1994 3.65X 2007 3.64X

1995 3.87X 2008 3.67X

1996 3.89X 2009 3.64X

1997 0.04X

57
Table 11. Detailed LCC Analysis for R-0 Attic Insulation in a Federal Building (Example)

FBLCCANALYSIS

PART 1 - INITIAL ASSUMPTIONS AND COST DATA.

PROJECT NAMES R-0 INSULATION

RUN DATE: 03-05-1986 01:39:39

BLDG. CHAR. FILE NAME: FED5.BCF, LAST MODIFIED 02-01-1986 01l24i40

LCC OUTPUT FILE NAME: FEDS. LCC, CREATED 02-03-1986 16l32t58

LCC ANALYSIS TYPE: NBS HANDBOOK 135

STUDY PERIOD: 25 YEARS (1985 TO 2010)

DISCOUNT RATE: 7. OX

BUILDING TYPE: RESIDENTIAL

DOE REGION: 1 INITIAL CAPITAL COMPONENT COSTS (NOT DISCOUNTED)

TOTAL FOR INSULATION

TOTAL PROJECT COST (ACTUAL)

LESS FEDERAL CONSERVATION CREDIT (a)

TOTAL ADJUSTED PROJECT COST

INITIAL COST

SO

«0

*0

*0

ENERGY-RELATED COSTS

ENERGY

TYPE

MMBTU/

YEAR

PRICE

(t/MMBTU)

DEMAND

COST

UPW*

FACTOR

TOTAL

P.V. COST

NATURAL GAS 20. O *7.90 *0 17.70 *2797

(a) TO REFLECT 107. FIRST COST ADJUSTMENT RULE IN NBS HANDBOOK 135.

PART II - LIFE-CYCLE COST ANALYSIS: DISCOUNT RATE = 7. OX

PROJECT NAME: R-0 INSULATION RUN DATE: 03-05-1986/01:39:39

A. INITIAL INVESTMENT REQUIREMENTS

B. OPERATING, MAINTENANCE & RELATED COSTS:

ANNUALLY RECURRING COSTS (NON-ENERGY)

NON-ANNUALLY RECURRING COSTS

ENERGY COSTS

SUBTOTAL

D. LESS: REMAINING VALUE AT END OF

STUDY PERIOD

E. TOTAL LIFE-CYCLE PROJECT COST

PRESENT VALUE

(1985 DOLLARS)

$0

ANNUAL VALUE

(1985 DOLLARS)

»0

*0

*0

*2,797

*2,797

*0

*2,797

SO

SO

*240

*240

SO

*240

******** *******************************

58
Table 12. Detailed LCC Analysis for R-19 Attic Insulation in a Federal Building (Example)

FBLCCANALYSIS

PART I - INITIAL ASSUMPTIONS AND COST DATA

• •**•• • * *

PROJECT NAMEt R-19 INSULATION

RUN DATE t 03-05-1986 01sAl:59

BLDG. CHAR. FILE NAME: FED6.BCF, LAST MODIFIED 02-01-1986 01l44l34

LCC OUTPUT FILE NAME: FED6.LCC, CREATED 02-03-1986 16t33l36

LCC ANALYSIS TYPE: NBS HANDBOOK 135

STUDY PERIOD: 25 YEARS (1985 TO 2010)

DISCOUNT RATE: 7.0-/. BUILDING TYPE: RESIDENTIAL

DOE REGION: 1 INITIAL CAPITAL COMPONENT COSTS (hCT DISCOUNTED)

TOTAL FOR INSULATION

TOTAL PROJECT COST (ACTUAL)

LESS FEDERAL CONSERVATION CREDIT (a)

TOTAL ADJUSTED PROJECT COST

INITIAL COST

300

*300

30

270

ENERGY-RELATED COSTS

ENERGY

TYPE

MMBTU/

YEAR

PRICE

(/MMBTU)

DEMAND

COST

UPW*

FACTOR

TOTAL

P.V. COST

NATURAL GAS 5.0 7.90 O 17.70 ^699

(a) TO REFLECT 107. FIRST COST ADJUSTMENT RULE IN NBS HANDBOOK 135.

PART II - LIFE-CYCLE COST ANALYSIS: DISCOUNT RATE = 7.07. PROJECT NAME: R-19 INSULATION RUN DATE: 03-05-1986/01:41:59

PRESENT VALUE

(1985 DOLLARS)

270

«o

SO

699

A. INITIAL INVESTMENT REQUIREMENTS

B. OPERATING, MAINTENANCE & RELATED COSTS:

ANNUALLY RECURRING COSTS (NON-ENERGY)

NON-ANNUALLY RECURRING COSTS

ENERGY COSTS

SUBTOTAL

D. LESS: REMAINING VALUE AT END OF

STUDY PERIOD SO

E. TOTAL LIFE-CYCLE PROJECT COST ^969

699

ANNUAL VALUE

(1985 DOLLARS)

23

O0

60

60

O

83

59
Table 13. Detailed LCC Analysis for R-30 Attic Insulation in a Federal Building (Example)

«««•»•

FBLCC ANALYSIS

« » PART 1 - INITIAL ASSUMPTIONS AND COST DATA

PROJECT NAMEt R-30 INSULATION

RUN DATE« 03-05-1986 01i52i54

BLDG. CHAR. FILE NAMEi FED7.BCF, LAST MODIFIED 02-01-1986 01i4St27

LCC OUTPUT FILE NAME: FED7.LCC, CREATED 02-03-1986 I61SI1II

LCC ANALYSIS TYPEs NBS HANDBOOK 135

STUDY PERIOD: 25 YEARS (1985 TO 2010)

DISCOUNT RATE: 7.0%

BUILDING TYPE: RESIDENTIAL

DOE REGION: 1 INITIAL CAPITAL COMPONENT COSTS (NOT DISCOUNTED)

TOTAL FOR INSULATION

INITIAL COST

»450

TOTAL PROJECT COST (ACTUAL)

LESS FEDERAL CONSERVATION CREDIT (a)

TOTAL ADJUSTED PROJECT COST

*450

«45

»405

ENERGY-RELATED COSTS

ENERGY

TYPE

MMBTU/

YEAR

PRICE

(*/MMBTU)

DEMAND

COST

UPW*

FACTOR

TOTAL

P.V. COST

NATURAL GAS 3.5 *7.90 *0 17.70 *490

(a) TO REFLECT lOV. FIRST COST ADJUSTMENT RULE IN NBS HANDBOOK 135.

PART II - LIFE-CYCLE COST ANALYSIS: DISCOUNT RATE = 7.0'/. PROJECT NAME: R-30 INSULATION RUN DATE: 03-05-1986/01:52:54

PRESENT VALUE

(1985 DOLLARS)

ANNUAL VALUE

(1985 DOLLARS)

A. INITIAL INVESTMENT REQUIREMENTS *405 $35

B. OPERATING, MAINTENANCE & RELATED COSTS:

ANNUALLY RECURRING COSTS (NON-ENERGY)

NON-ANNUALLY RECURRING COSTS

ENERGY COSTS

SUBTOTAL

SO SO

*o SO

*490 42

»490 »42

D. LESS: REMAINING VALUE AT END OF

STUDY PERIOD

E. TOTAL LIFE-CYCLE PROJECT COST

SO

*a95

so

S77

*»»*»#»*» **»»*»*»»**»**»**»»**

60
Table 14. Comparative LCC Analysis: R-30 Over R-19 Attic Insulation in

a Federal Building (Example)

FBLCCr COMPARATIVE LCC ANALYSIS

BASE CASE -R-19 INSULATION

ALTERNATIVE - R-30 INSULATION

PRINCIPAL STUDY PARAMETERS:

LCC ANALYSIS TYPE: NBS HANDBOOK 135

BASE YEAR: 1985

STUDY PERIOD: 25 YEARS

DISCOUNT RATE: 7.07. FED. CONSERVATION CREDIT: 107. DOE REBIONs 1 BUILDING TYPE: I (RESIDENTIAL)

BASE CASE FILES: FED6.BCF FED6.LCC

ALTERNATIVE CASE FILES: FED7.BCF FED7.LCC

RUN DATE: 03-05-1986 02:00:51

BBS^oesssssKSsssissei£1b:=^E^a:SSIassEisssssiaSB SB at ^:bssisb1S&SB3ss sssc ar at sa aeaca: 8B £ssiBGsaiss sKCQi aMBBB^HB IB ^a^asaBB^i COMPARISON OF PRESENT-VALUE COSTS

INVESTMENT-RELATED COSTS

INITIAL INVEST. (AS OF OCCUPANCY)

SUBTOTAL

OPERATING AND MAINTENANCE-RELATED COSTS:

ENERGY EXPENDITURES

BASE CASE: ALTERNATIVE:

R-19 INSULATl R-30 INSULATI

SAVINGS

FROM ALT.

(1) (2) (3)-(l>-(2)

*270 »40S -»13S

«270 *AOS

Si

*699 *490

-»135

•210

SUBTOTAL *699 »490 $210

TOTAL P.V. LIFE-CYCLE COST *969 »a95 #73

COMPUTATION OF NET SAVINGS FOR ALTERNATIVE

NET SAVINGS - P.V. OF O&M-RELATED SAVINGS «210

LESS ADD'L INVEST. -RELATED COSTS -«135

I

*75

=:=;= Es as := ^SSS3 sEss ^^2 COMPUTATION OF SAV I NQS-TO- INVESTMENT RATIO (SIR) FOR ALTERNATIVE

P.V. OF O&M-RELATED SAVINGS *210

SIR = = = 1.55

P.V. OF ADD'L INVEST. -RELATED COST *135

61
7. THE DISCOUNT PROGRAM

DISCOUNT is a program written In BASIC for microcomputer applications which can

perform all of the discounting operations described in Table 2.1 of NBS Handbook

135, Life-Cycle Cost Manual for the Federal Energy Management Program. The

DISCOUNT program is stored on the >:, c; disK.ecce as cne ictJLCC programs, but it is

executed independently of those pL^^, tenuis. ihe mam menu aisplayed on the video

screen when running DISCOUNT is shown in Figure 3. The program will determine

present, future, and equivalent annual values related to cash flows in different

time periods. It also displays the corresponding discount factor for the

selected operation. The number of time periods (usually years), discount rate,

and, where appropriate, rate of price change, can be entered or changed by the

user while running the program.

You must be in the BASIC mode to run DISCOUNT. At the system level, type BASIC

DISCOUNT to run this program. In BASIC, simply type RUN "DISCOUNT" .

Once running, the DISCOUNT program can be used repeatedly for any of the

discounting operations shown in the menu. In order to save time, the

discount rate can be temporarily locked in by pressing <L> and- specifying

the discount rate. If you wish to change the discount rate, use <U> to

unlock the rate, or press <L> again to lock in a new rate.

Most of the terms used in the menu can be defined by pressing <D>. This

command displays a second menu, as shown in Figure 6-4. The definition of

62
Figure 3. Main Menu from the DISCOUNT Program

DISCOUNTING APPLICATIONS MENU

CODE TO FIND I SINGLE AMOUNTS

1 FUTURE VALUE WHEN PRESENT VALUE IS KNOWN

2 PRESENT VALUE WHEN FUTURE VALUE IS KNOWN

UNIFORM SERIES OF PAYMENTS

3 PERIODIC PAYMENT AMOUNT WHEN FUTURE AMOUNT IS KNOWN

4 PERIODIC PAYMENT AMOUNT WHEN PRESENT AMOUNT IS KNOWN

5 FUTURE VALUE WHEN PERIODIC PAYMENT AMOUNT IS KNOWN

6 PRESENT VALUE WHEN PERIODIC PAYMENT AMOUNT IS KNOWN

NON-UNIFORM SERIES OF PAYMENTS

7 PRESENT VALUE WHEN PERIODIC PAYMENT AMOUNT INCREASES

AT CONSTANT RATE

B PRESENT VALUE WHEN PERIODIC PAYMENT AMOUNT INCREASES

AT CHANGING RATE

L=LOCK IN DISCOUNT RATE U=UNLOCK DISCOUNT RATE

D=DEFINE TERMS S=STOP

ENTER APPLICATIONS CODE:

Figure 4. Definitions Menu from the DISCOUNT Program

DEFINITIONS OF TERMS

CODE TERM TO BE DEFINED

1 DISCOUNT RATE

2 ESCALATION RATE

3 FUTURE VALUE

4 INTEREST RATE

5 NON-UNIFORM SERIES

6 PERIODIC PAYMENT AMOUNT

7 PRESENT VALUE

8 STUDY PERIOD

9 TIME PERIOD

10 UNIFORM SERIES

R=RETURN TO MAIN MENU S=STOP

ENTER CODE FOR DEFINITION:

63
each of these terras will be displayed by entering the corresponding code and

pressing the carriage return.

If a discounting operation is desired that is not included in the menu shown, it

is possible that it can be accomplished through a combination of steps using the

DISCOUNT program. For example, to find the present value of a future amount

that is unknown but has been defined in constant base-year dollars and is

expected to increase in value at a constant rate, use the following procedure:

(1) Find the future value of the present amount (code 1), substituting the rate

of price increase for the discount rate. Then (2) determine the present value

of that future amount (code 2) using the appropriare discount rate.

64
REFERENCES

Lippiatt, B. C. , Weber, S. F. , and Ruegg, R. T., Energy Prices and Discount

Factors for Life Cycle Cost Analysis , NBSIR 85-3273, U.S. Department

of Commerce, National Bureau of Standards, Gaithersburg, MD 20899, 1985.

Petersen, S. R., A User's Guide to the Building Life-Cycle Cost (BLCC) Computer

Program , American Society of Testing and Materials, Philadelphia, PA,

T985T

Ruegg, R. T., Life-Cycle Cost Manual for the Federal Energy Management Program , National Bureau of Standards Handbook 135 (revised), U.S. Department of

Commerce, National Bureau of Standards, Gaithersburg, MD 20899, 1982.

Title 10 Code of Federal Regulations, Revised, See 436, 1985.

U.S. Office of Management and Budget, Circular A-94 "Discount Ratee to be Used

in Evaluating Time-Distributed Costs and Benefits," March 27, 1972.

65
APPENDIX A

KEY VARIABLES USED IN THE FBLCC PROGRAM

A$

*AF

*P1

*P2

P3

Yl

Y2

*Y4

*Y5

*Y6

II

*I2

RG

T7

TYPE =

PROJECT TITLE

INITIAL COST ADJUSTMENT FACTOR FOR CONSERVATION INVESTMENTS (10%)

PLANNING/CONSTRUCTION PERIOD (years) (Y2-Y1)

OCCUPANCY PERIOD (years) (P3-PI)

STUDY PERIOD (years)

BASE DATE FOR LCC ANALYSIS AND DISCOUNTING (year)

OCCUPANCY DATE (year)

FIRST YEAR IN DOE ENERGY PRICE FILE

CONSTANT DOLLAR BASE IN DOE ENERGY PRICE FILE

NUMBER OF YEARS IN DOE ENERGY PRICE FILE

DISCOUNT RATE (real, i.e., net of Inflation)

I + II

DOE REGION

BUILDING TYPE FOR DOE ENERGY PRICE FILE:

1 = RESIDENTIAL

2 = COMMERCIAL

3 = INDUSTRIAL

1 FOR NBS HANDBOOK 135 ANALYSIS, 2 FOR OMB CIRCULAR A- 9 4 ANALYSIS

CAPITAL COMPONENT VARIABLES

CI = NUMBER OF CAPITAL COMPONENTS TO BE TREATED SEPARATELY (e.g,

land, building, equipment)

FOR EACH CAPITAL COMPONENT, I = 1 to CI:

C$(I) = NAME OF THE Ith COMPONENT

C(I,1) = INITIAL COST OF THE Ith COMPONENT (base-year dollars)

C(I,2) = AMOUNT OF C(I,1) SUBJECT TO FEDERAL CONSERVATION ADJUSTMENT

C(I,7) = AVERAGE ANNUAL PRICE ESCALATION RATE FOR Ith COMPONENT AND ITS

REPLACEMENTS DURING OCCUPANCY (% change in real terms, i.e., net

of general Inflation)

C(I,10) = EXPECTED USEFUL LIFE OF Ith COMPONENT, IN YEARS (use 999 for

land)

C(I,11) = PERCENT OF C(I,1) ESTIMATED TO REMAIN AS RESALE VALUE , UNADJUSTED

FOR INFLATION, AT THE END OF ITS USEFUL LIFE OR END OF THE STUDY

PERIOD (whichever comes first)

C(I,12) = NUMBER OF REPLACEMENTS TO THE Ith COMPONENT DURING THE STUDY PERIOD

*C(I,I3) = MINIMUM OF [occupancy period; useful life] FOR Ith COMPONENT

*C(I,14) = ACTUAL COST OF Ith COMPONENT (i.e., adjusted for real price

Increases during construction, if any)

C(I,15) = ANNUAL PRICE ESCALATION RATE DURING PLANNING/ CONSTRUCTION PERIOD

FOR THE Ith COMPONENT (% change in real terms, i.e., net of general

inflation)

* Asterisked variables are calculated internally

66
*DA(I) = RESALE VALUE OF GOMPOMENT I IF REMAIMING AT KHD OF STUDY PERIOD

*DB(I) = RESALE VALQE OF COMPONENT I IF DISPOSED OF BEFORE END OF STJDY

PERIOD

Q(I,J) = PERCENT OF THE TOTAL ACQUISITION COST (unadjusted for laflatloa) OF

THE Ith COMPONENT ALLOCATED TO THE Jth YEAR OF THE PLANNING/

CONSTRUCTION PERIOD (J = 1 to Pi) OR BEGINNING OF OCCUPANCY

(J = PI + 1)

*TI(I,J) = CONSTRUCTION/ACQUISITION EXPENDITURE FOR Ith COMPONENT IN PLANNING/

CONSTRUCTION YEAR J

REPLACEMENT VARIABLES

FOR EACH REPLACEMENT (K = 1 TO C(I,12)) TO THE Ith CAPITAL COST COMPONENT:

R1(I,K) = YEAR OF REPLACEMENT, COUNTING FROM START OF OCCUPANCY (e.g., 5 = 5th year of occupancy)

R2(I,K) = INITIAL COST OF REPLACEMENT (in base-year dollars)

R6(I,K) = EXPECTED USEFUL LIFE OF REPLACEMENT K TO COMPONENT I R7(I,K) = PERCENT OF R2(I,K) ESTIMATED TO REMAIN AS RESALE VALUE, UNADJUSTED

FOR INFLATION, AT END OF ITS USEFUL LIFE OR END OF THE STUDY PERIOD

(whichever comes first)

*R9(I,K) = ACTUAL COST OF REPLACEMENT (i.e., adjusted for real price increases,

if any)

*RA(I,K) = RESALE VALUE OF REPLACEMENT K TO COMPONENT I IF REMAINING AT END OF

STUDY PERIOD

*RB(I,K) = RESALE VALUE OF REPLACEMENT K TO COMPONENT I IF DISPOSED OF BEFORE

END OF STUDY PERIOD

O&M COST VARIABLES

Ml = ANNUALLY RECURRING O&M COSTS (in base-year dollars)

M2 = AVERAGE ANNUAL RATE OF INCREASE FOR ANNUALLY RECURRING O&M COSTS

OVER STUDY PERIOD (% change in real terras, i.e., net of general

inflation)

*M3 = UPW* FACTOR FOR ANNUALLY REOJRRING O&M COSTS (including price

increases during construction)

M4 = NUMBER OF NON-ANNUALLY RECURRING COSTS

M5 = AVERAGE ANNUAL RATE OF INCREASE FOR NON-ANNUALLY RECURRING O&M

COSTS DURING STUDY PERIOD (% change in real terras; i.e., net

of general inflation)

M(1,J) = YEAR OF OCCURANCE OF Jth NON-ANNUALLY RECURRING O&M COST (1 = first year of occupancy)

M(2,J) = AMOUNT OF Jth NON-ANNUALLY RECURRING O&M COST (in base-year

dollars)

67
ENERGY COST VARIABLES ;

El = NUMBER OF ENERGY TYPES USED

FOR EACH ENERGY TYPE:

E(I) = ENERGY NA^[E CODES:

1 - ELECTRICITY

2 - DISTILLATE FUEL OIL

3 - RESIDUAL FUEL OIL

4 - NATURAL GAS

5 - LIQUIFIED PETROLEUM GAS (LPG)

6 - COAL (OR STEAM COAL)

EM(I) = ENERGY PRICE ESCALATION CODES:

1 - RATES ENTERED BY USER

2 - RATES ACCESSED FROM ENCOSTFL

E1(I,I) = ENERGY PRICE FOR Ith ENERGY TYPE (in base-year dollars per

million Btu)

E1(2,I) = NUMBER OF DISCRETE ENERGY PRICE ESCALATION RATES TO BE USED

(starting at occupancy date) FOR Ith ENERGY TYPE

*E1(3,I) = UPW* FACTOR FOR Ith ENERGY TYPE (as of the date of occupancy)

*E1(4,I) = PRESENT VALUE COST OF ALL USE OF ENERGY TYPE I OVER STUDY PERIOD

E1(5,I) = ANNUAL RATE OF INCREASE IN PRICE OF Ith ENERGY TYPE DURING PLANNING/

CONSTRUCTION PERIOD (% change in real terras, i.e., net of

general inflation)

*E1(6,I) = ANNUAL ENERGY COST FOR ENERGY TYPE I AT THE BEGINNING OF OCCUPANCY

(including real energy price increases during planning/construction

period, if any)

E2(I,J) - LENGTH OF Jth TIME INTERVAL FOR Ith ENERGY TYPE (years)

(J = 1 TO E1(2,I))

E3(I,J) = ENERGY PRICE ESCALATION RATE IN Jth TIME PERIOD (J = 1 TO E1(2,I))

E4(I) = ANNUAL ENERGY CONSUMPTION (Million Btu/yr) for Ith ENERGY TYPE

E5(I) = ANNUAL INDIRECT ENERGY COST ($/yr) for the Ith ENERGY TYPE (in

base-year dollars)

* SUMMATION VARIABLES (ALL INTERNAL COMPUTATIONS)

NOTE: All T(1,I) variables are in actual dollars, i.e., including

price increases during planning/construction period, if any and not

discounted

T(l,l) = TOTAL PROJECT COST

T(l,2) = TOTAL PROJECT COST INCURRED DURING PLANNING/CONSTRUCTION PERIOD

T(l,3) = REDUCTION IN INITIAL PROJECT COST DUE TO CONSERVATION ADJUSTMENT

T(l,6) = TOTAL PROJECT COST INCURRED AT OCCUPANCY

* Asterisked variables are calculated internally.

68
NOTE: All T(2,I) and T(3,I) variables are discounted to base date (Yl)

T(2,2) = TOTAL PROJECT COST DURING PLANNING/CONSTRQCTION PERIOD

T(2,6) = ADDITIONAL PROJECT COST AT OCCUPANCY (reduced by T(l,3))

T(2,17) = RESALE VALUE OF CAPITAL COMPONENTS AND REPLACEMENTS REMAINING AT

END OF STUDY PERIOD

T(2,18) = RESALE VALUE OF COMPONENTS AND REPLACEMENTS DISPOSED OF BEFORE

THE END OF STUDY PERIOD^

T(2,21) = TOTAL ANNUALLY RECURRING O&M COSTS

T(2,22) = TOTAL NON-ANNUALLY RECURRING O&M COSTS

T(2,25) = TOTAL ENERGY COSTS

T(2,27) = TOTAL COST OF REPLACEMENTS

T(3,l) = TOTAL RESALE VALUE OF PROJECT

T(3,5) = TOTAL RECURRING & NON-RECURRING O&M COSTS

T(3,7) = TOTAL PROJECT COST AS OF OCCUPANCY

T(3,12) = TOTAL, PRESENT VALUE, LIFE-CYCLE PROJECT COST

T(3,18) = T(2,27) TOTAL COST OF REPLACEMENTS

T(3,19) = T(2,25) TOTAL ENERGY COSTS

NOTE: All T(4,I) and T(5,I) variables are annual value equivalents of

present-value costs Incurred over the entire study period (P3)

:

T(4,I) = ANNUAL VALUE OF T(2,I), where T(2,I) is present value

T(5,I) = ANNUAL VALUE OF T(3,I), where T(3,I) is present value

* Asterisked variables are calculated internally.

69
APPENDIX B KEY EQUATIONS USED IN THE LCCMAIN AND COMPARE SUBPROGRAM

Note: All variables are listed in Appendix A except for variables D0-D9 and

DA-DD. These latter variables are used for intermediate calculations aad have

no unique purpose. Convert all factors defined in percent form to decimal

form (e.g., 75%=0.75) before using these equations. The mathematical symbol

"**" means "raised to the power."

I. Initial cost calculations.

A. Without planning/constJTuctic..! period (Pl=0)

1. Actual component cost = initial cost for each coiaponent:

C(I,14)=C(I,1)

2. Compute total project cost, T(l,l), T(l,6):

CI

T(l,l)= I C(I,14)

1=1

T(1,6)=T(1,1).

3. If Analysis Type = 1 (NBS Handbook 135 analysis), compute

conservation adjustment to initial project cost, T(l,3):

CI

T(l,3) =

I C(I,2)*AF

1=1

4. Compute (adjusted) project cost at occupancy, T(2,6)

T(2,6) = T(l,6)-T(l,3)

B. With planning/const ruction period (Type 2 Analysis Only)

1. Compute actual component cost incurred in Jth year of planning/

construction period and at occupancy (Pl+1) for Ith component,

T1(I J):

T1(I,J) = C(I,1)*Q(I,J)*(1+C(I,15))**(J-1)

2. Compute total cost of Ith conqjonent, C(I,14):

Pl+1

C(I,14) = I T1(I,J)

J=l

3. Compute total project cost, T(l,l):

CI

T(l,l) =

I C(I,14)

1=1

4. Compute total project cost Incurred during planning/construction

period, undiscounted (T(l,2)) and discounted (T(2,2)):

CI PI

T(1.2) =

I I T1(I,J)

1=1 J=l

CI PI

T(2,2) = y I T1(I,J)/(I2**(J-1))

1=1 J=l

5. Compute total project cost incurred at occupancy, undiscounted

(T(l,6)) and discounted (T(2,6)):

T(1,6)=T(1,1)-T(1,2)

T(2,6)=T(1,6)/(I2**P1)

70
II. Replacement cost calculations.

Note: Replacements are considered to be capital expenditures incurred

at the end of the designated occupancy years.

Calculate cost for each replacement K = 1 to C(I,12) of each component

I = 1 to CI.

A. Actual cost of the replacement at time of installation, R9(I,K):

R9(I,K) = [R2(I,K)*(1+C(I,15))**P1]*[(H-C(I,7))**R1(I,K)].

B. PV of all replacement expenditures discounted

from end of year of replacement, T(2,27):

CI C(I,12) R9(I,K)

T(2,27) = y

I

. 1=1 K=l (1+I1)**R1(I,K)

III. Resale value of components and replacements.

A. Compute resale value of all components and replacements.

1. Compute resale value of components (I = 1 to CI) remaining at end

of study period, DA(I), and disposed of before end of study

period DB(I):

a. DA(I) = C(I,14)*C(I,11)*(1+C(I,7))**P2 for all I from 1 to CI

where C(I,10) > P2.

b. DB(I) = C(I,14)*C(I,11)*(H-C(I,7))**C(I,10) for all I from 1 to C where

C(I,10)<P2.

2. Compute resale value of replacements remaining at end of study

period, RA(I,K), and disposed of before end of study period,

RB(I,K):

a. RA(I,K) = R9(I,K)*R7(I,K)*(1+C(I,7))**(P2-R1(I,K+1)

for all I,K (I = 1 to CI, K = 1 to C(I,12))

where Rl(I,K) + R6(I,K) > P2.

b. RB(I,K) = R9(I,K)*R7(I,K)*(1+C(I,7))**R6(I,K)

for all I,K (I = 1 to CI, K = 1 to C(I,12))

where R1(I,K) + R6(I,K) < P2.

B. Compute PV of total resale value of all components and replacements:

1. PV of resale value of components and replacements remaining at

end of study period, T(2,17):

CI CI C(I,12)

T(2,17) = y DA(I) + I y RA(I,K) . 1=1 1=1 K=l

(1+I1)**P2

2. PV of resale value of components and replacements disposed of

before end of a study period, T(2,18):

Gl DB(I) CI C(I,12) RB(I,K)

T(2,18) =

I f I I 1=1 (1+I1)**C(I,10) 1=1 K=l (1+I1)**(R1(I,K)+R6(I,K)),

71
IV. Present Value of Recurring and Non-Recurring O&M Expenditures

A. Present value (PV) of all annually recurring O&M costs (ARC),

discounted from end of year incurred, T(2,21):

1. Compute PV factor for ARC, M3:

a. If M2 <> II then

1+M2 1+M2

M3 = ( ) * [1 - ( ) **P2] * (1+M2)**P1.

I1-M2 l+Il

b. if M2 = II then

M3 = P2*(H-M2)**P1.

2. T(2,21) =M1*M3.

B. Present value of all non-annually recurring O&M costs (NARC),

discounted from end of year incurred, T(2,22):

M4 M(2,J)*(1+M5)**(P1+M(1,J))

T(2,22) = I

. J=l (1+I1)**M(1,J)

V. Present value PV of all energy costs, discounted from end of year

incurred, T(2,25):

A. Compute PV of total cost for each energy type (1=1 to El),

E1(4,I):

1. Compute modified uniform present worth factor for each energy

type in time interval K, D8:

a. If II <> E3(I,K) then

1+E3(I,K) 1+E3(I,K)

D8 = i * r l-( -—)**E2(I,K)] . I1-E3(I,K) l+Il

b. If II = E3(I,K) then

D8 = E2(I,K).

2. Compute modified uniform present worth factor for each energy

type I over the entire study period, E1(3,I):

E1(2,I) K-1 1+E3(I,J)

E1(3,I) =

I n *D8 . K=l J=0 (1+I1)**E2(I,J)

72
3. Compute PV cost for energy type I over the study period, E1(4,I):

A. E1(4,I)=[E1(1,I)*E4(I)+E5(I)]*[(H-E1(5,I))**P1]*E1(3,I).

El

B. T(2,25) = I E1(4,I).

1=1

VI. If P1>0, then discount T(2,I), 1=5 to 27, from beginning of

occupancy to beginning of study period:

T(2,I)

T(2,I) is replaced by for I = 5 to 27.

(1*I1)**P1

VII. Aggregate all costs in present value terras at beginning of study period.

Aggregate cost variables:

1. T(3,l) = T(2,17) + T(2,18).

2. T(3,5) = T(2,21) + T(2,22).

3. T(3,7) = T(2,2) + T(2,6).

4. T(3,12) = T(3,5)+T(3,7)+T(3,18)+T(3,19)-T(3,l).

5. T(3,18) = T(2,27).

6. T(3,19) = T(2,25).

VIII. Find annualized value of all T(2,I) and T(3,I) costs.

A. Compute capital recovery factor, D9:

1. If IKO then

I1*(1+I1)**P3

D9 = . (H-I1)**P3 -1

2. If II = then D9 = 1/P3

B. T(4,I) = T(2,I)*D9 for I = 1,5,7,12,18, and 19.

C. T(5,I) = T(3,I)*D9 for I = 1,5,7,12,18, and 19.

73
Note: The following variables are used In the COMPARE program:

IX. Calculation of cost differentials (base case costs - alternative case

costs), NB(I):

A. Define new variables

CC(1,I) = T(3,I) for base case, I = 1,5,7,12,18 and 19.

CC(2,I) = T(3,I) for alternative case, I = 1,5,7,12,18 and 19.

B. Adjust credit items:

CC(K,1) = CC(K,1)*-1 for K = 1 to 2.

C. Calculate differential costs between base case and alternative

for each element of the LCC, NB(I):

NB(I) = CC(1,I) - CC(2,I) for I = 1,5,7,12,18 and 19.

where NB(1) = net increase in resale value,

NB(5) = net increase in O&M costs,

NB(7) = net increase in initial project cost,

NB(12) = net increase in total LCC project cost,

NB(18) = net increase in replacement costs,

NB(19) = net increase in energy costs,

all in present-value terras.

X. Calculation of Savings-to-Investraent Ratio

Savings-to-Investment Ratio (SIR):

NB(5)+NB(19)

SIR = . (NB(7)+NB(18)-NB(1))*-1

74
INDEX

alternative building design 1,23,24,49

analysis type 35

annual demand charge 44

annually recurring O&M costs (ARC) 40

annual value life-cycle cost 18,48

average price escalation rate during planning/construction period 38,39,40

average price escalation rate during occupancy 38,39,40

back-up copies 30

base-case building design 23,24,48,49

base year 2,4

BASIC 6,7,8,9,10

basic LCC assumptions 2,4,12,35-36

BCFFORM 5,31-34

building characteristics file 10-21,31-46,47,49-50,56

building type codes 36

capital components 12,36-39

COMPARE 10,23-26,48,54,56

component data 36-39

comparative LCC analysis (see COMPARE)

cost phasing 37,50

creation of files (see file creation)

default values 14,16

definitions 35-46

demand charge (see annual demand charge)

Department of Energy - energy price projections 2,3,42

Department of Energy - regions 36

DISCOUNT 5,62-64

discount rate 2,4,23,26

disk format 3

disk drive designation 8,9

energy conversion factors 43

energy cost data 12,41-46,47

energy price escalation methods 44

energy price escalation rates 42,44-45

energy prices 2,4,42,43

energy type codes 43

expected component life 38

expected replacement life 40

FBLCC (introductory module) 10,12

Federal Energy Management Program 1 file creation (BCF) 13-16

file names 9,13,14,21,19

file modification (BCF) 13,14,16-17

file save 17,27

file storage 27

file suffix 13,21

financial analysis assvimptlons (see basic LCC assumptions)

future costs 23,24,25

Handbook 135 1,2,35,56,62

75
inflation (see also price escalation rates) 31

initial component cost 1,2,23,37,39,49

initial cost adjustment factor 2,37

initial conservation-related cost 37

initial investment 25,48,54

initial replacement cost 39

installaion 8-9

land 38,

LCC output file 21,48

LCCDATA 10,12-17,26,27,31,54

LCCMAIN 10,18,27,48,54

life of components or replacements (see expected life)

life-cycle cost (LCC) analysis 1-3,49-61

microcomputer requirements 7 modification of files (see file modification)

net present-value savings 25

non-annually recurring O&M costs 40

non-energy-related projects 1,3,4,49

0MB Circular A-94 3,4

occupancy year 35

operating and maintenance (O&M) costs 1,2,12,35,40-41,47

planning/construction period 4,35,45,49-50

precision 7 present value 18,25,48,49

price escalation rates 31,38,40,41

PRINTBCF 10,18,27

PRINTLCC 10,18,27,54

project title 12,35

real rates 31

remaining value 39,48

renewable energy projects 1-3

replacement data 2,12,39-40,48

report types 47-49

resale value 2,4,39-40

saving files (see file save)

savings-to-investment ratio (SIR) 25,49

significant digits 7 sensitivity analysis 26

sequence of subprogram execution 26

start ap 9-11

study period 2,4,35

worksheet (BCFFORM) 5,31-34

76
NBS.n4A (REV. 2-8C) U.S. DEPT. OF COMM. BIBLIOGRAPHIC DATA

SHEET (See instructions)

1, PUBLICATION OR

REPORT NO. AlBS/TN-1222

2. Performing Organ. Report No. 3. Publication Date May 19 8 6

4. TITLE AND SUBTITLE

A User's Guide to the Federal Building Life Cycle Cost (FBLCC) Computer Program

5. AUTHOR(S)

Stephen R. Petersen

6. PERFORMING ORGANIZATION (If joint or other tlian NBS. see instructions)

NATIONAL BUREAU OF STANDARDS

DEPARTMENT OF COMMERCE

Gaithersburq, MP 20899

7. Contract/Grant No.

8. Type of Report & Period Covered

Final

9. SPONSORING ORGANIZATION NAME AND COMPLETE ADDRESS (Street. City. State. ZIPi

Federal Programs Office

Office of the Assistant Secretary for Conservation and Renewable Energy

U.S. Department of Energy

Washington, D.C. 20585

10. SUPPLEMENTARY NOTES

[^J Document describes a computer program; SF-185, FIPS Software Summary, is attached.

11. ABSTRACT (A 200-word or less factual summary of most significant information. If document includes a significant

bibliography or literature survey, mention it here) The FBLCC Computer Program and this User's Guide provide computational tools and

energy price data for performing life-cycle cost (LCC) analyses of Federal buildings

and related subsystems. Two kinds of Federal building projects can be evaluated

with FBLCC: (1) LCC analysis of projects directly related to energy conservation

and renewable energy, and (2) LCC analysis of projects not directly concerned with

energy conservation or renewable energy. The methods and procedures used in these

LCC analyses are based on the rules set forth by the U.S. Department of Energy's

Federal Energy Management Program and the U.S. Office of Management and Budget in

Circular A-94, respectively. The FBLCC computer program and DoE energy price data

are contained on a 5 1/4 inch diskette formatted for use on microcomputers with

an MS-DOS operating system. A comparative LCC analysis of alternative building

or subsystem designs can be performed by FBLCC in order to determine whether the

additional costs of design improvements or retrofits to a Federal building are cost

effective in terms of reductions in future operating-related costs when evaluated

in present value dollars.

12. KEY WORDS (Six to twelve entries; alphabetical order; capitalize only proper names; and separate key words by semicolons)

benefit-cost analysis; building economics; economic analysis; energy conservation;

Federal buildings; Federal Energy Management Program; life cycle cost analysis;

renewable energy

13. AVAILABILITY

[^^^nlimited

Q For Official Distribution. Do Not Release to NTIS

5p^ Order From Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.

\2Z\ Order From National Technical Information Service (NTIS). Springfield. VA. 22161

14. NO. OF

PRINTED PAGES

89

15. Price

* U.S. Government Printing Ollicc: I996-491 0<>7/57SS3 USCOMM-OC 6043-PSO



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and supplements are available from ACS, 1155 Sixteenth St., NW, Washington, DC 20056.

Building Science Series—Disseminates technical information developed at the Bureau on building materials,

components, systems, and whole structures. The series presents research results, test methods, and perfor- mance criteria related to the structural and environmental functions and the durability and safety

characteristics of building elements and systems.

Technical Notes—Studies or reports which are complete in themselves but restrictive in their treatment of a

subject. Analogous to monographs but not so comprehensive in scope or definitive in treatment of the subject

area. Often serve as a vehicle for final reports of work performed at NBS under the spxDnsorship of other government agencies.

Voluntary Product Standards—Develop)ed under procedures published by the Department of Commerce in Part 10, Title 15, of the Code of Federal Regulations. The standards establish nationally recognized re- quirements for products, and provide all concerned interests with a basis for common understanding of the

characteristics of the products. NBS administers this program as a supplement to the activities of the private

sector standardizing organizations.

Consumer Information Series—Practical information, based on NBS research and exjDerience, covering areas of interest to the consumer. Easily understandable language and illustrations provide useful background

knowledge for shopping in today's technological marketplace.

Order the above NBS publications from: Superintendent of Documents, Government Printing Office,

Washington, DC 20402. Order the following NBS publications—FIPS and NBSIR 's—from the National Technical Information Service, Springfield, VA 22161.

Federal Information Processing Standards Publications (FIPS PUB)—Publications in this series collectively constitute the Federal Information Processing Standards Register. The Register serves as the official source of

information in the Federal Government regarding standards issued by NBS pursuant to the Federal Property

and Administrative Services Act of 1949 as amended, Public Law 89-306 (79 Stat. 1127), and as implemented

by Executive Order 11717 (38 FR 12315, dated May 11, 1973) and Part 6 of Title 15 CFR (Code of Federal

Regulations).

NBS Interagency Reports (NBSIR)—A special series of interim or final reports on work performed by NBS

for outside sponsors (both government and non-government). In general, initial distribution is handled by the sponsor; public distribution is by the National Technical Information Service, Springfield, VA 22161, in paper copy or microfiche form.
U.S. Department of Commerce

National Bureau of Standards

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Official Business

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