M&V Guidelines: 

Measurement and 

Verifi cation for 

Federal Energy 

Projects 

Version 3.0 
M&V Guidelines:
 

Measurement and Verification for Federal Energy Projects 
 

Version 3.0 
 

Prepared For: 
 

U.S. Department of Energy 
 

Federal Energy Management Program 
 

www1.eere.energy.gov/femp/
 

Prepared By: 
 

Nexant, Inc. 
 

1401 Walnut Street, Suite 400 
 

Boulder, CO 80302 
 

Tel: 303.402.2480 
 

www.nexant.com
 

Under Subcontract To: 
 

EMP2, Inc. 
 

www.emp2.com
 

April 2008 

FEMP M&V Guidelines 3.0 i 
Acknowledgements 

This document was prepared by Lia Webster and James Bradford of Nexant, Inc. in 
 

Boulder, Colorado. 
 

Contributors to this document include: Dale Sartor of Lawrence Berkeley National 
 

Laboratory, John Shonder and Erica Atkin of Oak Ridge National Laboratory, and Steve 
 

Dunnivant of EMP2. Other materials were developed by various industry-government 
 

working groups and the authors of FEMP Guidelines v2.2 (Ellen Franconi, David Jump, 
 

Steve Schiller, and Mark Stetz). 
 

This document follows the International Performance Measurement and Verification 
 

Protocol (IPMVP) Concepts and Options for Determining Energy and Water Savings 
 

Volume 1, April 2007. 
 

ii M&V Guidelines 3.0 FEMP 
Contents 
 

Section 	 Page 

Section 1 Measurement and Verification (M&V) Guides .................................................. 1-1
 

1.1 	 Overview and purpose of the Federal Energy Management Program (FEMP) 

 M&V Guide ................................................................................................................. 1-1 
 

1.1.1 The Federal ESPC Authority ........................................................................... 1-1 
 

1.1.2 The Financial Structure of ESPCs ................................................................... 1-1 
 

1.1.3 Purpose of the FEMP M&V Guide.................................................................. 1-2 
 

1.1.4 Overview.......................................................................................................... 1-3 
 

1.2 Other M&V Guidelines................................................................................................ 1-4 
 

1.2.1 IPMVP ............................................................................................................. 1-4 
 

1.2.2 ASHRAE Guideline 14.................................................................................... 1-4 
 

Section 2 Overview of M&V for ESPCs............................................................................... 2-1
 

2.1 General Approach to M&V ......................................................................................... 2-1 
 

2.2 Steps to Determine and Verify Savings.......................................................................2-3 
 

2.2.1 Step 1: Allocate Project Responsibilities........................................................ 2-4 
 

2.2.2 Step 2: Develop a Project-Specific M&V Plan............................................... 2-4 
 

2.2.3 Step 3: Define the Baseline............................................................................. 2-5 
 

2.2.4 Step 4: Install and Commission Equipment and Systems............................... 2-5 
 

2.2.5 Step 5: Conduct Post-Installation Verification Activities............................... 2-6 
 

2.2.6 Step 6: Perform Regular-Interval Verification Activities............................... 2-6 
 

Section 3 Risk and Responsibility in M&V.......................................................................... 3-1
 

3.1 Using M&V to Manage Risk ....................................................................................... 3-1 
 

3.2 Risk, Responsibility, and Performance Matrix............................................................ 3-2 
 

Section 4 Detailed M&V Methods ........................................................................................ 4-1
 

4.1 Overview of M&V Options A, B, C, and D ................................................................ 4-1 
 

4.2 Developing Regression Models ................................................................................... 4-2 
 

4.2.1 Independent Variables ..................................................................................... 4-3 
 

4.2.2 Choosing a Model............................................................................................ 4-3 
 

4.2.3 Weather Data ................................................................................................... 4-4 
 

4.2.4 Documentation................................................................................................. 4-5 
 

4.2.5 Savings Determination..................................................................................... 4-5 
 

4.3 Option A—Retrofit Isolation with Key Parameter Measurement ............................... 4-6 
 

4.3.1 Approach to Option A...................................................................................... 4-6 
 

4.3.1.1 Measurements .................................................................................................. 4-7 
 

4.3.1.2 Estimates.......................................................................................................... 4-7 
 

4.3.1.3 Ongoing Verification ....................................................................................... 4-8 
 

4.3.2 M&V Considerations....................................................................................... 4-8 
 

4.4 Option B—Retrofit Isolation with All Parameter Measurement ................................. 4-8 
 

4.4.1 Approach to Option B...................................................................................... 4-9 
 

4.4.2 M&V Considerations....................................................................................... 4-9 
 

4.5 Option C—Whole-Building Data Analysis ............................................................... 4-10 
 

4.5.1 Approach to Option C.................................................................................... 4-11 
 

FEMP M&V Guidelines 3.0 iii 
Section 	 Page 

4.5.2Data Collection ..............................................................................................4-11 
 

4.5.2.1 Utility Billing Data ........................................................................................ 4-11 
 

4.5.2.2 Other Site Changes ........................................................................................ 4-12 
 

4.5.3 M&V Considerations..................................................................................... 4-12 
 

4.6 Option D—Calibrated Simulation ............................................................................. 4-12 
 

4.6.1 Approach to Option D.................................................................................... 4-14 
 

4.6.1.1 Collecting the Data ........................................................................................ 4-14 
 

4.6.1.2 Inputting the Data and Running the Baseline Model.....................................4-16 
 

4.6.1.3 	 Calibrating the Baseline Model ..................................................................... 4-16 
 

4.6.1.4 	 Create and Refine the Performance Period Model ........................................ 4-16 
 

4.6.1.5 	 Verifying Performance and Calculating Savings...........................................4-17 
 

4.6.2 Simulation Software....................................................................................... 4-18 
 

4.6.3 Model Calibration .......................................................................................... 4-18 
 

4.6.3.1 Weather Data ................................................................................................. 4-19 

4.6.3.2 Statistical Indices........................................................................................... 4-20 

4.6.3.3 Subsystem 	
 Level Calibration with Monitored Data....................................... 4-22 
 

4.6.3.4 	
Whole-Building Level Calibration with Monthly Data .................................4-22 
 

4.6.3.5 	
Whole-Building Level Calibration with Hourly Data ................................... 4-23 
 

4.6.4 M&V Considerations..................................................................................... 4-23 
 

Section 5 Selecting An M&V Approach...............................................................................5-1
 

5.1 Key Issues in Selecting the Appropriate M&V Approach...........................................5-1 
 

5.1.1 Value of ECM in Terms of Projected Savings and Project Costs.................... 5-1 
 

5.1.2 Complexity of ECM or System........................................................................ 5-2 
 

5.1.3 Number of Interrelated ECMs at a Single Facility .......................................... 5-2 
 

5.1.4 Risk of Achieving Savings............................................................................... 5-2 
 

5.1.5 Responsibility Allocation Between the ESCO and the Federal Agency ......... 5-3 
 

5.1.5.1 Other Uses for M&V Data and Systems.......................................................... 5-4 
 

5.2 Determining an M&V Approach ................................................................................. 5-4 
 

5.2.1 General Criteria for Selecting an M&V Approach.......................................... 5-4 
 

5.2.2 M&V Planning Tool ........................................................................................ 5-5 
 

5.2.2.1 	 Step 1: Develop a list of project and ECM-level objectives and 
 

constraints that relate to measurement and verification of savings. ................ 5-5 
 

5.2.2.2 	 Step 3: Evaluate the savings risk associated 
 

with the selected M&V option(s)..................................................................... 5-7 
 

5.2.2.3 	 Step 4: Estimate costs for the M&V option.................................................... 5-8 
 

5.2.2.4 	 Step 5: Write the M&V plan...........................................................................5-8 
 

5.3 Cost and Rigor .............................................................................................................5-8 
 

5.3.1 Balancing Cost and Rigor................................................................................ 5-8 
 

5.3.2 Savings Calculations........................................................................................ 5-9 
 

5.3.3 M&V Costs...................................................................................................... 5-9 
 

5.4 Uncertainty................................................................................................................. 5-10 
 

5.4.1 Measurement.................................................................................................. 5-10 
 

5.4.2 Sampling ........................................................................................................ 5-12 
 

5.4.3 Estimating ...................................................................................................... 5-12 
 

5.4.4 Modeling........................................................................................................ 5-13 
 

iv M&V Guidelines 3.0 FEMP 
Section 	 Page 

Section 6 Incorporating M&V in Super ESPCs—Key Submittals.................................... 6-1
 

6.1 M&V Approach ........................................................................................................... 6-1 
 

6.2 ESPC Risk and Responsibility Matrix.........................................................................6-2 
 

6.3 Measurement and Verification Plan.............................................................................6-2 
 

6.4 Commissioning Approach, Plan, and Report............................................................... 6-2 
 

6.5 Post-Installation Report ............................................................................................... 6-3 
 

6.6 Annual Inspections and Reports .................................................................................. 6-3 
 

Section 7 M&V Plan Details.................................................................................................. 7-1
 

7.1 Defining the baseline ................................................................................................... 7-2
 

7.2 Adjustments ................................................................................................................. 7-3 
 

7.2.1 Routine Adjustments........................................................................................ 7-3 
 

7.2.2 Non-Routine Adjustments ............................................................................... 7-4 
 

7.3 Interactive effects......................................................................................................... 7-4 
 

7.4 Metering....................................................................................................................... 7-5 
 

7.4.1 Equipment........................................................................................................ 7-6 
 

7.4.2 Sensor and Meter Accuracy and Calibration ................................................... 7-6 
 

7.4.3 Metering Duration............................................................................................ 7-7 
 

7.4.4 Sampling .......................................................................................................... 7-7 
 

7.5 Energy Costs ................................................................................................................ 7-8 
 

7.5.1 Using Escalation Rates ....................................................................................7-9 
 

7.6 Agency Witnessing of M&V Activities..................................................................... 7-10 
 

7.7 Reporting.................................................................................................................... 7-10 
 

7.7.1 Communicating M&V Activities to Federal Agencies.................................. 7-10 
 

7.7.2 Format and Content........................................................................................ 7-10 
 

7.7.3 Approvals....................................................................................................... 7-11 
 

7.8 Annual Inspections..................................................................................................... 7-11
 

7.9 O&M and other Energy-related Savings.................................................................... 7-12 
 

Section 8 Commissioning ....................................................................................................... 8-1
 

8.1 Overview...................................................................................................................... 8-1 
 

8.2 Commissioning Process for ESPCs ............................................................................. 8-1 
 

8.2.1 Specifying Commissioning Requirements in the Contract.............................. 8-2 
 

8.2.2 Defining Commissioning Activities During Project Design ........................... 8-3 
 

8.2.3 Implementing Commissioning Activities During Construction ...................... 8-4 
 

8.2.4 Completing Commissioning Activities Prior to Project Acceptance............... 8-4 
 

8.2.5 Post-Acceptance Phase Commissioning Activities ......................................... 8-5 
 

Section 9 Planning and Reporting for Operations & Maintenance................................... 9-1
 

9.1 Overview...................................................................................................................... 9-1 
 

9.2 Steps To Plan & Report on O&M and R&R Issues.....................................................9-1 
 

9.2.1 	 Step 1: Develop ESPC Contract Risk & Responsibility Matrix.....................9-2 
 

9.2.2 	 Step 2: Develop Detailed O&M Responsibilities and 

 Reporting Requirements .................................................................................. 9-2 
 

9.2.3 	 Step 3: Develop Project-specific O&M Checklists ........................................ 9-3 
 

9.2.4 	 Step 4: ESCO Assembles O&M manuals & Provides Training.....................9-4 
 

9.2.5 	 Step 5: Government (or ESCO) Periodically Reports on 

 Maintenance Performed................................................................................... 9-4 
 

FEMP M&V Guidelines v3.0 v 
Section Page 

9.2.6 Step 6: ESCO Submits Annual Report ........................................................... 9-5 
 

Section 10 Review and Oversight of M&V Activities ......................................................... 10-1
 

10.1 Government Witnessing of M&V Activities ............................................................. 10-1 
 

10.2 Using the Review Checklists and Report Templates................................................. 10-2 
 

10.2.1 Project Documentation Needed ..................................................................... 10-2 
 

10.2.2 Using the Checklists ...................................................................................... 10-2 
 

10.2.3 Summarize Findings in Evaluation Report.................................................... 10-3 
 

10.3 Reviewing M&V Plans .............................................................................................. 10-3 
 

10.3.1 Prescriptive and Qualitative Evaluation Items............................................... 10-3 
 

10.4 Reviewing Post-Installation and Annual Reports ...................................................... 10-5 
 

10.4.1 Prescriptive and Qualitative Evaluation Items............................................... 10-5 
 

Section 11 Technology Applications ..................................................................................... 11-1
 

11.1 Lighting Efficiency .................................................................................................... 11-1 
 

11.1.1 Equipment Inventory ..................................................................................... 11-1 
 

11.1.2 Operating Hours and Diversity Factor........................................................... 11-2 
 

11.1.3 Equipment Performance................................................................................. 11-2 
 

11.1.4 Interactive Effects .......................................................................................... 11-3 
 

11.1.5 Savings Calculations...................................................................................... 11-3 
 

11.1.6 Ongoing Verification ..................................................................................... 11-4 
 

11.2 Lighting Controls....................................................................................................... 11-4 
 

11.2.1 Operating Hours............................................................................................. 11-5 
 

11.2.2 Equipment Performance................................................................................. 11-5 
 

11.2.3 Savings Calculations...................................................................................... 11-5 
 

11.2.4 Ongoing Verification ..................................................................................... 11-6 
 

11.3 Constant-Speed Motors.............................................................................................. 11-6 
 

11.3.1 Equipment Inventory ..................................................................................... 11-6 
 

11.3.2 Equipment Performance................................................................................. 11-7 
 

11.3.2.1 Verify Constant Loading............................................................................ 11-8 
 

11.3.2.2 Accounting for Motor Slip......................................................................... 11-8 
 

11.3.3 Operating Hours............................................................................................. 11-9 
 

11.3.4 Savings Calculations...................................................................................... 11-9 
 

11.4 Variable-Speed Motors ............................................................................................ 11-10 
 

11.4.1 Establish Baseline Equipment Performance and Operating Hours.............. 11-10 
 

11.4.2 Post-Installation Performance...................................................................... 11-11 
 

11.4.3 Savings Calculations.................................................................................... 11-12 
 

11.4.4 Ongoing Verification ................................................................................... 11-13 
 

11.5 Chillers..................................................................................................................... 11-13 
 

11.5.1 Baseline M&V Activities............................................................................. 11-14 
 

11.5.2 Post-Installation Performance...................................................................... 11-15 
 

11.5.3 Savings Calculations.................................................................................... 11-15 
 

11.6 Water........................................................................................................................ 11-16 
 

11.6.1 Typical Measures......................................................................................... 11-17 
 

11.6.2 Equipment Inventory ................................................................................... 11-17 
 

11.6.3 Equipment Performance............................................................................... 11-17 
 

11.6.4 Usage Characteristics................................................................................... 11-18 
 

vi M&V Guidelines 3.0 FEMP 
Section Page 

11.6.5 Ongoing Verification ................................................................................... 11-19 
 

11.6.6 Other Issues.................................................................................................. 11-19 
 

11.7 Geothermal Heat Pumps .......................................................................................... 11-20 
 

11.7.1 Equipment Efficiency and System Performance ......................................... 11-21 
 

11.7.2 Borefield Performance .................................................................................11-21 
 

11.8 Renewable Energy Projects ..................................................................................... 11-22 
 

11.8.1 Savings Calculations.................................................................................... 11-23 
 

11.8.1.1 Net Energy Use ........................................................................................ 11-23 
 

11.8.1.2 Normalized Savings................................................................................. 11-24 
 

11.8.2 Energy Metering .......................................................................................... 11-24 
 

11.8.2.1 Electrical Metering................................................................................... 11-25 
 

11.8.2.2 Thermal Metering .................................................................................... 11-25 
 

11.8.3 Notes on Some Renewable Energy Technologies ....................................... 11-25 
 

11.8.3.1 Active Solar Thermal Systems................................................................. 11-25 
 

11.8.3.2 Passive Solar Systems.............................................................................. 11-26 
 

11.8.3.3 Wind, PV, and Other Renewable Generation Projects ............................ 11-26 
 

11.9 New Construction .................................................................................................... 11-26 
 

Appendix A Definition of Terms..................................................................................... A-1
 

Appendix B Sampling Guidelines ................................................................................... B-1
 

Appendix C O&M Savings in Federal Energy Savings Performance Contracts .... C-1
 

Appendix D M&V Plan and Reporting Outlines........................................................... D-1
 

Appendix E Reviewing Measurement & Verification Plans ........................................ E-1
 

Appendix F Reviewing Post Installation and Annual Reports .....................................F-1
 

Appendix G Standard M&V Plan for Lighting Equipment Retrofits.........................G-1
 

Appendix H Standard M&V Plan for Chiller Replacement Projects .........................H-1
 

Appendix I Including Retro-Commissioning in Federal ESPCs ................................. I-1
 

FEMP M&V Guidelines v3.0 vii 
Figures and Tables 

Figure Page 

Figure 1-1 ESPC Reallocation of Money Paid for Utilities........................................................1-2 
 

Figure 2-1 Energy Savings Depend on Performance and Usage................................................ 2-3 
 

Figure 4-1 Retrofit Isolation (Options A and B) vs Whole-Facility M&V Methods (Options C 
 

and D)........................................................................................................................................... 4-1 
 

Figure 5-1 M&V Planning Flowchart......................................................................................... 5-6 
 

Figure 5-1 The Law of Diminishing Returns for M&V ............................................................. 5-9 
 

Figure 5-1 Example Impact of Sensor Accuracy on Calculations............................................ 5-11 
 

Table Page 

Table 2-1 Steps to Verify Savings from Performance Contracts................................................2-4 
 

Table 3-1 Energy Savings Performance Contract Risk, Responsibility, and Performance Matrix
 

......................................................................................................................................................3-3 
 

Table 4-1 Overview of M&V Options A, B, C, and D............................................................... 4-2 
 

Table 4-2 Statistical Validations Guidelines............................................................................... 4-4
 

Table 4-3 Acceptable Calibration Tolerances........................................................................... 4-22 
 

Table 4-4 Example Calculations to Determine Monthly Model Calibration............................ 4-23 
 

Table 5-1 Example Estimate of Savings Risk.............................................................................5-3 
 

Table 5-2 Example Benefit-to-Cost Evaluation for M&V .........................................................5-3 
 

Table 5-3 Example M&V Considerations Matrix ...................................................................... 5-7 
 

Table 6-1 Super ESPC Submittals Related to Measurement and Verification...........................6-1 
 

Table 6-2 Super ESPC Project Terminology.............................................................................. 6-1 
 

Table 9-1 Steps to Plan & Report on O&M and R&R Issues..................................................... 9-1 
 

Table 9-2 Excerpt from Risk & Responsibility Matrix .............................................................. 9-2 
 

Table 9-3 Excerpt from M&V Plan & Savings Calculations Outline ........................................ 9-3 
 

Table 9-4 Excerpts from Annual Report Outline for Each ECM ...............................................9-5 
 

Table 11-1 Example Motor Survey Data Form ........................................................................ 11-7 
 

viii M&V Guidelines 3.0 FEMP 
Equations 

Equation Page 

Equation 2-1: General Equation Used to Calculate Savings ....................................................... 2-2 
 

Equation 4-1: Multi-Variant Regression Model for a Weather-Dependent ECM....................... 4-3 
 

Equation 4-2: Measured Energy Consumption.......................................................................... 4-21 
 

Equation 4-3: Root Mean Square Error .....................................................................................4-21 
 

Equation 4-4: Mean of the Measured Data ................................................................................ 4-21 
 

Equation 4-5: Cv(RSME) ..........................................................................................................4-21 
 

Equation 7-1: General Equation Used to Calculate Savings ....................................................... 7-3 
 

Equation 7-2: Expanded Equation Used to Calculate Savings .................................................... 7-3 
 

Equation 11-1: Total Energy Savings........................................................................................ 11-3
 

Equation 11-2: Total Demand Savings...................................................................................... 11-4 
 

Equation 11-3: Energy Savings for Each Usage Group or Piece of Equipment........................ 11-4 
 

Equation 11-4: Demand Savings for Each Lighting Usage Group or Piece of Equipment....... 11-4 
 

Equation 11-5: Peak Demand Savings for Each Usage Group or Piece of Equipment...........11-10 
 

Equation 11-6: Total Energy Savings...................................................................................... 11-12 
 

Equation 11-7: Total Demand Savings.................................................................................... 11-12 
 

Equation 11-8: Baseline (or Performance period) Energy Used by Each Usage Group or Piece of 
 

Equipment................................................................................................................................ 11-12 
 

Equation 11-9: Energy Savings for Each Piece of Equipment ................................................11-12 
 

Equation 11-10: Peak Demand Savings................................................................................... 11-13 
 

Equation 11-11: Energy Savings for Each Piece of Equipment .............................................. 11-16 
 

Equation 11-12: Cost Savings Determination Utilizing Net Energy Use Approach............... 11-23 
 

Equation 11-13: General Savings Equation for Renewable Energy Projects.......................... 11-24 
 

FEMP M&V Guidelines v3.0 ix 
x M&V Guidelines 3.0 FEMP 
Section 1	 Measurement and Verification (M&V) Guides 

1.1	 OVERVIEW AND PURPOSE OF THE FEDERAL ENERGY MANAGEMENT PROGRAM (FEMP) 

M&V GUIDE 

This document provides guidelines and methods for measuring and verifying energy, water, and 

cost savings associated with federal energy savings performance contracts (ESPCs). An ESPC is 

a contracting method in which the contractor provides and arranges financing and 

implementation of energy improvements and is repaid over the contract term from the cost 

savings generated by the improvements. 

1.1.1	 The Federal ESPC Authority 

The federal use of ESPCs was authorized in the 1986 amendments to the National Energy 

Conservation Policy Act of 1978 (NECPA), which gave federal agencies the authority to enter 

into shared-energy-savings contracts with private-sector energy service companies (ESCOs). The 

Energy Policy Act of 1992 (EPACT) further amended NECPA, authorizing federal agencies to 

execute guaranteed-savings ESPCs. EPACT also directed DOE to develop an ESPC regulation 

through a formal rule-making process. The final ESPC rule was published on April 10, 1995 and 

implemented the DOE ESPC regulation at 10 CRF Part 436 Subpart B. The Ronald W. Reagan 

National Defense Authorization Act for FY 2005 revised the definition of energy savings in 

federal ESPCs to include water conservation measures, and the National Energy Independence 

and Security Act of 2007 extended the federal ESPC authority indefinitely. 

Some aspects of the legislation are related to measurement and verification of savings. These 

items include requirements for measurement and verification of savings, annual energy audits, 

and factors that adjustments can be made for. 

Current federal energy goals are defined in Executive Order 13423, released in January 2007, 

which strongly supports the use of alternative financing methods, including ESPCs, to achieve 

them. 

For more information about federal ESPCs, including the authorizing legislation, regulations, 

and all aspects of implementing ESPC projects, go to the website of the FEMP, 

http://www1.eere.energy.gov/femp/financing/superespcs_espcrule.html. 

1.1.2	 The Financial Structure of ESPCs 

In an ESPC, the ESCO provides the energy surveys, engineering, design, construction 

management, labor, equipment, and sometimes maintenance to reduce energy and water use and 

costs, as well as related costs such as operations and maintenance (O&M) of energy systems. In 

federal ESPCs, the ESCO is required to guarantee a specific level of cost savings that will be 

sufficient to pay for the improvements over the term of the contract. Savings must exceed 

payments in every year of the contract. The federal ESPC authority requires the contractor to 

undertake measurement and verification (M&V) activities and provide documentation to 

demonstrate that the guarantee has been met. 

FEMP M&V Guidelines 3.0 1-1 
Agency 

savings

Agency 

savings Baseline

utility bill

ESCO

payments

Reduced 

utility bill

Reduced 

utility bill

As shown in Figure 1-1, ESPCs reallocate the money the agency pays for utilities. Energy costs 

are reduced, and part of the savings are paid to the ESCO for the improvements that generate the 

savings. The energy savings realized through an ESPC project provide the income stream to 

finance the project. After the contract term ends, any additional savings will accrue to the 

agency. 

Agency 

savings 

Agency 

savings Baseline 

utility bill 

ESCO 

payments 

Reduced 

utility bill 

Reduced 

utility bill 

Before ESPCDuring ESPCAfter ESPC

Figure 1-1 ESPC Reallocation of Money Paid for Utilities 

An ESPC can be used to finance renewable energy systems, water conservation, related O&M 

improvements, and other measures, as well as energy conservation measures and energy-efficient 

systems. Thus, in this document the word “energy” is used as a generic term that includes other 

things besides traditional sources of heat and electric power. The contract can apply to both new 

construction and retrofits. In many cases, old, inefficient equipment is replaced with new 

equipment and control systems. 

1.1.3 Purpose of the FEMP M&V Guide 

This document contains procedures and guidelines for quantifying the savings resulting from 

energy efficiency equipment, water conservation, improved operation and maintenance, 

renewable energy, and cogeneration projects implemented through ESPCs. This document is 

intended for federal energy managers, federal procurement officers, and contractors 

implementing performance contracts at federal facilities. 

The DOE Super ESPCs include a contractual requirement for ESCOs to comply with this guide 

in planning and carrying out M&V activities for federal agency customers. 

The “performance” aspect of performance contracting refers to energy performance and drives 

the way in which savings are determined. Since the M&V approach calculates and documents 

energy savings, it is one of the most important activities associated with implementing 

performance contracts and is a crucial issue in contract negotiations. 

This document has two primary purposes: 

	 It serves as a reference document for specifying M&V methods and procedures in 
 

delivery orders, requests for proposals (RFPs), and performance contracts. 
 

1-2 M&V Guidelines 3.0 FEMP 
	 It is a resource for those developing project-specific M&V plans for federal ESPC 
 

projects, especially under DOE’s Super ESPC contract mechanism.
 

The procedures defined in this document 1) can be applied with consistency to similar projects 

throughout all geographic regions, and 2) are impartial, reliable, and repeatable. If the procedures 

in this document are followed by a federal agency or other entity, then that agency or entity can 

be assured that their guaranteed savings can be realized. 

1.1.4 Overview 

The first three chapters of this Guideline present an overview of the M&V process and issues 

related to responsibility allocation, thereby providing the context for the specific M&V 

requirements that are essential in a federal ESPC project. Chapter 4 presents details of the four 

general M&V methods that should be used. Chapter 5 offers guidance on selecting an M&V 

approach for specific projects, and Chapter 6 details the M&V related submittals that are 

required in a Super ESPC project. Chapters 7, 8, and 9 discusses important issues that must be 

considered and specified in the contract, including M&V Plan details, commissioning 

requirements, and O&M responsibilities. Chapter 10 covers the key oversight issues that are the 

responsibility of the government. Chapter 11 includes guidance on determining savings from the 

most common technologies included in federal ESPCs. 

The Appendices to this document are fairly large, and are provided as a separate PDF document. 

Items include a definition of terms; guidance on statistical sampling; as well as instructions, 

formats, and checklists for reviewing M&V submittals. Several items developed by governmentindustry working groups are also provided, including standard M&V Plan templates for both 

lighting retrofits and chiller replacements, guidance on verifying O&M savings, and the M&V 

Plan and reporting outlines. The final appendix includes guidance on incorporating retrocommissioning services in performance contracts. Additional materials developed for the Super 

ESPC program are available online1, including the M&V Plan and reports from a fictitious 

project. 

This is Version 3.0 (2008) of the Guideline. Version 2.2 was published in 2000; Version 2.0 was 

published in 1996. This new version incorporates significant updates to the 2000 version. Much 

of the guidance included was developed by a variety of industry-government working groups, 

facilitated by DOE, since the release of the previous version. Some of the material developed has 

been incorporated in the Super ESPC contract. In developing the present version, the entities 

involved: 

	 Updated terminology and processes to harmonize with the 2008 Super ESPC master 

contract 

	 Updated definitions of savings and adjustments to match IPMVP 2007 

	 Revised Option A strategies to be in line with IPMVP 2007, noting when exceptions 

can be made 

	 Eliminated several measure-specific approaches and added a discussion on key issues 

related to the most common energy conservation measures (ECMs) 

1 Additional Super ESPC materials related to measurement and verification of savings are available at 

http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html and http://ateam.lbl.gov/mv/. 

FEMP M&V Guidelines 3.0 1-3 
 Added significant information on planning for operations and maintenance in ESPCs 

 Provided details and example on verifying energy related cost saving from operations 

and maintenance 

 Added detailed formats for M&V plans and reports 

 Added an example of an M&V Plan and reports for a fictitious Super ESPC project 

 Included FEMP’s Standard M&V Plan for Lighting Replacements 

1.2 OTHER M&V GUIDELINES 

Measuring and verifying savings from performance contracting projects requires special project 

planning and engineering activities. Although M&V is an evolving science, industry best 

practices have been developed. These practices are documented in several guidelines, including 

the International Performance Measurement and Verification Protocol2 (IPMVP 2007) and 

ASHRAE Guideline 14: Measurement of Energy and Demand Savings3 (2002). These two 

guidelines are described below. 

1.2.1 IPMVP 

The IPMVP 2007 is a guidance document that provides a conceptual framework in measuring, 

computing, and reporting savings achieved by energy or water efficiency projects at facilities. 

The IPMVP defines key terms and outlines issues that must be considered in developing an 

M&V Plan, but does not provide details for specific measures or technologies. The latest version 

is an update of the 2002 edition. 

Developed through a collaborative effort involving industry, government, financial, and other 

organizations, the IPMVP serves as the framework for M&V procedures, provides four M&V 

options, and addresses issues related to the use of M&V in third-party-financed and utility 

projects. 

The FEMP M&V Guideline contains specific procedures for applying concepts originating in the 

IPMVP. The Guideline represents a specific application of the IPMVP for federal projects. It 

outlines procedures for determining M&V approaches, evaluating M&V plans and reports, and 

establishing the basis of payment for energy savings during the contract. These procedures are 

intended to be fully compatible and consistent with the IPMVP. 

1.2.2 ASHRAE Guideline 14 

ASHRAE Guideline14-2002 Measurement of Energy and Demand Savings is a reference for 

calculating energy and demand savings associated with performance contracts using 

measurements. In addition, it sets forth instrumentation and data management guidelines and 

describes methods for accounting for uncertainty associated with models and measurements. 

Guideline 14 does not discuss other issues related to performance contracting. 

2 International Performance Measurement and Verification Protocol: Concepts and Options for Determining Energy and Water Savings 

Volume I, EVO-10000 -1.2007, Efficiency Valuation Organization. 

3 ASHRAE Guideline 14-2002: Measurement of Energy and Demand Savings, American Society of Heating, Refrigerating and AirConditioning Engineers. 

1-4 M&V Guidelines 3.0 FEMP 
The ASHRAE document specifies three engineering approaches to M&V. Compliance of each 

approach requires that the overall uncertainty of the savings estimates is below prescribed 

thresholds. The three approaches presented are closely related to and support the options 

provided in IPMVP. 

FEMP M&V Guidelines 3.0 1-5 
1-6 M&V Guidelines 3.0 FEMP 
Section 2 Overview of M&V for ESPCs 
 

Implementing measurement and verification (M&V) strategies in energy performance contracts 

is required in federal contracts such as the Super Energy Savings Performance Contracts (Super 

ESPCs). Since energy savings are guaranteed, the legislation requires that the contractor verify 

that energy cost savings have been achieved each year. 

The federal legislation outlining the rules for implementing federal ESPC projects is the Energy 

Policy Act of 1992 (EPACT). The EPACT legislation includes specific requirements for annual 

verification of energy cost savings to support the saving guarantee. The goal of measurement and 

verification is to reduce the risk to agencies by providing a mechanism to evaluate the 

performance of a project throughout the term of the contract. The savings guarantee is defined by 

the M&V activities, whose function is to reduce agency risk. The challenge of M&V is to 

balance M&V costs with the value of increased certainty in the cost savings from the 

conservation measure. 

Many of the reasons for using M&V strategies go beyond merely satisfying the law. Properly 

applied, M&V can: 

 Accurately assess energy savings for a project 

 Allocate risks to the appropriate parties 

 Reduce uncertainties to reasonable levels 

 Monitor equipment performance 

 Find additional savings 

 Improve operations and maintenance (O&M) 

 Verify that the cost savings guarantee is met 

 Allow for future adjustments, as needed 

2.1 GENERAL APPROACH TO M&V 

Facility energy (O&M or water) savings cannot be measured, since they represent the absence of 

energy use. Instead, savings are determined by comparing the energy use before and after the 

installation of conservation measure(s), making appropriate adjustments for changes in 

conditions. 

The “before” case is called the baseline. The “after” case is referred to as the post-installation or 

performance period. Proper determination of savings includes adjusting for changes that affect 

energy use, but that are not caused by the conservation measure(s). Such adjustments may 

account for changes in weather, occupancy, or other factors between the baseline and 

performance periods. Equation 2-1 shows the general equation used to calculate savings. 

FEMP M&V Guidelines 3.0 2-1 
_ _ _

Equation 2-1: General Equation Used to Calculate Savings 

Savings = (Baseline Energy − Post Installation Energy ) ± Adjustments 

Baseline and performance period energy use can be determined by using the methods associated 

with several different M&V approaches classified by the types of measurements performed. The 

four options, originating in the International Performance Measurement and Verification 

Protocol (IPMVP), are termed Options A (Retrofit Isolation with Key Parameter Measurement), 

B (Retrofit Isolation with All Parameter Measurement), C (Whole Building), and D (Calibrated 

Simulation). (These options are discussed in Chapter 4 of this document.) These options enables 

one to apply a range of suitable techniques for a variety of applications. How one chooses and 

tailors a specific option is determined by the level of M&V rigor required to obtain the desired 

accuracy level in the savings determination and is dependent on the complexity of the 

conservation measure, the potential for changes in performance, the measure’s savings value, 

and the project’s allocation of risk. 

Two fundamental factors drive energy savings: performance and usage. Performance describes 

how much energy is used to accomplish a specific task; usage describes how much of the task is 

required, such as the number of operating hours during which a piece of equipment operates. For 

example, in the simple case of lighting, performance is the power required to provide a specific 

amount of light, and usage is the operating hours per year. For a chiller (which is a more 

complex system), performance is defined as the energy required to provide a specific amount of 

cooling (which varies with load), whereas usage is defined by the cooling load profile and the 

total amount of cooling required. Both performance and usage factors need to be known to 

determine savings, as shown in Figure 2-1. 

2-2 M&V Guidelines 3.0 FEMP 
Improved

Performance 

(Efficiency) 

Energy

Savings

Baseline 

Operating 

Hours

Baseline Energy Use Post-retrofit Energy Use 

Baseline 
 

Efficiency
 

Post-
 

Retrofit 
 

Efficiency
 

Performance 

Reduced (rate of energy Operating use) Hours 

Hours per year 

Post-retrofit 

Operating 

Hours 

Figure 2-1 Energy Savings Depend on Performance and Usage 

In Figure 2-1, the area of the large box represents the total energy used in the baseline case. 

Reduction in the rate of energy use (increase in performance) or reductions in usage (decrease in 

operating hours) lead to reduced total energy use, which is represented by the smaller box. The 

difference between the two boxes—the shaded area—represents the energy savings. 

M&V activities include site surveys, metering of energy and independent variables, engineering 

calculations, and reporting. How these activities are applied to determine energy savings depends 

on the characteristics of the energy conservation measures (ECMs) being implemented and 

balancing accuracy in energy savings estimates with the cost of conducting M&V. 

2.2 STEPS TO DETERMINE AND VERIFY SAVINGS 

In general, determining actual savings achieved can be difficult and costly. In many performance 

contracts, it is more important to verify the potential of the ECM to generate the predicted 

savings. Verifying the potential to perform requires confirming that: 

 The baseline conditions were accurately defined 

 The proper equipment/systems were installed and properly commissioned 

 The equipment/systems are performing to specification 

Although confirming these items may appear simple, a structured approach is helpful. Regardless 

of the M&V option used, similar steps are taken to verify and determine the project’s 

performance. These steps are outlined in Table 2-1, and an overview of each one is included in 

this section. 

FEMP M&V Guidelines 3.0 2-3 
Table 2-1 Steps to Verify Savings from Performance Contracts 

Timing Activity 

Before Project Implementation 

Step 1 Allocate project responsibilities 

Step 2 Develop a project-specific M&V plan 

Step 3 Define the baseline 

During Project Implementation Step 4 Install and commission equipment and systems 

Step 5 Conduct post-installation verification activities 

After Project Implementation Step 6 Perform regular-interval verification activities during the 

performance period 

The sections below provide an overview of M&V activities in each phase of the ESPC project. 

Additional details on these topics are included in later sections. 

2.2.1 Step 1: Allocate Project Responsibilities 

The basis of any project-specific M&V Plan is determined by the allocation of key project 

responsibilities between the energy service company (ESCO) and the federal agency involved. 

On an ESPC project, a number of typical financial, operational, and performance issues must be 

considered when allocating risks and responsibilities. These issues are discussed in Chapter 3. 

The distribution of responsibilities will depend on the agency’s resources and preferences, and 

the ESCO’s ability to control certain factors. 

2.2.2 Step 2: Develop a Project-Specific M&V Plan 

The M&V Plan is the single most important item in an energy savings guarantee. The plan 

defines how savings will be calculated and specifies any ongoing activities that will occur during 

the contract term. 

Although the M&V Plan is usually developed during contract negotiations, it is important that 

the agency and the ESCO agree upon general M&V approaches to be used prior to starting the 

Investment Grade Audit (IGA). The M&V method(s) chosen will determine to a large extent 

what activities are conducted during the audit, and will affect the cost and duration of the audit. 

The project-specific M&V Plan includes project-wide items as well as details for each ECM. 

Project-wide items include: 

 Overview of proposed energy and cost savings 

 Schedule for all M&V activities 

 Agency witnessing requirements 

 Utility rates and the method used to calculate cost savings 

 O&M reporting responsibilities 

ECM-level items include: 

 Details of baseline conditions and data collected 

 Documentation of all assumptions and sources of data 

2-4 M&V Guidelines 3.0 FEMP 
	 Details of engineering analysis performed 

	 The way energy savings will be calculated 

	 Details of any O&M or other cost savings claimed 

	 Details of proposed energy and cost savings 

	 Details of post-installation verification activities, including inspections, 
 

measurements, and analysis 
 

	 Details of any anticipated routine adjustments to baseline or reporting period energy 

	 Content and format of all M&V reports (post-installation and periodic M&V) 

2.2.3 Step 3: Define the Baseline 

Typically, the ESCO defines the baseline as part of the IGA. Baseline physical conditions (such 

as equipment inventory and conditions, occupancy schedule, nameplate data, equipment 

operating schedules, energy consumption rate, current weather data and control strategies) are 

determined during the IGA through surveys, inspections, spot measurements, and short-term 

metering activities. Utility bills are often used to verify the baseline has been accurately defined. 

Baseline conditions are established for the purpose of estimating savings by comparing the 

baseline energy use with the post-installation energy use. Baseline information is also used to 

account for any changes that may occur during the performance period, which may require 

baseline energy use adjustments. This baseline information is included in the ESCO’s Final 

Proposal. It is the agency’s responsibility to ensure that the baseline has been properly defined. If 

a whole building metering or calibrated simulation approach is used, it is important to document 

the baseline energy use of all end uses, not just those affected by the retrofit. 

After the ECM has been implemented, one cannot go back and reevaluate the baseline. It no 

longer exists! Therefore, it is very important to properly define and document the baseline 

conditions. Deciding what needs to be monitored (and for how long) depends on such factors as 

the complexity of the measure and the stability of the baseline, including the variability of 

equipment loads and operating hours, and the other variables that affect the load. 

The primary sources of questions and complaints on Super ESPC projects are the occasional 

situations where the customer does not think that savings are being realized. Adequate 

documentation of the baseline is critical to resolving any such disagreements that may arise. 

2.2.4 Step 4: Install and Commission Equipment and Systems 

Commissioning of installed equipment and systems is considered industry best-practice and is 

required on Super ESPC projects. Commissioning ensures that systems are designed, installed, 

functionally tested in all modes of operation, and are capable of being operated and maintained 

in conformity with the design intent (appropriate lighting levels, cooling capacity, comfortable 

temperatures, etc.). Commissioning is generally completed by the ESCO and witnessed by the 

agency. In some cases, however, it is contracted out to a third party. 

Commissioning activities include inspections and functional testing. These activities are 

specified in a Commissioning Plan, and their results are documented in a Commissioning Report. 

More specific information on commissioning for ESPC projects is provided in Section 8. 

FEMP M&V Guidelines 3.0 2-5 
Commissioning usually requires performance measurements to ensure that systems are working 

properly. Because of the overlap in commissioning and post-installation M&V activities, some 

people may confuse the two. The difference is that commissioning ensures that systems are 

functioning properly, whereas post-installation M&V quantifies how well the systems are 

working from an energy standpoint. 

2.2.5 Step 5: Conduct Post-Installation Verification Activities 

Post-installation measurement and verification activities are conducted by both the ESCO and 

the federal agency to ensure that proper equipment/systems were installed, are operating 

correctly, and have the potential to generate the predicted savings. Verification methods include 

surveys, inspections, spot measurements, and short-term metering. 

The Post-Installation Report includes: 

	 Project description 

	 Detailed list of installed equipment 

	 Details of any changes between the Final Proposal and as-built conditions, including 

any changes to the estimated energy savings 

	 Documentation of all post-installation verification activities and performance 
 

measurements conducted 
 

	 Performance verification—how performance criteria were met 

	 Documentation of construction-period savings (if any) 

	 Status of rebates or incentives (if any) 

	 Expected savings for the first year 

For projects using certain M&V methods (Option A)(see Chapter 4), the post-installation 

verification is the most important M&V step, because any measurements to substantiate the 

savings guarantee are made only once. For some measures, where equipment performance and 

energy savings are not expected to vary significantly over time, post-installation measurements 

may be the primary source of data used in the savings calculations.. Thereafter, inspections are 

conducted to verify that the potential to perform exists. 

2.2.6 Step 6: Perform Regular-Interval Verification Activities 

At least once a year, the ESCO and the federal agency are required to audit the project. This 

includes, at a minimum, verifying that the installed equipment/systems have been properly 

maintained, continue to operate correctly, and continue to have the potential to generate the 

predicted savings. 

An Annual Report from the ESCO is required to document annual M&V activities and report 

verified and guaranteed savings for the year. In many cases, however, more frequent verification 

activities are appropriate. More frequent monitoring and/or inspection ensures that the M&V 

monitoring and reporting systems are working properly, installed equipment and systems are 

operating as intended throughout the year, allows fine-tuning of measures throughout the year 

based on operational feedback, and it avoids surprises at the end of the year. 

2-6 M&V Guidelines 3.0 FEMP 
The Annual Reports must include: 

	 Results/documentation of performance measurements and inspections 

	 Verified savings for the year (energy, energy costs, O&M costs, etc.) 

	 Comparison of verified savings with the guaranteed amounts 

	 Details of all analysis and savings calculations, including commodity rates used and 

any baseline adjustments performed 

	 Summary of operations and maintenance activities conducted 

	 Details of any performance or O&M issues that require attention 

FEMP M&V Guidelines 3.0 2-7 
2-8 M&V Guidelines 3.0 FEMP 
Section 3	 Risk and Responsibility in M&V 

3.1 USING M&V TO MANAGE RISK 

DOE’s overarching energy savings performance contract, Super ESPC, establishes general terms 

and conditions of the agreement between the agency and the energy service company (ESCO). 

On individual projects (Task Orders) there is broad latitude to tailor a deal to suit the federal 

agency’s own particular needs, priorities, and circumstances. At the heart of a performance 

contract is a guarantee of a specified level of cost savings and performance. One of the primary 

purposes of measurement and verification (M&V) is to reduce the risk of non-performance to an 

acceptable level, which is a subjective judgment based on the agency’s priorities and 

preferences. In performance contracts, project risks and responsibilities are allocated between the 

ESCO and the owner. In the context of M&V, the word “risk” refers to the uncertainty that 

expected savings will be realized, including the potential monetary consequences. 

The allocation of responsibilities between the ESCO and the agency drives the measurement and 

verification strategy, which actually defines the specifics of how fulfillment of the savings 

guarantee will be determined. Both ESCOs and agencies are reluctant to assume responsibility 

for factors they cannot control. 

A few fundamental principles can be applied to the allocation of responsibilities in Super ESPC 

agreements: 

	 Logic and cost-effectiveness drive the allocation of responsibilities. 

	 The responsible party predicts its likely tasks and associated costs to fulfill its 
 

responsibilities, and makes sure these are covered in the ESPC or the agency’s 
 

budget. 
 

	 Any unforeseen costs are paid by the party that caused the costs, or by the party 
 

responsible for that risk area. 
 

	 Stipulating certain parameters in the M&V Plan can align responsibilities, especially 

for the items no one controls. 

The risks in achieving energy savings can be allocated to usage and performance factors. 

Risk related to usage stems from uncertainty in operational factors. For example, savings 

fluctuate depending on weather, the number of hours in which equipment is used, user 

intervention, and equipment loads. Because ESCOs often have no control over such factors, they 

are usually reluctant to assume usage risk. The agency generally assumes responsibility for usage 

risk by either allowing baseline adjustments based on measurements or by agreeing to stipulated 

equipment operating hours, cooling load profiles, or other usage-related factors. 

Performance risk is the uncertainty associated with characterizing a specified level of equipment 

performance. The ESCO is ultimately responsible for selection, application, design, installation, 

and performance of the equipment, and typically assumes responsibility for achieving savings 

related to equipment performance. Operations, preventive maintenance, and repair and 

FEMP M&V Guidelines 3.0 3-1 
replacement practices can have a dramatic impact on equipment performance. These 

responsibilities must be carefully planned, and are discussed in further detail in Chapter 8 of this 

document. 

Stipulating certain parameters in the M&V Plan can align responsibilities, especially for the 

items that no one controls. Using stipulations means that the ESCO and agency agree to employ 

a set value for a parameter throughout the term of the contract, regardless of the actual behavior 

of that parameter. 

If no stipulated values are used and savings are verified based entirely on measurements, then all 

risk resides with the ESCO, which must show that the guaranteed savings are realized, regardless 

of contributing factors. Alternatively, the agency assumes the risk for the parameters that are 

stipulated. In the event that the stipulated values overstate the savings, or reductions in use 

decrease the savings, the agency must still pay the ESCO for the agreed-upon savings. If the 

actual savings are greater than expected, the agency retains all of the surplus savings. 

The use of stipulations can be a practical, cost-effective way to reduce M&V costs and allocate 

risks. Stipulations used appropriately do not jeopardize the savings guarantee, the agency’s 

ability to pay for the project, or the value of the project to the government. However, stipulations 

shift risk to the agency, and the agency should understand the potential consequences before 

accepting them. Risk is minimized and optimally allocated through carefully crafted M&V 

requirements, including diligent estimation of any stipulated values. 

3.2 RISK, RESPONSIBILITY, AND PERFORMANCE MATRIX 

A project-specific Risk, Responsibility, and Performance Matrix (referred to below simply as the 

“Responsibility Matrix”) is required for Super ESPC projects. This matrix details risks, 

responsibilities, and verification requirements that should be considered when developing 

performance contracts. The matrix is developed to help identify the important project risks, 

assess their potential impacts, and clarify the party responsible for managing the risk. 

The first step in developing an M&V Plan for a Super ESPC project is the completion of a 

project-specific Responsibility Matrix. Early in the project development process, the ESCO and 

the agency review Federal Energy Management Program’s (FEMP’s) Responsibility Matrix and 

evaluate how to allocate the key responsibilities. 

The Responsibility Matrix, shown in Table 3-1, describes typical financial and operational issues 

and their influence on ESPC contracts. The table lists the primary factors that impact the 

determination of savings and illustrates how their definition indicates which party—the ESCO or 

the government agency, or perhaps neither—is responsible for each factor. These risks fall into 

three primary categories: financial, operational, and performance. Each category has several 

subcategories. 

For Super ESPC projects, the Responsibility Matrix is first included in the Preliminary 

Assessment and finalized in the Final Proposal. A blank column in the Responsibility Matrix is 

completed by the ESCO to describe the proposed allocation of responsibilities in the project, and 

an additional column can be added for the agency’s assessment. The final version will only 

contain allocations agreed upon by both the ESCO and agency.. 

3-2 M&V Guidelines 3.0 FEMP 
Completing the Responsibility Matrix serves as a useful exercise in understanding the 

approaches required in the M&V Plan because the Matrix indicates what factors are the 

responsibility of the ESCO and thus need to be documented during the life of the contract term. 

The allocation of responsibility must take into account the agency’s resources and preferences 

and the ESCO’s ability to control certain factors. In general, a contract objective may be to 

release the ESCO from responsibility for factors beyond its control, such as building occupancy 

and weather, yet hold the ESCO responsible for controllable factors (risks), such as maintenance 

of equipment efficiency. 

Table 3-1 Energy Savings Performance Contract Risk, Responsibility, and Performance Matrix4 

Responsibility/Description 

Contractor Proposed 

Approach 

1. Financial 

a. Interest rates: Neither the contractor nor the agency has significant control over prevailing interest 

rates. Higher interest rates will increase project cost, financing/project term, or both. The timing of the 

Task Order signing may impact the available interest rate and project cost. 

b. Construction costs: The contractor is responsible for determining construction costs and defining 

a budget. In a fixed-price design/build contract, the agency assumes little responsibility for cost 

overruns. However, if construction estimates are significantly greater than originally assumed, the 

contractor may find that the project or measure is no longer viable and drop it before TO award. In any 

design/build contract, the agency loses some design control. Clarify design standards and the 

design approval process (including changes) and how costs will be reviewed. 

c. M&V confidence: The agency assumes the responsibility of determining the confidence that it 

desires to have in the M&V program and energy savings determinations. The desired confidence will 

be reflected in the resources required for the M&V program, and the ESCO must consider the 

requirement prior to submittal of the final proposal. Clarify how project savings are being verified 

(e.g., equipment performance, operational factors, energy use) and the impact on M&V costs. 

d. Energy Related Cost Savings: The agency and the contractor may agree that the project will 

include savings from recurring and/or one-time costs. This may include one-time savings from avoided 

expenditures for projects that were appropriated but will no longer be necessary. Including one-time 

cost savings before the money has been appropriated may involve some risk to the agency. Recurring 

savings generally result from reduced O&M expenses or reduced water consumption. These O&M and 

water savings must be based on actual spending reductions. Clarify sources of non-energy cost 

savings and how they will be verified. 

e. Delays: Both the contractor and the agency can cause delays. Failure to implement a viable 

project in a timely manner costs the agency in the form of lost savings and can add cost to the project 

(e.g., construction interest, remobilization). Clarify schedule and how delays will be handled. 

f. Major changes in facility: The agency (or Congress) controls major changes in facility use, 

including closure. Clarify responsibilities in the event of a premature facility closure, loss of 

funding, or other major change. 

2. Operational 

a. Operating hours: The agency generally has control over operating hours. Increases and 

decreases in operating hours can show up as increases or decreases in “savings” depending on the 

M&V method (e.g., operating hours multiplied by improved efficiency of equipment vs. wholebuilding/utility bill analysis). Clarify whether operating hours are to be measured or stipulated and 

what the impact will be if they change. If the operating hours are stipulated, the baseline should be 

carefully documented and agreed to by both parties. 

4 ESPC Risk, Responsibility, and Performance Matrix is included in the Super ESPC master contract. 

FEMP M&V Guidelines 3.0 3-3 
Responsibility/Description 

Contractor Proposed 

Approach 

b. Load: Equipment loads can change over time. The agency generally has control over hours of 

operation, conditioned floor area, intensity of use (e.g., changes in occupancy or level of automation). 

Changes in load can show up as increases or decreases in “savings” depending on the M&V method. 

Clarify whether equipment loads are to be measured or stipulated and what the impact will be if 

they change. If the equipment loads are stipulated, the baseline should be carefully documented and 

agreed to by both parties. 

c. Weather: A number of energy efficiency measures are affected by weather, which neither the 

contractor nor the agency has control over. Should the agency agree to accept risk for weather 

fluctuations, it will be contingent upon aggregate payments not exceeding aggregate savings. Clearly 

specify how weather corrections will be performed. 

d. User participation: Many energy conservation measures require user participation to generate 

savings (e.g., control settings). The savings can be variable, and the contractor may be unwilling to 

invest in these measures. Clarify what degree of user participation is needed and utilize 

monitoring and training to mitigate risk. If performance is stipulated, document and review 

assumptions carefully and consider M&V to confirm the capacity to save (e.g., confirm that the 

controls are functioning properly). 

3. Performance 

a. Equipment performance: The contractor has control over the selection of equipment and is 

responsible for its proper installation, commissioning, and performance. The contractor has the 

responsibility to demonstrate that the new improvements meet expected performance levels, including 

specified equipment capacity, standards of service, and efficiency. Clarify who is responsible for 

initial and long-term performance, how it will be verified, and what will be done if performance 

does not meet expectations. 

b. Operations: Performance of the day-to-day operations activities is negotiable and can impact 

performance. However, the contractor bears the ultimate risk regardless of which party performs the 

activity. Clarify which party will perform equipment operations, the implications of equipment 

control, how changes in operating procedures will be handled, and how proper operations will 

be assured. 

c. Preventive Maintenance: Performance of day-to-day maintenance activities is negotiable and 

can impact performance. However, the contractor bears the ultimate risk regardless of which party 

performs the activity. Clarify how long-term preventive maintenance will be assured, especially if 

the party responsible for long-term performance is not responsible for maintenance (e.g., 

contractor provides maintenance checklist and reporting frequency). Clarify who is 

responsible for performing long-term preventive maintenance to maintain operational 

performance throughout the contract term. Clarify what will be done if inadequate preventive 

maintenance impacts performance. 

d. Equipment Repair and Replacement: Performance of day-to-day repair and replacement of 

contractor-installed equipment is negotiable; however it is often tied to project performance. The 

contractor bears the ultimate risk regardless of which party performs the activity. Clarify who is 

responsible for performing replacement of failed components or equipment replacement 

throughout the term of the contract. Specifically address potential impacts on performance 

due to equipment failure. Specify expected equipment life and warranties for all installed 

equipment. Discuss replacement responsibility when equipment life is shorter than the term of 

the contract. 

3-4 M&V Guidelines 3.0 FEMP 
Section 4 Detailed M&V Methods 

4.1 OVERVIEW OF M&V OPTIONS A, B, C, AND D 

The measurement and verification (M&V) protocol mandated for projects conducted under the 

Super Energy Savings Performance Contract (Super ESPC) is the Federal Energy Management 

Program (FEMP) M&V Guidelines: Measurement and Verification for Federal Energy Projects. 

The FEMP Guidelines are an application of the International Performance Measurement and 

Verification Protocol5

 (IPMVP). Both of these guidelines group M&V methodologies into four 

general categories: Options A, B, C, and D. The options are generic M&V approaches for energy 

and water saving projects. 

M&V approaches are divided into two general types: retrofit isolation and whole-facility. 

Retrofit isolation methods look only at the affected equipment or system independent of the rest 

of the facility; whole-facility methods consider the total energy use and de-emphasize specific 

equipment performance. One primary difference in these approaches is where the boundary of 

the energy conservation measure (ECM) is drawn, as shown in Figure 4-1. All energy used 

within the boundary must be considered. Options A and B are retrofit isolation methods; Option 

C is a whole-facility method; Option D can be used as either, but is usually applied as a wholefacility method. 

Figure 4-1 Retrofit Isolation (Options A and B) vs Whole-Facility M&V Methods (Options C and D) 

The four generic M&V options are summarized in Table 4-1 and described in more detail below. 

Each option has advantages and disadvantages based on site-specific factors and the needs and 

expectations of the agency (see Chapter 5). While each option defines an approach to 

determining savings, it is important to realize that savings are not directly measured, and all 

savings are estimated values. The accuracy of these estimates, however, will improve with the 

number and quality of the measurements made. Although not required in Super ESPC projects, 

the accuracy of savings estimates can be quantified, as discussed in Section 5.4. 

International Performance Measurement and Verification Protocol: Concepts and Options for Determining Energy and Water Savings 

Volume I, EVO-10000 -1.2007, Efficiency Valuation Organization. 

FEMP M&V Guidelines 3.0 4-1 

5 
Table 4-1 Overview of M&V Options A, B, C, and D 

M&V Option Performance1 and Usage2 Factors Savings Calculation 

Option A—Retrofit 

Isolation with Key 

Parameter 

Measurement 

This option is based on a combination of measured and estimated 

factors when variations in factors are not expected. 

Measurements are spot or short-term and are taken at the component 

or system level, both in the baseline and post-installation cases. 

Measurements should include the key performance parameter(s) 

which define the energy use of the ECM. Estimated factors are 

supported by historical or manufacturer’s data. 

Savings are determined by means of engineering calculations of 

baseline and post-installation energy use based on measured and 

estimated values. 

Direct measurements and 

estimated values, 

engineering calculations 

and/or component or 

system models often 

developed through 

regression analysis 

Adjustments to models are 

not typically required. 

Option B—Retrofit 

Isolation with All 

Parameter 

Measurement 

This option is based on periodic or continuous measurements of 

energy use taken at the component or system level when variations in 

factors are expected. 

Energy or proxies of energy use are measured continuously. Periodic 

spot or short-term measurements may suffice when variations in 

factors are not expected. 

Savings are determined from analysis of baseline and reporting period 

energy use or proxies of energy use. 

Direct measurements, 

engineering calculations, 

and/or component or 

system models often 

developed through 

regression analysis 

Adjustments to models 

may be required. 

Option C – Utility 

Data Analysis 

This option is based on long-term, continuous, whole-building utility 

meter, facility level, or sub-meter energy (or water) data. 

Savings are determined from analysis of baseline and reporting period 

energy data. Typically, regression analysis is conducted to correlate 

with and adjust energy use to independent variables such as weather, 

but simple comparisons may also be used. 

Based on regression 

analysis of utility meter 

data to account for factors 

that drive energy use 

Adjustments to models are 

typically required. 

Option D—Calibrated 

Computer Simulation 

Computer simulation software is used to model energy performance of 

a whole-facility (or sub-facility). Models must be calibrated with actual 

hourly or monthly billing data from the facility. 

Implementation of simulation modeling requires engineering expertise. 

Inputs to the model include facility characteristics; performance 

specifications of new and existing equipment or systems; engineering 

estimates, spot-, short-term, or long-term measurements of system 

components; and long-term whole-building utility meter data. 

After the model has been calibrated, savings are determined by 

comparing a simulation of the baseline with either a simulation of the 

performance period or actual utility data. 

Based on computer 

simulation model (such as 

eQUEST) calibrated with 

whole-building or end-use 

metered data or both. 

Adjustments to models are 

required. 

1 Performance factors indicate equipment or system performance characteristics, such as kW/ton for a chiller or watts/fixture for 

lighting. 

2 Operating factors indicate equipment or system operating characteristics such as annual cooling ton-hours for chillers or 

operating hours for lighting. 

4.2 DEVELOPING REGRESSION MODELS 

All M&V options utilize models to predict the baseline and performance period energy use of the 

project or ECM based on the behavior of the appropriate independent variables. An independent 

variable is a parameter that is expected to change regularly and has a measurable effect on the 

energy use of a system or building. The models used to predict energy use, with the exception of 

Option D which utilizes simulation software, are often mathematical equations derived through 

regression analysis that incorporate key independent variables. Regression models involve an 

4-2 M&V Guidelines 3.0 FEMP 
evaluation of the energy behavior of a facility or system to determine how it relates to one or 

more independent variables (e.g., weather, occupancy, production rate). Regression models are a 

technique often used to adjust baseline or performance period energy use to account for changes 

in weather, occupancy, or other factors between the baseline and performance periods. Proper 

applications of these routine adjustments are discussed in Section 5.2. 

IPMVP 2007 Appendix B-2 and ASHRAE Guideline 14-2002 Annex D both have additional 

details on developing models by means of regression analyses as well as techniques for 

validating these models. 

4.2.1 Independent Variables 

An independent variable is a parameter that is expected to change regularly and has a measurable 

effect on the energy use of a system or building. Typical independent variables that drive energy 

consumption that can be incorporated in regression models include outdoor temperature, other 

weather parameters (e.g., heating or cooling degree days), occupancy, operating hours, and other 

variable site conditions. 

Data on independent variables may be from a third party or may be tracked using onsite data 

collection, depending on their nature. Weather data are typically more reliable when supplied by 

an independent source, but should be validated with site data to ensure applicability. 

Once the data have been collected, the mathematical model that is used to predict the baseline (or 

performance period) energy use is developed. The model should make intuitive sense—the 

independent variables should be reasonable and the coefficients should have the expected sign 

(positive or negative) and be within an expected range or magnitude. 

4.2.2 Choosing a Model 

There are various forms of models used in standard statistical practice. Examples of multi-variant 

regression models are included in IPMVP 2007 and ASHRAE Guideline 14. 

One example of a linear multi-variant regression model for a weather-dependent ECM is shown 

in Equation 4-1 below. In models using weather data, it can be beneficial to define a custom 

temperature base for calculating HDD and CDD data based on the actual behavior of the 

building.6 

Equation 4-1: Multi-Variant Regression Model for a Weather-Dependent ECM 

E = B1 + (B2 ×Ti −Ti−1)) + (B3 × HDD i ) + (B4 ×CDD i ) +

(B5 × X1) + (B6 × X2 ) + (B7 × X3 ) 

where: 

E = energy use 

i = index for units of time for period 

B1-7 = coefficients 

T = ambient temperature 

HDD = heating degree days using a base temperature of 60oF 

6 2005 ASHRAE Handbook - Fundamentals, page 32.17. 

FEMP M&V Guidelines 3.0 4-3 
CDD = cooling degree days using a base temperature of 65oF 

Xn = independent steady-state variables 

It is important that the best model type be used, which in turn will depend on the number of 

independent variables that affect energy use and the complexity of the relationships. Finding the 

best model often requires testing several models and comparing their statistical results. The 

number of coefficients should be appropriate for the number of observations. Similarly, the form 

of the polynomial should be suitable to number of independent variables. Additionally, the 

independent variables must be truly independent of one another. The model should be tested for 

possible statistical problems (e.g., autocolinearity7) and corrected. 

Validation steps should include checks to make sure that statistical results meet acceptable 

standards. The statistical requirements outlined in Table 4-2 are examples of validation standards 

for mathematical models using typical statistical indicators. An example application of these 

indices is included in the Standard M&V Plan for Chiller Replacements (Appendix H). The 

statistical validity of models can be demonstrated using other published sources such as 

ASHRAE Guideline 14-2002. Specific goals should be set for validating mathematical models 

used in each project based on suitable levels of effort (see Chapter 5) and should be specified in 

the M&V Plan. Many analysis tools provide some of these statistical results, while others will 

need to be calculated. 

Table 4-2 Statistical Validations Guidelines 

Parameter Evaluated Abbreviation 

Suggested 

Acceptable 

Values Purpose 

Coefficient of determination R2 > 0.75 Indicates model’s overall ability to account for variability in the 

dependent variable. Lower R2 values may indicate independent 

variables may be missing or additional data is needed. 

Coefficient of variation of 

root-mean squared error 

CV(RSME) < 15% Calculates the standard deviation of the errors, indicating overall 

uncertainty in the model 

Mean Bias Error MBE +/- 7% Overall indicator of bias in regression estimate. Positive values 

indicate higher than actual values; negative values indicate that 

regression under-predicts values. 

t-statistic t-stat > 2.0 Absolute value >2 indicates independent variable is significant 

4.2.3 Weather Data 

If the energy savings model incorporates weather data, several issues should be considered: 

	 The relationship between temperature and energy use may vary depending upon the 

time of year. For example, an ambient temperature of 55°F in January has a different 

implication for energy usage than the same temperature in August. Thus, seasons may 

need to be addressed in the model. 

	 The relationship between energy use and weather may be nonlinear. For example, a 

10°F change in temperature may result in a very different energy use impact if that 

change is from 75°F to 85°F rather than 35°F to 45°F. 

7 Autocolinearity can result when one or more important independent variables were left out of the model. 

4-4 M&V Guidelines 3.0 FEMP 
	 Matching degree-day and other data with billing start and end dates. 

4.2.4 Documentation 

All models should be thoroughly documented including specifying model limits. Ideally, the 

range of values of the independent variables used to create the model span the entire range of 

possible conditions. Models are generally good only for the range of independent variables used 

in creating the regression model. 

The criteria used for identifying and eliminating any available data must be documented. Outliers 

are data beyond the expected range of values (or two to three standard deviations away from the 

average of the data). The elimination of outliers, however, should be justified by abnormal or 

specific mitigating factors. If a reason for the unexpected data cannot be found, the data should 

be included in the analysis. Outliers should be defined using common sense as well as common 

statistical practice. 

4.2.5 Savings Determination 

In general, the procedure for determining energy savings with a regression model is as follows: 

	 Develop and validate an appropriate baseline model relating the baseline energy use 

during normal operations to key independent variables. 

	 Install ECMs and continuously measure the independent variables used in the 
 

baseline model. along with any additional variables that may be needed for 
 

performance period model development. 
 

	 Using the baseline model, estimate what the energy use would have been without the 

ECMs by driving the baseline model with the performance period weather or other 

independent variables. 

	 Calculate savings by comparing the predicted baseline energy use with the actual 
 

energy use of the performance period. 
 

An alternative approach that is sometimes warranted includes creating a separate regression 

model to describe performance period energy use. Both the baseline and performance period 

models are then adjusted to the same period’s conditions prior to comparison. This approach 

allows for calculation of normalized savings8

 based on a predefined set of parameters, such as 

typical weather. All independent variables and criteria for validating performance period models 

should be included in the M&V Plan. 

The best regression model is one that is simple and yet produces accurate and repeatable savings 

estimates. Determining the best model often requires testing several models to find one that is 

easy enough to use and meets statistical requirements for accuracy (see Section 4.2). 

8 See Section 7.2. 

FEMP M&V Guidelines 3.0 4-5 
4.3 OPTION A—RETROFIT ISOLATION WITH KEY PARAMETER MEASUREMENT 

M&V Option A involves a retrofit or system level M&V assessment. The approach is intended 

for retrofits where key performance factors (e.g., end-use capacity, demand, power) or 

operational factors (e.g., lighting operational hours, cooling ton-hours) can be spot- or shortterm-measured during the baseline and post-installation periods. Any factor not measured is 

estimated based on assumptions, analysis of historical data, or manufacturer’s data. 

All end-use technologies can be verified using Option A. However, the accuracy of this option is 

generally inversely proportional to the complexity of the measure. Thus, the savings from a 

simple lighting retrofit will typically be more accurately estimated with Option A than the 

savings from a more complicated chiller retrofit. If greater accuracy is required, Options B, C, or 

D may be more appropriate. Properly applied, an Option A approach: 

	 Ensures that baseline conditions have been properly defined 

	 Confirms that the proper equipment/systems were installed and that they have the 
 

potential to generate predicted savings 
 

	 Verifies that the installed equipment/systems continue to have the capacity to yield 

the predicted savings during the term of the contract 

Option A can be applied when identifying that the potential to generate savings is the most 

critical M&V issue, including situations where: 

	 The magnitude of savings is low for the entire project or a portion of the project to 

which Option A is applied. 

	 The risk of not achieving savings is low. 

	 The independent variables that drive energy use are not difficult or expensive to 
 

measure, and are not expected to change. 
 

	 Interactive effects can be reasonably estimated or ignored 

	 Long-term measurements are not warranted 

	 The agency is willing to accept some uncertainty 

4.3.1 Approach to Option A 

Option A is an approach designed for projects in which the potential to generate savings must be 

verified, but the actual savings can be determined from short-term measurements, estimates, and 

engineering calculations. Performance period energy use is not measured throughout the term of 

the contract. Performance period energy use and baseline energy use are predicted using an 

engineering or statistical analysis of information that does not involve long-term measurements. 

With Option A, savings are determined by measuring the key parameters such as capacity, 

efficiency, or operation of a system before and after a retrofit, and by multiplying the difference 

by an estimated factor. Using estimates is the easiest and least expensive method of determining 

savings. It can also be the least accurate and is typically the method with the greatest uncertainty 

in savings. This level of savings determination may suffice for certain types of projects where a 

single factor represents a significant portion of the savings uncertainty. 

4-6 M&V Guidelines 3.0 FEMP 
Option A is appropriate for projects in which both parties agree to a payment stream that is not 

subject to fluctuation due to changes in the operation or performance of the equipment. However, 

payments could be subject to change based on periodic measurements or non-routine 

adjustments. 

4.3.1.1 Measurements 

Within Option A, various methods and levels of accuracy determining savings are available. The 

level of accuracy depends on what measurements are made to verify equipment ratings, capacity, 

operating hours, and/or efficiencies; the quality of assumptions made; and the accuracy of the 

equipment inventory including nameplate data and quantity of installed equipment. There may 

be sizable differences between published information and actual operating data. Where 

discrepancies exist or are believed to exist, field-operating data should be obtained. 

A key consideration in implementing Option A is identifying the parameters that will be 

measured and those that will be estimated. The key performance parameter(s) that the ESCO is 

responsible for should be measured in both the baseline and performance period cases, and 

savings should be calculated from these values. For example, the watts/fixture is the key 

performance parameter for a lighting retrofit. 

Other parameters that affect energy use (e.g., operating hours) that the agency or no one controls, 

can be estimated and then stipulated in the contract. Where these other parameters are not known 

with sufficient certainty, they should be measured in the baseline case and then stipulated. The 

penalty associated with low accuracy is not achieving the estimated savings and the associated 

utility bill cost reductions. Appropriate sources of estimated values are discussed below. 

4.3.1.2 Estimates 

The estimated parameters will affect the reported savings over the entire contract term. All 

estimates should be based on reliable, documentable sources and should be known with a high 

degree of confidence. While direct measurements from short-term logging or existing EMCS 

records are the preferred information source, such information may not be available or may be 

costly to obtain. Sources of information on which estimations should be based include the 

following (in decreasing order of preference): 

	 Models derived from measurements and monitoring 

	 Manufacturer’s data or standard tables (such as lighting tables used in utility demandside management programs) 

	 Manufacturer’s curves, such as pump, fan, and chiller performance curves 

	 Industry-accepted performance curves, such as standards published by the American 

National Standards Institute (ANSI), American Refrigeration Institute (ARI), and the 

American Society of Heating, Refrigeration, and Air-Conditioning Engineers 

(ASHRAE) 

	 Typical Meteorological Year (TMY) weather data 

	 Observations of building and occupant behavior 

	 Facility operations and maintenance logs 

FEMP M&V Guidelines 3.0 4-7 
Estimated parameters should not come from the following: 

	 Undocumented assumptions or “rules-of-thumb” 

	 Proprietary “black-box” algorithms or other undocumented software 

	 Handshake agreements with no supporting documentation 

	 Guesses at operating parameters 

	 Equations that do not make mathematical sense or are derived from questionable data 

4.3.1.3 Ongoing Verification 

The potential to generate savings may be verified through spot/short-term metering and 

inspections conducted immediately before and immediately after installation. Annual (or some 

other regular interval) inspections must be conducted to verify that the proper equipment/systems 

are installed and the equipment/systems are performing to specification. If conditions have 

changed, additional performance period measurements or non-routine adjustments may be 

appropriate. 

4.3.2 M&V Considerations 

Option A is for projects in which the potential to generate savings must be verified and actual 

savings can be determined from short-term measurements, estimates, and engineering 

calculations. Some considerations when using Option A approaches include: 

	 Option A methods can vary in the level of accuracy in determining savings and 

verifying performance. The level of accuracy depends on the validity of estimates, the 

quality of the equipment inventory, and the measurements that are made. 

	 Verifying proper ongoing operation and potential to perform is an important aspect of 

Option A. 

	 Option A is appropriate for relatively simple ECMs whose baseline and postinstallation conditions (e.g., equipment quantities and ratings such as lamp wattages 

or motor kW) represent a significant portion of the uncertainty associated with the 

project. 

	 Option A methods are not suitable for ECMs whose performance is uncertain or 
 

unpredictable. 
 

4.4 OPTION B—RETROFIT ISOLATION WITH ALL PARAMETER MEASUREMENT 

M&V Option B is a retrofit isolation or system-level approach. The approach is intended for 

retrofits with performance factors (e.g., end-use capacity, demand, power) and operational 

factors (lighting operational hours, cooling ton-hours) that can be measured at the component or 

system level and where long-term performance needs to be verified. It is similar to Option A, but 

uses periodic or continuous metering of all energy quantities, or all parameters needed to 

calculate energy, during the performance period. This approach provides the greatest accuracy in 

the calculation of savings, but increases the performance-period M&V cost. 

The Option B approach ensures the same items as Option A, but also: 

4-8 M&V Guidelines 3.0 FEMP 
 Determines energy savings using periodic or continuous measurement of energy use 

or all parameters needed to calculate energy use during the term of the contract. 

Option B is typically used when any or all of these conditions apply: 

	 For simple equipment replacement projects with energy savings that are less than 

20% of total facility energy use as recorded by the relevant utility meter or sub-meter 

(Option C is not applicable) 

	 When energy savings values per individual measure are desired 

	 When interactive effects can be estimated using methods that do not involve long-
 

term measurements 
 

	 When the independent variables that affect energy use are not complex and 
 

excessively difficult or expensive to monitor 
 

	 When operational data on the equipment is available through control systems 

	 When sub-meters already exist that record the energy use of subsystems under 

consideration (e.g., a separate sub-meter for heating ventilation and air-conditioning 

(HVAC) systems) 

4.4.1 Approach to Option B 

Option B verification procedures involve the same items as Option A, but require more end-use 

metering. Option B relies on the physical assessment of equipment change-outs to ensure that 

the installation is to specification. The potential to generate savings is verified through 

observations, inspections, and spot/short-term/continuous metering of energy or proven proxies 

of energy use, such as variable frequency drive speed for motor power. Baseline models are 

typically developed by correlating metered energy use with key independent variables. 

Depending on the ECM, spot or short-term metering may be sufficient to characterize the 

baseline condition, and the continuous metering of one or more variables may occur after retrofit 

installation. It is appropriate to use spot or short-term measurements in the performance period to 

determine energy savings when variations in performance are not expected, and may support 

some normalized savings approaches (Section 7.2) though adjustments to the baseline and/or the 

performance period model(s). When variations are expected, it is appropriate to measure factors 

continuously during the contract period. Continuous monitoring of information can be used to 

improve or optimize the operation of the equipment over time, thereby improving the 

performance of the retrofit. 

4.4.2 M&V Considerations 

Option B is for projects in which the potential to generate savings must be verified and actual 

energy use during the contract term needs to be measured for comparison with the baseline 

model for calculating savings. Option B involves procedures for verifying the same items as 

Option A plus the determination of energy savings during the contract term through short-term or 

continuous end-use metering. Some considerations when using Option B approaches include: 

	 All end-use technologies can be verified with Option B; however, the degree of 
 

difficulty and costs associated with verification increases as metering complexity 
 

increases. 
 

FEMP M&V Guidelines 3.0 4-9 
	 The task of measuring or determining energy savings using Option B can be more 

difficult and costly than that of Option A. However, results are typically more precise 

using Option B than the use of estimations as defined for Option A. 

	 Periodic spot or short-term measurements of factors are appropriate when variations 

in loads and operation are not expected. When variations are expected, it is 

appropriate to measure factors continuously. 

	 Performing continuous measurements or periodic measurements over the term of the 

contract will account for operating variations and will result in closer approximations 

of actual energy savings. Continuous measurements provide long-term persistence 

data on the energy use of the equipment or system. 

	 Data collected for energy savings calculations can be used to improve or optimize the 

operation of the equipment on a real-time basis, thereby improving the benefit of the 

retrofit. For constant-load retrofits, however, there may be no inherent benefit of 

continuous over short-term measurements. 

4.5 OPTION C—WHOLE-BUILDING DATA ANALYSIS 

M&V Option C involves whole-facility utility or sub-meter data analysis procedures to verify the 

performance of retrofit projects in which whole-facility baseline and performance period data are 

available. Option C usually involves collecting historical whole-facility baseline energy use and 

related data and continuously measuring whole-facility energy use after ECM installation. 

Baseline and periodic inspections of the equipment are also needed. Energy savings under 

Option C are estimated by developing statistically representative models of whole-facility or submetered energy consumption (i.e., therms and/or kWh). This method confirms total energy 

savings, but does not measure the savings from individual components. 

In general, Option C should be used with complex equipment replacement and controls projects 

for which predicted savings are relatively large, i.e., greater than about 10% to 20% of the site’s 

energy use, on a monthly basis. Option C regression methods are valuable for measuring 

interactions between energy systems or determining the impact of projects that cannot be 

measured directly, such as insulation or other building envelope measures. Regression analysis 

requires experienced, qualified analysts, and Option C methods should be employed only for 

projects that meet the following requirements: 

	 Savings are predicted to be greater than about 10% to 20% of the overall consumption 

measured by the utility or sub-meter. 

	 At least 12 and preferably 24 months or more of pre-installation data are used to 
 

calculate a baseline model. 
 

	 At least 9 and preferably 12 months of performance period data are used to calculate 

annual savings. 

	 Adequate data on independent variables are available to generate an accurate baseline 

model, and procedures are in place to track the variables required for performance 

period models. 

4-10 M&V Guidelines 3.0 FEMP 
	 Significant operational or other changes are not planned for the facility during the 

performance period, and procedures are in place to document changes that do occur at 

the site. 

4.5.1 Approach to Option C 

With Option C, energy savings are determined using whole-building utility meter or facilitylevel metered data. Savings are determined through analysis of utility data (therms, fuel oil, kW, 

kWh, etc.) and the independent variables that affect energy consumption. Regression models are 

developed to predict energy use based on the appropriate independent variables for the project. 

Although simple mathematical techniques utilizing utility bill comparison are sometimes used, 

they are unreliable and not recommended on federal ESPC projects. Regression models can take 

into account the impacts of weather and other independent variables on energy use, whereas 

simple utility bill comparison techniques cannot. The analysis requires an evaluation of the 

behavior of the facility as it relates to one or more independent variables (e.g., weather, 

occupancy, production rate) using regression analysis. 

Utility data analysis can take several approaches to calculate savings, as described in Section 

4.2.5 and Section 7.2. The key elements of these approaches include developing an appropriate 

baseline model which relates the baseline energy use to key independent variables, and 

continuously measuring the performance period energy use and the key independent variables. 

Savings are often calculated by comparing the energy use predicted by the baseline model using 

measured conditions with the actual energy use of the performance period. Alternately, 

performance period models may be developed if the baseline and performance period models are 

to be adjusted to typical conditions prior to comparison. Performance period models may also be 

needed if there is not a full year’s worth of data available for the performance period. 

4.5.2 Data Collection 

Collecting, validating, and properly applying data are important elements of using utility data 

analysis. Option C techniques utilize three types of data: utility billing data, independent 

variables, and information on unrelated changes at the site. These data elements are discussed 

below. 

4.5.2.1 Utility Billing Data 

Utility billing data provide the basis for savings calculations by allowing a comparison of 

adjusted baseline models with performance period energy use. Regardless of the type of utility 

data used, a key to properly applying the data is ensuring that all start and end dates of the utility 

data are aligned with those of the independent variables. Collecting data on independent 

variables more often than collecting billing data can help align time frames. Billing data can be: 

	 Monthly billing data. Billing data should be measured at least once a month. There 

are typically two types of monthly billing data: total usage for the month and usage 

aggregated by time-of-use periods. Although either type of data can be used with a 

regression model, time-of-use is preferable because it provides more insight into 

usage patterns. In many cases, the peak demand is also recorded. 

FEMP M&V Guidelines 3.0 4-11 
 Interval demand billing data. This type of billing data records the average demand (or 

energy use) for a given interval (e.g., 15 minutes) associated with the billing period, 

and typically includes peak demand charges. 

 Stored energy billing data. Inventory readings or delivery information can be used to 

determine historical consumption for resources such as fuel oil, although submetering is preferred. 

4.5.2.2 Other Site Changes 

One of the challenges in applying Option C is accounting for factors beyond the ECM that affect 

overall site energy use, such as changes in square footage or loads. Tracking site changes 

provides a means for accounting for changes in energy use not associated with ECM installation. 

Adequately tracking the information needed to make these non-routine baseline adjustments can 

be a challenging task for long-term contracts and sites that have significant operational changes. 

4.5.3 M&V Considerations9 

The following points should be considered when conducting Option C utility data analyses for 

M&V: 

	 All independent variables that affect energy consumption must be specified, whether 

or not they are accounted for in the model. Critical variables can include weather, 

building occupancy, set points, time of day, number of meals served, etc. The most 

common variable for many types of ECMs is outdoor air temperature. 

	 The form and content of any separate performance period model(s) (if used) should 

be specified, along with the statistical validation targets. Statistical validity of the 

final regression model(s) must be demonstrated. 

	 Independent variable data need to correspond to the time periods of the billing meter 

reading dates and intervals. A plan for data collection, including sources and 

frequencies, should be specified. 

	 It is best to develop models using data in whole-year sets (12, 24, 36, or 48 months) 

so that any seasonal variations are not overstated. 

	 It is necessary to specify how site changes unrelated to the installation of the ECMs 

will be tracked over the performance period and how these data will be used to 

perform savings adjustments. 

	 If baseline energy use needs to be adjusted to incorporate minimum energy or 

operating standards (such as minimum ventilation rates or lighting levels), any 

modification to the model needs to be detailed. 

4.6 OPTION D—CALIBRATED SIMULATION 

Option D involves whole facility or system analysis procedures to verify the performance of 

retrofit projects using calibrated computer simulation models. Computer simulation is a powerful 

tool that allows an experienced user to model the building and mechanical systems in order to 

9 See ASHRAE Guideline 14-2002 and IPMVP Volume 1 (EVO 10000-1.2007) for additional information on utility billing analysis. 

4-12 M&V Guidelines 3.0 FEMP 
predict building energy use both before and after the installation of ECMs. The accuracy of the 

models is ensured by using metered site data to describe baseline and/or performance period 

conditions. Carefully constructed models can provide savings estimates for the individual ECMs 

on a project. More elaborate models generally improve the accuracy of savings calculations, but 

increase costs. A calibrated simulation of a building, however, can be utilized to easily evaluate 

savings from other potential improvements. 

Building simulation requires experienced, qualified analysts, and Option D methods should be 

used only for projects that meet any or all of the following requirements: 

	 For complex equipment replacement and controls projects with too many ECMs to 

cost-effectively use retrofit isolation methods A or B 

	 When interactive effects between ECMs are too complex for retrofit isolation 
 

approaches, but need to be quantified 
 

	 When the Option C utility data analysis approach is not viable due to the overall level 

of savings being less than 20% of metered use 

	 When complex baseline adjustments are expected during the performance period 

	 When energy savings values per individual measure are desired 

	 When new construction projects are involved 

	 When savings levels are sufficient to warrant the cost of simulation 

	 When either baseline or performance period energy data, but not both, are unavailable 

or unreliable. 

Option D is especially useful where a baseline does not exist (e.g., new construction or major 

building modification) or the factors responsible for savings are not easily measured (e.g., 

reduced solar gain and heat loss through new windows). 

Situations for which computer simulation is not appropriate include: 

	 Analysis of ECM savings that can be more cost-effectively determined with other 

methods 

	 Buildings that cannot be adequately modeled, such as those with complex geometries 

or other unusual features 

	 Building systems or ECMs that cannot be adequately modeled, such as radiant 
 

barriers or demand-response control algorithms that are important in comparing 
 

baseline and performance period scenarios 
 

	 Projects with limited resources that are not sufficient to support the effort required for 

data collection, simulation, calibration, and documentation 

Even for the simplest projects simulation modeling and calibration are time-intensive activities 

and should be performed by an accomplished building simulation specialist. Calibrated 

simulation analysis is an expensive M&V procedure, and should be undertaken only on projects 

that generate enough savings to justify its use. 

FEMP M&V Guidelines 3.0 4-13 
4.6.1 Approach to Option D 

M&V Option D for an existing building typically follows five general steps: 1) collect data; 2) 

input data and test baseline model; 3) calibrate the baseline model; 4) create and refine the 

performance period model; and 5) verify performance and calculate savings. Each of these steps 

is discussed in detail below. 

The methodology followed for new construction projects is somewhat different, and is detailed 

in IPMVP Volume III.10 One primary difference between the methods used for existing and new 

buildings is the availability of utility data. In new construction, the performance period model 

would be calibrated to utility data, whereas the baseline model would not due to lack of data, 

although comparisons with similar buildings can be made. This approach would also apply to an 

existing building that does not have reliable baseline energy data. 

4.6.1.1 Collecting the Data 

The data required for simulating an existing building can be voluminous, and ensuring collection 

of all data required to develop the simulation models is key. Collecting comprehensive baseline 

data is advised. All data collected do not necessarily need to be incorporated into the model, but 

may be included to meet specific model accuracy requirements. All collected information and 

inputs need to be documented in a format that allows due-diligence review. Inadequate, 

disorganized, self-contradictory, or conflicting documentation can be grounds for rejecting a 

submittal. 

To obtain end-use data for model calibration, building subsystem metering must be included in 

the project M&V activities for baseline and performance periods. The specific sub-systems 

selected for monitoring are in most cases the installed ECMs and related systems. For ECMs 

such as windows or insulation that cannot be monitored, the impacted HVAC system should be 

sub-metered. The model calibration will benefit the most from monitoring the energy end uses 

for which the least information is available. 

Required data typically includes: 

	 Utility bill records: Collect a minimum of 12 (and preferably 24, 36, or 48) 

consecutive months of utility bills for the months immediately before installation of 

the ECMs. The billing data should include meter read date, kWh consumption, peak 

electric demand, and heating fuel use (e.g., natural gas). Additional data in hourly and 

15-minute formats may be required. 

	 Architectural, mechanical, and electrical drawings: as-built drawings are preferred. 

	 Site survey data: Comprehensive equipment and system data, typically collected 
 

during an investment grade audit, including: 
 

−	 HVAC systems: primary equipment (e.g., chillers and boilers): capacities, 

number, model and serial numbers, age, condition, operating schedules, etc. 

10 International Performance Measurements and Verification Protocol: Concepts and Options for Determining Energy Savings in New 

Construction, Volume III, April 2003. 

4-14 M&V Guidelines 3.0 FEMP 
−	 HVAC systems: secondary equipment (e.g., air-handling units, terminal boxes): 

characteristics, fan sizes and types, motor sizes and efficiencies, design-flow rates 

and static pressures, duct-system types, economizer operation, and type of 

controls 

−	 HVAC system controls, including location of zones, temperature set-points, 

control set-points and schedules, and any special control sequences 

−	 Lighting systems: number and types of lamps, with nameplate data for lamps and 

ballasts, lighting schedules, etc. 

−	 Building occupants: population counts, occupation schedules in different zones 

−	 Other major energy-consuming loads: type (industrial process, air compressors, 

water heaters, elevators), energy consumption, schedules of operation 

	 Site survey data that may be required in addition to data normally collected during an 

audit include: 

−	 Plug loads: summarize major and typical plug loads for assigning values per zone 

−	 Building envelope and thermal mass: dimensions and type of interior and exterior 

walls, properties of windows, and building orientation and shading from nearby 

objects. Infiltration rates are important, but are often difficult to determine 

−	 HVAC systems: ventilation air-flow rates can have a dramatic effect on energy 

use 

	 Short-term monitoring: The building energy management control system (EMCS) or 

data-logging equipment is set up to record system data as it varies over time. 

Typically, primary energy using systems and equipment involved in an ECM are 

monitored. These data may be required if particular subsystems (e.g., the chiller 

plant) need to be accurately modeled in order to determine savings. The data reveal 

how variable loads change with building operating conditions such as weather, 

occupancy, daily schedules, etc. 

	 Spot measurements of specific equipment: The power draw on lighting, plug load, 

HVAC equipment, and other circuits should be recorded to determine actual 

equipment operating powers. 

	 Operator interviews: Building operators can provide much of the above listed 

information and also any deviation in the intended operation of building equipment. 

	 Weather data: For calibration purposes, representative site weather data are required 

for the period in question, as outlined below (Section 4.6.3). 

	 Minimum code performance standards: For new construction projects and major 

renovations, minimum performance standards are often mandated for the baseline 

based on required codes.11 If standards must be referenced in the baseline model, the 

minimum equipment efficiencies to represent the standards should be used. 

11 Minimum efficiency standards include CA Title 24, ASHRAE 90.1, IECC 2006, and state energy codes. 

FEMP M&V Guidelines 3.0 4-15 
4.6.1.2 Inputting the Data and Running the Baseline Model 

The data must be adapted as required to the baseline model and entered into the simulation 

program input files. Key data for inclusion are physical properties of the facility, equipment and 

system types and efficiencies, appropriate weather data, and control sequences. Specific attention 

should be given to systems that will be modified by ECMs. 

The more site-specific data incorporated the more accurate the savings calculations, but the 

greater the costs. The simulation program’s user guide and other resources should be consulted 

as needed to determine how to properly input the collected data into the model. From the volume 

of data collected, many decisions must be made to best represent the data in the simulation 

program’s input file. This can be done most cost-effectively by an experienced building 

modeling specialist. 

After the data have been inputted, a few simulations should be run to debug the model and the 

model output files should be checked to verify that there are no errors in running the program, 

such as: 

 Does the HVAC system satisfy the heating and cooling loads? 

 Are the equipment schedules correct? 

 Are equipment efficiencies accurate? 

 Are the model predictions reasonable? 

4.6.1.3 Calibrating the Baseline Model 

The baseline simulation model should be calibrated using the procedures described in Section 

4.5.3 by comparing the energy usage and demand projected by the model with the usage and 

demand of the measured utility data. For new construction projects, the baseline energy use 

should be compared to other buildings that have similar operation and function. If required 

tolerances to the measured data are not met, the input data to the model should be refined until 

requirements are met. 

The calibrated model should be documented by showing final input parameters for the model. 

This information, as well as the actual calibration results, needs to be provided in the M&V 

submittals. 

4.6.1.4 Create and Refine the Performance Period Model 

Starting with the calibrated baseline model, the model should be updated to include the 

building’s ECMs to create the performance period model. 

If individual savings levels from each ECM are desired, an approach that includes the interactive 

effects of the ECMs is to input the ECMs consecutively into the baseline model. Some software 

allows the modeler to create a rolling baseline by including the previous ECMs in the model. 

After each ECM has been modeled, the simulation is run. The first run is the baseline model, the 

second run is ECM 1, the third run is ECM 1 and ECM 2, the fourth run is ECM 1, ECM 2, and 

ECM 3, etc. After the final ECM has been inputted, the model should represent the performance 

4-16 M&V Guidelines 3.0 FEMP 
period condition with all ECMs installed. This approach includes interactive effects in the 

savings for each ECM. 

Determining the sequence to input the ECMs into the model is an important consideration in 

managing interactive effects. Typically, measures that will affect the overall heating and cooling 

loads of the building (e.g., envelope improvements or lighting upgrades) should be inputted first. 

Secondary ECMs are those that affect the HVAC subsystems, and the final ECMs that should be 

inputted are those affecting the central plant. 

Some simulation programs run each ECM against the original baseline, which neglects any 

interactive effects between the measures. These intermediate results are not always 100% 

additive, as two ECMs that save 2% alone, may not save 4% combined. Considering the 

interactive effects of ECMs, these ECMs combined may save 3%. When using this approach, a 

final run including all measures must be executed to determine the interactive effects of all the 

ECMs. This approach does not allocate interactive effects to the individual ECMs. 

4.6.1.5 Verifying Performance and Calculating Savings 

The method used to determine savings will depend upon the phase of the project. During project 

development, proposed savings are determined by subtracting the results of the performance 

period model from the results of the calibrated baseline model, both using the agreed-upon 

weather data and facility operating conditions. 

As with all M&V methods, after implementation of the ECMs the proper installation and 

operation of the ECMs must be verified periodically. Performance data should be collected not 

only to calibrate the model, but to validate that the new equipment and systems are installed and 

operating properly. 

After the first year of performance, there are two options to calculate verified savings: 1) 

calibrate the performance period model and subtract the results of baseline model using the same 

conditions; or 2) subtract measured utility data for the performance period from the results of 

baseline model that was updated to actual conditions. 

The first option requires that the performance period model be calibrated using the procedures 

described in Section 4.6.3. Update the performance period model using data collected during the 

performance period from site surveys, spot measurements, short-term monitoring, and utility 

data. Effort can be minimized by focusing data collection on the installed ECMs. 

If savings are to be estimated for a specific year, actual weather and other data from that year 

must be used. If savings are to be normalized to typical conditions (see Section 7.2), for example, 

then typical weather data (e.g., TMY data) should be used. In any case, both the baseline model 

and the performance period model must be run with the same weather data. The weather data to 

be used are specified in the site-specific M&V Plan. Although time-intensive, Option D 

approaches are well suited to adjust models when significant site changes occur during the 

performance period. 

If savings for each ECM are to be determined including interactive effects, the ECMs must be 

inputted consecutively into the model and simulations run after each input, as described above. 

FEMP M&V Guidelines 3.0 4-17 
Individual ECM savings are determined by the difference in energy or demand use between two 

consecutive runs. The savings determined for the individual ECMs should total the savings 

determined from the baseline and performance period runs. It is important that savings be 

determined with both models using the same conditions (weather, occupancy schedules, set 

points, etc.), except for the characteristics of the installed ECMs. 

The energy values and rate structure specified in the M&V Plan are applied to the energy savings 

determined by the model. If utility rates are included in the model, sufficient information on the 

savings should be provided so that cost calculations can be verified. When time-of-use charges 

or other variable usage schedules are applied, the demand (kW) and energy (kWh) savings must 

be broken down into the proper categories to determine cost savings (see Section 7.2). 

4.6.2 Simulation Software 

The most frequently used type of building energy simulation program for energy analyses are 

whole-building programs that create customized models of buildings and their systems, and 

employ hourly weather data to predict energy use. Such programs are very versatile, allowing the 

accurate modeling of most buildings through custom input data. Two of the most common public 

domain programs of this type are eQUEST and EnergyPlus.12 A complete list of available energy 

simulation programs is maintained by the DOE.13 

These building simulation programs require extensive input data to accurately model the energy 

use of a building. Recently, user interfaces have been improved that simplify the input process 

with graphical formats, and libraries of typical building components have been added to facilitate 

model development. 

Simulation programs acceptable for Option D should have the following characteristics14: 

 The program is commercially available, supported, and documented. 

 The program has the ability to adequately model the project site and ECMs. 

 The model can be calibrated to an acceptable level of accuracy. 

 The program allows the use of actual weather data in hourly format. 

4.6.3 Model Calibration15 

The model calibration for existing buildings is accomplished by linking simulation inputs to 

actual operating conditions and comparing simulation results with whole-building and/or end-use 

data. The simulation may be of a whole facility or just for the end use or system affected by the 

ECM. Both baseline and performance period models should be calibrated wherever possible. 

Model calibration is typically an iterative process of adjusting model inputs and re-comparing 

12 eQUEST is available through http://doe2.com/equest/ (current release is eQUEST 3.6 and 3.61b) and EnergyPlus is available through 

http://www.eere.energy.gov/buildings/energyplus/. 

13 See http://www.eere.energy.gov/buildings/tools_directory/subjects_sub.cfm 

14 For more information on building simulation program elements See ASHRAE 90.1-2004 Energy Standard for Buildings Except Low-Rise 

Residential Buildings, Section G.2 or ASHRAE Guideline 14-2002. 

15 See ASHRAE Guideline 14-2002 and IPMVP Volume 1 (EVO 10000-1.2007) for additional information on simulation modeling and 

validation techniques. 

4-18 M&V Guidelines 3.0 FEMP 
the results to measured data. A model is considered in calibration when the statistical indices 

demonstrating calibration have been met. Expected calibration requirements should be specified 

in the project-specific M&V Plan, and industry standard guidelines are included in Table 4-3. 

These requirements should be adjusted as required to meet the needs of the project. 

For most models, there are multiple levels of calibration that can be performed: 

 System level calibration with hourly monitored data 

 Whole-building level calibration with monthly utility data 

 Whole-building level calibration with hourly utility data 

Determining the level of calibration that is needed depends on the value of the project, the 

availability of data, and the need for certainty in the savings estimates. All models should be 

calibrated to monthly data at a minimum. Simulation models that focus on specific systems 

should be calibrated to system level data. Also, calibrating the models to hourly data will help 

ensure accuracy, especially for determining peak demand savings. Calibrating a computer 

simulation to measured utility data necessitates that actual weather data be used, as discussed 

below. 

The calibration procedures should apply to all energy sources (demand, electricity, natural gas, 

etc.), but should focus on the primary source(s) of savings. Each of these model calibration 

strategies is discussed below. 

4.6.3.1 Weather Data 

The first step in calibrating a model is updating and running the model using weather data that 

correspond precisely to the same calendar days as each utility bill. Programs that allow the use 

of only average weather files or weather data from only a few representative periods per month 

or per season are not suitable for the calibration techniques required for Option D. 

Obtaining weather data for the appropriate location and time-period is an important step in 

calibrating any simulation model. Several resources are available for getting real-time weather 

data and converting them into the proper format for use with the simulation software. DOE 

maintains a website16 that provides weather data from 1998 to the present from up to 4,000 

weather stations. Some data may be missing, but can be extrapolated from the DOE’s database.17 

The database provides data in a format used by Energy Plus, but can be converted for use with 

eQUEST and other programs.18 Since using actual weather data can be time consuming, it is 

sometimes appropriate to modify average weather to more closely match the actual weather.19 

The time period and frequency of the weather data need to align with the utility data periods, 

which can require data manipulation. The measure-specific M&V Plan must specify which 

16 The DOE website is http://www.eere.energy.gov/buildings/energyplus/cfm/weatherdata/weather_request.cfm . 
 

17 Detailed information on the data can be found in Real-Time Weather Data Access Guide, User’s Guide NREL/BR-550-34303 March 2006, 
 

National Renewable Energy Laboratory. The FAQ and instructions on this web page should be followed to fill in the missing data: 

http://www.eere.energy.gov/buildings/energyplus/cfm/weatherdata/faq.cfm 

18 Weather file converter software is available through http://doe2.com/index_Wth.html . 

19 See http://gundog.lbl.gov/ for discussion on simulation issues. 

FEMP M&V Guidelines 3.0 4-19 
weather data sources will be used, including both the source of the data and the physical location 

of the weather station. 

After the model has been calibrated using actual weather data, the building’s energy use may be 

adjusted to average-year weather. Average weather data may be obtained from ASHRAE 

(WYEC2) and the National Renewable Energy Laboratory (TMY2).20 

4.6.3.2 Statistical Indices 

For all of these approaches, two prescribed statistical indices (described below) must be 

calculated in order to declare a model calibrated: the mean bias error (MBE) and the coefficient 

of variation of the root mean squared error Cv(RMSE).21 The recommended calibration 

requirements are those specified by ASHRAE Guideline 14. Specific calibration goals should be 

set for each project based on appropriate level of effort (see Chapter 5). This process should be 

applied to electricity (kWh), demand (kW), and all other fuels used. 

In addition to statistical indices, graphical comparison techniques can be an effective tool 

understanding the variances present in a model. Simple or advanced methods of graphical 

comparison techniques can be effective, and are detailed in ASHRAE Guideline 14. 

As mentioned above, actual weather corresponding to the time period in question should be used 

in the model. Typically, the energy consumption predicted by the model and measured by the 

utility or sub-meter are determined for every month or interval in the data set, as well as for the 

whole year or period, and statistical analyses are performed on the results. The same techniques 

can be applied to hourly and subsystem data. The statistical values that need to be calculated are 

MBE and Cv (RMSE). 

	 MBE—mean bias error. The MBE indicates how well the energy consumption is 

predicted by the model as compared to the measured data. Positive values indicate 

that the model overpredicts actual values; negative values indicate that the model 

underpredicts actual values. However, it is subject to cancellation errors, where the 

combination of positive and negative values serves to reduce MBE. To account for 

cancellation errors, the CV(RSME) is also needed. 

	 CV(RSME)— coefficient of variation of the root-mean-squared error. This value 

indicates the overall uncertainty in the prediction of whole-building energy usage. 

The lower the CV(RSME), the better the calibration. This value is always positive. 

The mean bias error is calculated by subtracting the simulated energy consumption from the 

measured energy consumption for all the intervals over a given time period. The differences 

from each interval are summed and then divided by the sum of the measured energy 

consumption over the same time period. MBE is calculation is expressed in Equation 4-2. 

20 A comprehensive list of sources for weather data is available at 

http://www.eere.energy.gov/buildings/energyplus/weatherdata_sources.html. 

21 See ASHRAE Guideline 14-2002 and Section 4.2.2 for additional information. 

4-20 M&V Guidelines 3.0 FEMP 
Equation 4-2: Measured Energy Consumption 

∑ (SM − )Interval
 

MBE(%) = Period ×100 ∑ M Interval
 

Period
 

Where: 

M is the measured kWh or fuel consumption during the time interval 
 

S is the simulated kWh or fuel consumption during the same time interval 
 

The Cv(RSME) is a normalized measure of variability between two sets of data. For calibrated 

simulation purposes, it is obtained by squaring the difference between paired data points, 

summing the squared differences over each interval through the period, and then dividing by the 

number of points, which yields the mean squared error. The square root of this quantity yields 

the root mean squared error (RMSE). The Cv(RMSE), is obtained by dividing the RMSE by the 

mean of the measured data for the period. 

The root mean square error for the period is calculated using Equation 4-3. 

Equation 4-3: Root Mean Square Error 

− 2

∑(SM )Interval RMSEPeriod = NInterval 

Where: 

NInterval are the number of time intervals in the monitoring period. 

The mean of the measured data for the period is calculated using Equation 4-4. 

Equation 4-4: Mean of the Measured Data 

∑ M Interval
 

A = Period
 

Period
 NInterval
 

The Cv(RSME) is calculated using Equation 4-5. 

Equation 4-5: Cv(RSME) 

Cv RMSE Period ) = RMSEPeriod ( ×100

APeriod
 

The primary differences in applying these indices to the various data sets (monthly, hourly, submetered) are 1) the acceptable values of the indices and 2) the definition of “interval” and 

“period” in each of the equations above. The application of these statistical indices for each level 

of calibration is detailed in the sections below. 

FEMP M&V Guidelines 3.0 4-21 
The recommended acceptable values for each approach are included in Table 4-3. These values 

have been adopted from ASHRAE Guideline 14. Specific calibration goals should be set for each 

project based on the appropriate level of effort (see Chapter 5) and should be specified in the 

project-specific M&V Plan. For existing buildings, the model calibration will occur prior to 

contract award, and both the calibration goals and results should be included in the IGA. 

Table 4-3 Acceptable Calibration Tolerances22 

Calibration Type Index Acceptable Value* 

Monthly MBEmonth ± 5%

 Cv(RMSEmonth) 15% 

Hourly MBEMonth ±10 %

 Cv(RMSEMonth) 30% 

*Lower values indicate better calibration 

4.6.3.3 Subsystem Level Calibration with Monitored Data 

Calibration of a building model’s subsystems to measured data may be required to enhance or 

ensure the overall accuracy of the model meets specified targets. The model’s hourly predicted 

energy usage (kWh, therms, or Btu) is compared against measured hourly energy usage for the 

monitored building subsystems to determine whether the model accurately predicts subsystem 

level usage. 

Most simulation programs, including eQUEST, output subsystem usage values minimally in 

1-hour intervals. Therefore, for calibration, measured data must be averaged over each hour. For 

example, if 15-minute chiller demand (kW) data are collected, they must be averaged into hourly 

values. 

When applying the statistical equations above to sub-metered data, the interval is an hour and the 

period can be defined by the user. 

4.6.3.4 Whole-Building Level Calibration with Monthly Data 

Comparing energy use projected by the building model with monthly utility bills is the minimum 

level of calibration that should be conducted on any model of an existing building with monthly 

utility data available. In the statistical equations above, the interval is a month and the period is a 

year. 

When using monthly data, an additional check of the monthly variances should be made by 

calculating MBE by defining both the interval and the period as a month. 

Example calibration calculations and results using monthly data are shown in Table 4-4. The 

results show that in addition to meeting the overall MBE and CV (RMSE) goals, the MBE for 

each month was also below the target value. 

22 ASHRAE Guideline 14-2002, Section 6.3.3.4.2.2. 

4-22 M&V Guidelines 3.0 FEMP 
4.6.3.5 Whole-Building Level Calibration with Hourly Data 

When hourly data are applied, the interval is an hour and the period can be defined by the user, 

and often a 1-month billing period is used. These indices, however, may be calculated for the 

entire period or for weekdays, weekends, and holidays separately.23 

Table 4-4 Example Calculations to Determine Monthly Model Calibration 

Month 2,006 Measured kWh 

(M) 

eQUEST Simulated kWh 

(S) S-M MBE Squared Error 

Jan 839,040 842,236 3,196 0% 10,212,435 

Feb 814,080 774,882 (39,198) 5% 1,536,448,710 

Mar 766,080 827,555 61,475 -8% 3,779,175,625 

Apr 874,555 928,017 53,462 -6% 2,858,226,075 

May 984,960 1,077,269 92,309 -9% 8,520,951,481 

Jun 960,000 1,005,105 45,105 -5% 2,034,461,025 

Jul 1,079,040 1,184,382 105,342 -10% 11,096,884,293 

Aug 956,160 1,034,555 78,395 -8% 6,145,776,025 

Sep 908,160 1,009,812 101,652 -11% 10,333,192,128 

Oct 888,960 999,842 110,882 -12% 12,294,831,230 

Nov 952,320 840,194 (112,126) 12% 12,572,295,939 

Dec 871,680 822,511 (49,169) 6% 2,417,626,946 

Total 10,895,035 11,346,360 451,325 -4% 73,600,081,912 

 Overall Results:

 MBEmonth

 Cv(RMSE): 

-4% 

9% 

4.6.4 M&V Considerations 

Many issues must be considered and addressed in developing a project-specific M&V Plan using 

Option D. Some of the more common steps are outlined below. 

	 Use an experienced building modeling professional. Although new simulation 

software packages make much of the process easier, a program’s capabilities and real 

data requirements cannot be fully understood by inexperienced users, and resulting 

models may not be accurate. 

	 Determine the availability of utility bill data. 

	 Determine whether hourly or monthly billing data are available and whether meters 

can be installed to collect hourly data. Calibrations to hourly data are generally more 

accurate than calibrations to monthly data because there are more points to compare. 

Hourly energy or demand data, however, are generally only available for a utility’s 

largest customers or may be collected with portable data loggers. If only monthly 

billing data are available, conducting additional short-term monitoring of building 

sub-systems can improve the accuracy of the model. 

23	 Bou-Saada, T.E. and J.S. Haberl, “An Improved Procedure for Developing Calibrated Hourly Simulation Models,” International Building 

Performance Simulation Association, Report No. ESL-PA-95/08-01, 1995. 

FEMP M&V Guidelines 3.0 4-23 
	 Use actual equipment performance data in the simulation models. Many software 

packages have libraries of HVAC equipment that closely match actual system 

performance. Be cautious and investigate the library HVAC description to be sure it 

is a good representation of the real system and consider developing user-defined 

equipment performance curves based on field measurements or manufacturer’s data. 

	 Specify spot measurements and short-term monitoring of key parameters for both the 

baseline and performance period models. Spot and short-term measurements augment 

the whole-building data and more accurately characterize building systems. It is 

recommended that an end use be monitored over a period that captures the full range 

of the equipment’s operation (e.g., spring and summer for cooling systems. The data 

must also be collected in a way that facilitates sub-system level calibration. Careful 

selection of spot measurements and short-term monitoring is necessary because it can 

add significant cost and time to the project. 

	 Use trend data to determine actual controls. Sequencing of building controls is 

difficult to interpret from interviews, site surveys, manufacturer’s data, and spot 

measurements. The best way to ascertain actual sequences is through trending data. 

Sometimes, the EMCS systems can be utilized to determine actual operating 

scenarios. However, the capability for data storage in many systems may be limited. 

	 Specify model calibration procedures that will be followed for monthly, hourly, or 

subsystem data for both the baseline and performance period models. Prescribe 

statistical calibration requirements based on the accuracy required for the project. 

	 Specify the simulation program and version and the source of weather data used (onsite, local weather station or typical weather data). 

	 Clearly explain how savings will be calculated after the first year. Keeping models up 

to date can be expensive. For projects without substantial site changes expected, an 

Option C utility billing analysis approach may be viable.24 Regardless of how savings 

are calculated each year, the ongoing performance of the measures needs to be 

verified periodically. 

24 IPMVP Volume 1 2007, Section 4.10.4 

4-24 M&V Guidelines 3.0 FEMP 
Section 5 Selecting An M&V Approach 

Since the primary purpose of measurement and verification (M&V) is to validate payments or 

performance guarantees, the cost of M&V should be less than the payment amount or guarantee 

that is at risk. Consequently, the objective of M&V should not necessarily be to derive a precise 

energy savings number, but rather to ensure that energy services companies (ESCOs) properly 

complete their projects and that the resulting energy savings are reasonably close to the savings 

claimed. The appropriate level of M&V rigor and accuracy is a level that protects the project 

investment and fulfills the intent of the federal legislative requirements. Careful consideration of 

the M&V level, type, and rigor benefits both parties and can help mitigate potential problems 

during the performance period. 

In general, the selection of a project specific M&V method is based upon: 

 Project costs and expected savings 

 Complexity of the ECM 

 Number of interrelated ECMs at a single facility 

 Uncertainty or risk of savings being achieved 

 Risk allocation between the parties 

 Other uses for M&V data and systems 

This chapter discusses these issues, presents some rules of thumb to use when selecting an M&V 

approach, and discusses a methodology for evaluating project-specific M&V options. Additional 

discussion is provided on balancing M&V costs and technical rigor, as well as tips on 

minimizing uncertainty in the savings results. 

5.1 KEY ISSUES IN SELECTING THE APPROPRIATE M&V APPROACH 

The level of certainty and thus effort required to verify both a project’s potential to perform and 

its actual performance will vary from project to project. The contract and/or the project-specific 

M&V plan should be prepared with serious consideration of what M&V requirements, reviews, 

and costs will be specified. Some key factors, outlined below, should be considered when 

choosing the M&V options and techniques to use for each Energy Savings Performance Contract 

(ESPC) project. 

5.1.1 Value of ECM in Terms of Projected Savings and Project Costs 

The scale of a project, energy rates, term of the contract, comprehensiveness of energy 

conservation measures (ECMs), the benefit-sharing arrangement, and the magnitude of savings 

can all affect the value of the ECM or ESPC project. The M&V effort should be scaled to the 

value of the project so that the value of the information provided by the M&V activity is 

appropriate to the value of the ECM and the project itself. 

FEMP M&V Guidelines 3.0 5-1 
For Super ESPC projects, the average annual M&V costs are 3.3%25 of annual project cost 

savings. Some more complex ECMs will often warrant greater M&V costs, but the overall M&V 

costs for the project are typically balanced by other ECMs that do not require substantial annual 

activities. 

5.1.2 Complexity of ECM or System 

More complex projects may require more complex (and thus more expensive) M&V methods to 

determine energy savings. In general, the complexity of isolating the savings is the critical factor. 

For example, a complicated chiller measure may not be difficult to assess if there are energy submeters and monitoring systems dedicated to the chiller system. 

When defining the appropriate M&V requirements for a given project, it is helpful to consider 

ECMs as being in one of the following categories (listed in order of increasing M&V 

complexity): 

 Constant load, constant operating hours 

 Constant load, variable operating hours 

 Variable hours with a fixed pattern 

 Variable hours without a fixed pattern (e.g., weather-dependent) 

 Variable load, variable operating hours 

 Variable hours or load with a fixed pattern 

 Variable hours or load without a fixed pattern (e.g., weather-dependent) 

5.1.3 Number of Interrelated ECMs at a Single Facility 

If multiple ECMs are being installed at a single site, the savings from each measure may be, to 

some degree, related to the savings resulting from other measures or other non-ECM activities at 

the facility. Examples include interactive effects between lighting and HVAC measures or 

between envelope improvements and a chiller replacement. In these situations, it may not be 

possible to isolate and measure one system in order to determine savings. Thus, for multiple, 

interrelated measures, whole-building Options C or D may be the most appropriate. 

5.1.4 Risk of Achieving Savings 

The importance of the M&V activities is often tied to the confidence associated with the 

estimated energy or cost savings. An ECM with which the facility staff is familiar may, 

subjectively, require less M&V rigor than ECMs that are less well known. Similarly, unproven 

technologies may warrant additional attention. 

A simple method of estimating payment risk can be based on the estimated project value, 

technical uncertainty, and project sponsor experience. Such a method assumes that, as a starting 

point, all projects will be inspected to verify the project’s potential to perform and estimate 

savings uncertainty and payment risk. A simple illustration of this method is shown in Table 5-1. 

25 Costs are based on cost schedules from 166 Super ESPC projects. 

5-2 M&V Guidelines 3.0 FEMP 
Table 5-1 Example Estimate of Savings Risk 

Sample Project Estimated Savings Estimated Uncertainty Savings Risk 

Small lighting $50,000 10% $5,000 

Large custom $500,000 20% $100,000 

A limit on the M&V budget can then be established as a percentage of the project’s payment risk 

before an M&V plan is specified. As illustrated, smaller projects consisting of predictable 

technologies have less payment risk (and thus a lower M&V budget cap) than large projects that 

include less predictable technologies. 

In the same example, for the “large custom” measure, two M&V approaches may be evaluated 

based on their benefit-to-cost ratio, as indicated Table 5-2. In this example M&V Option C 

appears to be the better approach. 

Table 5-2 Example Benefit-to-Cost Evaluation for M&V 

Sample 

Project 

Estimated 

Savings 

Estimated 

Uncertainty 

(No M&V) 

Savings 

Risk (No 

M&V) 

Proposed 

M&V 

Method 

Estimated 

Annual 

M&V Cost 

Resulting 

Savings 

Uncertainty/ 

Savings Risk 

Benefit-to-Cost 

Ratio: Risk 

Reduction in 

Savings/M&V 

Cost 

Large custom $500,000 20% $100,000 Option C $25,000 10% / $50K 2.0 

Large custom $500,000 20% $100,000 Option B $50,000 8% / $40 K 1.2 

Accuracy requirements for measuring and verifying savings are either defined by the federal 

agency in its RFP or negotiated with the ESCO. In either case, the required level of measurement 

and verification effort is specified in the task order between the federal agency and the ESCO in 

the form of the M&V plan. This plan must be developed in early phases of a project’s 

development to ensure that (a) M&V is not left as an afterthought or that (b) inadequate funding 

has been allocated to the required M&V activities. 

5.1.5 Responsibility Allocation Between the ESCO and the Federal Agency 

For Super ESPC projects, the achievement of guaranteed cost and energy savings must be 

verified each year. At a minimum, the ESCO and the federal agency must verify that the installed 

equipment/systems have been properly maintained, continue to operate correctly, and continue to 

have the potential to generate the predicted savings. Although annual reports may be required for 

establishing savings guarantees, interim reports can be prepared semi-annually for more complex 

projects. This ensures that the M&V monitoring and reporting systems are working properly; it 

also allows fine-tuning of measures throughout the year based on operational feedback, and it 

helps avoid surprises at the end of the year. 

Typically, the aspects of the projects that are measured and verified are those for which the 

ESCO is held responsible. The Responsibility Matrix and contract should specify how savings 

will be determined and thus what needs to be verified. For example, variations in the operating 

hours of a facility during the term of a task order may be an acceptable risk to the federal agency. 

For example, operating hours may be determined by short-term measurements rather than 

continuously measured for purposes of payment. 

FEMP M&V Guidelines 3.0 5-3 
5.1.5.1 Other Uses for M&V Data and Systems 

Often, the array of instrumentation installed and the measurements collected for M&V can be 

used for other purposes, including commissioning and system optimization. Data and systems are 

more cost-effective if they are used to meet several objectives, and not just those of the M&V 

plan. In addition, savings could be quantified beyond the requirements of the performance 

contract. This information could be useful for allocating costs among different tenants, planning 

future projects, or allocating research. 

5.2 DETERMINING AN M&V APPROACH 

An M&V approach must be tailored for the specific project, based on the project’s costs, savings, 

objectives, and constraints. This section outlines some general criteria that can be used to 

determine an approach, and presents the M&V Planning Tool that provides general procedures to 

develop a project-specific M&V approach. 

5.2.1 General Criteria for Selecting an M&V Approach 

The four M&V options can be applied to almost any type of ECM. However, the rules-of-thumb 

listed below generally indicate the most appropriate M&V approach for an application. 

Option A can be applied when the most critical M&V issue is identifying the potential to 

generate savings, including situations in which: 

	 The magnitude of savings is low for the entire project or a portion of the project to 

which Option A can be applied. 

	 The risk of not achieving savings is low or ESCO payments do not need to be directly 

tied to actual savings. 

Option B, retrofit isolation, is typically used when any or all of these conditions apply: 

	 For simple equipment replacement projects with energy savings that are less than 

20% of total facility energy use, as recorded by the relevant utility meter or sub-meter 

	 When energy savings values per individual measure are desired 

	 When interactive effects are to be ignored or are estimated using estimating methods 

that do not involve long-term measurements 

	 When the independent variables that affect energy use are not complex and 
 

excessively difficult or expensive to monitor 
 

	 When sub-meters already exist that record the energy use of subsystems under 

consideration (e.g., a 277 V lighting circuit, a separate sub-meter for HVAC systems) 

Options C, billing analysis, is typically used when any or all of these conditions apply: 

	 For complex equipment replacement and controls projects 

	 When predicted savings are relatively large (greater than 10% to 20%) as compared 

with the energy use recorded by the relevant utility meter or sub-meter 

	 When energy savings values per individual measure are not desired 

5-4 M&V Guidelines 3.0 FEMP 
	 When interactive effects are to be included 

	 When the independent variables that affect energy use are complex and excessively 

difficult or expensive to monitor. 

Option D, calibrated simulation, is used in situations similar to Option C, or in addition when 

any or all of these conditions apply: 

	 When new construction projects are involved 

	 When energy savings values per measure are desired 

	 When Option C tools cannot cost-effectively evaluate particular measures or their 

interactions with the building when complex baseline adjustments are anticipated 

5.2.2 M&V Planning Tool 

The M&V Planning Tool is an iterative exercise designed to assist in the development of custom 

M&V approaches for individual projects. The Tool uses a five-step process that requires the 

development of a custom list of objectives and constraints that relate to measurement and 

verification of savings. The process considers both project level and ECM-specific objectives 

and constraints, which must be prioritized during the evaluation process. The steps described 

below correspond to the step numbers on the flowchart shown in Figure 5-1. 

5.2.2.1 Step 1: Develop a list of project and ECM-level objectives and constraints that relate to 

measurement and verification of savings. 

Some typical objectives and constraints for M&V are listed below. A custom list should be 

developed for the specific project based on key topics that will affect the M&V plan for the 

project and/or ECMs. 

Typical Objectives 

	 Track energy savings through utility metering 

	 Verify energy performance continuously 

	 Verify energy performance annually 

	 Track post-retrofit consumption 

	 Track performance of individual measures 

	 Adjust baseline for changes 

	 Maximize infrastructure by using least-cost M&V option 

Typical Constraints 

	 Historical utility data not available 

	 Lack of dedicated utility meters 

	 High degree of Interaction between ECMs 

	 ECMs scope affects a very small portion of overall utility baseline 

FEMP M&V Guidelines 3.0 5-5 
3. Evaluate savings

risk for the M&V option.

4. Estimate

cost for the M&V option. Is M&V cost

acceptable?

Evaluate new M&V option. A B C D

5. Write M&V Plan.

1. List ECM and project

objectives and constraints

2. Evaluate Project and ECM level Objectives &

Constraints to identify candidate M&V options.

It is appropriate to identify objectives and constraints that may apply, but enough information is 

not yet available, as these items may be significant to the M&V approach selected. These 

uncertain items should be clarified as early in the project as possible if they drive the approach 

selected. 

As shown in Table 5-3, a priority (high, medium, or low) can be assigned to each objective and 

constraint identified to help with the evaluation. High-priority objectives and constraints have the 

strongest influence on M&V selection and should be considered most important in the 

evaluation. 

M&V approach 

too risky. 

M&V cost not 

acceptable. 

Cost acceptable 

Select an M&V Option 

Risk acceptable 

3. Evaluate savings 

risk for the M&V option. 

4. Estimate 

cost for the M&V option. Is M&V cost 

acceptable? 

A B C D 

M&V approach

too risky.

M&V cost not

acceptable.

Evaluate new M&V option. 

5. Write M&V Plan. 

1. List ECM and project 

objectives and constraints 

2. Evaluate Project and ECM level Objectives & 

Constraints to identify candidate M&V options. 

Cost acceptable

Select an M&V Option

Risk acceptable

Figure 5-1 M&V Planning Flowchart 

Step 2: Select an M&V option for evaluation (Options A, B, C, or D). 

Project and ECM-level objectives and constraints must be evaluated to identify the most 

appropriate M&V option. The nature of the objective or constraint will either lend itself to or 

5-6 M&V Guidelines 3.0 FEMP 
rule out specific M&V options, including a retrofit isolation approach (Options A and B), a 

whole-building utility data analysis (Option C), or a calibrated simulation (Option D). 

One should determine if a single M&V Option can be used and is desirable for the entire project 

or if a more custom M&V approach is required for the proposed set of ECMs. If one of the 

important project-level objectives or constraints is not met, another M&V option should be 

selected for evaluation. If none of the M&V Options can satisfy project level objectives and 

constraints, an appropriate M&V Option should be selected for the first ECM and the evaluation 

process should be completed following Steps 3 through 5. This process should be followed until 

an M&V approach is defined for ECM. 

Table 5-3 Example M&V Considerations Matrix 

Objective 

or 

Constraint 

ECM or 

Project 

Level Priority 

Project Specific Objectives and 

Constraints (List the Ones That 

Directly Affect the M&V Approach for 

the Project) 

Retrofit 

Isolation 

Approach 

(Options A 

and B) 

Utility Bills 

Comparison 

Approach 

(Option C) 

Calibrated 

Simulation 

Approach 

(Option D) 

Objective Project High Ensure equipment performance for life of 

contract X 

Objective Project Medium Want to track energy savings at utility 

meter(s) X 

Constraint Project Medium Historical utility data pertinent to project 

scope are available X X 

Objective Project Medium Verify energy performance periodically X X X 

Objective Project Low 

Maximize infrastructure improvement by 

implementing the most cost-effective 

M&V option 

X 

Objective HVAC High Ensure long-term equipment 

performance X 

Objective HVAC High Ensure savings for the duration of the 

contract (persistence) X X 

Objective Lighting High Maintain lighting levels X 

Objective Lighting Medium Quantify savings through measurements X 

Constraint Windows Medium High interactive effects X X 

Objective Windows Medium Quantify savings from ECM X 

5.2.2.2 Step 3: Evaluate the savings risk associated with the selected M&V option(s). 

To perform this exercise, a custom list of risk elements should be developed based on project and 

ECM specifics. The Responsibility Matrix in Chapter 3 provides a compete discussion of risk 

elements, how responsibilities should be allocated, and how they impact M&V plan selection. 

Typical risk elements for ESPC projects include: 

 Operating hours 

 Environmental/process loads 

 User participation 

 Weather 

FEMP M&V Guidelines 3.0 5-7 
	 Equipment performance 

	 Major changes to the facilities 

	 Savings risk associated with the performance of O&M, repair, and replacement 

5.2.2.3 Step 4: Estimate costs for the M&V option. 

If one M&V option has been selected for all ECMs, the cost of using this M&V option in 

relation to savings risks should be estimated. If a custom approach is being followed for 

individual ECMs, Steps 3 and 4 should be repeated for each ECM until an M&V option has been 

associated with each ECM. Then, the cost of using the selected M&V options should be 

estimated. 

If the M&V requirements and the savings risk fail to justify the M&V expenses one should 

return to Step 2. 

5.2.2.4 Step 5: Write the M&V plan. 

If all the M&V requirements are met and the savings risk justify the M&V expenses, proceed 

with the development of the M&V plan for the project. 

5.3 COST AND RIGOR 

In general, the more rigorous the M&V, the more expensive it will be to determine energy 

savings. The factors that typically affect M&V accuracy and costs (some are interrelated) are 

listed below. 

	 Level of detail and effort associated with verifying baseline and performance period 

surveys 

	 Sample sizes (number of data points) used for metering representative equipment 

	 Duration and accuracy of metering activities 

	 Number and complexity of dependent and independent variables that are metered or 

accounted for in analyses 

	 Level of engineering required to conduct analyses 

	 Availability of existing data collecting systems (e.g., energy management systems) 

	 Contract term 

	 Level of accuracy needed in energy savings analyses 

5.3.1 Balancing Cost and Rigor 

One of the most challenging aspects of M&V is providing adequate accuracy while ensuring that 

M&V costs are reasonable. As shown in Figure 5-2, the incremental value of the information 

obtained from additional M&V will at some point be less than the cost to obtain it. 

Unfortunately, there is no easy way to define this point and one must rely upon judgment and 

experience to determine what is cost-effective and what is not. 

A few strategies for keeping costs down while maintaining technical rigor include: 

5-8 M&V Guidelines 3.0 FEMP 
Uncertainty in Savings

M&V Cost

Uncertainty in Savings

 Use extensive metering in the baseline period and stipulate values over which the 

ESCO has no control. 

 Verify key performance items using periodic rather than continuous data collection to 

reduce data collection and management issues. 

 Rely upon existing instrumentation, energy management systems, and energy 

management behavioral practices wherever possible. 

 Engage a third-party M&V expert to assist in the development of the measurement 

and verification plan to ensure key agency interests are protected and costs are 

minimized. 

Figure 5-2 The Law of Diminishing Returns for M&V 

M&V Rigor 

% 

Uncertainty in Savings 

M&V Rigor

M&V Cost 

%

V Rigor

M&V Cost

5.3.2 Savings Calculations 

The savings calculation approach usually depends on the M&V method selected for the measure. 

If long-term monitoring is not used in the M&V technique, the ESCO and the agency must 

accept that the agreed-upon savings will not equal the savings that would be determined through 

a process that involves rigorous analyses and measurements. If important values are estimated, 

both parties should understand that the savings determination will tend to be less accurate than if 

measurements were used to determine the values. 

5.3.3 M&V Costs 

The M&V effort should be scaled to the value of the project so that the value of the information 

provided by the M&V activity is appropriate to the value of the project itself. Rule-of-thumb 

estimates put overall annual M&V costs at 1% to 10% of typical project cost savings. Often, 

some ECMs will entail greater M&V costs, but the overall M&V costs for the project are 

balanced by other ECMs that do not require substantial annual activities. 

FEMP M&V Guidelines 3.0 5-9 
For a Super ESPC project, M&V are reported into two categories: initial and annual M&V 

expenses. The initial M&V costs may include metering or instrumentation required to perform 

the M&V activities, and is delineated by ECM on Task-Order Cost Schedule TO-2 

(Implementation Price by Energy Conservation Measure). The performance-period M&V 

expenses included for the entire project are included on Task-Order Cost Schedule TO-3 (PostAcceptance Performance Period Cash Flow). M&V cost breakouts should be requested and 

evaluated to ensure that costs are in line with the scope of work outlined in the M&V Plan. 

5.4 UNCERTAINTY 

Any statement of measured savings includes some degree of uncertainty. Since no instrument 

can be 100% accurate, all measurements contain some error or difference between the true and 

observed value. In addition, energy savings are typically based on measured values, which to 

some extent are estimates. As with all estimates, there will be some uncertainty in the reported 

numbers. The goal for each project is to reduce the uncertainty in the reported savings values, 

which is accomplished by limiting the errors in the measurements and analyses conducted. 

Calculating the uncertainty in the estimated savings is not required by Super ESPC, but this 

uncertainty is often estimated by the ESCO in order to set the overall level of savings guarantee 

for each ECM. Including the uncertainty in calculated savings values provides a more 

meaningful statement of savings. Uncertainty is typically proportional to the complexity of the 

ECM. 

Uncertainty at the project level can be broken down into four general types: measurement, 

sampling, estimation, and modeling. For any given project, the project error is calculated from 

theses four uncertainties. Projects often do not contain one or more of the four components; 

however, in a hypothetical project that contains all four components, the total project uncertainty 

(standard error) would be calculated by taking the square root of the sum of the squares of the 

individual standard errors of the components, as below: 

2 2 2 2

project ( ) ( ) ( ) ( ) Measurement Sampling Stipulation Modeling SE = SE + SE + SE + SE

The following sections discuss the sources of these errors and the way that these sources can be 

minimized in a Super ESPC project.26 

5.4.1 Measurement 

Measurement uncertainty is due to metering equipment inaccuracies. For example, the 

specifications for a meter may indicate that it is accurate to within ± 5%, meaning that any 

reading taken the meter may be up to 5% off in either direction. Additional error in 

measurements may be introduced if an instrument is not properly calibrated or if it is applied 

under inappropriate conditions. Data management can also introduce errors through omitted, 

adjusted, or lost data. 

For an M&V plan to be successful, the sensors used for baseline and performance period 

measurements must meet minimum accuracy requirements for the application and must be 

26 Additional information on these topics is contained in ASHRAE Guideline 14 Section 5.2.11 and IPMVP Appendix B. 

5-10 M&V Guidelines 3.0 FEMP 
properly calibrated. If the accuracy of any instrument is less than suitable, the measurements may 

introduce unacceptable levels of error into the energy calculations. 

Instrumentation accuracy requirements should be sufficient to ensure that overall energy and cost 

estimates are reasonable. Although error analysis is not required by Super ESPC projects, it is 

important to keep in mind that the inaccuracies introduced by the instrumentation will likely be 

the greatest source of uncertainty in calculated savings. 

For example, in a chiller project, the most important measurements are the chilled water 

temperatures which are used to determine load. The impact of sensor accuracy on predicted 

kW/ton values is shown in Figure 5-35-3. 

Figure 5-3 Example Impact of Sensor Accuracy on Calculations27 

Uncertainty o fCalculated kW/ton vs. DifferentialTemperature

at various T emperature SensorAccuracies

Flow Measurement Error =+/- 5%PowerMeasurementError= +/- 2%
 

Error 25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

3.00oF

2.00oF

1.10oF

0.10oF

0.20oF

0.50oF

2610 1418 22

Measured Differential Temperature(Tr-Ts)

Tips for reducing measurement error: 

	 Determine and prescribe the needed accuracy for measurement equipment. 

	 Ensure that the measurement equipment has been recently calibrated. 

	 Specify data management strategies, including periodic checks and back-up 
 

procedures. 
 

27 Analysis provided by Scott Judson. 

FEMP M&V Guidelines 3.0 5-11 
5.4.2 Sampling 

Sampling uncertainty occurs when measurements are taken on a sample of the affected 

equipment and the results extrapolated to the entire population of the equipment. For example, it 

may not be economically feasible to monitor the hours on every fixture in a building lighting 

retrofit. Often, a sample is monitored, and the results applied to the remainder of the lighting 

population. Sampling uncertainty is calculated from the standard deviation of the sampled 

results. When the standard deviation is large, the uncertainty is also large. A detailed discussion 

on sampling can be found in Appendix B. 

Tips for reducing sampling error: 

	 Assign homogeneous usage groups based on similarities in equipment performance or 

operating characteristics. 

	 Use statistical sampling strategies described in Appendix B. 

	 Use sample sizes that meet a confidence of at least 80% and a precision of 20%. 

	 Ensure that the measured data meet statistical requirements by calculating the actual 

coefficient of variation (Cv) from the measurements. 

	 Use a conservative approach in selecting original sample sizes by using a high Cv, 

typically greater than 0.5, especially for populations that are know to contain 

variations. This will increase the initial sample size, but reduce the risk of undersampling. 

5.4.3 Estimating 

Estimates have to be made when values are necessary to complete a calculation, but the values 

cannot be measured directly. When engineering estimates are used in lieu of actual 

measurements, uncertainty is introduced. This uncertainty itself must often be estimated based on 

the expected accuracy of the estimated values. For example, the efficiency of a boiler may be 

estimated rather than measured directly. The estimate would be based on the type and age of the 

boiler, and may result in an estimated stipulation error of ± 20% (e.g., 75%, between 60% and 

90%). If a building engineer who is familiar with the boiler gives additional operational 

information about the boiler, the uncertainty may be less, such as ± 10% (e.g., 75%, between 

67.5% and 82.5%). 

Tips for reducing estimating error: 

	 Use measured values wherever possible, especially for parameters that contribute to a 

high percentage of project savings. 

	 Use the manufacturer’s original specifications or industry-accepted performance 
 

curves to determine performance. 
 

	 Use typical meteorological year (TMY) weather data28 from an applicable site to 
 

conduct calculations. 
 

28 TMY weather data is available from National Oceanographic Atmospheric Administration (NOAA). 

5-12 M&V Guidelines 3.0 FEMP 
	 Use observations of building occupant behavior and facility operating and 
 

maintenance logs. 
 

	 DO NOT use rules-of-thumb, proprietary software/algorithms, guesses at operating 

parameters, or data from other facilities. 

5.4.4 Modeling 

Modeling uncertainty is introduced when savings are estimated using engineering or simulation 

models. The accuracy of any model is based on the ability of the model to account for all 

variations in energy use by employing the proper analysis techniques, including all relevant 

variables, and excluding those that are irrelevant. 

A tip for reducing modeling error is to request the ESCO provides calculations in electronic 

format, and to have a qualified third-party reviewer closely analyze the savings calculations. 

FEMP M&V Guidelines 3.0 5-13 
5-14 M&V Guidelines 3.0 FEMP 
Section 6 Incorporating M&V in Super ESPCs—Key Submittals 

This section provides an overview of measurement and verification (M&V) submittals required 

in each phase of a Super Energy Savings Performance Contract (ESPC) project. The key 

submittals related to M&V in a Super ESPC project are outlined in Table 6-1 and discussed 

below. In this table, the name of the Super ESPC submittal or item is shown in italics. Some of 

the terminology used specifically in Super ESPC projects is defined in Table 6-2. 

Table 6-1 Super ESPC Submittals Related to Measurement and Verification 

Required M&V Item Location(s) Timing for Development29 

M&V Approach Preliminary Assessment Initial project scoping 

Risk and Responsibility Matrix Preliminary Assessment 

Final Proposal 

Initial project scoping, prior to Notice of Intent to 

Award 

During Investment Grade Audit 

M&V Plan and Savings Calculation 

Methods Final Proposal After Notice of Intent to Award and during Investment Grade Audit 

Commissioning Approach Final Proposal During Investment Grade Audit 

Commissioning Plan Separate submittal After approval of Design & Construction Package 

Commissioning Report Separate submittal Prior to Project Acceptance 

Post-installation Report Separate submittal Prior to Project Acceptance 

Annual Reports Separate submittal 60 days after anniversary date of Project 

Acceptance 

Table 6-2 Super ESPC Project Terminology 

Project Phase M&V Submittal Term Used 

Project Development M&V Plan (Final Proposal) Proposed Savings 

Project Acceptance Post-Installation Report Expected Savings 

Performance Period Annual Reports Verified Savings 

6.1 M&V APPROACH 

The first M&V-related item received on a Super ESPC project is the ECM Performance 

Measurement section of the Preliminary Assessment. This section provides a general description 

of the M&V Plan proposed for the project. Although very little detail is included in this section, 

it is important that the agency and the ESCO agree on the general M&V approach(s) to be used 

prior to starting the Investment Grade Audit (IGA). The M&V method(s) chosen can have a 

dramatic effect on how the baseline is defined, determining what activities are conducted during 

the IGA. 

29 Detailed information on DOE’s Super ESPC process is available at http://www1.eere.energy.gov/femp/financing/superespcs.html. 

FEMP M&V Guidelines 3.0 6-1 
6.2 ESPC RISK AND RESPONSIBILITY MATRIX 

A project-specific Risk, Responsibility and Performance Matrix is required for Super ESPC 

projects. It is first presented in the Preliminary Assessment and is finalized in the Final Proposal. 

The Responsibility Matrix details risks and responsibilities that should be considered when 

developing performance contracts, especially the verification requirements of these contracts. 

This Responsibility Matrix was developed to help identify the important project risks, assess 

their potential impact, and clarify the party responsible for managing the risk. 

The final agreed-upon Responsibility Matrix will greatly influence the measurement and 

verification approach(s) used in the project, which must reflect the allocation of responsibilities. 

Additional discussion of the Responsibility Matrix is included in Chapter 3. 

6.3 MEASUREMENT AND VERIFICATION PLAN 

The project-specific M&V Plan is included in the ECM Performance Measurement section of the 

Final Proposal. The M&V Plan is the single most important item in an energy savings guarantee, 

as it defines how savings will be calculated and specifies any ongoing activities that will take 

place during the contract term. The M&V Plan details the proposed Year 1 energy and cost 

savings. The ESCO prepares the project-specific M&V Plan and submits it to the federal agency 

for review and approval. 

Super ESPC projects are required to use the M&V Plan and Savings Calculation Methods 

Outline described in Appendix C. 

Details required in the Measurement and Verification Plan are discussed in Section 7 of this 

document. 

6.4 COMMISSIONING APPROACH, PLAN, AND REPORT 

The Commissioning Approach for each ECM is included in the ECM Performance Measurement 

section of the Final Proposal. The Commissioning Approach outlines the expected 

commissioning activities and identifies roles and responsibilities of the ESCO and the federal 

agency. 

The project-specific Commissioning Plan is developed after the engineering design is finalized 

and the Design and Construction Package has been approved by the agency. The Commissioning 

Plan finalizes the Commissioning Approach outlined in the Final Proposal and addresses each 

ECM with specific steps that will be taken during the commissioning process. 

Once commissioning activities have been completed and documented per the approved 

Commissioning Plan, the Commissioning Report is submitted. This report details the inspections 

and performance tests implemented, along with the results of these inspections and tests, to 

ensure that the systems were installed and performing properly. It also verifies systems and 

equipment are operating as intended and according to design intent. 

Information on commissioning can be found in Section 7 of this document. 

6-2 M&V Guidelines 3.0 FEMP 
6.5 POST-INSTALLATION REPORT 

After the commissioning activities have been completed, the post-installation verification 

activities defined in the M&V Plan are conducted. The results of the post-installation verification 

activities are presented in the Post-Installation Report, which is delivered by the ESCO prior to 

project acceptance. This report also documents any changes in the project scope and energy 

savings that may have occurred since the Final Proposal, and reports the expected Year 1 energy 

and cost savings. 

Super ESPC projects are required to use the Post-Installation Report Outline shown in Appendix 

C. Information on post-installation is included Section 2.2.5. 

6.6 ANNUAL INSPECTIONS AND REPORTS 

Each year during the performance period, typically just after the anniversary of the project’s 

acceptance, the contractor submits an Annual Report. The report documents the execution and 

results of the activities prescribed in the M&V Plan (measurements, savings calculations) and 

reports the verified Year 1 energy and cost savings. The report also describes O&M activities 

conducted during that performance period, as well as any identifying items that may require 

additional follow-up. 

For Super ESPC, M&V needs to show only that the overall cost savings guarantee has been met, 

and not that the predicted savings for each ECM have been achieved. 

The verified savings values presented in the Annual Report determine if the annual savings 

guarantee has been met, and if any true-up of payments is required. As stipulated in the contract 

or Task Order, the federal agency may use the annual report to reconcile payments made to the 

ESCO for previous billing periods if previous payments were based on expected savings that 

then need to be trued-up to reflect verified savings. The estimates in the report may also be used 

as the basis for subsequent payments. 

Super ESPC projects are required to use the Annual Report Outline shown in Appendix C. 

FEMP M&V Guidelines 3.0 6-3 
6-4 M&V Guidelines 3.0 FEMP 
Section 7	 M&V Plan Details 
 

The Measurement and Verification (M&V) Plan is a document that defines project-specific 

M&V methods and techniques that will be used to determine savings resulting from a specific 

performance contracting project. The plan may include 1) a single option that addresses all the 

measures installed at a single facility, or 2) several M&V options to address multiple measures 

installed at the facility. 

In addition to providing accurate and conservative methods to calculate energy savings, a good 

M&V Plan is clear, consistent, and repeatable. In a long-term contract, it is very important to 

ensure that all assumptions, procedures, and data are recorded properly so they may be easily 

referenced and verified by others. The data included should be sufficient for a third party to 

implement or verify the M&V procedures. 

M&V activities include site surveys, energy measurements, metering of key variables, data 

analyses, calculations, quality assurance procedures, and reporting. All of these key components 

need to be adequately detailed in the M&V Plan. 

The project-specific M&V Plan must be submitted and approved by the federal agency before 

M&V activities begin. In some cases, the agency will specify an approach in the RFP, while in 

other cases the energy service company (ESCO) will propose a site-specific plan for approval. 

Final resolution of M&V and other project issues are left to the discretion of the federal agency, 

although the details of the M&V Plan can be a highly negotiated item. 

Contracts implemented under DOE’s Super Energy Savings Performance Contract (Super ESPC) 

are required to follow the M&V Plan and Savings Calculation Methods Outline included in 

Appendix C. This outline was developed through an industry-government working group and has 

been incorporated into the Super ESPC contract. The project-specific M&V Plan includes 

project-wide items as well as details for each energy conservation measure (ECM) (see Section 

2.2.6). 

In general, the contents of a project-specific M&V Plan should: 

	 Provide an overview of the ECM and verification activities, including: 

−	 State the goals and objectives of the verification activities 

−	 Define the M&V option and techniques to be used for each measure 

−	 Identify the key physical characteristics of the facility, system, and ECM to be 

installed 

−	 Define the critical factors that affect energy consumption of the system or ECM 

	 Adequately define the baseline conditions, including: 

−	 Identify the key baseline performance characteristics of the system or ECM, such 

as lighting intensities and temperatures 

FEMP M&V Guidelines 3.0 7-1 
−	 Define baseline operating conditions, such as loads and hours of operation 

	 Detail all measurements, data analyses procedures, algorithms, and assumptions 

	 Define all performance period verification activities, including: 

−	 Specify the parameters to be measured, period of metering, accuracy 

requirements, calibration procedures, metering protocols, sampling protocols, and 

archiving requirements 

−	 Explain requirements for agency witnessing of M&V activities 

	 Detail the schedule for periodic M&V reports and procedures 

	 Describe procedures and details for annual inspections 

	 Describe O&M reporting requirements by agency and ESCO (See Section 9 of this 

document). 

	 Detail how savings will be calculated, including: 

−	 Provide rationale and procedures for any baseline or reporting period energy 

adjustments anticipated 

−	 Detail how interactive effects will be handled 

The first step in defining a project-specific M&V Plan involves selecting an appropriate M&V 

approach or approaches. This process is discussed in detail in Chapter 5 and includes evaluating 

project-wide and ECM-specific objectives and constraints, assessing the viability of various 

M&V options, ascertaining savings risks, and evaluating implementation costs. 

The following sections discuss and provide insight into the key areas covered by an M&V Plan. 

Procedures for reviewing M&V Plans for content and quality are detailed Section 10 of this 

document, and review checklists can be found in Appendix E. Issues and requirements 

associated with specific technologies are described in Chapter 8. 

7.1 DEFINING THE BASELINE 

Since energy savings must be determined by comparing energy use before and after a retrofit, the 

characterization of the pre-retrofit or baseline conditions is critical. Defining the baseline 

consists of identifying the performance and operating factors that influence energy consumption, 

and determining their values through observations and measurements. 

Regardless of the M&V option or method used, the baseline conditions for all projects and 

ECMs must be adequately defined. Typically, the ESCO will define the baseline conditions 

during the Investment Grade Audit, but the federal agency may define baseline conditions. 

The purpose of establishing the baseline conditions is to: 

	 Define the baseline sufficiently for purposes of calculating savings 

	 Document the baseline conditions in case operational changes occur after ECM 

installation that mandate adjustments to the performance period baseline energy use 

7-2 M&V Guidelines 3.0 FEMP 
_ _ _

_ _ _

_ _

Baseline conditions include physical, operational, and energy use data on the facility and 

systems. Baseline conditions are typically determined through surveys, inspections, and spot and 

short-term metering activities. Typically, pre-installation metering is conducted for a period of 

time required to capture all operating conditions of affected systems and/or processes. 

Physical conditions that should be documented include equipment inventories, locations, 

nameplate data, system design features, and building occupancy. The key operational conditions 

include control strategies, set points, operating schedules, condition of equipment, loads, 

maintenance procedures used, peripheral equipment conditions, and weather. Energy use data 

that constitute the baseline may include utility billing data, sub-metered system data, and utility 

rate structures. 

Although only a portion of a facility’s systems may be included in the ESPC project, it may be 

appropriate to document the site conditions for other key energy using systems. This is especially 

true if a whole-building M&V approach (Option C or D) is being used. Often, changes outside 

the scope of the ESPC project at a large facility can affect the overall energy consumption at a 

site and may warrant an adjustment, as discussed in Section 7.2. 

7.2 ADJUSTMENTS 

As indicated in Chapter 2 and the basic equation used to determine savings shown below 

(Equation 7-1), adjustments are sometimes required to account for changes unrelated to the ECM 

that affect energy use. Such adjustments may account for changes in weather, occupancy, or 

other factors between the baseline and performance periods. 

Equation 7-1: General Equation Used to Calculate Savings 

Savings = (Baseline Energy − Post Installation Energy ) ± Adjustments 

The purpose of adjustments is to express both baseline and post-installation energy under the 

same set of conditions. The modifications to the savings can be further distinguished as routine 

and non-routine adjustments, as shown in Equation 7-2. 

Equation 7-2: Expanded Equation Used to Calculate Savings 

Savings = (Baseline Energy − Post Installation Energy ) 

±Routine Adjustments ± Non − Routine Adjustments 

7.2.1 Routine Adjustments 

Routine adjustments are used to account for expected variations in independent variables and 

energy use. These adjustments often use regression analysis to correlate and adjust energy use to 

independent variables such as weather, but simple comparisons may also be employed. Routine 

adjustments are used to normalize energy use as a function of one or more independent 

parameters such as temperature, humidity, or meals served. 

Normalizing energy savings to a prescribed set of conditions is a very important technique used 

in ESPC projects. Using a fixed set of conditions for both the baseline and performance period 

FEMP M&V Guidelines 3.0 7-3 
cases, such as average weather conditions and the corresponding cooling load profile, allows the 

risks associated with these operational factors to be reduced. 

Alternatively, baseline and performance period conditions could be normalized to either baseline 

or performance period conditions. If performance period conditions are used to adjust the 

baseline case, the savings calculated will estimate the actual avoided energy use for that period. 

One of the key assumptions made when normalizing savings is that the performance period 

energy use will have a predictable relationship to the independent variables to be standardized. 

The baseline model will be completely defined in the contract, but the performance period model 

will need to be developed from measured data collected during the performance period. 

Typically, a valid baseline model indicates that a similar performance period model can be 

successfully developed. 

Once the baseline and performance period models of the equipment’s energy consumption and 

the parameter(s) are established and validated, the standardized values of the independent 

parameters can be used to drive the both models and calculate savings. 

Therefore, a project-specific M&V Plan should identify critical independent variables, explain 

how these variables will be measured or documented, and discuss how they will be used in the 

empirical models. Additionally, assumptions and mathematical formulas used in the M&V Plan 

must be clearly stated, and the validity of any mathematical model used should be verified. The 

verification strategies discussed in Section Error! Reference source not found. can be applied 

to any mathematical model. 

7.2.2 Non-Routine Adjustments 

Non-routine adjustments are used to compensate for unexpected changes in energy driving 

factors, such as facility size, operating hours, and facility use. These factors must be monitored 

for change to ensure that they are not affecting the performance of the energy conservation 

measure. Tracking these factors is primarily a concern for projects using whole-building options 

(Options C & D). Option A approaches typically avoid these types of adjustments as many of the 

factors that could change are stipulated. If future changes are expected, the M&V Plan should 

incorporate methods for making these non-routine adjustments. 

7.3 INTERACTIVE EFFECTS 

It is commonly understood that ECMs and energy systems interact with one another. Reduced 

lighting loads, for example, can reduce air conditioning energy consumption (a cooling bonus), 

but increase heating consumption (a heating penalty). Whole-building M&V approaches such as 

building simulation or utility billing analysis account for these types of interactive effects, 

whereas retrofit isolation M&V approaches do not. 

When using retrofit isolation M&V Options A and B, careful consideration must be given to 

dealing with interaction between ECMs. One must properly account for interactive effects and 

avoid double-counting of savings, which can occur inadvertently if interactions are not carefully 

considered. 

7-4 M&V Guidelines 3.0 FEMP 
For example, if the lighting retrofit mentioned above is accompanied by a chiller replacement, 

care must be taken to account for the reduced cooling loads on both the new and existing chillers 

due to the change in lighting. In addition, the cooling bonus should be based on the efficiency of 

the new chiller. 

In general, the possibility of double-counting energy savings can be reduced by considering one 

ECM at a time. The later ECMs should start (the baseline condition) from the performance 

period condition of the previous ECMs. For related ECMs, such as lighting efficiency and 

lighting controls, double-counting can sometimes be avoided by using a single equation to 

determine savings from both measures. 

Methodologies for determining some of the more common interactions, such as lighting and 

HVAC, have been developed (see Section 11.1). However, detailed relationships between many 

dissimilar but interactive ECMs are not known, and the methods for measuring interactive effects 

are not cost-effective for many applications. For projects using retrofit isolation approaches 

(Options A or B), one of three approaches can be taken to account for savings associated with 

interactive effects between ECMs. These approaches are as follows: 

 Ignore interactive effects. 

 Use mutually agreed-upon values that are based on the site-specifics of the building 

and HVAC equipment types. The values can be developed on the basis of computer 

model simulations for typical building conditions or assigned on the basis of available 

information for typical buildings. 

 Develop a site-specific method to measure and estimate interactive effects. The 

federal agency and/or ESCO will need to agree on the merit and reasonableness of the 

proposed approach, which may include directly measuring the effects. 

7.4 METERING30 

To determine energy savings, some measurement processes need to be conducted to identify the 

pre-retrofit and post-retrofit conditions. These measurements typically include energy 

consumption and energy-related variables. Metering issues that should be considered in 

preparing a project-specific M&V Plan are discussed below. 

A project-specific M&V Plan should demonstrate that any metering and analysis will be done in 

a consistent and logical manner and with a level of accuracy acceptable to all parties. Metering 

and monitoring reports must specify exactly what was measured, how and when the 

measurements were made, what meter or meters were used, and who conducted these 

measurements. Any metering protocols that will be followed must be specified.31 

Issues covered below include types of meters, meter accuracy and calibration, metering 

protocols, duration of metering, and the use of samples. 

30 More information on metering is available throughMetering Bset Practices: A Guide to Achieving Utility resource Efficeincy, Federal Energy 

Management Program, October 2007. 

31 Metering protocols are standardized procedures developed for measuring physical characteristics and metering specific types of 

equipment. For example, ASHRAE Guideline 14 Annex E describes standard procedures for measuring physical characteristics, including 

power, temperature, flow, pressure, and thermal energy and describes standards for measuring the performance of chillers, fans, pumps, 

motors, boilers/furnaces, and thermal storage. 

FEMP M&V Guidelines 3.0 7-5 
7.4.1 Equipment 

Many tools are available which help collect and analyze system-wide HVAC data, control data, 

and lighting performance data. Data may include power (kW), energy (kWh), and operating 

parameters such as temperature, humidity, pressure, flow rates, status, and lighting levels. Data 

can be collected through one-time measurements or can be recorded in user-defined intervals. 

Prices, applications, and complexity of these tools vary. 

For data collection, storage, and reporting, there are two general categories of metering 

equipment for M&V activities: data loggers and energy management systems. 

Data loggers range from simple battery-powered portable devices to more complex tools that can 

collect inputs from up to 30 transducers. The most simple portable data loggers collect 

information about a single variable (such as light fixture on/off status or amp draw from a 

motor). Others can capture multiple inputs (such as voltage, power factor, and amperage) and 

perform some calculations. Portable data loggers tend to be inexpensive per unit, but are more 

limited in applications. The downloading of data is usually done manually off site through a 

connection to a personal computer, although modem connections are sometimes used. Batterypowered portable loggers can offer non-intrusive monitoring within an occupied area, are 

relatively simple to use, and are inexpensive. More complex data loggers can collect information 

from a range of different inputs, conduct some analyses, prepare reports, and, typically through 

modems, download information for remote data collection. Permanently installed data loggers 

tend to be relatively expensive (when transducer and installation costs are included) and, if hardwired, not very portable, which is an issue when only short-term measurements are required. 

Energy management systems are used for controlling systems. These would logically be an 

excellent option since such systems are often already in place and have data collection, trending, 

and computing capability; however, caution should be exercised, as many systems are not 

designed for data storage and reporting, and many operators are not familiar with M&V 

requirements. 

7.4.2 Sensor and Meter Accuracy and Calibration 

Before any data are collected, all sensors and meters should be reviewed to ensure that they are 

appropriate for the application. The accuracy of the device used to collect data can significantly 

affect the validity of the data collected and increase the level of error that is introduced in any 

calculations. Often, measurement error will be the primary source of uncertainty in a savings 

value. Using high-quality sensors for gathering key data can help increase the accuracy of 

savings estimates. Measurement uncertainty is discussed in detail in Section 5.4. 

Equipment accuracies provided by the manufacturer are meaningful only if the equipment is in 

calibration. Sensors and meters used to collect M&V data should be calibrated to known 

standards (such as those of the National Institute of Standards and Technology). Forms 

indicating that calibration has been conducted are a required part of the M&V reports. 

For the calibration to be valid, the equipment used to calibrate the sensors and meters must be of 

a greater accuracy than the sensors or meters themselves. Calibration methods for a variety of 

applications are included in ASHRAE Guideline 14. 

7-6 M&V Guidelines 3.0 FEMP 
7.4.3 Metering Duration 

The duration of metering and monitoring must be sufficient to ensure an accurate representation 

of the amount of energy used by the affected equipment both before and after project installation. 

The appropriate measurements should be taken within a specified and representative time period. 

These measurements can then be used to determine time-of-use and annual energy consumption. 

The time period of measurement must be representative of the long-term (i.e., annual) 

performance of the ECM or system. For example, lighting retrofits in a 24-hour warehouse that 

is operated every day of the year may require only a few days of metering. However, a chiller 

retrofit may require metering throughout the cooling season or perhaps for 1 month each season 

of the year. 

The required length of the metering period depends on the type of ECM(s) or system. Some 

common scenarios are discussed below. 

	 For equipment that operates according to a well-defined schedule under a constant 

load, such as a constant-speed exhaust fan motor, the period required to determine 

annual savings could be quite short. In such a case, short-term energy savings can be 

extrapolated easily to the entire year. 

	 If the project’s energy use varies across both day and season, as with air-conditioning 

equipment, a much longer monitoring period may be required to characterize the 

system. In a case like that, long-term data are used to determine annual energy 

savings. When the metering is complete, the limits of the model used to characterize 

the system must be defined. For example, if data were taken on the chiller system 

only when the outside air temperature ranged from 50°F to 70°F, then the resulting 

chiller model would probably be valid only within the model limits of 50°F to 70°F. 

	 For some types of projects, metering time periods may be uncertain. For example, 

there is still controversy over how long lighting operating hours must be measured in 

office buildings to determine a representative indication of annual operating hours. In 

these situations, an agreement is required between the project parties to determine the 

appropriate measurement period and accuracy level for the ECM(s) or systems under 

consideration. For lighting projects, 3 weeks of monitoring during non-holiday 

periods is typically effective. 

	 For some projects, the metering time period can be reduced by forcing a system to go 

through all of its operating modes in a short period of time. For example, a variablespeed drive ventilation system that is controlled by outside air temperature may 

require months of data collection to capture a full range of performance data. 

However, if the control system were over ridden to force it to operate in various 

modes, the data collection might take only a day. This approach should be used with 

caution, as additional monitoring may be required to determine the system’s 

relationship to independent variables. 

7.4.4 Sampling 

Sampling techniques should be used when it is unrealistic to monitor every piece of equipment 

affected by a retrofit. The sampling procedures outlined in Appendix B provide guidance on 

selecting a properly sized random sample of equipment for monitoring energy-related factors 

FEMP M&V Guidelines 3.0 7-7 
such as operating hours, load factor, or kW. The measurements, taken from a sample of 

equipment, can then be used to estimate the energy-related factors for the entire population. 

A successful sample will be sufficiently representative of the population to enable one to draw 

reliable inferences about the population as a whole. The reliability with which the sample-based 

estimate reflects the true population is a function of specified statistical criteria, such as the 

confidence interval and precision level, used in the sample design. The reliability of a samplebased estimate can be computed only after the metered data have been collected. Before 

collecting the data, one cannot state the level of reliability that a given sample size will yield. 

However, one can compute the sample size that is expected to be sufficient to achieve a specified 

reliability level. This is done by using projections of certain values and criteria in the sample size 

calculations. 

Based on the data gathered for a selected period of time, the sample size required may be 

reduced or increased. If the projections are too conservative, the estimate will exceed the 

reliability requirements. If these projections prove to be overly optimistic, then the reliability of 

the estimates will fall short of the requirements, necessitating additional data collection to 

achieve the specified reliability level. This method of using projections to calculate the necessary 

sample size is the one adopted for these guidelines. 

7.5 ENERGY COSTS 

The goal of ESPC is to reduce energy, water, and/or operations and maintenance (O&M) costs at 

federal facilities. The M&V Plan should be designed to provide energy, water, and operating 

savings information in such a way that cost savings can be reasonably estimated. 

For example, energy cost savings will be calculated using energy savings and the appropriate 

cost per unit of energy saved. In most cases, the unit cost of energy will be based on the 

servicing utility’s energy rate schedules at the time the project is implemented. The unit cost of 

energy that will be used in calculating energy cost savings each year during the performance 

period must be defined in sufficient detail in the contract to allow savings to be calculated using 

each of the factors that affect cost savings. These factors include items such as (for electric bills) 

kWh saved, kW saved, power factor, kW ratchets, and energy rate tiers. If the rate uses time-ofuse periods, the energy and demand savings may be calculated separately for each time-of-use 

period. More complex rates, such as demand ratchets, may require additional calculations. The 

savings calculations are straightforward. 

Demand savings may be based on an average demand reduction or a maximum demand 

reduction. Average reduction in demand, which is typically not equal to the actual reduction in 

billing demand, is calculated as the kWh savings during the time period in question (usually the 

utility summer peak period) divided by the hours in the time period. Maximum reduction in 

demand is typically the reduction in the utility-metered maximum demand under terms and 

conditions specified by the servicing utility. For example, the billing peak may be based on the 

maximum building kW load measured in 15-minute intervals and coincident with the utility peak 

demand period. The maximum demand reduction is usually calculated to determine savings in 

utility peak demand charges. Thus, if utility demand savings are to be determined, each site must 

define 1) how the reduction will affect the utility bill and 2) how the demand reduction will be 

calculated for purposes of payments to the ESCOs. 

7-8 M&V Guidelines 3.0 FEMP 
For performance contracts with cost savings based on peak or billing period load reductions, an 

M&V method should be selected that provides energy savings data by time-of-use periods 

corresponding to the facility’s rate structure. For example, at a federal prison, the water heating 

peak load might be 252 kW over a 2-minute averaging period, 228 kW over 15 minutes, or 192 

kW using 60-minute time periods of analysis. Considerable error in cost savings estimates are 

introduced by data that do not correspond to the rate structure (15 minutes, in this case). Thus, it 

is critical that M&V Plans reflect the effects of time-of-use and block rate schedules. Similarly, 

if the utility’s peak demand period is from 9 am to 5 pm, any demand savings realized outside of 

these hours will not result in reductions in demand charges. 

When determining the value of the energy, caution should be exercised to ensure that a 

conservative estimate is used that will not overvalue savings. The marginal cost of energy (i.e., 

the actual cost for the last portion of energy used for each month) should be used, rather than 

average values. The marginal costs can be determined by reducing the utility usage by 1 kWh or 

1 kW, for electricity, and then recalculating the bill. Because there can be many fixed fees, 

demand charges, and distribution charges, it is important that average values are not used and 

that only commodity-based charges are included. 

The ESCO may propose rates to use, but it is up to the agency to ensure that the correct rates are 

applied and the arithmetic is correct. At a minimum, the ESCO must provide the unit cost of fuel 

for each source of savings in the M&V Plan. 

7.5.1 Using Escalation Rates 

For each project, the ESCO and agency must mutually agree upon both the unit cost of energy 

for each fuel source and any escalation factors that may be applied during the performance 

period. Escalation rates are often employed in long-term contracts to estimate the future values 

of energy more accurately. Although higher values of energy will provide better cash-flow for 

the project, overvaluing savings is a serious concern that can cause budgetary problems for the 

agency. 

A common source on which to base this rate of change would be the energy price escalation rates 

projected annually by the DOE Energy Information Administration (EIA). As these rates vary 

from year to year by region, fuel type, and rate schedule, it can be difficult to condense these 

variables into one annual average rate for all project sources, which is the preferred approach. 

The DOE has created a tool, Energy Escalation Rate Calculator (EERC), which can calculate a 

single appropriate escalation rate to use over the entire contract term. The EERC uses percentage 

of base-year cost savings attributable to each fuel in the project, commercial or industrial rate 

type, project location, and start and duration of performance or contract period. It then retrieves 

the matching EIA rates and calculates the weighted average escalation rate in real terms 

(excluding inflation) and nominal terms (including inflation). The default inflation rate, which 

can be edited, is the long-term inflation rate published annually on April 1 by FEMP for use in 

life-cycle cost analyses of energy and water conservation and renewable energy projects. 

The EERC-calculated average annual escalation rate, when applied to the base-year costs or 

savings of ESPC projects, results in approximately the same future total amounts over the 

contract period as do the EIA-projected variable rates, making the EERC rate a reasonable proxy 

FEMP M&V Guidelines 3.0 7-9 
rate for escalating contract payments. EERC can be downloaded from the FEMP website.32 It is 

updated on April 1 of each year with the latest EIA energy price data. 

Escalation rates for other savings, such as O&M costs, should be determined separately from 

energy rates, since inflation in labor and material costs may be substantially different from 

inflation in energy costs 

7.6 AGENCY WITNESSING OF M&V ACTIVITIES 

In federal ESPCs, federal agencies are expected to: 

 Witness baseline, post-installation, first-year, and annual M&V inspections 

 Witness the commissioning of installed ECMs 

 Approve required submittals in writing 

These inspections will help ensure that all scheduled activities are properly conducted, increase 

the confidence in the documentation submitted to the federal agency by the ESCO, and ensure 

that the agency representative is apprised of any ongoing performance issues. Agency 

participation in the M&V activities does not take the place of a thorough technical review of all 

submittals. 

As detailed in Section 10 of this document, witnessing of key M&V activities by a 

knowledgeable agency representative is strongly suggested, and should be clearly specified in 

the project-specific M&V Plan. 

7.7 REPORTING 

The M&V submittals detailed in the M&V Plan are the Post-Installation Report, the Annual 

Reports, and any additional periodic reports required. Reporting formats for these reports are 

defined by the Super ESPC’s master contract. Specific content requirements, schedules, and 

approval procedures for each ESPC project are defined in the project-specific M&V Plan. All of 

the submittals, however, should adhere to the same general standards and procedures. 

7.7.1 Communicating M&V Activities to Federal Agencies 

ESCOs must notify the federal agency whenever they are about to install and calibrate metering 

equipment, remove metering equipment, or perform a site inspection. Enough lead-time must be 

given in case the federal agency needs to witness the activities or conduct a site inspection before 

the equipment is either installed or removed. The federal agency can conduct progress 

inspections of metering, as required. 

7.7.2 Format and Content 

For Super ESPC projects, the format and content of the key reports are prescribed, and are 

included in Appendix C of this document. 

In general, all relevant documentation should be included with the M&V submittals, and these 

data should be provided in both electronic and hard-copy formats, as specified by the federal 

32 FEMP’s website is http://www1.eere.energy.gov/femp/. 

7-10 M&V Guidelines 3.0 FEMP 
agency. When submitting an M&V report, ESCOs should provide the data supporting the M&V 

activities. Data formats should be specified in the M&V Plan, and both the original data and final 

data analyses should be submitted in support of surveys, savings estimates, and calculations. 

Metered data must be furnished in formats that are usable by the federal agency and based on 

products or software that are publicly available. For billing analysis and computer simulation 

M&V methods, electronic and hard-copy input and output files must be provided. If special 

software products are required for the reading or analysis of ESCO submittals, the federal agency 

may reject the data or request that the ESCO supply the software. 

7.7.3 Approvals 

Federal facility personnel ensure that the report and verification documentation are complete and 

accurate and in compliance with the contract and approved site-specific M&V Plan. The federal 

agency must approve these submittals in writing. Federal Acquisition Regulation (FAR)33 

provisions require agencies to verify in writing that the terms and conditions of the contract 

agreement have been met, prior to payment by the government. Verbal communication 

concerning changes or acceptance of ESCO M&V submittals is not binding on the federal 

agency. All submittals, changes to submittals, and approvals must be in writing and signed by an 

authorized party, as indicated in the ESPC Task Order. 

If the federal agency believes that the conditions at the site are not accurately represented by the 

ESCO’s submittals, the ESCO will be allowed to address the problem and make a new submittal. 

If the ESCO and federal agency cannot agree on site conditions, however, a contract or project 

may be modified or terminated. The federal agency’s inspection personnel do not have the 

authority to approve changes to contract documents or ESCO submittals to the federal agency. 

The federal agency’s authorized representative must approve submittals and any changes. 

7.8 ANNUAL INSPECTIONS 

For Super ESPC projects, an annual inspection of the energy conservation measures is required 

by DOE’s ESPC regulations.34 This inspection may be conducted by the federal agency or the 

ESCO, and is intended to verify that the installed equipment/systems have been properly 

maintained, continue to operate correctly, and continue to have the potential to generate the 

predicted savings. Typically, the ESCO will perform an annual site inspection while being 

accompanied by an agency representative. Any measurements or monitoring required by the 

M&V Plan may be executed in conjunction with this site visit. The federal agency can witness 

metering, as required. 

Although an Annual Report from the ESCO is required to substantiate savings guarantees and 

adjust payments, if required, more frequent verification activities can be appropriate. This 

ensures that the M&V monitoring and reporting systems are working properly; it allows finetuning of measures throughout the year based on operational feedback, and it avoids surprises at 

the end of the year. 

33 Federal Acquisitions Regulation 
 

34 See DOE Final Rule, 10 CFR 436 Subpart B – Methods and Procedures for Energy Savings Performance Contracting, April 10, 1995,
 

Section 436.37. 

FEMP M&V Guidelines 3.0 7-11 
These periodic inspections by both the ESCO and agency staff will help ensure that all scheduled 

activities are properly conducted, increase the confidence in the documentation submitted to the 

federal agency by the ESCO, and ensure that the agency representative is apprised of any 

ongoing performance issues. Agency participation in the M&V activities does not take the place 

of a thorough technical review of all submittals, including Annual Reports. 

The Annual Reports should include: 

	 Results/documentation of performance measurements and inspections 

	 Realized savings for the year (energy, energy costs, O&M costs, other) 

	 Comparison of actual savings with the guaranteed amounts 

	 Details of all analysis and savings calculations, including commodity rates used and 

any baseline adjustments performed 

	 Summary of O&M activities conducted 

	 Details of any performance or O&M issues that require attention 

Detailed review instructions are provided in Chapter 10 of this document. 

7.9 O&M AND OTHER ENERGY-RELATED SAVINGS 

O&M and other energy-related cost savings are allowable in federal ESPCs, and are defined as 

reduction in expenses (other than energy cost savings) related to energy and water consuming 

equipment. Energy-related cost savings can result from avoided expenditures for operations, 

maintenance, equipment repair, or equipment replacement due to the ESPC project. This 

includes capital funds for projects (e.g., equipment replacement) that, because of the ESPC 

project, will not be necessary. Sources of energy-related savings include: 

	 Avoided current or planned capital expense 

	 Transfer of responsibility for O&M and/or equipment repair and replacement (R&R) 

to the ESCO 

	 Avoided renovation, renewal, or repair costs as a result of replacing old and 
 

unreliable equipment 
 

Specific guidance on documenting and verifying O&M savings in federal ESPCs was developed 

by a industry-government working group. The resulting document, How To Determine and 

Verify Operating and Maintenance (O&M) Savings in Federal Energy Savings Performance 

Contracts, is included as Appendix C. 

The general rule to follow is that any savings claimed from O&M activities must result in a real 

decrease in expenditures. O&M budget baselines cannot be based on what the agency should be 

spending for proper O&M; baseline expenditures must be based on what the agency is spending. 

The agency’s O&M expenditures after implementation need to decrease for savings to be 

considered real. “Savings” due to redirected labor or O&M efforts that do not reduce real 

expenditures cannot be claimed as savings under the Super ESPC program. For example, labor 

reductions for agency staff may not qualify as “real savings” if labor expenditures do not 

decrease. 

7-12 M&V Guidelines 3.0 FEMP 
The approach for calculating energy-related cost savings mirrors the concepts used for 

determining energy savings—performance-period labor and equipment costs are subtracted from 

baseline values, plus or minus any adjustments required. Similarly, determining the appropriate 

level of effort to invest in the M&V of energy-related cost saving is the same as for energy cost 

savings—the level of M&V rigor will vary according to 1) the value of the project and its 

expected benefits, and (b) the risk in not achieving the benefits. A graded approach towards 

measuring and verifying O&M and R&R savings is advised. 

Baseline O&M and R&R costs should be based on actual budgets and expenditures to the 

greatest extent practical. This essentially “measures” the baseline consumption of these parts or 

services. The use of estimated expenditures should be avoided if at all possible. Performance 

period or baseline adjustments are used to reflect any site-specific factors that would affect costs. 

Some additional key points to keep in mind are as follows. 

	 An agency’s decision to commit ongoing funds from O&M budgets towards ESPC 

project payments has a long-term impact and must be documented adequately for 

future agency staff in both the M&V plan and the annual reports. 

	 Agencies should maintain O&M cost records that will be needed to document 

baseline O&M costs. These records should be included in the Super ESPC proposal. 

	 ESCOs should include detailed information in annual reports to clearly convey the 

source of O&M savings as well as sufficient data to verify any savings calculations 

performed. 

	 Escrow accounts can help alleviate R&R risk for both the ESCO and agency. 

	 Using an Option B or continuous measurement approach to tracking ongoing O&M 

savings can be cumbersome to the agency because of the required record keeping and 

accounting for ongoing changes at the site. 

More specific guidance on how to determine and verify energy related savings, including 

examples, is included in Appendix C. 

FEMP M&V Guidelines 3.0 7-13 
7-14 M&V Guidelines 3.0 FEMP 
Section 8 Commissioning 

8.1 OVERVIEW 

Commissioning of installed equipment and systems is considered industry best-practice and is 

required on projects implemented under DOE’s Super Energy Savings Performance Contract 

(Super ESPC) . Commissioning ensures that systems are designed, installed, functionally tested 

in all modes of operation, and are capable of being operated and maintained in conformity with 

the design intent (i.e., appropriate lighting levels, cooling capacity, comfortable temperatures, 

etc.). Benefits of commissioning include increased building comfort, reduced operational 

problems, lower installation costs, fewer contractor call-backs, and improved energy 

performance. The commissioning requirements outlined herein have been adapted from industry 

standard procedures detailed in ASHRAE’s commissioning guidelines.35 

Commissioning (Cx) is a process that begins at project conception and typically ends after 

project acceptance. Key activities in the commissioning process include documentation of design 

intent, design reviews, execution of construction checklists, systematic functional testing of 

equipment and systems, oversight of training for operations and maintenance staff, and follow-up 

on any warranty issues. 

Commissioning usually requires taking performance measurements to ensure that systems are 

working properly. Because of the overlap in commissioning and post-installation measurement 

and verification (M&V) activities, some people may confuse the two. The difference is that 

commissioning ensures that systems are functioning properly; post-installation M&V quantifies 

how well the systems are working from an energy standpoint. 

Following the commissioning process will help realize the full potential of the energy 

conservation measures (ECMs), but key issues must be anticipated and planned. These issues are 

discussed in this section, and include: 

	 Allocating adequate resources and time to the commissioning process 

	 Appointing a commissioning agent (CxA), and/or prescribing the affiliation and 
 

qualifications required 
 

	 Providing an overview of roles and responsibilities for CxA, agency, and ESCO 

	 Making provisions to document the design intent for each system or ECM 

	 Incorporating a process for design reviews and submittal approvals 

	 Specify commissioning reporting requirements. 

8.2 COMMISSIONING PROCESS FOR ESPCS 

Because of the design-build nature of ESPCs, the details of the commissioning activities are 

developed along with the project scope, rather than being explicitly defined at the beginning of 

the project. In an ESPC, the commissioning activities are: 

35 ASHRAE Guideline 1-1996 The HVAC Commissioning Process and ASHRAE Guideline 0-2005 The Commissioning Process 

FEMP M&V Guidelines 3.0 8-1 
	 Specified in the contract 

	 Defined explicitly after design 

	 Implemented during construction 

	 Completed prior to final project acceptance 

	 Reviewed after project acceptance. 

The sections below outline the key commissioning activities and considerations in an ESPC. The 

complete commissioning process is described in ASHRAE Guideline 036. 

8.2.1 Specifying Commissioning Requirements in the Contract 

The scope of work for an ESPC project usually evolves from an investment grade energy audit, 

which includes descriptions of energy conservation measures (ECMs), analyses of energy and 

cost impacts, and the basis for a savings or performance guarantee. The contract negotiations and 

scope are completed based on the conceptual design presented in the energy audit. For complex 

projects, the design is typically about 30% complete at the time of contract award. Since the 

detailed design of the project often occurs after the contract is in place, it is impractical to define 

all details of the project’s commissioning in the contract. It is critical, however, to include 

sufficient details on the commissioning process that will be followed for the duration of the 

project to ensure the benefits of commissioning are realized. 

The contract should outline the project’s specific commissioning requirements. The key items 

that should be specified include: 

	 The affiliation and qualifications of the Commissioning Agent (CxA) 

	 Roles and responsibilities of CxA, ESCO and agency, including witnessing of Cx 
 

activities 
 

	 Process that will be followed to document the design intent or agency’s project 
 

requirements for each energy conservation measure (ECM) or system
 

	 Requirements for agency or third-party design reviews or submittal approvals 

	 Schedule for developing and approving a Cx plan, including expected content such 

as: 

− Pre-functional inspections 

− Functional testing procedures 

− Required use of manufacturer start-up procedures 
 

− Plan for seasonal testing and conditional acceptance, if needed 
 

	 Contents and timing of the Final Cx Report, Systems Manual, and any periodic 
 

project reports 
 

	 Requirements for CxA oversight of O&M training 

36 ASHRAE Guideline 0-2005 The Commissioning Process 

8-2 M&V Guidelines 3.0 FEMP 
	 Plan for warranty walk-though or other follow-up procedures 

The contract should designate both the affiliation and qualifications of the CxA that will lead the 

commissioning process for the project. The key responsibilities of the CxA are: 1) directing the 

commissioning team in the completion of the commissioning requirements; 2) overseeing or 

performing the commissioning tests; and 3) verifying the adequacy of the commissioning results. 

In the ideal scenario, the CxA will be from an independent third party reporting directly to the 

agency. In some cases the CxA may be a qualified member of the agency’s staff, but sufficient 

time and resources must be allocated for fulfillment of this role. Typically, it is a challenge to 

simply identify an in-house project manger, much less a CxA. 

Often in ESPCs, the CxA may be from the energy service companies (ESCO). In this situation, 

the CxA should not be part of the design or construction management team, but another 

individual that meets the prescribed qualifications. In many cases, however, utilizing project 

funds to engage a third party CxA, rather than have the ESCO utilize internal resources, is 

advisable. While it is essential that contractors verify and test the installed systems, formal 

commissioning requires independent oversight which ensures that the agency’s best interests are 

maintained. 

Key qualifications for the individual acting as CxA include onsite availability, experience 

executing the Cx process, hands-on experience in testing and troubleshooting applicable systems, 

familiarity with a variety of testing equipment, and detailed understanding of the systems and 

equipment affected by the project. 

In addition to identifying the affiliation and qualifications for the CxA, the agency should specify 

a representative to witness the Cx activities and to resolve any disputes that might arise. The 

agency’s Cx representative will also be expected to provide some oversight and approval of the 

commissioning activities. 

If not already included, the contract should mandate the development of a written design intent 

for each system or ECM installed that documents the agency’s project requirements. Specific 

operational parameters, design details, performance requirements (conditions in addition to 

energy savings), or other provisions that are established by a design intent are: 

	 Operational parameters, such as temperature setback capabilities or operator interface 

features 

	 Requirements for design details or ancillary items, such as sensors, valves, access, 
 

electrical, existing equipment demolition, etc. 
 

	 Performance requirements, such as equipment efficiencies, or ton-hours of chilled 
 

water to be delivered 
 

8.2.2 Defining Commissioning Activities During Project Design 

Once the ESPC contract has been awarded, any remaining design and engineering of the project 

scope is completed. Commissioning related activities performed by the Cx team in the design 

phase include: 

FEMP M&V Guidelines 3.0 8-3 
	 The ESCO completes the project design 

	 The agency and CxA review design and approve equipment submittals 

	 The ESCO and agency document the design intent for each ECM or system 

	 The CxA develops a draft Cx Plan, including the specifics of all pre-functional 
 

inspections and functional performance tests 
 

	 The CxA develops Cx specifications for the project (if needed) 

	 The agency and ESCO review and accept Cx documents 

	 The CxA issues Final Commissioning Plan and specifications 

8.2.3 Implementing Commissioning Activities During Construction 

After the design and commissioning plan have been finalized, construction begins. Cx-related 

activities that occur during the construction phase include: 

	 Construction is observed by the agency’s Cx representative and the CxA 

	 Periodic Cx meetings are held with the project team; 

	 Cx progress reports are submitted by the CxA 

	 Pre-functional inspections are completed and certified by the ESCO prior to 
 

equipment start-up and functional testing 
 

	 Manufacturer start-up procedures are completed by the ESCO or manufacturer’s 
 

representative 
 

8.2.4 Completing Commissioning Activities Prior to Project Acceptance 

Once construction has been completed and ready for acceptance by the agency, the functional 

performance tests are executed and the procedures are documented by the CxA. The CxA 

documents the test results, explicitly including how the agency’s project requirements or design 

intent prescribed for each system were met. Any items that did not pass are tracked and 

presented to the project team in a deficiency log. The ESCO then rectifies the items and performs 

a retest in the presence of the CxA to confirm that the items have been fixed. The deficiency log 

is then updated by the CxA, noting the date and corrective action taken. The agency may choose 

to specify consequences for multiple failed retests to limit the possibility of excessive use of the 

CxA’s time. 

It is common for the CxA to oversee and ensure the adequacy of the O&M training in order to 

ensure that the ECMs and systems are properly maintained and operated. Some ECMs, such as 

natural ventilation, daylighting, night time flushing, and use of building thermal mass, result in a 

building that behaves differently than a conventional building. It is important that the 

commissioning contractor, building maintenance staff, and occupants understand how the 

building works. For example, an energy management behavioral program for employees is one 

way to educate building occupants. 

8-4 M&V Guidelines 3.0 FEMP 
Depending on the preference of the agency, the ESCO then assembles the Final Commissioning 

Report or a Systems Manual, as prescribed in the contract. At a minimum, a Final Cx Report 

should be provided, which typically includes: 

 Commissioning summary report 

 ESCO-certified pre-functional checklists 

 Completed manufacturers startup sheets 

 Results of functional testing and verification of system performance 

 Detailed operating procedures/sequences of operations 

 Closed-out deficiency log 

 Overview of training provided to O&M staff. 

Some agencies may prefer to receive a more comprehensive Systems Manual, which is required 

for LEED37 certification. A Systems Manual typically brings together comprehensive project 

documentation, including: 

 Agency’s project requirements or design intent 

 Schematic system drawings 

 Approved submittals 

 Recommended record keeping procedures 

 Maintenance procedures and schedules 

 Test requirements for ongoing commissioning 

8.2.5 Post-Acceptance Phase Commissioning Activities 

Commissioning activities that typically extend beyond Project Acceptance include deferred 

functional testing and warranty verification. 

Often, some functional testing may be postponed until seasonal conditions are appropriate to 

evaluate the system. When some functional testing has been deferred, acceptance of the project is 

conditional upon the success of the scheduled tests. 

Most equipment installed will have a 1-year warranty provided by the manufacturer. A warranty 

check-out with the ESCO after 8 to 10 months of operation is a recommended commissioning 

activity. Reviewing the equipment warranties and performing a site walk-though at this time can 

identify any problems that may still be covered by a manufacturer’s or contractor’s warranty. 

37 Leadership in Energy & Environmental Design is a Green Building Rating System, developed by the U.S. Green Building Council. 

FEMP M&V Guidelines 3.0 8-5 
8-6 M&V Guidelines 3.0 FEMP 
Section 9 Planning and Reporting for Operations & Maintenance 

In performance contracts, operation and maintenance (O&M) is critical to maintain the 

performance of the installed equipment, to achieve the guaranteed energy savings, and to 

minimize the chance of unexpected repair and replacement issues arising for the term of the 

contract. 

This chapter provides guidance on: 

 Allocating O&M and repair and replacement (R&R) responsibilities; and 

 Incorporating O&M reporting requirements. 

9.1 OVERVIEW 

Either the ESCO or the government (or the government’s representative) may perform O&M 

activities on equipment installed as part of an ESPC. However, the ESCO is ultimately 

responsible for ensuring the performance of new equipment installed as part of the ESPC 

throughout the duration of the ESPC contract term. The government is typically responsible for 

existing equipment. 

In an ideal scenario, the ESCO will both operate and perform all maintenance activities on 

equipment installed in an ESPC project. In many cases, however, it is not practical for the ESCO 

to carry out these activities. Often, the site is accustomed to performing O&M and the cost of 

reallocating these responsibilities is not be feasible within the ESPC contract term, since services 

must be paid from savings. In other instances, limited site access or other issues may make 

government O&M preferable. 

A critical factor in the success of an ESPC is to ensure that the O&M plan for new equipment 

relates well to the O&M approach for existing equipment. This is especially true when new and 

existing equipment are located in the same facility or when existing equipment has a potential 

effect on the operation or savings achieved by new equipment. Clear definition of roles and 

responsibilities for O&M contribute toward proper coordination of O&M activities for new and 

existing equipment 

9.2 STEPS TO PLAN & REPORT ON O&M AND R&R ISSUES 

The activities required for ensuring proper planning and reporting for O&M and R&R are 

summarized in the Table 9-1, and discussed in this section. 

Table 9-1 Steps to Plan & Report on O&M and R&R Issues 

Step 1: Develop ESPC contract Risk & Responsibility Matrix to allocate overall 

responsibilities. 

Step 2: Develop detailed O&M responsibilities and reporting requirements in the contract. 

Step 3: Develop project-specific O&M checklists. 

Step 4: ESCO assembles O&M manuals & provides training to site staff. 

Step 5: Government (or ESCO) periodically reports on maintenance procedures performed. 

Step 6: ESCO submits Annual Report on project performance. 

FEMP M&V Guidelines 3.0 9-1 
9.2.1 Step 1: Develop ESPC Contract Risk & Responsibility Matrix 

Early in the Super ESPC project development phase, the agency and the ESCO allocate overall 

project responsibilities by completing the Risk & Responsibility Matrix. Key items related to 

O&M and R&R are included in the Performance section of the Risk & Responsibility Matrix, 

and cover four topics: Equipment Performance, Operations, Maintenance, and Equipment Repair 

& Replacement. These sections are detailed in the table below. 

The ESCO is responsible for the guaranteed savings of the contract and thus ultimately 

responsible for all O&M related items. The responsibility for hands-on performance these items 

may be accomplished by the ESCO or the Government, or shared, as agreed upon for the specific 

project. Financial, security, or other factors may cause the government to decide to accept 

responsibility for conducting the O&M activities. 

Table 9-2 Excerpt from Risk & Responsibility Matrix38 

3. Performance: 

a. Equipment performance: The contractor has control over the selection of equipment and is responsible for its proper 

installation, commissioning, and performance. The contractor has responsibility to demonstrate that the new improvements 

meet expected performance levels including specified equipment capacity, standards of service, and efficiency. Clarify who 

is responsible for initial and long-term performance, how it will be verified, and what will be done if performance 

does not meet expectations. 

b. Operations: Performance of the day-to-day operations activities is negotiable and can impact performance. However, 

the contractor bears the ultimate risk regardless of which party performs the activity. Clarify which party will perform 

equipment operations, the implications of equipment control, how changes in operating procedures will be handled, 

and how proper operations will be assured. 

c. Preventive Maintenance: Performance of day-to-day maintenance activities is negotiable and can impact performance. 

However, the contractor bears the ultimate risk regardless of which party performs the activity. Clarify how long-term 

preventive maintenance will be assured, especially if the party responsible for long-term performance is not 

responsible for maintenance (e.g., contractor provides maintenance checklist and reporting frequency). Clarify who 

is responsible for performing long-term preventive maintenance to maintain operational performance throughout 

the contract term. Clarify what will be done if inadequate preventive maintenance impacts performance. 

d. Equipment Repair and Replacement: Performance of day-to-day repair and replacement of contractor-installed 

equipment is negotiable, however it is often tied to project performance. The contractor bears the ultimate risk regardless of 

which party performs the activity. Clarify who is responsible for performing replacement of failed components or 

equipment replacement throughout the term of the contract. Specifically address potential impacts on performance due 

to equipment failure. Specify expected equipment life and warranties for all installed equipment. Discuss replacement 

responsibility when equipment life is shorter than the term of the contract. 

9.2.2 Step 2: Develop Detailed O&M Responsibilities and Reporting Requirements 

Once the ESCO and Government agree-upon O&M related responsibilities in the Risk & 

Responsibility Matrix, the detailed requirements supporting these responsibilities must be 

included in the contract. For Super ESPC projects, the allocation of O&M responsibilities is 

discussed in the Site Management Plan, and O&M reporting requirements are defined in the 

38 See complete ESPC Risk, Responsibility and Performance Matrix in Section 3. 

9-2 M&V Guidelines 3.0 FEMP 
M&V Plan. Ensuring that all related items are appropriately defined requires careful contract 

development and review. 

When the government elects to perform O&M activities on new equipment, several issues will 

require careful review because the ESCO may be compensated by the government to take over 

the O&M activities if inadequate O&M threatens the realization of savings, equipment reliability 

or equipment life. These issues include: 

 Provisions for ESCO to monitor Government performance of O&M 

 Specific O&M record keeping / reporting requirements by government 

 Procedures for ESCO review / verification of O&M records 

 Impact of O&M of old equipment on new equipment 

 Define criteria for ESCO to take over operations 

 Define criteria for ESCO to take over maintenance (Prior to equipment failure) 

 How does ESCO get paid for performing Government’s activities? 

Table 9-3 Excerpt from M&V Plan & Savings Calculations Outline 

From Whole Project Data / Global Assumptions 

2.4 Operations, Preventive Maintenance, Repair, and Replacement Reporting Requirements 

2.4.1 Define Government and ESCO reporting requirements: 

Summarize key verification activities and reporting responsibilities of government and ESCO on operations, preventive 

maintenance, repair, and replacement items from details in ECM specific M&V Plans. 

Define content of reports and reporting schedule. 

From ECM Specific M&V Plan (for each ECM) 

3.7.8 Define operations, preventive maintenance, repair, and replacement reporting requirements. 

Detail verification activities and reporting responsibilities of government and ESCO on operations, preventive maintenance, 

repair, and replacement items. 

Define contents of report and reporting schedule, if different than in global section 2.4. 

9.2.3 Step 3: Develop Project-specific O&M Checklists 

For projects in which the government accepts some responsibility for O&M activities, the ESCO 

must define the required activities. Although checklists are not always required in the contract, it 

is a good idea to develop one for those ECMs that may have extensive preventive maintenance 

requirements and/or where O&M responsibilities may be distributed. Typically, the ESCO will 

develop the O&M checklists listing specific O&M tasks, their frequency, and the party 

responsible for carrying out those activities. 

For O&M checklists to be effective, both the ESCOs and the agency must agree on them and be 

committed to performing the O&M tasks on time. For this reason, it is recommended that the 

O&M checklists should be submitted as part of the Final Proposal. If including finalized 

checklists is not reasonable, preliminary checklists indicative of the final scope of work should 

be included. 

FEMP M&V Guidelines 3.0 9-3 
Checklists not only provide a good way for ensuring that routine O&M activities are being 

performed on time but it also provides an effective method of documenting and tracking 

distributed responsibilities. Developing comprehensive O&M checklists that are consistent with 

the O&M manual is an excellent way to maximize the performance of installed equipment and 

ensure savings persistence over the term of the ESPC contract. 

FEMP’s O&M Best Practices Guide39 has standard O&M checklists for chillers, lighting, fans, 

pumps, electric motors, air compressors, cooling towers, steam traps, and building control 

systems. 

9.2.4 Step 4: ESCO Assembles O&M manuals & Provides Training 

As detailed in the contract, the ESCO will prepare the O&M manuals and provide related 

training to the site staff. Often, the O&M manuals will become the basis for proper O&M of 

installed equipment and should include any project specific O&M checklists that will be used. 

Further, the responsibilities of the two parties detailed in the O&M manuals should be consistent 

with the contract. Once the O&M manual is submitted by the ESCO, it is the government’s 

responsibility to check that the O&M manuals meet the requirements specified in the contract 

and are adequate for government records. 

Generally, O&M manuals (ASHRAE 1993,40 199641) should include a master list of installed 

equipment, including all information pertinent to proper operations and maintenance. 

Information on each piece of major equipment typically includes: 

 Names and contact information for the equipment reps, vendors or manufacturers; 

 Model and size and its location in the campus/building; 

 Operating instructions including start-up, shut down, emergency conditions, safety 

precautions, and trouble shooting suggestions; 

 List procedures that must be followed while operating equipment; 

 Preventive maintenance instructions including maintenance, overhaul, and 

lubrication instructions; 

 Checklist that will be used as the basis to perform the O&M procedures. Preventive 

maintenance actions shall preferably be categorized by recommended frequencies. 

9.2.5 Step 5: Government (or ESCO) Periodically Reports on Maintenance Performed 

Since the ESCO is responsible for the performance of new equipment for the term of the 

contract, it is often appropriate for the government to document the completion of any O&M 

procedures performed. The O&M checklists developed in Step 3 should be utilized to record 

these activities. 

39 Operations and Maintenance (O&M) Best Practices Guide - A Guide To Achieving Operational Efficiency V 2.0 is available at 

http://www1.eere.energy.gov/femp/operations_maintenance/om_bpguide.html 

40 ASHRAE Guideline 4: Preparation of Operating and Maintenance Documentation for Building Systems. Atlanta, GA: ASHRAE, 1993. 

41 ASHRAE Guideline 1: The HVAC Commissioning Process. Atlanta, GA: ASHRAE, 1996. 

9-4 M&V Guidelines 3.0 FEMP 
Although the ESCO is required to submit annual reports that include a summary of O&M 

activities, described below, there are instances when additional reporting on O&M may be 

required. These reporting requirements were identified in the Final Proposal and should be 

included in the contracted M&V plan. 

9.2.6 Step 6: ESCO Submits Annual Report 

A minimum of annual performance reporting is required for Super ESPC projects. The Annual 

Report Outline provides sufficient O&M reporting provisions for most ECMs. These 

requirements should be reviewed during contract development. The portions related to O&M in 

Annual Report Outline are detailed in Table 5. 

This step will only provide value if appropriate actions are taken to address issues that are 

identified during the performance period. Following-up on problems identified in the Annual 

Report is an important key to savings persistence. 

Table 9-4 Excerpts from Annual Report Outline for Each ECM 

1. Executive Summary 

1.5 Performance and O&M Issues 

• Note impact of operating deficiencies or enhancements on generation of savings 

• Note impact of maintenance deficiencies on generation of savings 

• Detail any deficiencies needed to be addressed by ESCO or Government 

2. Details for ECM 

2.5 O&M and Other Activities 

2.5.1 Operating requirements: 

• State organization(s) responsible for equipment operations. If appropriate, detail how responsibilities are shared. 

• Summarize key operating procedures and any related verification activities. 

• Detail any deficiencies needed to be addressed by ESCO or Government 

• Note impact of operating deficiencies or enhancements on generation of savings 

2.5.2 Preventive maintenance requirements: 

• State organization(s) responsible for performing maintenance. If appropriate, detail how responsibilities are shared. 

• Verification of scheduled maintenance items completed by ESCO or Government 

• Detail any deficiencies needed to be addressed by ESCO or Government 

• Note impact of maintenance deficiencies on generation of savings 

2.5.3 Repair & replacement requirements: 

• State organization(s) responsible for repair and replacement. If appropriate, detail how responsibilities are shared. 

• Summary of activities conducted this period by ESCO or Government 

• Detail any deficiencies needed to be addressed by ESCO or Government 

• Note impact of equipment deficiencies on generation of savings 

FEMP M&V Guidelines 3.0 9-5 
9-6 M&V Guidelines 3.0 FEMP 
Section 10	 Review and Oversight of M&V Activities 

The purpose of agency oversight and review of M&V activities is to: 

	 Verify that all M&V activities are conducted in accordance with the M&V plan; 

	 Confirm that the reported results of inspections and measurements are accurate and 

represent actual operation of the equipment or systems involved; 

	 Confirm contractor payments are based on verified savings; 

	 Ensure that M&V activities are properly documented; and 

	 Follow-up on any outstanding issues identified. 

Government agencies are expected to witness baseline, post-installation, first-year, and annual 

measurement and verification (M&V) inspections and commissioning of installed ECMs, and 

approve required submittals in writing. This requires that the agencies designate individual(s) to 

observe these inspections, review the resulting M&V reports by the ESCO, and certify in writing 

that those reports are acceptable to the agency. Detailed requirements for each project will be 

included in the project specific M&V Plan. 

Depending on available resources, the agency may seek outside assistance in the review of M&V 

reports, analyses, and results. The government representative who is responsible for oversight of 

M&V activities and review and acceptance of reported findings should have significant 

experience in the analysis, design, commissioning or measurement and verification of energy 

efficiency projects, and be familiar with both the site and the details of the ESPC project. 

Recommended qualifications for the representatives conducting these activities are provided in 

Guide to Government Witnessing and Review of Post-Installation and Annual M&V.42 

10.1 GOVERNMENT WITNESSING OF M&V ACTIVITIES 

Witnessing of M&V activities by knowledgeable agency representative(s) is recommended 

primarily to: 

	 Assure that both agency and ESCO fully understand the measurement and 
 

verification of savings that justifies payments being made to the ESCO, 
 

	 Provide increased confidence that savings expected under the ESPC are being 
 

achieved, and 
 

	 Make a direct link between payments made to the ESCO and the verification that 
 

savings are being achieved. 
 

Active involvement by agency personnel in the verification of savings is recommended by 

federal oversight agencies, and is required to meet the legislative requirements, including the 

Federal Acquisition Regulations (FAR). FAR provisions generally require agencies to verify in 

42	 Guide to Government Witnessing and Review of Post-Installation and Annual M&V, September 7, 2006 by Agency Witnessing Working 

Group of the Federal ESPC Steering Committee. 

FEMP M&V Guidelines 3.0 10-1 
writing that applicable procurement terms and conditions have been met by a contractor, prior to 

payment by the government. 

Active participation in the M&V process by agency staff can reduce the number and intensity of 

disputes about performance, as well as fulfill the legislative requirements. Additional guidance 

on these issues is presented in Guide to Government Witnessing and Review of Post-Installation 

and Annual M&V.43 

10.2 USING THE REVIEW CHECKLISTS AND REPORT TEMPLATES 

Review checklists and templates for written reviews of M&V Plans, Post-Installation Reports, 

and Annual Reports are included in Appendix D. These checklists and templates should be 

utilized to complete a thorough evaluation by an agency representative prior to accepting the 

submitted M&V plan, Post-Installation Report, or Annual Report. 

10.2.1 Project Documentation Needed 

Prior to conducting the review, ensure that all related project documentation is on-hand. At a 

minimum for any ESPC project report or M&V plan review, the M&V plan, the final cost 

schedules, and any contract modifications should be available. For review of Annual Reports, the 

Post-Installation Report and any previous Annual Reports are needed. Savings calculations 

should be carefully scrutinized, and will often need to be reviewed in their electronic format. 

Missing documentation can cause confusion and lead to incorrect conclusions. 

10.2.2 Using the Checklists 

The layout of the checklists follows the prescribed outlines for M&V Plans, Post-Installation and 

Annual Reports (Appendix C) and each one has two parts - Project Level items and ECM Level 

items. Prior to beginning the review, determine the percent contribution of cost savings for each 

ECM in the project (from cost schedule TO-4 Task Order Performance Period First Year 

Estimated Annual Cost Savings by ECM), and prioritize the measures that will save the most. 

The reviewer should customize the review checklists found in Appendix D and available 

electronically44. 

Principal review efforts should be focused on the measures providing the largest portion of the 

cost savings for the project. This strategy of reviewing the principal cost saving measures first 

will help the reviewer spend the smallest amount of time while maximizing the value of the 

review, and is especially helpful when review time is limited. Provide a detailed review of the 

M&V strategy for each measure if possible. 

Read through the M&V submittal (Plan, Post-install, or Annual Report) while checking off 

topics and making notes in the customized checklists. Note the location of key items in the first 

column of the checklists (labeled “Reference Page”) so they can be easily cross-referenced. The 

inability to comment on an item suggests that relevant information may be missing or not in 

complete form. Items in the checklist that require follow-up should be flagged by placing an 

43 Guide to Government Witnessing and Review of Post-Installation and Annual M&V, September 7, 2006 by Agency Witnessing Working 

Group of the Federal ESPC Steering Committee. 

44 Electronic versions of the review checklists are available at http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html 

10-2 M&V Guidelines 3.0 FEMP 
“X” in the last column of the checklist (labeled “Follow-Up?”) and noting the deficiency or issue 

identified in the adjacent column. Some of the items in the checklists are marked “Evaluation”. 

This indicates that additional qualitative assessment is necessary. These qualitative issues are 

discussed for each individual M&V submittal type in subsequent sections of this chapter. 

10.2.3 Summarize Findings in Evaluation Report 

After reading the M&V submittal (Plan, Post-Installation or Annual Report), filling out the 

Review Checklists, and evaluating the qualitative issues, the findings from the review should be 

summarized in a written report. The written review should follow the format in the appropriate 

Review Template and include the completed Review Checklists. The format of the report can be 

modified as needed to meet the specific project needs. Complete all the sections and customize 

placeholder text included in the Review Template, and delete any instructions once completed. 

The written review of the M&V submittal should be provided to the agency staff, as well the 

DOE representative, who will archive it for project records. The agency should follow up on any 

questions or action-items identified through the review, including the ESCO as appropriate, and 

document any subsequent actions taken. 

10.3 REVIEWING M&V PLANS 

Evaluating M&V plans is an inexact science that requires technical expertise and experience. 

Ideally, the reviewer will have been involved in the project development phase and has an 

intimate understanding of the agency’s goals, the agree-upon allocation of project risks, site 

specific issues, as well as the objectives and constraints for each ECM. 

The M&V Plan deserves careful evaluation as it defines the requirements for all future M&V 

activities. Discussion with the agency on the findings from the M&V plan review is usually 

warranted, and may result in revisions to the M&V plan. Often, the review process is iterative. 

After an initial review, subsequent revisions of the M&V plan must be assessed to determine if 

adequate modifications have been made. Written evaluations of these subsequent M&V plans are 

needed to document follow-up actions taken. 

10.3.1 Prescriptive and Qualitative Evaluation Items 

The first step in evaluating an M&V plan is to complete the M&V Plan Review Checklists. The 

inclusion of all items on the checklists does not indicate the appropriateness of the M&V 

approach, only that the required information is included. Each measure requires extensive 

qualitative assessment, and tips for evaluating the M&V approach are included therein. All 

findings resulting from review, including completed checklists, should be included in the 

evaluation report, as discussed in Section 10.2.3. 

Evaluate overall project level items: 

	 Do all M&V strategies included in Plan support the concepts included in Risk & 
 

Responsibility Matrix?
 

	 Are contracted energy rates based on actual rates, including time-of-use rates and 
 

peak demand ratchets? Are marginal (not blended) energy rates used?
 

	 Are proposed escalation rates based on latest NIST data (see Section 7.5.1)? 

FEMP M&V Guidelines 3.0 10-3 
	 Are M&V costs reasonable? Do costs align with planned activities? 

−	 See TO-2 for Initial M&V cost for each measure. See TO-4 for performance 

period M&V costs 

	 Are ancillary payments required to make the project cash-flow? 

	 Is the level of savings predicted reasonable? Were project level savings compared to 

overall site usage? (optional) 

	 Were all objectives and constraints of the project considered? 

Assess each ECM: 

	 Review agreed-upon Responsibility Matrix for the project. Ensure the M&V strategy 

for each measure conforms to the agreed-upon risk allocation. 

	 Note the source(s) of cost savings for each measure (O&M, electricity, demand, 

natural gas, water, etc.). Ensure M&V activities are adequate for all significant 

sources of savings. 

	 What is the likelihood for success for this measure? More rigorous M&V strategies 

are warranted for ECMs with substantial uncertainty and/or technical complexity. 

	 Is the level of savings predicted reasonable? Were ECM savings compared to system 

usage? 

	 Were key variables affecting energy use measured for each ECM (e.g. watts/fixture 

and hours/yr)? 

	 Do the measurements include the parameters that are the source of the savings (e.g. 

reduction in watts/fixture or hours/yr)? 

	 Are M&V costs reasonable? Do costs align with planned activities? 

	 See TO-2 for Initial M&V cost for each measure. See TO-4 for performance period 

M&V costs. 

Consider the adequacy of baseline developed: 

	 Are all assumptions / stipulations reasonable, and includes source of data? 

	 Were system performance characteristics recorded (e.g. lighting intensities, 
 

temperature set points)? 
 

	 Where energy calculations closely reviewed? 

	 Are savings estimates sound & reasonable? 

	 Were utility or weather based models validated? 

Evaluate the quality of performance period activities: 

	 Is meaningful ongoing performance period data going to be used to calculate savings? 

	 What is being verified? Is this sufficient to support the guarantee? 

	 Will key variables affecting energy use be measured for this ECM? How often? 

10-4 M&V Guidelines 3.0 FEMP 
	 Will single post-installation measurements apply to all years in the performance 
 

period? If so, how valuable are the data used? 
 

	 How likely is this data to change over the performance period? 

	 Based on which party has accepted ongoing responsibility for each item, is this 
 

approach appropriate?
 

Review the strategy for conducting O&M for this ECM: 

	 Are O&M activities sufficiently detailed to demonstrate level of effort? 

	 Are responsibilities allocated as suggested by R&R Matrix? 

	 Are reporting requirements adequately defined? 

10.4 REVIEWING POST-INSTALLATION AND ANNUAL REPORTS 

Evaluating the Post-Installation and Annual Reports is more straight forward than reviewing 

M&V plans, as the level of qualitative assessment and engineering judgment required is 

considerably less. These reports document the results of the activities defined in the M&V plan 

The Post-Installation Report documents the results of verification activities conducted by the 

ESCO after project installation but prior to project acceptance. This report documents any 

changes in the project scope and energy savings that may have occurred since the Final 

Proposal, and reports the expected Year 1 energy and cost savings. Keep in mind that many 

applications of M&V Option A methods, measurements are only taken once following 

installation. Subsequent activities may be limited to inspections to verify ‘potential to perform.’ 

The Post-Installation Report is therefore a critical document for projects using an Option A 

approach. 

Similarly, each year during the performance period the contractor submits an Annual Report 

which documents the execution and results of the periodic M&V activities prescribed in the 

M&V plan (i.e. measurements, inspections, savings calculations, O&M activities), as well as any 

items that may require additional follow-up. The Annual Report is the basis for determining if 

the annual savings guarantee has been met, and for determining if any “true-up” of payments is 

required. 

M&V for Super ESPC projects needs to show that the overall savings guarantee has been met, 

and does not necessarily need to determine the actual savings for each ECM. The total level of 

cost savings for the project must meet or exceed the guaranteed cost savings for that performance 

year. If the contractor fails to meet the guaranteed annual savings as verified by the M&V 

documents, the agency shall adjust the payment schedule, as necessary, to recover the agency’s 

overpayments in the previous year and to reflect the lower performance level into the current 

year. 

10.4.1 Prescriptive and Qualitative Evaluation Items 

The first step in evaluating an M&V report is to complete the appropriate Review Checklists, as 

discussed in Section 10.2. The inclusion of all items on the checklists indicates the prescribed 

information is included. A through evaluation of each measure, however, also requires some 

FEMP M&V Guidelines 3.0 10-5 
qualitative and engineering judgment as well, as discussed below. All findings resulting from 

review, including completed checklists, should be included in the evaluation report, as discussed 

in Section 10.2.3. 

Answer the following key questions: 

	 Were all activities required by the M&V Plan followed? 

	 Was the content of the submitted report complete? 

	 Were the guaranteed savings for the project met? If the guarantee is not fulfilled for 

the performance year, is the explanation adequate? 

Understand any changes in the project’s performance: 

	 Have any ECMs whose savings levels increased or decreased significantly from year 

to year? Is explanation of why changes occurred in savings values sufficient? If not, 

why not and what corrective actions will or should be taken? By whom? 

−	 Note any changes in scope or performance, or results that differ from the PostInstallation or previous year’s report 

−	 Note that ECMs using Option A methods may not show a change even if there are 

performance problems. 

	 Did the report provide useful feedback on the performance of each measure? 

	 Did the report verify the potential of the ECMs to save in future? 

	 Are there any performance problems, O&M issues, or deficiencies that need to be 

addressed? By whom? 

Review the savings calculations: 

	 Were calculations submitted in electronic format? 

	 Was the prescribed savings calculation methodology used? Did the reviewer verify 

the math in the savings calculations? 

	 Were rates shown in the final proposal used, and were rate adjustment factors applied 

correctly? 

	 If savings result from rate changes, have the baseline and new rates been reported? 

	 Is the basis for any adjustment valid, and have the adjustments been consistently and 

uniformly applied? 

10-6 M&V Guidelines 3.0 FEMP 
Section 11 Technology Applications 

This section provides a guide for the application of M&V methods to a variety of common 

energy conservation measures, including: 

1. Lighting Efficiency 

2. Lighting Controls 

3. Constant Speed Motors 

4. Variable Speed Motors 

5. Chillers 

6. Water 

7. Geothermal Heat Pumps 

8. Renewable Technologies 

9. New Construction 

11.1 LIGHTING EFFICIENCY 

One of the most common energy conservation measures implemented in ESPCs is lighting 

efficiency improvements due to equipment retrofits or replacements. The source of savings in 

lighting efficiency projects is reduced lighting demand and energy use due to higher efficiency 

lighting equipment. 

Key considerations related to M&V of lighting efficiency projects include: 

 Ascertaining existing equipment inventory 

 Determining operating hours and a peak diversity factor 

 Establishing baseline equipment performance 

 Determining performance of new equipment 

 Accounting for interactive effects. 

Energy savings from lighting retrofits can be accurately predicted using short-term 

measurements. For this reason, energy savings are often determined and verified using an Option 

A approach. The recommended approach for federal projects is described below and is 

demonstrated in the Standard M&V Plan for Lighting Retrofits included in Appendix J. 

11.1.1 Equipment Inventory 

Equipment inventories, typically on a per-room basis, should include counts of each fixture, 

lamp, and ballast combination. Additional details that should be included are counts of nonoperating fixtures, usage area description, control type (including dual switching arrangements), 

existing lighting levels, and if space-is heated and/or air conditioned. If a significant number of 

lamps or fixtures are not operating, the baseline energy use may need to be adjusted to account 

for burned-out fixtures that are intended for repair. Fixtures that have been purposely de-lamped 

should be accounted for in their own equipment category. 

FEMP M&V Guidelines 3.0 11-1 
11.1.2 Operating Hours and Diversity Factor 

In lighting efficiency projects without control modifications, baseline and performance period 

operating hours are assumed to be the same since they are unaffected by the retrofit. The 

operating hours are a critical component in calculating the savings and need to be accurately 

estimated. The recommended approach is to measure the operating hours of a sample of fixtures 

and subsequently stipulate the operating hours based on the monitoring in the contract. 

Comparing measured operating hours to occupancy schedules provided by the agency can be 

useful to identify any schedule adjustments that short-term measurements may miss. 

When measuring operating hours, it is appropriate to use statistically valid samples and to verify 

the statistical characteristics of the sample, as discussed in Section 7.4.4 and in Appendix B. 

For measurement of operating hours, the fixture inventory is divided into usage groups based on 

similar operating conditions. Random samples of fixtures are selected from each usage group, 

the size of which is based on a prescribed confidence and precision (80% and 20%, respectively, 

are often used). Portable on-off data loggers are then installed in the selected fixtures to measure 

on/off times, and/or the demand from dedicated lighting circuits is measured using short term 

monitoring. Current, along with spot-measured power factor and voltage may be (and is often) 

used as a proxy for power. Measurements are typically conducted for 3 weeks during regular 

non-holiday operations. The measured operating hours are analyzed to determine the operating 

profile, which is extrapolated to a full year. Multiple metering periods may be warranted if 

significant operational variations exist. 

For projects that claim peak demand savings, a diversity factor must be determined and applied 

to baseline and performance period demand to avoid over-counting demand reductions. At any 

facility, only a portion of the lighting will be on when the building’s peak demand charges are 

set. Sometimes, measured time-stamped operating data collected to determine run hours are used 

to determine the percent of lights in operation during the peak period, and on other occasions the 

diversity factor is estimated. The diversity factor can be an overall weighted factor of all lighting 

included in the project, or it can be determined for each usage group. Agencies should be wary of 

any approach that blends peak demand (kW) savings with consumption (kWh) savings. Demand 

savings should be reported independently and the cost impacts calculated separately from energy 

savings. 

11.1.3 Equipment Performance 

As discussed in Section 4.2, when applying an Option A approach, the key parameter must be 

measured. For lighting efficiency projects, the key parameter is fixture power. For lighting 

projects to be compliant with IPMVP, both the power of baseline and performance period 

fixtures should be measured. 

Another performance metric that should be documented is the baseline and performance period 

lighting levels. In most cases, light levels are not expected to change significantly as a result of 

the retrofit. Any change in light levels from the baseline condition should be specified by the 

agency. Representative pre- and post-retrofit light levels should be recorded. Specific procedures 

need to be specified in conducting lighting level measurements, an example of which is included 

in the Standard M&V Plan for Lighting Retrofits shown in Appendix J. 

11-2 M&V Guidelines 3.0 FEMP 
_ _ _ _

In best practice applications, both the baseline and performance period demand on the various 

fixture types should be measured. Sampling strategies outlined for operating hours (above) 

should be separately applied to fixture powers in both the baseline as performance period cases. 

When measuring fixture power, one should use either 1) true root-mean-squared (RMS) 

measurements, or 2) current as a proxy for power when combined with spot-measured volts and 

power factor. Meters with accuracy at or approaching ±2% of readings should be employed. 

Using lighting circuit measurements requires dedicated lighting circuits with known loads. Non 

lighting loads should not be included in the measured circuits, but if there are any , they must be 

constant and accounted for in the analysis. Measurements for each fixture type are averaged to 

determine fixture demand. For new lighting equipment, measurements should be made after at 

least 100 hours of use. 

For smaller projects, measuring the fixture powers before and after the retrofit may not be 

practical. In these cases, it is important to focus measurements on the most uncertain parameters. 

In lighting projects, the existing stock of lighting equipment tends to be the least well-known 

item, as various equipment types may have been installed over time. The newly installed lighting 

equipment will be specified, and is typically much more predictable. Where measurements are 

not practical, fixture powers can be estimated from a table of standard fixtures, such as those 

used in utility programs. While this approach may be acceptable on some ESPC projects, it is not 

IPMVP-compliant. A conservative approach is to establish baseline fixture wattages on current 

minimum efficiency standards. 

11.1.4 Interactive Effects 

For spaces that are heated and cooled, there will be interactions between the lighting equipment 

and HVAC systems. A lighting retrofit will decrease cooling loads in the summer and increase 

heating loads in the winter. The general approach to dealing with interactive effects is presented 

in Section 7.3. 

Methodologies for determining some of the more common interactions, such as lighting and 

HVAC, have been developed.45 These effects are sometimes ignored, however, because the 

cooling bonus and the heating penalty can somewhat cancel each other. Projects implemented in 

extreme climates may wish to quantify these interactive effects, as they may be significant. If 

these effects are to be ignored, this provision should be included in the contract and agreed to by 

both parties. 

11.1.5 Savings Calculations 

The equations used for calculating energy and demand savings for lighting efficiency projects 

are shown below. These equations do not include any interactive effects. 

Equation 11-1: Total Energy Savings 

kWh SavingsTotal = (kWh Savings 1) + (kWh Savings2 ) +...+ (kWh Savings n ) 

45 See Rundquist, et. al., Calculating Lighting and HVAC Interactions, ASHRAE Journal, November 1993, or 
 

Sezgen, Osman et. al., Interactions Between Lighting and Space Conditioning Energy Use in Commercial Buildings, LBNL-39795, April 1998.
 

FEMP M&V Guidelines 11-3 
_ _ _ _

_

_ _

Equation 11-2: Total Demand Savings 

kW SavingsTotal = (kW Savings 1) + (kW Savings 2 ) +...+ (kW Savingsn ) 

As shown above, the total energy and demand savings will be the sum of the savings from each 

usage group or piece of equipment, 1 through n. The energy and demand savings for each usage 

group should be calculated separately, as shown in Equation 11-3 and Equation 11-4. One should 

keep in mind that the usage groups assigned to determine fixture powers may be different from 

those used to measure operating hours, and the equations must be carefully applied. 

Equation 11-3: Energy Savings for Each Usage Group or Piece of Equipment 

kWh Savings = (kWBaseline × Hours Baseline ) − (kW Post × Hours Post ) 

Equation 11-4: Demand Savings for Each Lighting Usage Group or Piece of Equipment 

kW Savings = kWBaseline {( ) − (kW × Diversity Factor) Post )} ( 

where: 

kWh Savings = Kilowatt-hour savings realized during the performance period time period 

kW Savings = Demand savings realized during the performance period time period, typically calculated for 

each month or utility billing period 

kWbaseline = Total baseline demand for a usage group or piece of equipment (1 through n) 

kWpost = Total performance period demand for a usage group or piece of equipment (1 through n) 

Hours = Number of operating hours during the performance period time period for the usage group or 

piece of equipment (1 through n) 

Diversity Factor= Percentage of lighting load on during the building’s peak demand for the usage group or 

piece of equipment (1 through n) 

11.1.6 Ongoing Verification 

Using an Option A approach for lighting retrofits typically precludes the need for savings 

adjustments, except for non-routine adjustments (see Section 7.2). Since the connected load and 

run-times of each fixture should not change over time, additional measurements during the 

performance period are typically not warranted. 

It is important however, to periodically verify the retrofit’s potential to perform. This means that 

equipment types, quantities, and condition are verified. Often, a different portion of the 

installation is inspected each year to verify that the proper equipment has been installed and is 

operating as expected. Lighting levels may be spot-checked, and specifications of replacement 

lighting equipment kept on site may be verified. In order to ensure overall performance, some 

sites may need to specify a maximum allowable number of burn-outs in the performance period. 

11.2 LIGHTING CONTROLS 

A common energy conservation measure is lighting controls. The source of savings in these 

lighting controls projects is reduced energy use due to decreased run-times (or reduced load 

factor if dual switching or dimming is employed) of the lighting equipment due to day-lighting 

or occupancy controls. 

11-4 M&V Guidelines 3.0 FEMP 
Key issues related to lighting controls projects include: 

 Ascertaining existing equipment inventory 

 Establishing equipment performance 

 Determining baseline operating hours 

 Determining performance period operating hours 

Several of the issues pertaining to lighting controls are the same as for lighting retrofits. 

Specifically, establishing equipment inventories and determining fixture energy use are the same 

as lighting retrofits (discussed in section A.1). In lighting controls projects, baseline and 

performance period fixture powers are assumed to be the same since they are unaffected by the 

retrofit. 

Baseline and performance period operating hours can usually be accurately predicted using 

short-term measurements. For this reason, energy savings can often be determined and verified 

using an Option A approach. An Option B approach that includes ongoing measurements of 

operating hours throughout the term of the contract may be warranted in some cases. When using 

Option A, additional annual verification activities are needed to account for the possibility of 

changes in the controls during the performance period. 

11.2.1 Operating Hours 

Operating hours are the key performance parameter in lighting controls projects, and should be 

measured before and after retrofit to quantify change in operating hours. The statistical sampling 

and measurement strategies described for lighting efficiency projects can also apply to lighting 

control projects to determine operating hours. The primary difference in the methodology is the 

measurements that must be conducted both before and after the retrofit. 

11.2.2 Equipment Performance 

Although fixture demand is not expected to change, it is an important parameter used in the 

savings calculations. Accurately estimating the electrical demand (kW) from the various fixture 

types is critical for savings estimates to be valid. In best practice applications, the fixture powers 

are measured. Sampling strategies outlined for operating hours for lighting efficiency projects 

should also be applied to fixture powers. Typically, these measurements are made in the baseline 

period. In some cases, fixture wattages may be based on current lighting efficiency standards, 

which can be a conservative method as it ensures the baseline energy use is not overstated. 

11.2.3 Savings Calculations 

The equations used for calculating energy savings from lighting controls projects are the same as 

those for lighting efficiency projects shown in Equation 11-1 through Equation 11-4. These 

equations, however, can be simplified mathematically if the baseline and performance period 

demand are the same. The total energy savings will be the sum of the savings from each usage 

group or piece of equipment. 

There is typically no demand savings associated with lighting control projects. Performance 

period demand is the same as baseline demand unless reduced operation coincidence with 

FEMP M&V Guidelines 11-5 
building peak demand is demonstrated. Interactive effects between the lighting and HVAC 

systems should be accounted for as described for lighting efficiency projects above. 

If controls are implemented in conjunction with a lighting retrofit, the baseline demand should be 

based on the post-retrofit equipment. Using a single savings equation to calculate either energy 

or demand savings (such as Equation 11-3) for both retrofits can ensure that savings are not 

double-counted. Demand and energy savings require separate calculations. 

11.2.4 Ongoing Verification 

It is necessary to periodically verify the retrofit’s potential to perform. As is the case with 

lighting efficiency projects, equipment types, quantities, and the condition of the controls 

equipment should be verified. Control set points must also be checked. It is common practice to 

have a different portion of the installation inspected each year to verify that proper equipment 

has been installed and is operating as expected. The performance of the controls should be 

verified through field testing. For occupancy controls, sensitivity and delay time should be 

checked. For day-lighting controls, illumination threshold set points should be verified to ensure 

proper operation. Some manufacturers may have recommended testing procedures. 

11.3 CONSTANT-SPEED MOTORS 

One of the most common energy conservation measures is motor efficiency improvements 

resulting from motor replacements serving constant loads. The source of savings in these projects 

is reduced demand and energy use due to higher efficiency motors. 

Key considerations related to motor efficiency projects include: 

 Ascertaining existing equipment inventory 

 Establishing baseline equipment performance 

 Determining performance of new equipment 

 Determining operating hours 

The issues pertaining to motor replacement projects are relatively simple, and energy savings can 

be accurately predicted using short-term measurements. Therefore, energy savings from 

constant-load motors are normally determined and verified using an Option A approach. 

11.3.1 Equipment Inventory 

Equipment inventories are typically provided on a room-by-room or system-by-system basis. 

Survey data that should be collected for the baseline and after installation and should include the 

motor application, location, loads served, operating schedule, and nameplate data. Nameplate 

data collected for each motor should include the motor tag or other identifier, manufacturer, 

enclosure type, horsepower, service voltage, nominal efficiency, and rated motor speed. 

Additional nameplate data can be helpful, and should be recorded, as shown in Table 11-1. 

The party responsible for defining the baseline will also identify any non-operating motors, and 

adjust the baseline accordingly. 

11-6 M&V Guidelines 3.0 FEMP 
Table 11-1 Example Motor Survey Data Form46 

Item Baseline Post-Installation 

Survey completed by 

Motor ID or Tag # 

Application 

Manufacturer 

Model Number 

Enclosure or Frame Type 

Horsepower (hp) 

Rated Motor Speed (rpm) 

Voltage 

Phase and Frequency (Hz) 

Full Load Amps 

Service Factor 

Power Factor 

Insulation Class 

Serial Number 

Duty Rating 

Design Code Letter or Locked Rotor Amps 

Weekday Operating Hours 

Weekend Operating Hours 

Physical and Environmental Conditions 

11.3.2 Equipment Performance 

In motor efficiency projects, the key performance factor is motor power. Best practice requires 

that both the baseline and post-installation motor powers are measured. When measuring motor 

power, true root-mean-squared power measurements should be used, and/or current, volts, and 

power factor should be measured to calculate demand. Motor speed, measured in revolutions per 

minute (RPM), should be recorded based on spot metering of each motor to be replaced. Power 

meters with accuracy at or approaching ±2% of readings should be used. The same meter and 

measurement procedures should be used in both the baseline and performance period scenarios. 

The power draw of a motor depends upon its load factor, which can be determined only through 

measurements. A load factor is the ratio of the load actually drawn compared with what could be 

drawn under full-load conditions. In addition to impacting the power required, load factor also 

affects both the power factor and efficiency of a motor. For most motors, efficiency varies based 

on load factor, with the efficiency peaking at about 75% load and decreasing substantially under 

50% load47. Similarly, overloaded motors experience decreased efficiency. Since load factors 

and corresponding motor power can vary substantially, it is important to measure rather than 

estimate the load on motors. This is why replacing undersized or oversized motors with correctly 

sized motors can be an effective energy conservation measure. 

46	 A user-friendly data collection form for motors is included in Determining Electric Motor Load and Efficiency, US DOE Motor Challenge Fact 

Sheet, available at www1.eere.energy.gov/industry/bestpractices/pdfs/10097517.pdf 

47	 Determining Electric Motor Load and Efficiency, US DOE Motor Challenge Fact Sheet, available at 

www1.eere.energy.gov/industry/bestpractices/pdfs/10097517.pdf 

FEMP M&V Guidelines 11-7 
In projects where many motors on similar applications are being replaced, a sampling strategy 

can be appropriate to determine performance parameters. The appropriate use of statistically 

valid samples is discussed in Section 7.4.4 and in Appendix B. 

For certain applications, such as motors located in a conditioned air stream, additional 

measurements may be needed to capture interactive effects produced by the heat of the motor. In 

these cases, temperature measurements of the working fluid may be taken on either side of the 

motor and documented so the baseline and performance period measurement locations are 

identical. These measurements, however, may be impractical since the temperature difference 

may be small and could be determined only by a very accurate meter. As an alternative, 

ASHRAE presents a simplified method for estimating the heat gain form motors in a conditioned 

air-stream48. Estimating these interactive effects using other methods (such as whole-building 

modeling) may be appropriate. 

11.3.2.1 Verify Constant Loading 

When categorizing motors as constant-load devices, performance measurements should be made 

over a period of time. The period of time required to confirm constant loading varies depending 

on the application. Confirming that a motor operates under constant-load conditions is easily 

accomplished if measurements made to determine run-times use an ammeter or power meter 

rather than a device that determines only if a motor is on or off. 

To verify that a load is constant, one compares the average of the measured values with all 

hourly non-zero values. An application may be considered constant if 90% of all non-zero 

observations are within ±10% of the average amperage or power. If any application cannot be 

verified for constant load, the data should be analyzed to determine whether the load for the 

motor varies systematically and predictably, whether the constant load was changed during the 

test period, or whether there is some system anomaly. If the load varies systematically, the motor 

is treated as a variable load. If a system anomaly occurs or the load changes during the shortterm monitoring period, spot-metering and short-term monitoring tests should be repeated. In 

some cases it is appropriate to select a conservative load factor to simplify M&V even if the load 

is not truly constant. Each constant-speed motor application should be supported by schematic 

system drawings and control sequences. Once a load has been confirmed constant, additional 

verification should not be necessary. 

11.3.2.2 Accounting for Motor Slip 

For induction motors, the synchronous (unloaded) speed of a motor is greater than the actual 

speed of a loaded motor. The difference between the actual and rated (unloaded) speeds is called 

slip. The slip is a characteristic of a particular motor and describes how much the motor slows 

down as it gets loaded. Because the slip characteristics of pre and post retrofit motors with the 

same synchronous speed may be different, standard-efficiency motors and high-efficiency 

motors may rotate at different rates when serving the same load. Such differences in rotational 

speed may increase the amount of work done, and result in smaller savings than expected. 

48 ASHRAE Fundamentals Handbook 2005, Section 30 - Nonresidential Cooling and Heating Load Calculations. 

11-8 M&V Guidelines 3.0 FEMP 
Differences in either the measured load factor or rotation speed (rpm) between the existing motor 

and a new high-efficiency motor can impact savings. Changes in load factor or speed of more 

than 10% may occur if the new motor is smaller than the baseline motor. If the load factor or 

speed lies outside the expected range, the ESCO should provide an explanation, with supporting 

calculations and documentation. Large differences in load factor between the existing motor and 

the replacement high-efficiency motor point to operational problems or misunderstanding of the 

installation. 

For motors where it is determined that end-use has not changed, the baseline and postinstallation motor speed should be the same. For belt-driven motors, re-sheaving the motor can 

be an effective way to equalize system performance for changes in motor slip. 

11.3.3 Operating Hours 

On motor efficiency projects, baseline and performance period operating hours are assumed to be 

the same if they are unaffected by the retrofit. The operating hours are a major component in 

calculating the savings, however, and need to be accurately estimated. The most common 

approach is to measure the operating hours on all or a sample of motors with short-term or longterm monitoring during the baseline period and stipulate the operating hours in the contract. 

Monitoring should provide an estimate of annual equipment operating hours, and must be of 

sufficient duration to capture all operating conditions. For projects where post-installation 

operating hours will be different, post-installation measurements should be included. 

On projects where many motors with similar operating patterns are being replaced, sampling 

strategies can be an appropriate way to ascertain operating hours. Examples of such motor 

groupings are supply fan motors, exhaust fan motors, and boiler circulating pump motors. Each 

group type should have similar use patterns and comparable average operating hours. The 

appropriate use of statistically valid samples is discussed in Section 7.4.4 and in Appendix B. 

When measurements of operating hours are not supported by the project value, operating hours 

can be determined from schedules used in energy management systems, operational logs, or 

documented operating schedules provided by the federal agency. Operating hours can be 

estimated for each individual motor or for groups of motors with similar applications and 

schedules. 

11.3.4 Savings Calculations 

The overall equations used for calculating energy and demand savings are Equation 11-1 and 

Equation 11-2, the same basic equations used for lighting efficiency projects. The total energy 

and demand savings will be the sum of the savings from each usage group or piece of equipment. 

Similarly, Equation 11-3 can be applied to determine the energy savings from each piece of 

equipment for each operating scenario. 

Demand savings from motor efficiency improvements accrue only if the motors operating hours 

coincide with the building’s utility peak demand. In some cases, only a subset of the motors 

installed may contribute to demand savings. The demand savings are calculated from the time 

period in which the minimum demand savings are achieved during the building’s utility peak 

period. Operating schedules should be closely considered to ensure that only the motors that are 

FEMP M&V Guidelines 11-9 
_

operating during the building’s peak hours are included in calculating demand savings using 

Equation 11-5, below. Adjustments to the baseline demand may be required for non-operating 

motors that are normally operating or intended for operation. 

Equation 11-5: Peak Demand Savings for Each Usage Group or Piece of Equipment 

kW Savings = Minimum {(kW Baseline ) − (kW Post )}t − peak 

where: 

kW Savings = Peak demand savings realized at the utility meter during the performance period 

peak time period t-peak, typically calculated for each month or utility billing period 

kWpost = Performance period demand for motor or usage group during time interval t-peak 

kWbaseline = Baseline demand predicted for motor or usage group (1 through n) during same 

time interval 

11.4 VARIABLE-SPEED MOTORS 

Variable-speed-drive (VSD) efficiency projects involve the replacement of existing motor or 

load controllers with VSD motor controllers. These projects reduce demand and energy use, but 

do not necessarily reduce utility demand charges. VSD retrofits often include the installation of 

new, high-efficiency motors. Typical VSD applications include HVAC fans as well as boiler and 

chiller circulating pumps. 

Key considerations related to variable speed motor projects include: 

 Ascertaining existing equipment inventory 

 Establishing baseline equipment performance for each operating scenario 

 Determining operating hours for each operating scenario 

 Determining performance of new equipment for each operating scenario 

Many of the issues pertaining to variable-speed motors are the same as for constant-speed motor 

replacements. There are, however, some additional considerations. Establishing equipment 

inventories and determining baseline equipment performance for variable-speed motors are the 

same as for constant-speed motors, which are discussed in the previous section. In addition to the 

equipment inventory items identified for constant-speed motors, surveys should also document 

the baseline motor controls (e.g., motor starters, inlet vane dampers, and VSDs). 

11.4.1 Establish Baseline Equipment Performance and Operating Hours 

For projects whose baseline loads are constant, as described in Section 11.3.2, the baseline 

demand should be established by following the procedures outlined in Section 11.1.3 above. For 

projects where loads are not constant, additional short-term metering is required during the 

baseline. Metering should be performed on all baseline motors or on a randomly selected sample 

of motors with the same application and/or operating hours. 

For applications where the baseline is variable, short-term measurements of electrical demand 

are required. The length of metering should capture all normal operating scenarios, and the 

11-10 M&V Guidelines 3.0 FEMP 
baseline power usages should correspond to specific operating scenarios or to other independent 

variables. 

Demand metering should be of sufficient duration to determine operating hours for each different 

motor operating scenario. For systems where variations are predictable, shorter term monitoring 

may be sufficient. Sometimes, spot measurements made while the motors’ applicable systems are 

modulated over their normal operating range (i.e., measure pump motor demand in cooling 

mode, economizer mode, and heating mode) are adequate. 

Short-term monitoring for variable-load, baseline motors should be done to characterize baseline 

usage. Two approaches to evaluating baseline energy use are as follows: 

	 Develop a schedule of motor kW, e.g., 4,380 hours per year at 40 kW and 4,380 hours 

per year at 20 kW 

	 Define the relationship between motor kW and the appropriate independent variables, 

such as outdoor air temperature or system pressure for a variable air-volume system 

11.4.2 Post-Installation Performance 

After VSDs are installed, short-term or long-term metering should be conducted on all motors or 

a statistical sample of similar motors if appropriate. Post-installation metering is intended to 

determine the actual operation of the VSDs, including: 

	 Power used by new equipment in each operating scenario, or as a function of a 
 

measurable variable(s). 
 

	 The hours of operation for each operating scenario 

The performance period performance of the new equipment can be predicted prior to 

implementation, but must be confirmed. This is especially a concern for VSD projects that claim 

demand savings, as VSDs can go to 100% speed under full-load conditions, eliminating any peak 

demand savings. Ongoing measurements are required for applications that are not easily 

predictable, such as HVAC uses. 

The duration of the performance period metering will depend upon the predictability of the 

performance of the new equipment. At a minimum, the metering should capture all normal 

operating scenarios. For many applications, continuous metering for at least the first year of the 

performance period will be required to confirm operations under all conditions. 

Measuring demand or a direct proxy such as the speed of the drive, captures the performance and 

operating hours of the system. The power draw of the motors with VSDs will vary depending on 

the speed of the motor being controlled and the efficiency of the VSD. Although many VSDs 

display motor power, these readings must be verified before they can be deemed reliable. A 

calibrated power meter should be used to correlate VSD speed with actual kW. Direct motor rpm 

measurements can be made or readings can be read from the VSD control panel. Accurately 

correlating motor demand (kW) to the motor speed allows the rpm’s to be tracked and act as a 

proxy for demand. In addition, other factors, such as downstream pressure controls, can affect 

the power draw and may need to be considered. If routine adjustments are planned, the 

FEMP M&V Guidelines 11-11 
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_ _ _ _

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appropriate independent variables should also be measured so they may be correlated with the 

performance period demand readings. 

For systems whose variations are predictable and level of savings is too low to warrant the cost 

of long-term measurements, short-term monitoring may be utilized. Spot measurements made 

while the motors’ applicable systems are modulated over their normal operating range can be 

used to validate savings estimates. 

11.4.3 Savings Calculations 

The overall equations used for calculating energy and demand savings from VSD projects are 

Equation 11-1 and Equation 11-2, the same basic equations used for lighting efficiency projects, 

which are restated here as Equation 11-6 and Equation 11-7. The total energy and demand savings 

will be the sum of the savings from each usage group or piece of equipment (1 through n). 

Equation 11-6: Total Energy Savings 

kWh SavingsTotal = (kWh Savings 1) + (kWh Savings2 ) +...+ (kWh Savings n ) 

Equation 11-7: Total Demand Savings 

kW SavingsTotal = (kW Savings 1) + (kW Savings 2 ) +...+ (kW Savingsn ) 

In order to determine the savings from each piece of equipment, the baseline (and performance 

period) energy must first be determined using Equation 11-8. The energy use will be the sum of 

the energy used in each operating scenario (denoted as a through z). If demand (kW) is a 

function of an independent variable (such as speed), then the demand at each value of the 

independent variable must first be calculated. 

Equation 11-8: Baseline (or Performance period) Energy Used by Each Usage Group or Piece of 
 

Equipment 
 

kWh ,1 = (kW Baseline a × Hours Baseline , a ) + (kW , × Hours Baseline , b ) +...+ (kW × Hours , ) Baseline , Baseline b z Baseline z 

The savings from each piece of equipment (1 though n) can then be determined using Equation 

11-9. These values are then summed, as shown in Equation 11-6, to determine total energy 

savings. 

Equation 11-9: Energy Savings for Each Piece of Equipment 

kWh Savings1 = kWh baseline ,1 − kWh post,1 

Where: 

kWBaseline = Baseline demand for a usage group or piece of equipment (1 through n) 

kWPost = Performance period demand for a usage group or piece of equipment under the 

same operating conditions as the baseline (1 through n) 

kWh Post = Energy required by the new motor encountered for interval t in the performance 

period (1 through n) 

kWh Baseline = Energy that the baseline motor would have used under the under the same 

conditions encountered for the same interval t in the performance period (1 

11-12 M&V Guidelines 3.0 FEMP 
_

through n) 

HoursPost = Number of operating hours during the performance time period for a specific 

group or piece of equipment 

HoursBaseline = Number of operating hours during the baseline time period for a specific group 

or piece of equipment 

Demand savings from VSD projects accrue only if the VSD does not operate at 100% speed 

during the hours that are coincide with the building’s utility peak demand. The level of demand 

savings achieved is calculated from the time interval in which the minimum demand savings are 

achieved during the building’s utility peak period. For this reason, it is important that the 

measurement interval of the post installation conditions accommodate the utility’s actual billing 

interval. The demand savings achieved by many VSD projects are diminished during peak 

cooling loads. 

As shown in Equation 11-10, demand savings are based on the kW measured before new motors 

are installed minus the kW measured after the new motors are installed the same interval during 

the building’s peak period when the minimum demand savings are achieved. 

Equation 11-10: Peak Demand Savings 

kW Savings = Minimum {(kW Baseline ) − (kW Post )}t− peak 

where: 

Time period (t-peak) is defined as the time interval during the building’s peak 

period for that billing month during which the minimum demand savings are 

achieved. Billing months are defined by the serving electric utility. 

kW Savings = Peak demand savings realized at the utility meter during the performance period 

peak time period t-peak, typically calculated for each month or utility billing period 

kWbaseline = Baseline demand for motor or usage group predicted during time t 

kWpost = Performance demand for motor or usage group during the same interval 

11.4.4 Ongoing Verification 

As is the case in other projects, it is necessary to periodically verify the retrofit’s potential to 

perform by verifying equipment types, quantities, and condition of the equipment. If the VSD is 

continuously monitored, data should be inspected periodically to ensure that the VSDs are still 

working properly. Since VSDs can easily be overridden in the field, the performance of each 

VSD should be verified. 

11.5 CHILLERS 

A common energy conservation measure is chiller replacement projects. The source of savings 

on these projects is reduced chiller demand and energy use due to higher efficiency equipment. 

Key considerations related to chiller efficiency projects include: 

 Establishing existing equipment performance and plant operating conditions 

 Determining cooling loads and chiller sizing 

 Confirming performance of new equipment 

FEMP M&V Guidelines 11-13 
The issues pertaining to chiller replacement projects tend to be relatively complex and require 

short- or long-term measurements. For these reasons, energy savings are typically determined 

and verified using an Option B approach. The recommended approach is described below and is 

detailed in the Standard M&V Plan for Chiller Replacements, which is included as Appendix K. 

11.5.1 Baseline M&V Activities 

The baseline M&V activities for a chiller replacement project are intended to: 

	 Define the existing chillers’ efficiencies (i.e., kW/ton) 

	 Determine the cooling loads experienced by the plant based on outdoor air 
 

temperatures and other variables as needed 
 

	 Determine key operating conditions of the chiller plant (e.g., condenser water supply 

temperatures, chilled water supply temperatures, chiller sequencing). 

The first step in establishing a baseline is to document the existing conditions. The information 

needed includes nameplate data, seasonal operating schedules, chiller ages and condition, loads 

served, locations, condition of peripheral equipment, and month and time of day of peak building 

demand. 

Short-term measurements are required to determine baseline conditions across the expected 

range of operating conditions (e.g., load, outside air temperature and humidity), and the metering 

period should include both shoulder and peak months. Parameters that should be measured 

include: 

	 Chiller electric demand (kW) and energy use (kWh) 

	 Chilled water load (e.g., tons), calculated from coincident measurements of chilled 

water flow (gpm), chilled water supply, and return temperatures (oF) 

	 Condenser water supply and return temperatures (oF) 

	 Pump and cooling tower demand (kW) and energy use (kWh) (if affected) 

	 Outdoor air temperature and humidity 

For a chiller project, the most important measurements are the chilled water temperatures, which 

are used to calculate cooling loads and equipment efficiencies. The sensors used for baseline and 

performance measurements should meet minimum accuracy requirements and must be properly 

calibrated. A minimum accuracy of ±0.3oF is recommended, and identical sensors for supply 

and return are preferred. If the accuracy of any instrument is less than prescribed, the 

measurements may not be suitable, as they will introduce unacceptable levels of error into the 

energy calculations. Examples of the error introduced by these sensors are given in Section 5.4.1. 

Baseline measured data are used to determine existing load profiles. Correlating the measured 

loads with independent variables such as outdoor air temperature will allow the load profile to be 

adjusted to typical conditions, which is often appropriate. To account for interactions (reductions 

in load) from other measures, these reductions in load should be estimated and the load profile 

should be adjusted accordingly. 

11-14 M&V Guidelines 3.0 FEMP
Metered data should also be used to calculate existing chiller performance (kW/ton), which 

varies with operating conditions (e.g., load, chilled water temperature, and condenser water 

temperature). In addition, the metered data are used to determine the key operating conditions of 

the chiller plant, such as cooling tower performance, chilled and condenser water set points, 

chiller sequencing, and other baseline parameters, all of which should be thoroughly 

documented. 

11.5.2 Post-Installation Performance 

After the new chillers have been installed, short-term or long-term metering should be conducted 

to determine the actual operating efficiencies of the chillers and any affected equipment. The 

post-installation performance of the new equipment can be predicted, and may also be factorytested, but should be confirmed after installation. The power use of any peripheral equipment 

that was affected, such as pumps and cooling towers, should also be measured. 

Typically, permanent metering equipment is installed with the new chillers. The accuracy and 

calibration of all meters should be confirmed prior to data collection. Depending on the project, 

the metering can either be continuous or periodic. Continuous metering can accurately track 

operations and offers additional opportunities to improve overall performance of the chiller 

plant. The down-side of continuous metering is the challenge of keeping the data continuous and 

accurate. 

One approach is to meter continuously for informational purposes, but calculate savings using 

periodic equipment performance tests. This approach lends itself to projects that have a well 

defined cooling load profile and the performance of the chillers themselves is the primary 

concern. Chiller projects, however, will often include controls or other measures that may require 

continuous monitoring. 

Parameters typically measured include: 

	 Chiller electric demand (kW) and energy use (kWh) 

	 Chilled water load (tons), calculated from coincident measurements of chilled water 

flow (gpm), chilled water supply, and return temperatures (oF) 

	 Condenser water supply and return temperatures (oF) 

	 Pumps and cooling tower fans (if affected) demand (kW) and energy use (kWh) 

	 Outdoor air temperature and humidity 

Data collected can be used to calculate chiller performance (kW/ton) and actual cooling loads. 

These data should be used to calculate savings or at least compared with the expected values to 

ensure continued performance. Periodically repeating these tests is recommended, and this also 

requires recalibration of instrumentation. 

11.5.3 Savings Calculations 

The overall equations used for calculating energy and demand savings from chiller replacement 

projects are Equation 11-1 and Equation 11-2, the same basic equations used for lighting 

FEMP M&V Guidelines 11-15 
_

efficiency projects. The total energy and demand savings will be the sum of the savings from 

each piece of equipment. 

Equation 11-8 can be applied to determine the energy savings from each piece of equipment, 

although it may need to be applied for a number of operating scenarios. Another way to state this 

equation, which is more suitable to hourly calculations, is shown in Equation 11-11. 

Equation 11-11: Energy Savings for Each Piece of Equipment 

Energy ( ) = ∑(kWh Baseline − kWh Post )t Savings kWh t 

Where: 

kWh Post, t = Energy required by the new chiller encountered for interval t in the 

performance period 

kWh Baseline, t = Energy that the baseline chiller would have used under the under the same 

conditions encountered for the same interval t in the performance period 

The utility peak demand savings from many chiller projects are established during peak cooling 

loads when demand savings are at their minimum. Demand savings resulting in cost reductions 

from chiller projects can occur only during the hours that are coincide with the building’s utility 

peak demand. The level of demand savings achieved is calculated for the interval during this 

time period in which the minimum demand savings are achieved, which typically occurs under 

peak cooling conditions, and can be calculated using Equation 11-10. For this reason, the 

measurement interval used to measure the post installation conditions should accommodate the 

utility’s actual billing interval. 

11.6 WATER 

Water conservation projects are often included on ESPC projects. The source of savings in these 

projects is reduced water use due to increased performance of the water using equipment, 

fixtures, or controls. Savings can also result from reduced water supply charges, sewer charges, 

and/or energy costs. Energy savings are commonly achieved from reduced water heating, and 

additional energy savings may be realized for facilities that use pumps to boost water pressure or 

to irrigate with groundwater, or at facilities with their own water treatment systems. 

Key issues related to water conservation projects include: 

 Ascertaining equipment inventory for both the baseline and post-installation 

 Establishing existing equipment performance for each type of device 

 Determining usage characteristics of each type of device 

 Determining post-installation equipment performance for each type of device 

 Accounting for interactive effects 

Several of the issues pertaining to water retrofits are similar to those affecting lighting efficiency 

projects. There are, however, some differences in implementation procedures. Since the 

performance of many common water conservation projects can be accounted for through shortterm measurements, and usage factors can be estimated, water savings are most often verified 

using Option A. All M&V options, however, can be applied to water projects. 

11-16 M&V Guidelines 3.0 FEMP 
There are several circumstances that would indicate that another M&V approach should be 

considered. Projects that save more than 15% of the total water usage at a single meter should 

use an Option C approach. When an Option C approach is used, the quality and accuracy of the 

water meters should be verified. If existing water meters are used, historic water meter data may 

not provide an accurate baseline, and additional meters should be installed. One difficulty using 

whole-building consumption data is that outdoor water use can be so variable that desegregating 

that end use from a facility’s water load, which is also variable in use, can be problematic. 

Option B may be warranted for projects where 1) the water consuming devices do not have 

constant flows; 2) operating schedules are erratic and require measurement; 3) sub-meters 

already exist or can easily be installed, such as individual buildings on a campus, cooling towers, 

irrigation, or gray water systems; or 4) metering costs are small in comparison to other project 

costs. 

11.6.1 Typical Measures 

A partial list of water conservation measures that federal agencies can consider includes the 

following: 

	 Replacing components of older plumbing systems with water-saving equipment such 

as ultra–low-flow toilets, waterless urinals, high-efficiency showerheads, aerators, 

and self-closing valves 

	 Eliminating continuously flowing urinals, lab drains, drinking fountains, and other 

similar devices 

	 Replacing once-through cooling devices for space cooling, ice making, and other 
 

purposes with closed-loop or air-cooled systems 
 

	 Improving technologies and management techniques for boilers, dishwashing, 
 

laundry, and other special purposes 
 

	 Maintaining proper pressure through the use of pressure regulating valves 

	 Decreasing the use of water for landscaping by installing drought-tolerant 
 

landscaping or implementing more efficient irrigation systems and practices 
 

	 Installing gray water, rainwater, and reclaimed water-recycling technology for 
 

flushing and/or irrigation 
 

11.6.2 Equipment Inventory 

Equipment inventories are typically provided on a room-by-room basis. Survey data that should 

be collected include the type of device/fixture, location, number in each location, and nameplate 

data. The inventory should characterize both existing and post-installation equipment, and should 

be updated after installation to ensure accuracy. 

11.6.3 Equipment Performance 

On water efficiency projects, the key performance factor is water consumption on a per use basis 

(i.e., gallons per flush). In best practice applications, both the baseline and performance period 

water consumption is measured. Sampling strategies for similar fixture types are appropriate, and 

FEMP M&V Guidelines 11-17 
confidence and precision of 80% and 20%, respectively, are recommended. Typically, spot 

measurement of flows is sufficient to characterize the performance of various fixture types. 

The average flow rates for each type of fixture measured should be used. Flow rates may vary, 

depending on the specific equipment, water pressure, and condition of the fittings. Measurement 

strategies include making volumetric measurements or using a portable flow meter. Suitable flow 

meters should be selected for appropriate accuracy and should have flow ratings that conform to 

field conditions. Several flow measurement techniques are included in ASHRAE Guideline 14 

Section A5.6. Spot measurements are useful, not only to quantify water consumption, but also to 

verify that all devices assigned to any sampling groups have similar performance characteristics. 

ESCOs and agencies should exercise caution if they rely on nameplate data to determine water 

use. The water consumed by many water fixtures can be easily adjusted to go well above or 

below nameplate specification. Actual use for existing fixtures can be determined by short-term 

metering or other techniques. All newly installed equipment should be tested and adjusted as 

needed. 

11.6.4 Usage Characteristics 

On water efficiency projects, baseline and performance period use of the water consuming 

equipment (i.e., flushes per day) are assumed to be the same since they are unaffected by the 

retrofit. The frequency with which the equipment is used is a major factor in calculating the 

savings, however, and needs to be accurately estimated. The most common approach is to 

estimate the usage of fixtures and stipulate these operating characteristics in the contract. 

Projects quantifying outdoor water use using Option B or C methods would need to develop 

regression models based on parameters that drive water use, such as rainfall, so that routine 

adjustments can be made. 

Once a complete inventory and performance characteristics of the fixtures have been determined, 

the number of uses per day must be determined. Since this parameter is not easy to measure, it is 

typically estimated. For many fixture types, the only usage item to quantify is the frequency of 

use. For others, such as showers and sinks, both the frequency and duration of use must be 

determined. The overall fixture usage is typically determined from published studies and historic 

data on the actual building’s occupancy. Because of the differences in performance of toilets and 

urinals, the daily per fixture use is often segregated by men and women. 

Units of measure should be consistent with the fixture type, but all should be expressed in a 

common volumetric measure (usually gallons) so that those totals can be aggregated easily. For 

example, water consumption for water closets might be expressed in gallons per flush, while 

showers consumption might be expressed in gallons per minute. Water consumption per unit of 

measure must then be quantified in the same units, and periods of service must be expressed in 

consistent terms (such as flushes per day, or minutes per shower and showers per day). In 

facilities where the usage changes seasonally (e.g., a school summer vacation period), separate 

data will be needed for each season. 

Once the fixture inventory, performance characteristics, and usage parameters have been 

estimated, the data should be compared to historic water consumption at the facility to ensure 

that the consumption and savings values are reasonable. 

11-18 M&V Guidelines 3.0 FEMP 
11.6.5 Ongoing Verification 

Using an Option A approach for water retrofits typically precludes the need for savings 

adjustments, except for non-routine adjustments (see Section 7.2). Since the performance of each 

fixture or end use should not change over time, and usage parameters are typically stipulated in 

the contract, additional measurements during the performance period are not warranted. 

It is important, however, to periodically verify the retrofit’s potential to perform. This means 

equipment types, quantities, and condition of the installed equipment have to be verified. Often, 

a different portion of the installation is inspected each year to verify that the proper equipment 

has been installed and is operating as expected. Confirming the type of equipment replacement 

stock that may be kept on site is also advisable. 

11.6.6 Other Issues 

There are several additional issues that should be considered when implementing water 

conservation projects. Some of these issues are outlined below. 

	 Some water measures may actually increase energy use, such as switching from a 
 

once-through cooling system to a closed-loop cooling system. It is important that 
 

these energy impacts are quantified. 
 

	 Water conservation measures may reduce the energy used for water heating, the level 

of which will depend upon the efficiency of the existing water heater. 

	 Water utilities can have demand charges based on the size of the utility meter. 
 

Typically, the meter would have to be downsized to realize demand cost savings. 
 

	 Water and sewer rates vary considerably, and the actual rate structure should be 

applied. For locations that do not charge on the basis of consumption for water or 

sewer, water cost savings will be more difficult to generate. Most areas, however, bill 

for water and sewer service from meter readings, and a large percentage of charges 

are consumption-based. 

	 When evaluating outdoor water use that is not sub-metered, the usual first step is to 

evaluate several years of water consumption data to compare seasonal irrigation use 

with non-seasonal irrigation use. The difference can be used for a baseline, but should 

be adjusted for changes in temperature, rainfall, evapotranspiration, and/or other 

relevant factors, if possible. If the water utility separately meters outdoor water use, 

then establishing baseline use is relatively simple, except for concerns regarding the 

accuracy of older utility meters. 

	 Irrigation technologies increase the delivery efficiency of the water (e.g., drip 

irrigation or more efficient sprinkler technologies) or include other changes that result 

in lower evaporative losses. The savings from these retrofits depend on local climate 

and evapotranspiration rate as well as plant species. 

	 Most domestic water use is for cleaning and transporting waste. These are sanitary 

functions that employ equipment and systems designed to comply with carefully 

crafted sanitary codes and standards. Saving water by using methods that compromise 

system performance is unacceptable. 

FEMP M&V Guidelines 11-19 
11.7 GEOTHERMAL HEAT PUMPS 

In general, geothermal heat pump (GHP) projects face the same issues as any HVAC system 

replacement, but with some additional items related to system specific features. Geothermal heat 

pumps, sometimes called ground source heat pumps, are categorized as either closed- or openloop systems. The most typical retrofit involving GHP systems at federal sites involves replacing 

customary HVAC systems with GHP systems using vertical-bore ground heat exchangers, and 

this discussion focuses specifically on that system type. 

For closed-loop systems, heat pumps absorb heat from and reject heat to a piping loop that 

contains water or water/antifreeze solution. The loop includes a borefield consisting of an array 

of pipes buried in the ground. The borefield acts as a heat exchanger, absorbing heat from and 

rejecting heat to the solution. 

Key issues related GHP projects include: 

 Ascertaining heating and cooling loads 

 Establishing baseline equipment efficiencies 

 Predicting performance of the GHP systems 

 Verifying the performance of the installed GHP system 

The last two issues listed above involve challenges that are unique to GHP projects, and are 

discussed below. Estimating the energy use of such equipment is difficult because both the 

cooling efficiency (EER) and the heating effectiveness (COP) of the heat pumps depend on the 

temperature of the fluid received from the ground heat exchanger. This fluid temperature, in turn, 

depends on the property of the soil formation at the site, and on the building heating and cooling 

loads. 

For this reason, energy savings from GHP retrofit projects are usually estimated using an Option 

D approach. As-built drawings, on-site measurements, and models of the existing HVAC 

equipment are used to develop a baseline simulation model of the building using a building 

energy analysis programs such as DOE-2, TRACE 700, TRNSYS, or another program that 

includes subcomponent models for geothermal heat pumps and vertical-bore heat exchanger 

arrays. 

As discussed in Section 4.5, outputs from the model are compared with site-monitored building 

energy use data (utility bills or temporary metering) to ensure adequate calibration. Once the 

model has been deemed to be of sufficient accuracy, it is typically driven with typical 

meteorological year (TMY) weather for the site to determine the average baseline annual energy 

use. The baseline models of the existing HVAC equipment are then updated with GHP models 

that match the rated performance of the equipment to be installed. A borefield model is also 

included. Defining parameters include soil formation thermal conductivity and deep-earth 

temperature (which are measured at the site using an in situ test), borehole depth, pipe 

dimensions, and the thermal properties of any grouting material. The system model is driven by 

TMY weather to estimate average post-retrofit annual energy use. The proposed energy savings 

are then the difference between the post-retrofit and the baseline annual energy use. 

11-20 M&V Guidelines 3.0 FEMP 
Since the savings estimates depend on the manufacturer’s rated performance of the new GHPs, 

the recommended M&V approach calls for annual verification of the performance of the new 

systems. The two performance areas that should be verified are: 1) equipment efficiency and 

system performance; and 2) borefield performance. 

11.7.1 Equipment Efficiency and System Performance 

For sites with multiple installations, measurements can be made on a portion of the GHPs 

installed each year to ensure that they are still meeting the specified performance and the 

resulting guaranteed savings. If for example, the agency selects a random sample of 20% of the 

heat pumps that were installed, then all units will be verified every 5 years. 

Since ground source heat pumps provide both heating and cooling, the efficiency of the 

dominant function should be tested. For a cooling dominated facility, during a specified period in 

peak cooling season such as July of each year (this could be in January at a heating-dominated 

site) data are collected from selected heat pumps. The following data should be collected at 5­

minute intervals: 

	 Water temperatures entering and leaving the heat pump 

	 Ambient outdoor air temperature, 

	 Supply and return dry-bulb air temperatures for water-to-air GHP units; supply and 

return load water temperatures for water-to-water GHP systems 

	 Heat pump unit input kW 

The measured input kW readings are compared with manufacturer’s performance data for the 

same operating conditions (rated gpm, rated cubic feet per minute, entering water temperature, 

leaving water temperature). Since the manufacturer’s data will be limited to full-load conditions, 

the data must be manipulated to eliminate part-load conditions and to avoid comparing part load 

conditions against full-load data. Once the data set has been selected, logged input demand (kW) 

readings are compared to manufacturer’s performance published data at the given conditions. 

If the overall average measured demand (kW) is less than 110% of manufacturer’s published 

data, the modeled energy savings are considered to be true and accurate. If the average kW is 

greater than 110%, the energy savings are recalculated using the original building simulation 

model. The GHP performance profile is changed to reflect the sampled kW readings, and the 

model is rerun to determine the actual energy consumption and revised savings estimates. 

In addition, heat pumps used in air distribution systems typically require a greater volume of air 

than conventional systems due to the more moderate supply temperatures. For retrofit 

applications, the distribution system may require modification to accommodate the increased 

volume of air required to heat and cool the facility. The overall ability of the system to 

adequately heat and cool the facility should be verified. 

11.7.2 Borefield Performance 

The long-term performance of a GHP system depends on the design of the vertical borefield, 

which acts as a heat exchanger between the ground and the fluid. System designers choose a 

design temperature for the fluid (usually around 95oF for cooling-dominated systems, around 

FEMP M&V Guidelines 11-21 
40oF for heating-dominated systems) and use estimated peak load conditions to size the system. 

If the borefield is correctly designed, the temperature of the fluid supplied to the heat pumps 

from the borefield should only rarely exceed the design temperature in the cooling mode (or 

should rarely fall below it in the case of a heating-dominated system). 

Because borefield performance may change over time, the performance of at least a sample of 

units should be verified each year. If measured data collected to verify equipment performance 

(water temperature entering the heat pump) are used, the percentage of readings in which the 

entering fluid temperature exceeded the design temperature should be determined. If more than 

10% of the temperatures during full-load conditions exceeded the design temperature, it is likely 

that the borefield is undersized for the current building loads. Higher entering water temperatures 

in cooling mode (or lower temperatures in heating dominated systems) reduce system efficiency. 

In such a situation it may be necessary to investigate whether building loads have changed since 

the project was installed (e.g., additional interior loads, increased operating hours). If it is 

ultimately determined that the loads have not changed, the ESCO may be required to adjust the 

model to account for the higher entering fluid temperatures, and to recalculate the savings 

accordingly. 

11.8 RENEWABLE ENERGY PROJECTS 

Federal agencies are allowed to use energy service performance contracts (ESPCs) for 

installation of renewable energy projects that reduce facility energy costs and related operation 

and maintenance expenses. The term “renewable energy” refers to sources of energy that are 

regenerated by nature and sustainable in supply. 

Renewable energy projects covered by this section involve the installation of devices and/or 

systems that generate energy (e.g., electricity or heat) or displace energy use thorough the use of 

renewable energy resources. Examples of technologies include: photovoltaics (PV), active or 

passive solar systems for space conditioning or production of domestic hot water, biomass 

conversion systems (e.g., landfill gas methane recovery projects), and wind systems. For 

additional information on the measurement and verification of renewable energy projects, refer 

to IPMVP for renewables49. 

The most notable difference between renewable energy projects and other ECMs is that 

renewable projects supply energy rather than reduce the amount of energy used. Measuring the 

energy supplied allows for a simplified approach to measuring savings that is not possible with 

energy efficiency projects. Option B deserves special consideration when evaluating M&V 

options for renewable energy projects. 

Like many projects, the performance of most renewable energy technologies depends on the 

environmental conditions, such as solar radiation or wind speed. The use of long-term averages 

of these values is reliable, but any M&V Plan should be structured in such a way as to allocate 

the risk due to short-term variations in environmental conditions. Therefore, it may be 

appropriate to stipulate these conditions and verify the performance of the equipment using 

49 International Performance Measurement & Verification Protocol: Concepts and Practices for Determining Energy Savings in Renewable 

Energy Technologies Applications, Volume II, August 2003. 

11-22 M&V Guidelines 3.0 FEMP 
_

_

short-term measurements (e.g., the efficiency of a solar hot water heater). Long-term 

performance typically needs to be verified. 

11.8.1 Savings Calculations 

There are two general approaches for calculating energy savings from renewable energy projects: 

	 Net energy use 

	 Normalized savings based on typical environmental conditions and actual 
 

performance characteristics 
 

For all renewable energy projects, consideration should be given to the impact of parasitic 

energy use by the renewable system and to increased operations and maintenance costs due to 

the addition of new equipment. Demand savings from renewable energy technologies may occur, 

but, depending on the electric utility’s rate structure, the energy must be available and 

uninterrupted during all peak periods. Accounting for demand savings requires more 

sophisticated metering that aligns measurement intervals with the utility interval. 

11.8.1.1 Net Energy Use 

The first approach involves directly measuring the energy output from the system and 

quantifying any additional costs incurred or savings realized. This approach is suitable for wind, 

PV, and other electricity generating equipment. The measurement concept assumes that energy 

(electrical and/or thermal) produced by the renewable system is used at the project site, and 

displaces energy that would have been provided by an existing source. Savings are determined 

by measuring the net amount of energy produced by the renewable system and used at the project 

site valued at prescribed utility rates. This approach eliminates the need for a baseline and places 

the risk of weather variations on the ESCO. 

Utility savings from renewable measures that supply thermal energy (e.g., solar hot water heater) 

are determined by dividing the energy delivered by the efficiency of the original equipment (e.g., 

conventional water heater). For projects that may sell excess energy or store energy on-site, 

additional costs and savings may need to be considered. Cost savings using this approach can be 

calculated using Equation 11-12. 

Equation 11-12: Cost Savings Determination Utilizing Net Energy Use Approach 

CostSavings = (kWh Delivered ) ( RatekWh ) +{ (ThermalEnergy ) ×	 } EfficiencyDisplacedEquipment
 

1kWh

×( )×( RatekWh ) +{$ EnergySold } −{$ ParasiticLoads } −{$ New O&MCosts } 3, 413 BTU 

Where: 

kWh Delivered = Electrical energy delivered by the system and used at the facility 

RatekWh = Specified cost of electrical energy 

Thermal Energy = Thermal energy delivered by the system in Btu during the performance 

period 

Efficiency Displaced = Operating efficiency of the equipment that would have been used 

Equipment 

1kWh/3,414 Btu = Conversion between thermal energy (Btu) and electrical energy (kWh) 

FEMP M&V Guidelines 11-23 
_

_ _ _

$Energy Sold 

$Parasitic Loads 

$New O&M Costs 

= 

= 

= 

Funds received through the sale of energy produced 

Cost of operating systems and equipment related to renewable 

technology 

Additional cost of operations and maintenance due to renewable 

technology 

11.8.1.2 Normalized Savings 

The second primary approach involves calculating normalized savings based on typical 

environmental conditions and actual performance characteristics of the system. Savings are 

determined by calculating the difference between baseline energy and demand and predicted or 

metered energy and demand, with both sets of data adjusted to a prescribed set of conditions. 

Depending on the type of system, this strategy can use any of the four M&V options. 

Normalizing savings in this manor places the risk of weather fluctuations on the federal agency, 

and requires that the ESCO periodically demonstrate that specified performance characteristics 

have been met. These performance characteristics and how they will be determined should be 

specified in the project-specific M&V Plan. Performance parameters that should be specified 

include efficiency of PV modules, minimum hot-water temperatures, and the content in landfill 

gases. 

The basic energy savings equation (Equation 2-1) can be modified to determine cost savings, as 

shown in Equation 11-13. 

Equation 11-13: General Savings Equation for Renewable Energy Projects 

CostSavings = [{(Baseline Energy ) − (Performance Period Energy) 

±Adjustments }×(Rate Energy )] −{$ ParasiticLoads } {$ New O&MCosts − }

Where: 

Baseline Energy = The calculated or measured energy use of a piece of equipment prior 

to the implementation of the project 

Performance = The calculated or measured energy use of a piece of equipment after 

Period Energy the implementation of the project 

Adjustments = 	 Routine and non-routine changes made to the baseline or 

performance period energy use to account for expected and 

unexpected variations in conditions 

RatekWh = Specified cost of electrical energy 

Thermal Energy = Thermal energy delivered by the system in Btu during the postinstallation period 

$Parasitic Loads = Cost of operating systems and equipment related to renewable 

technology 

$New O&M Costs = Additional cost of operations and maintenance due to renewable 

technology 

11.8.2 Energy Metering 

Determining the electrical output of systems is relatively straightforward. This is because 

electrical output and parasitic loads can be simply measured with many commercially available 

meters. Measuring thermal output (e.g., hot water from a domestic hot-water solar system 

11-24 M&V Guidelines 3.0 FEMP
displacing an electric water heating system) is also straightforward, but not necessarily 

inexpensive, using commercial Btu meters, water flow meters, temperature transducers, etc. 

However, all of the thermal and electrical output from a system does not necessarily displace an 

equivalent amount of load. This is due to storage, system losses, and differences in time between 

when useful energy is produced and when it is needed. 

11.8.2.1 Electrical Metering 

Electricity measurements associated with system output, parasitic loads, power to the project 

site, and power to third parties and the utility may be needed. All electrical meters (and related 

equipment) are usually provided, installed, owned, and maintained by the ESCO or the servicing 

utility. 

When a net metering approach is used, meter(s) will typically show the measure’s gross output 

(in kW and kWh) less parasitic use (e.g., pump motors) and sales to third parties or the local 

utility, as well as any local transformation and transmission and battery storage losses. The goal 

with this method is usually to measure net generation delivered to the project site. Metering, 

interconnection (including safety provisions), reporting, and other related issues are to be in 

accordance with current electrical standards and the requirements of the servicing electric utility. 

With the net energy-use M&V approach, deliveries to and from the facility should be separately 

recorded and treated as separate transactions. For purposes of power delivered to the site, a 

single meter that records energy supplied to the site is preferred. If a calculated transformer loss 

value is used, it should be based on certified factory test data for that particular transformer. 

The following are some suggested metering requirements: 

 kWh and demand metering at the point of delivery 

 Time of-delivery metering 

 Provisions for remote meter reading 

11.8.2.2 Thermal Metering 

Thermal meters (e.g., Btu meters) are required for measuring the net thermal output of certain 

renewable energy systems (e.g., hot water generated by an active solar system). Note that 

metering of thermal energy requires a “net” measurement of flows and enthalpy to and from a 

system. Measurements of thermal flows may need to take into account any vented or wasted 

energy that is produced by the system but not used at the site, as well as distribution and storage 

losses. Also note that small errors in enthalpy measurements (usually determined by 

temperature) can introduce large errors in the energy calculations; hence, meter precision, 

accuracy, and calibration are especially important. 

11.8.3 Notes on Some Renewable Energy Technologies 

11.8.3.1 Active Solar Thermal Systems 

Active solar thermal systems include systems for producing industrial process heat, domestic hot 

water, and space heating and cooling. Useful monitoring includes 1) site inspections and brief 

FEMP M&V Guidelines 11-25 
temperature and system monitoring for diagnostics, 2) spot, short-term, or long-term monitoring 

of system key parameters such as temperatures, energy flows, and control status, and 3) utility 

billing analyses. 

11.8.3.2 Passive Solar Systems 

Passive solar systems usually involve the performance of a whole building with architectural 

features such as overhang design and use of thermal mass. As such, this technology is different 

from other renewable energy measures in that mechanical devices with identifiable energy inputs 

and outputs are not involved. Thus, passive solar M&V typically involves the analysis of a whole 

building, and thus it is best to use utility billing analyses or calibrated simulation techniques, i.e., 

Options C or D. 

11.8.3.3 Wind, PV, and Other Renewable Generation Projects 

With these types of systems, the performance characteristics of the components are usually well 

defined, such as the conversion efficiency of the PV modules or the Btu content of landfill gas. 

In addition, the electrical or thermal flows can usually be easily measured and Option B is 

typically utilized. The complexity of these projects lies in projecting long-term performance due 

to variation in the resources (e.g., solar insolation, wind resource, or reserve of methane gas in a 

landfill) and accounting for any variations between when the resource is available and when it is 

needed (i.e., the interaction of storage systems and their inefficiencies). 

11.9 NEW CONSTRUCTION 

Performance contracting projects are not only applied to existing buildings, but are sometimes 

used to supplement the capital required for new-construction projects. The ESPC part of the 

project provides added budget for the implementation of energy saving features that would not 

have been otherwise included in the project. Financing for these items is provided by the ESCO, 

and the ongoing performance of the measures is guaranteed. 

Examples of ESPC new-construction projects used to limit energy-related costs include 

improvements in the building’s glazing, lighting, heating and cooling, pumping, and air handling 

systems, as well as efficiency upgrades of other equipment that were originally planned for the 

building. 

Savings from new-construction ESPCs are measured and verified using an Option D calibrated 

simulation approach, which is detailed in Section 4.5. The methodology detailed, however, is for 

projects conducted in existing buildings. One primary difference between the methods used for 

existing and new buildings is that for new construction the performance period model is 

calibrated and the baseline model is based on minimum code standards or the original building 

plans. The methodology followed for new construction projects is somewhat different and is 

detailed in IPMVP Volume III.50 

50	 International Performance Measurements and Verification Protocol: Concepts and Options for Determining Energy Savings in New 

Construction, Volume III, April 2003. 

11-26 M&V Guidelines 3.0 FEMP
Appendix A Definition of Terms 

Note: This is not intended to be a comprehensive listing of terms used in federal ESPCs. If there 

is any discrepancy between the definitions in this document and those in the ESCO / Federal 

agency contract or task order, the definitions in the contract or task order prevail. 

Definition of Terms 

TERM DEFINITION 

Adjustments, Nonroutine & Routine Changes made to the baseline and/or the performance period energy use to account for changes. 

Routine adjustments are used to account for expected variations in independent variables; NonRoutine adjustments are used to compensate for unexpected changes unrelated to the ECMs. 

Annual Report A report issued annually, typically on the anniversary of project acceptance, which documents the 

execution and results of the M&V activities prescribed in the M&V Plan. This documentation verifies 

the continued operation of the ECMS, provides the associated energy savings estimates, 

demonstrates proper maintenance, and provides M&V results. The energy savings documented in the 

report serves as the basis for the ESCO’s invoice after the regular interval report has been reviewed 

and approved by the federal agency. 

Avoided Energy Use The reductions in energy use that occurred during the performance period relative to what would have 

been used during the baseline period, using actual operating conditions experienced during that 

period. This may require baseline energy use to be adjusted to actual conditions. This approach is 

different than calculating normalized savings. 

Baseline Conditions Physical conditions that existed prior to the implementation of the ESPC project (such as equipment 

inventory and conditions, occupancy, nameplate data, energy consumption rate, and control 

strategies), which are determined through surveys, inspections, spot measurements, and short-term 

metering activities. Baseline conditions are established for the purpose of estimating savings and are 

also used to account for any changes that may occur during the performance period, which may 

require adjustments to baseline energy use. 

Baseline Energy or 

Demand 

The calculated or measured energy usage or demand by a piece of equipment or a site prior to the 

implementation of the project. 

Commissioning (Cx) The process of documenting and verifying through adjusting/remedying the performance of building 

facility systems so that they operate in conformity with the design intent. An independent party may 

complete system/equipment commissioning. The American Society of Heating, Refrigerating, and Air 

Conditioning Engineers’ (ASHRAE) Guideline 0-2005 can be the basis for commissioning activities. 

Contract The executed document between a Federal agency and the ESCO and any appendices, as amended 

from time to time, which outline provisions of the project. 

CxA Commissioning Agent or Commissioning Authority are equivalent terms used to describe the 

designated individual in charge of leading the commissioning process. 

Energy Conservation 

Measure (ECM) 

The individual components or sub-projects which save energy that comprise an ESPC project. 

Energy Services 

Company (ESCO) 

An organization that designs, finances, procures, installs, and possibly maintains one or more ECMs 

or systems at a Federal facility or facilities. 

Expected Savings For a Super ESPC project, expected savings are those reported in the Post-Installation Report. They 

are based on as-built conditions and post-installation verification activities, and are the savings 

expected for Year 1 of the project. 

Independent Variable A parameter that is expected to change regularly and have a measurable impact on the energy use of 

a building or system. 

Insolation A measure of solar radiation energy received on a given surface area in a given time. 

Interactive Effects Energy impacts to one system resulting from changes made to another building system. 

Investment Grade 

Audit (IGA) 

A comprehensive assessment of a facility’s energy and water usage characteristics, identifying and 

analyzing energy conservation measures. 

FEMP M&V Guidelines 3.0 A-1 
TERM DEFINITION 

Measurement and 

Verification (M&V) 

Approach 

An evaluation procedure for determining energy and cost savings. M&V techniques discussed in this 

document include engineering calculations, metering, utility billing analysis, and computer simulation. 

M&V Option One of four generic M&V approaches (A, B, C, and D) defined for ESPC projects. These options are 

defined in the IPMVP and in Chapter 2 of this document. 

M&V Plan The Measurement and Verification (M&V) Plan is a document that defines project-specific M&V 

methods and techniques that will be used to determine savings resulting from a specific performance 

contracting project. 

Measurements, 

Continuous 

Measurements repeated at regular intervals over the baseline period or contract term. 

Measurements, LongTerm Measurements taken over a period of several years. 

Measurements, 

Short-Term 

Measurements taken for several hours, weeks, or months. 

Measurements, Spot Measurements taken one-time; snap-shot measurements. 

Normalized Savings The reductions in energy use that occurred during the performance period relative to what would have 

been used during the baseline period, but adjusted to a normal set of conditions (such as typical 

weather conditions). 

Performance Period The time period spanning from approval of the project installation to the end of the contract, or for a 

specific time-frame such as 1-year within that period. 

Performance Period 

Energy Use or 

Demand 

The calculated energy usage (or demand) by a piece of equipment or a site after implementation of 

the project. The ESCO and the Federal agency verify the performance period energy use, the 

installation of the proper equipment components or systems, the correct operation of the components 

and systems, and their potential to generate the predicted savings. 

Post-Installation 

Conditions 

The physical and operational conditions present during the time period following the installation of an 

ESPC project. 

Post-Installation 

Report 

The report that provides results of post-installation M&V activities, documents any changes in the 

project scope hat may have occurred during project implementation, and provides energy savings 

estimates for the first year of performance. 

Project The implementation of energy efficiency services at a Federal facility or group of facilities. 

Project-Specific M&V 

Plan 

Plan providing details on how a specific project’s savings will be verified based on the general M&V 

options described in this document. 

Proposed Savings For a Super ESPC project, proposed savings are those estimated in the contract prior to project 

implementation determined from metering and/or calculations performed in accordance with the 

provisions of the Federal agencies’ approved measurement and verification plan. 

Regression Analysis A technique used to develop a mathematical model from a set of data that describes the correlation of 

measured variables. 

Sampling A process of selecting random pieces of similar equipment for monitoring in order to characterize 

some feature of an entire population of equipment. This strategy is used when it is unrealistic to 

measure all affected equipment. 

Standard M&V Plan FEMP has developed two Standard M&V Plans, both of which are included in the Appendix. These 

are complete M&V Plans, which use the Super ESPC M&V Plan format, that need to be customized 

for an individual project. These plans represent a best-practice approach developed through industrygovernment working groups. 

Usage Group A collection of equipment (e.g., motors or rooms with light fixtures) with similar characteristics (e.g., 

operating schedule). 

Verified Savings For a Super ESPC project, verified savings are those reported in the Annual Report. They are based 

on verification activities conducted during the performance period, and are the savings calculated for 

that year of the project. 

A-2 M&V Guidelines 3.0 FEMP 
Entire Population

X

X

X

X

X

X X

X

X

X

X

X

X

X

X X

X

X

X

X

X

X X

X

X

X

X

X

X

X

Sampled member, typical

Member of population

Appendix B Sampling Guidelines 

B.1 INTRODUCTION 

This appendix introduces the statistical background, theory and formulas used to select, analyze 

and validate samples for project monitoring and evaluation. It also provides guidelines and 

procedures for the design and implementation of sampling. 

B.1.1 Sampling 

The purpose of monitoring a sample, as an alternative to monitoring an entire population is to; 

(a) characterize particular attributes of a population from which a sample is drawn with adequate 

accuracy and reliability, while (b) reducing monitoring costs and effort. 

As shown in Figure B-1, sampling involves selecting several members from a population for 

monitoring and evaluation. The measured characteristics or behavior of the sample group is then 

used to infer the characteristics and/or behavior of the entire population. As expected, the 

assumption is that the sample is representative of the population. To ensure that the sample is 

indeed representative, calculations must be performed to assess and quantify the statistical 

validity of the sampled data. These calculations are presented later in this Appendix. 

Entire Population 

X 

X 

X 

X 

X 

X X 

X 

X 

X 

X 

X 

X 

X 

X X

X 

X 

X 

X 

X 

X X 

X 

X 

X 

X 

X 

X 

X 

Sampled member, typical 

Member of population 

Figure B-1 Population and Sample 

Sampling is applicable to projects such as lighting retrofits, energy efficient motor replacements, 

HVAC unit replacement, steam-trap monitoring, or any other project in which a number of 

similar pieces of equipment are affected by the same type of ECM. In the most common 

applications, sampling strategies are used to characterize the hours of operation and the 

instantaneous power draw of a constant-load device. A separate sample set is required for each 

item evaluated. 

When selecting a sample from a population to determine hours of operation, it is necessary to 

ensure that the load is or device being sampled is monitored at or down-stream of its last point of 

FEMP Appendix B – Sampling Guidelines B-1 
control (LPC). The last point of control (LPC) is the portion of an electrical circuit (or other 

source of energy), that serves a set of equipment that is controlled on a single switch. As a result, 

all of the fixtures or pieces of equipment on that LPC are typically operated the same number of 

hours per year. For metering purposes, it is assumed that measurements taken of a single piece of 

equipment on an LPC captures the operating hours for all of the equipment served on the same 

circuit. 

B.2 MATHEMATICAL METHODS FOR SAMPLING 

Sampling must be conducted using accepted methods and use an appropriate level of care to 

ensure that the M&V results that rely on the sampling and analysis are sufficiently accurate. This 

section provides a summary of the concepts, methods and equations to be used. 

Although various assumptions regarding the distribution of the sampled data can be made, the 

large majority of sampling statistical analysis assumes that the data is normally distributed about 

the mean and in this Appendix, this assumption is made. 

Statistical validity requires that the samples be randomly selected. Use of a random number 

generator, such as that found in MS ExcelTM is convenient for ensuring the sample is randomly 

selected. 

B.2.1 Point Estimation – Confidence and Precision 

When we use sampling to estimate an average value of an entire population, we are performing 

an activity know as point estimation. A value or ‘point’ that is estimated based on a sample is not 

the actual average value but rather, is a value that is “reasonably close” to the actual average 

value. The question, then, for the M&V practitioner is: “What do we mean when we say 

‘reasonably close’?” The question is answered using the following statistical terms. 

 Confidence: Confidence is fundamentally the same as probability, except that 

confidence refers to data already obtained, while probability refers to a future value. 

A confidence of 90% is commonly used in M&V. So, using our 90% example, when 

we refer to a confidence level, we are saying “I am 90% confident that the measured 

value is within my stated confidence interval.” 

 Confidence Interval (or Precision): Because the value estimated by sampling can not 

be expected to be the actual value, it is useful to state an interval in which we have 

confidence the true value lies. Confidence interval is also often referred to as 

precision. An M&V practitioner may state that they know the value has a precision of 

10%, which would mean that the “The estimated is within 10% of the true value.” 

Confidence and precision, then, are the values referred to when a 90/10 (or 80/20 or any other) 

criteria is specified. 

Example 

Imagine that we wish to measure the run-hours of a sample of equipment for a month. Imagine 

now that we measure 200 ‘on’ hours. If we are hoping to meet a 90/10 criteria, we are hoping 

that we can say, with a 90% probability, that our estimate is within 10% of the actual average run 

hours – that is, we are 9/10th sure the actual runtime is between 180 and 220 hours. 

B-2 Appendix B – Sampling Guidelines FEMP 
To graphically illustrate the concepts of normal distribution, confidence, and precision, Figure B2 shows a normal distribution with a confidence interval. Note that the confidence interval in the 

figure is defined by the error (+/- E). This error figure is discussed further below and is defined 

in Equation 1. 

Figure B-2 Normal distribution with confidence interval 

The confidence interval (or precision) and the confidence level are positively linked; for any 

sample, as the confidence interval increases (that is, the precision is reduced, and the range of 

possible values of the true mean increases) the confidence level increases. Or, looking at it 

another way, as the confidence interval is reduced, the confidence level is also reduced. 

B.2.2 Sample size calculation 

When sampling, it is the M&V professional’s job to meet certain levels of confidence and 

precision and to calculate the actual confidence and precision that resulted from a sampling 

exercise. In order to accomplish this analysis, it is helpful to start with Equation 1, the statistical 

equation for calculating the maximum error in the result. This value is also depicted as ‘E’ in 

Figure B-2. 

E z s = Equation 1 

n 

Where: 

E = maximum value of error 

s = the standard deviation of the sample1 

n = sample size 

1 Calculating the standard deviation is not defined herein. 

FEMP Appendix B – Sampling Guidelines B-3 
n , 

z = the z-statistic2, typically denoted as z α/2. Alpha (α), is equal to 1 – % confidence, and is used 

in most statistical references because it represents the top and bottom tails of the normal 

distribution, which together bound the confidence level. 

x − μ The z statistic is a variable that is calculated such that the following equation is true: z = s / 

where μ is the population mean (unknown) and x is the sample mean. Although the true mean, 

μ, is unknown, values of z, at various levels of confidence (1 – alpha) are known and are 

tabulated in many statistics books3. Values of z, assuming that the number of samples, n, is 

greater than 30 are 1.645 for 90% confidence and 1.282 for 80% confidence. 

Rearranging Equation 1 we can solve for the number of samples needed to ensure we are within 

a certain confidence interval: 

2 ⋅ 2

zs 

n = Equation 2 

E2 

Note in Equation 2 that the standard deviation of the sample, s, and the maximum allowable 

error, E, are in the units of measurement, (i.e.: hours or kW). The standard deviation, s, of the 

sample can be expressed as the coefficient of variation (or Cv), which is a fraction of the mean, as 

shown in Equation 3. 

Cv = s  Equation 3 

x 

Where: 

x is the sample mean 

In like manner the maximum error, E can also be expressed as a fraction of the mean, (precision), 

as shown in Equation 4. 

E P = Equation 4

x 

Substituting Cv and P into Equation 2, we get a unitless expression, as shown in Equation 5. 

z 

2 ⋅(/ s x ) 2 

n = Equation 5 

( / ) 2 E x 

Or expressed another way, 

2 A similar statistic, known as the t-statistic, which assumes a 't-distribution' rather than a normal distribution, and is a function of the number 

of samples can be substituted for the z static is a more correct approach. Although preferable, for small populations and which exhibit more 

'spread' than, for samples large than 30, use of the normal distribution gives a good approximation of the t-distribution. At smaller sample 

sizes slightly larger samples than are indicated using the normal distribution should be taken. 3 For example: Statistics, 5th Edition, by Robert S. Witte and John S. Witte or Probability and Statistics for Engineers, by Iwrin Miller and John 

E. Freund 

B-4 Appendix B – Sampling Guidelines FEMP 
z 

2 ⋅( )2 C 

n = v Equation 6 

( )2 P 

where 

Z = Z-statistic, 1.645 for 90% confidence, 1.282 for 80% confidence. 

P = Precision required, typically 10% or 20% 

Equation 6 is the basic equation used in sample group sizing. For small populations the sample 

size should be modified using the finite population correction shown in Equation 7. Typically, 

this correction is required when the population is less than 500. The finite population adjustment 

calculation gives n*

, which is the new sample size corrected for population size. 

Nn 

n* = Equation 7 

n + N 

Where 

n

* = sample size corrected for population size 

n = sample size for infinite population 

N = population size 

A critical step, that is often not completed, is the post-monitoring calculation of the actual 

standard deviation, coefficient of variation, and subsequent calculation of precision at various 

levels of confidence using the above equations. Ultimately, the maximum error (E) using 

Equation 1 should be calculated for various levels of confidence. No job is complete until these 

post-monitoring calculations are completed and reported. 

B.3 APPLICATION OF SAMPLING TO PROJECTS 

In the next sections considerations for the design and application of sampling are explored. 

The analysis steps to be used in conducting sampling are as follows: 

1. Compile and analyze the project, ECM and M&V Plan Information 

2. Designate sampling groups 

3. Select Samples 

4. Collect and analyze sample data 

5. Extrapolate the result from the sample over the entire population 

These steps are discussed below. 

B.3.1 Compile Project/ECM and M&V Plan Information 

In this step, the goal is to fully understand several things, including: the measure scope, the 

savings calculations quantifying the intended performance, the M&V method to be used and the 

data to be collected. Once the project is understood, an M&V practitioner can identify the 

calculation method and select variables to be sampled. 

FEMP Appendix B – Sampling Guidelines B-5 
In many energy conservation projects, it is often necessary to conduct both pre and post 

installation sampling. Regardless of whether the sampling is for evaluating the baseline or the 

post-retrofit conditions, the following information is typically required to properly assign usage 

groups and determine sample sizes. 

 Number of circuits, devices or LPCs. Identify and document the LPCs that are 

affected by the installation of ECMs. This should be provided in the form of an 

equipment inventory survey in which each line in the survey represents an LPC that 

includes descriptions of affected and proposed ECM nameplate data and quantity as 

well as location information. 

 Actual or change in load or wattage. Using the equipment inventory survey, the total 

change in load or wattage of the affected equipment by usage group can be computed. 

 Hours of operation. Sampling can be used to estimate the average hours of operation 

of the equipment. After the first sampling period (whether it is a year, month or week) 

of monitoring, the sampling result (actual Cv, Equation 3) should be used to compute 

the sample size. If it is expected that the equipment will be used in a significantly 

different in the current period than it was in the previous period, the estimate may be 

adjusted. 

B.3.2 Designate Sampling Groups 

Each device or LPC should be assigned to a usage group based on similarities in the parameter 

being determined, such as operating hours or connected load. If differences are expected, but 

there are too few usage groups, the resulting variance of the data may result in unsatisfactory 

confidence and precision levels. However, if too many usage groups are created, then excessive 

monitoring and too small of populations may occur. So, while considering the tradeoffs, usage 

groups should be developed from criteria such as: 

 Area type (for example; office, hallway, meeting room) 

 Annual operating hours 

 Timing / usage patterns of the operating hours, load, or other variable 

 Variability of operating hours, load, or other variable 

 Similar functional use 

Usage groups should be selected so that equipment or LPC’s are similar in that the sampled 

value (for example, hours or kW or kW/unit) is clustered around a specific estimate. When 

possible, avoid designating usage groups with populations that will yield less than 10 sample 

points. Examples of standard usage groups for fan motors with similar operating hours are 

HVAC ventilation supply fans, return fans, and exhaust fans. Examples of standard usage groups 

to determine lighting operating hours are fixtures with similar operating characteristics in offices, 

laboratories, hallways, stairwells, common areas, perimeters, storage areas, etc. 

Usage groups may be defined for the population on a building-by-building basis or across a 

number of buildings with similar usage areas. Monitoring can be done for a single or multiple 

buildings provided the usage groups are similar. Defining populations for multiple buildings is 

B-6 Appendix B – Sampling Guidelines FEMP 
acceptable and usually results in fewer monitoring points than if each building were considered 

separately. 

B.3.3 Select Samples 

Select desired confidence and precision levels. A 90/10 confidence/precision level is commonly 

used in M&V and is suggested. 

Establishing the Coefficient of Variation. Prior to selecting a sample, an estimate of the sampled 

coefficient of variation (Cv) must be made. A Cv of 0.5 has been historically recommended, and 

numerous projects have shown this to be reasonable guess for most applications. After the first 

year of monitoring, the coefficient of variation for each usage group can be projected from the 

results of the metering in the previous year. 

Having selected a confidence and precision level (90/10) and a Cv (perhaps 0.5), use Equation 6 

and 7, above, to calculate a sample size for each sampling group. Then, randomly select that 

number of samples from the population. It is strongly recommended that oversampling (at a 10% 

or greater level) be included in case of data collection device failure or unexpectedly high data 

scatter. 

Table B-1 illustrates the effect of confidence interval and precision on sample size. 

Table B-1 First-Year (Cv=0.5) Sample Size Table based on Usage Group Sampling4 

Precision 20% 20% 10% 

Confidence 80% 90% 90% 

Z-Statistic 1.282 1.645 1.645 

Population Size, N Sample Size, n* 

4 3 4 4 

8 5 6 8 

12 6 8 11 

16 7 9 13 

20 8 10 16 

25 8 11 19 

30 9 11 21 

35 9 12 24 

40 9 12 26 

45 9 13 28 

50 10 13 29 

60 10 14 32 

70 10 14 35 

90 10 15 39 

100 10 15 41 

125 11 15 45 

Table does not reflect oversampling. However, because data collection problems are very, very common and because of the departure from 

normal distribution for small samples (less than 30), over-sampling is critical. 

FEMP Appendix B – Sampling Guidelines B-7 

4 
Precision 20% 20% 10% 

Confidence 80% 90% 90% 

Z-Statistic 1.282 1.645 1.645 

Population Size, N Sample Size, n* 

200 11 16 51 

300 11 17 56 

400 11 17 59 

500 11 17 60 

infinite 11 17 68 

The samples in each usage group should be drawn at random5

, so that each member has an equal 

probability of being selected. 

If there is reason to believe that there are significant seasonal variations in the operation of the 

equipment, sufficient monitoring will need to be conducted to capture these variations. 

B.4 COLLECT AND ANALYZE SAMPLE DATA 

After metering has been completed, calculate mean, standard deviation and Cv (Equation 3) of 

the collected data for each usage group. If the actual Cv is equal to or less than the Cv originally 

assumed to calculate the sample size, then the confidence interval will have been met. 

Using Equation 1, calculate the maximum error and confidence interval (precision) at the 

selected confidence level. The confidence interval is then either accepted or, if it is too large, 

additional sampling (and possible sampling redesign) may be required. Once a sample has been 

selected and monitoring is done, the engineer has no say over the results, but can rather only 

report their findings and the level of confidence in the findings. 

B.5 EXTRAPOLATE THE RESULT FROM THE SAMPLE OVER THE ENTIRE POPULATION 

Once the sample mean and standard deviation are know, the result can be applied to the entire 

population by assuming the mean of the sample is true for the entire population. For example, if 

the mean of the sample is Y kW per unit, multiplying the mean of sample by the number of units 

in the entire population gives the total kW. 

Example 

Usage group sampling can be applied to one, or numerous, buildings that are similar in function, 

layout, and operation. 

Suppose that an ESCO is retrofitting lighting fixtures in a large office complex containing six 

buildings that have similar floor plans, functions, and operating schedules. As shown in Table B2, usage group sampling is applied to each of the four usage groups that appear in the six 

buildings, and the sample size is 76 points. 

5 Random selection of monitoring points is critical to avoid bias in the sample. Spreadsheet or other computer software should be used to 

generate a list of random numbers that may be used to place loggers on a given LPC. 

B-8 Appendix B – Sampling Guidelines FEMP 
Table B-2 Example Inputs for Calculation of Monitoring Sample for Complex A 

Usage Groups for 

Complex A Number of Lighting LPCs (N) 

Sample Size (90/20) 

n* +10% 

(rounded) 

BUILDING A-1 A-2 A-3 A-4 A-5 A-6 All 

Offices 400 350 450 440 350 450 2,440 19 

Hallways 600 550 450 440 550 450 3,040 19 

Meeting Rooms 150 200 200 160 200 200 1,110 19 

Other 200 220 180 180 220 180 1,180 19 

Total 1,350 1,320 1,280 1,220 1,320 1,280 7,770 76 

Note: Sample points (19 for each usage group, as shown above) should be distributed randomly across the sites. 

The sampling procedure varies depending on if it is the first monitoring period (no prior 

sampling data available) or if it is in subsequent monitoring periods: 

 First Monitoring Period: Using Table B-2 or Equations 6 and 7, assuming Cv of the 

hours = 0.5) to determine the sample size based on number of lighting areas (N) in 

each usage group, one obtains a total sample size of 76, as shown in Table B-3. 

 Subsequent Monitoring Periods: In the second and subsequent years, the same 

procedure will be used to calculate the sample size, except the actual value of Cv from 

the data collected in the previous year’s sample. 

Suppose that the ESCO obtains useful metered data for the required number of sample points and 

computes the standard errors of the actual measured operating hours for each usage group, where 

the actual values are presented in Table B-3. Using Equation 1, the standard error of the total 

estimated savings for each usage group can be calculated. The calculated values are shown in 

Table B-3. For two of the four usage groups, (hallways and meeting rooms), the actual metered 

standard error is greater than the allowable amount; thus the reliability requirement is not met for 

each usage group in the project. 

Table B-3 Monitoring Results Based on Usage Group Sampling 

in the First Performance Period 

Usage Groups 

for Complex A 

Number of 

Samples 

Metered 

Measured 

Annual Op

Hours 

Standard 

Deviation 

Maximum 

Error 

Allowable 

Error 

Actual 

Precision 

at 90% 

Confidence 

Reliability

Requirement

Met? 

Offices 19 5,256 1,314 495.9 1051.2 9.4% Yes 

Hallways 19 7,008 5,605 2115.3 1401.6 30.2% No 

Meeting Rooms 19 2,628 1,568 591.74 525.6 22.5% No 

Other 19 1,752 701 264.5 350.4 15.1% Yes 

Total 76 

For the subsequent monitoring periods a revised sample size is calculated from the metered data. 

The actual coefficients of variation (Equation 3) can be calculated from the standard deviation of 

FEMP Appendix B – Sampling Guidelines B-9 
operating hours in each usage group divided by the average measured hours. These values for Cv 

are used in Equations 6 and 7 to calculate a revised total sample size and allocation across usage 

groups. In this example, the revised rounded total sample size is 92. The allocation by usage 

group is presented in Table B-4. 

Table B-4 Revised Sample Requirements Using Usage Group Sampling 

Usage Groups for 

Complex A N 

Original

Sample

Size 

Measu 

red 

hours Actual Cv New Sample Size 

New Sample Size 

n* + 10% 

Offices 2,440 19 5,256 0.25 4 5 

Hallways 3,040 19 7,008 0.8 43 48 

Meeting Rooms 1,110 19 2,628 0.6 24 27 

Other 1,180 19 1,752 0.4 11 12 

Total 7,770 76 92 

B.5 FINAL NOTE 

The purpose of sampling is to monitor a representative sample of points rather than the entire 

population. The end result is to obtain reliable estimates within a specified precision and 

statistical confidence. Monitoring the specified number of points does not necessarily mean that 

compliance with project requirements has been obtained. Again, the job is not done until postmonitoring calculations are completed and reported. 

Sample problems may include improperly designated usage groups, incorrect sample design 

assumptions, or selection of nonrandom points, all of which may lead to sample-based estimates 

that are biased and/or unreliable within specified levels. Data logger failure is common, and 

therefore, over-sampling is usually necessary and recommended. It is critical to take care during 

the initial developmental stages to design a sample that truly reflects the project site. In any case, 

the M&V practitioner should use whatever reliable data is available. 

B-10 Appendix B – Sampling Guidelines FEMP 
Appendix C O&M Savings in Federal Energy Savings 

Performance Contracts 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts C-1 
C-2 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
How to Determine and Verify Operating 

and Maintenance (O&M) Savings in 

Federal Energy Savings Performance 

Contracts 

November 2007 

Prepared by: 

Operations and Maintenance Saving Determination 

Working Group 

Approved by: 

Federal ESPC Steering Committee 

Table of Contents

1. INTRODUCTION..............................................................................................................................................1

1.1 BACKGROUND .............................................................................................................................................1

1.2 EXISTING GUIDANCE...................................................................................................................................2

2. M&V APPROACH............................................................................................................................................3

2.1 CALCULATION METHOD..............................................................................................................................3

3. COST SCHEDULES..........................................................................................................................................4

3.1 SCHEDULE DO-3 – PERFORMANCE PERIOD CASH FLOW.............................................................................4

3.2 SCHEDULE DO-4 – FIRST YEAR ENERGY AND COST SAVINGS BY ECM......................................................4

4. M&V PLAN........................................................................................................................................................4

4.1 DEFINING & DOCUMENTING THE BASELINE................................................................................................5

4.2 MANAGING REPAIR & REPLACEMENT COSTS AND SAVINGS.......................................................................6

4.3 CALCULATING SAVINGS AND ADJUSTING BASELINES .................................................................................6

4.4 DEFINING ONGOING VERIFICATION ACTIVITIES..........................................................................................7

5. ANNUAL REPORTS.........................................................................................................................................7

5.1 VERIFYING AND REPORTING SAVINGS ........................................................................................................8

6. EXAMPLE SCENARIOS .................................................................................................................................8

6.1 EXAMPLE 1: O&M SAVINGS IS DUE TO ELIMINATION OF A MAINTENANCE CONTRACT. ...............................8

6.2 EXAMPLE 2: O&M SAVINGS IS DUE TO REDUCTION IN GOVERNMENT’S O&M STAFF .................................9

6.3 EXAMPLE 3: O&M SAVINGS DUE DECREASED NEED FOR REPLACEMENT EQUIPMENT ...............................10

7. LESSONS LEARNED .....................................................................................................................................13

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts iii 
iv Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
1. Introduction 

This document was developed by the Operations and Maintenance (O&M) Savings 

Determination Working Group of the Federal ESPC Steering Committee,1 and provides guidance 

on documenting and verifying O&M savings in federal Energy Savings Performance Contracts 

(ESPCs). 

A recent analysis of annual measurement and verification (M&V) reports from 100 ongoing 

Super ESPC projects showed that 21% of the reported savings were due to reductions in O&M 

costs. These energy-related cost savings, which can also include savings on repair and 

replacement (R&R) costs, can constitute a substantial portion of a project’s savings, yet O&M 

and R&R cost savings are often not as diligently verified or reviewed as energy savings. 

To support the Super ESPC program’s integrity, new projects must strengthen the basis for 

O&M cost savings. Documenting and verifying O&M or other energy-related savings will help 

ensure persistence of the savings for the contract term, avoid conflicts, and address oversight 

agency concerns. Key items identified for enhancement in new projects are baseline 

documentation, savings calculation methods, and verification of O&M and R&R savings. This 

document provides guidance in these areas for reoccurring energy-related cost savings, including 

the following. 

 An agency’s decision to commit ongoing funds from O&M budgets towards ESPC project 

payments has long-term impacts and must be documented adequately for future agency staff 

and oversight agencies. 

 The expectations regarding information required in Super ESPC project submittals is 

clarified, including cost schedules, M&V plans, and annual M&V reports. 

 “Savings” due to redirected labor or O&M efforts that do not reduce real expenses cannot be 

claimed as savings under the Super ESPC program. 

 Agencies should maintain O&M cost records that will be needed to document baseline O&M 

costs for a Super ESPC project. 

 Energy services companies (ESCOs) should include detailed information in annual M&V 

reports to clearly convey the source of O&M savings as well as sufficient data to verify any 

savings calculations performed. 

 Escrow accounts can help alleviate repair and replacement risk for both the ESCO and the 

agency. 

 Variable annual savings and cost streams can be accommodated, and will need to be 

addressed in the financing arrangement and reflected in the delivery order (DO) schedules. 

1.1 Background 

O&M and other energy-related cost savings are allowable in federal ESPCs, and are defined as 

reduction in expenses (other than energy cost savings) related to energy and water consuming 

equipment: 

1

 Information on the ESPC Steering committee is available at http://gaia.lbl.gov/federal-espc/ 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 1 
10 CFR § 436.31.2

 Energy cost savings means a reduction in the cost of energy and related 

operation and maintenance expenses, from a base cost established through a methodology set 

forth in an energy savings performance contract, utilized in an existing federally owned building 

or buildings or other federally owned facilities as a result of— 

(1) The lease or purchase of operating equipment, improvements, altered operation 

and maintenance, or technical services, or... 

Energy-related cost savings can result from avoided expenditures for operations, maintenance, 

equipment repair, or equipment replacement due to the ESPC project. This includes capital funds 

for projects (e.g., equipment replacement) that, because of the ESPC project, will not be 

necessary. Sources of energy-related savings include: 

 avoided current or planned capital expense, 

 transfer of responsibility for O&M and/or R&R to the ESCO, and 

 avoided renovation, renewal, or repair costs as a result of replacing old and unreliable 

equipment. 

Methods for estimating O&M savings resulting from changes to equipment have not been 

developed for the FEMP or IPMVP M&V Guidelines.3 However, the general rule to follow is 

that any savings claimed from O&M activities must result in a real decrease in expenditures. 

O&M budget baselines cannot be based on what the agency should be spending for proper 

O&M; baseline expenditures must be based on what the agency is spending. The agency’s O&M 

expenditures after implementation need to decrease for savings to be considered real. 

1.2 Existing Guidance 

Preceding the work of this group was the development of the DOE-FEMP Guidelines Regarding 

One-Time Savings Payments and One-Time Savings in ESPCs,

4

 dated 10/5/06, which was 

developed for the Federal ESPC Steering Committee. This document provides guidance 

regarding allowable one-time payments from agencies to contractors in federal ESPCs. 

The guidance allows avoided costs of programmed expenditures that become unnecessary due to 

implementation of an ESPC project, or savings that exceed contractually guaranteed savings, to 

be claimed as savings. Such savings must come from real and verifiable budgets, not from the 

perceived value that the agency receives for the reduction in O&M efforts. “Savings” due to 

redirected labor or O&M efforts that do not reduce real expenditures cannot be claimed as 

savings under the Super ESPC program. This guidance applies to recurring O&M savings as 

well. 

2

 Title 10, Code of Federal regulation part 436 Subpart B – Methods and Procedures for Energy Savings 

Performance Contracting. 3

 Information on FEMP M&V Guidelines: Measurement and Verification for Federal Energy Projects and 

International Performance Measurement Protocol is available through 

http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html. 4 http://www1.eere.energy.gov/femp/financing/superespcs_espcbasics.html 

2 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
This working group (WG) follows a former O&M WG that produced Planning and Reporting 

for Operations & Maintenance in Federal Energy Saving Performance Contracts.5 That 

guidance document covers the related topics of: 

 Properly allocating O&M and R&R responsibilities, and 

 Defining project-specific O&M reporting requirements. 

The FEMP M&V Guidelines v2.2 (Chapter 33) and Detailed Guide to Option A (Section 5.10) 

provide some discussion of issues associated with O&M and R&R savings, whereas the IPMVP 

does not. The Practical Guide to Savings and Payments describes a few related example 

scenarios. Within the current (2004) Super ESPC indefinite-delivery, indefinite-quantity (IDIQ) 

contracts, the risk and responsibility matrix provides an overview of key issues. The important 

relevant concepts from these documents have been incorporated herein. 

2. M&V Approach 

Determining the appropriate level of effort to invest in the M&V of energy-related cost saving is 

the same as for energy cost savings: The level of M&V rigor will vary according to (a) the value 

of the project and its expected benefits, and (b) the risk in not achieving the benefits. A graded 

approach towards measuring and verifying O&M and R&R savings is advised. There is one 

primary method for calculating O&M savings, which is detailed below. 

2.1 Calculation Method 

The most common approach for calculating energy-related cost savings involves the same 

concepts as those used for determining energy savings: Performance-period labor and equipment 

costs are subtracted from adjusted baseline values, as shown in the equation below. 

O&M Cost Savings = {Adjusted Baseline O&M Costs} – {Actual O&M Costs} 

This method is appropriate for most projects, and is especially simple to apply to those that 

include elimination of a maintenance contract or reduction in government staff. For other 

projects, costs for replacement parts can often be determined from purchase records and 

averaged to arrive at an annual baseline value. Labor costs for particular services may be more 

difficult to quantify since service records may not be representative or may lack sufficient detail. 

For example, parts costs for replacement light bulbs, ballasts, or steam traps are relatively easy to 

quantify from purchase records. Labor costs to replace lamps, ballasts, or steam traps are more 

difficult to quantify because time spent on these specific tasks may not be well documented. 

Additionally, labor reductions on these specific tasks may not qualify as “real savings” if labor 

expenditures do not decrease. Although the agency receives value in the sense that labor is freed 

up to perform other useful tasks, this value may not result in cost savings that can be paid to the 

ESCO. 

Baseline O&M and R&R costs should be based on actual budgets and expenditures to the 

greatest extent practical. This essentially “measures” the baseline consumption of these parts or 

services. Estimated expenditures should be avoided if at all possible. In cases where such 

information is not available and must be estimated, parts and labor costs can be derived from 

5 http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 3 
resources such as R.S. Means6

 or other methods. Estimated expenditures should be adjusted to 

reflect any site-specific factors that would affect costs. 

Example applications of this method are demonstrated in Examples 1, 2, and 3 in Section 6. 

3. Cost Schedules 

O&M and R&R savings and costs are found in two places in the financial schedules for a Super 

ESPC project: performance-period ESCO expenses in schedule DO-3, and first year energy and 

cost savings by energy conservation measure (ECM) in schedule DO-4. 

3.1 Schedule DO-3 — Performance-Period Cash Flow 

Schedule DO-3 presents the cash flow for the Super ESPC project and includes the details of all 

performance-period expenses incurred by the ESCO over the course of the project. 

Performance-period expenses are delineated by contract year in the following line items: 

Management/Administration; Operation; Maintenance; Repair and Replacement; Measurement 

and Verification; Permits and Licenses; Insurance; and Property Taxes. Schedule DO-3 shows all 

performance-period costs incurred by the ESCO, whereas baselines and Agency savings are 

found in DO-4. 

3.2 Schedule DO-4 — First Year Energy and Cost Savings by ECM 

Schedule DO-4 presents a summary of the estimated annual cost savings that will be achieved by 

each of the ECMs included in a Super ESPC project. This schedule documents the changes in 

costs to the Agency during the first year. Costs for subsequent contract years can be determined 

by applying the appropriate escalation rates, if used. 

First year savings (or increase in use or costs) due to each ECM are quantified for all energy and 

commodity sources along with their individual cost impacts. Line items for each ECM include 

electric energy savings, electric cost savings, demand savings, demand cost savings, other 

energy-related and O&M cost savings, and others. Savings in this table are positive, while 

additional costs are recorded as negative values. 

4. M&V Plan 

The M&V Plan Outline for Super ESPCs contains the following section for documenting O&M 

and other cost savings for each ECM: 

Excerpt from SuperESPC M&V Plan Outline for each ECM: 

6

 Means Facilities Maintenance & Repair 2007 Book is available through 

http://www.rsmeans.com/bookstore/detail.asp?sku=60307. 

4 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
3.4 Operations and Maintenance and Other Cost Savings 

3.4.1 Provide justification for O&M cost savings, if applicable. 

 Describe how savings are generated 

 Detail cost savings calculations. 

 Provide performance period O&M cost savings adjustment factors, if different 

from in Whole Project Data / Global Assumptions section. 

3.4.2 Provide justification for other cost savings, if applicable. 

 Describe how savings are generated. 

 Detail cost savings calculations. 

 Provide performance period adjustment factors, if different from in Whole Project 

Data / Global Assumptions section. 

Already required in the M&V plan is information on how the O&M and other cost savings 

(including R&R) are generated and calculated. Although not explicitly called out in the M&V 

plan outline, this information should include baseline documentation, savings calculation 

methods, and a plan for verification of savings. The M&V plan should clearly indicate how the 

agency’s expenditures will be directly reduced. 

4.1 Defining and Documenting the Baseline 

In general, the baseline labor and equipment costs can be determined from the following: 

• Historical data on cost of equipment parts and consumables 

• Records of historical labor hours based on work orders and timesheet systems 

• Labor rates, including benefits and overhead as well as any part-time or temporary labor 

services 

• Existing service contracts for O&M services 

Adequate documentation in the M&V plan will include the following: 

• Identification of key variables affecting the realization of savings 

• Specification of how the Agency’s expenditures will directly be reduced by the 

implementation of the measure or O&M contract 

• Definition of the O&M performance standard (e.g., annual chiller tube cleaning or lamp 

replacements within 48 hours of burnouts) 

An issue in defining the baseline is establishing the time period for analysis. How far back do 

you go to define the O&M baseline? What if equipment has needed an atypically high level of 

maintenance during the last years of service? This decision requires engineering judgment, and 

will depend on the availability of historic data. The fundamental goal is to provide transparency 

in the decision making process by thoroughly documenting why a specific method was chosen, 

what data was available and used, and how cost savings were determined. 

In general, it is recommended to use as much historical data as possible when defining the 

baseline conditions. Ideally, maintenance parts and/or labor should be determined for the life of 

the equipment, and then an average annual cost can be calculated. If the O&M savings vary 

dramatically from year to year, it may not be appropriate to use an average cost. This is a site-byFEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 5 
site decision since overall savings from the ESPC must cover payments every year. The key is 

making sure that historic costs would continue if not for the project. Conducting a “reality 

check” on historic O&M costs using RS Means Facility Maintenance and Cost Data7 or other 

data is recommended to ensure that site data are realistic. Actual site data should be used 

wherever possible. 

For sites that do not have detailed O&M records and where the ESCO will be assuming some 

O&M responsibility, the Agency can allocate a portion of their O&M budget for materials to 

cover ESCO services. This approach requires a long-term commitment from the Agency, and 

could be regretted in subsequent years. 

Another situation that sometime arises is when baseline O&M procedures are unacceptable or 

substandard. Projects can increase O&M costs over the baseline conditions by adding new 

equipment or by requiring certain preventative maintenance activities that were not previously 

conducted. Since only real budgetary savings can be claimed, O&M “savings” can sometimes be 

negative if additional costs are incurred. The negative savings should be shown in cost schedule 

DO-4, just as savings would be. 

4.2 Managing Repair & Replacement Costs and Savings 

In some cases, a site’s O&M budget may include general funding for emergency R&R. 

Sometimes this is the only R&R budget, and it is not allocated for specific equipment (e.g., 

boiler X will be replaced in year Y). For Agencies with a sufficient unspecified R&R fund, it 

may be possible to claim one-time or periodic avoided material costs and/or subcontracted labor 

fees. Alternatively, if the ESCO is assuming responsibility for some fraction of the infrastructure, 

a justified portion of the budget attributed to material replacement and contracted labor cost 

could be allocated as an annual savings. In both cases, the rationale for claiming the cost savings, 

the source of savings, and the specific year(s) of implementation must be carefully documented. 

In some cases an escrow account is established to cover future R&R costs for the new 

equipment. Use of an escrow account can reduce risks to both the agency and ESCO related to 

future R&R. An ESCO can allocate a predetermined portion of the payment stream (DO-3 line 

item) into a dedicated R&R fund. Use of this fund must be related to the equipment installed 

under the ESPC, and the funds return to the government if they are not used. Draw-downs of 

funds can be mutually determined by the ESCO and agency as repairs are required. Use of an 

escrow account limits the financial exposure to the party accepting overall responsibility for 

R&R of the new equipment. 

4.3 Calculating Savings and Adjusting Baselines 

Documentation of calculation methods should include how the baseline and actual O&M and 

R&R budgets will be established and calculated, including costs for labor and materials for 

7

Means Facilities Maintenance & Repair 2007 Book is available through 

http://www.rsmeans.com/bookstore/detail.asp?sku=60307 

6 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
equipment replacement, equipment maintenance and repairs, and consequential items such as 

lost energy savings or other effects. Additional details should be included such as hourly labor 

costs, labor inflation rates, hours required per specific task, and equipment lifetimes. 

The M&V plan should also describe how adjustments will be made to savings calculations to 

account for changes at the facility. Factors such as changes in operating hours, occupancy, loads, 

and equipment life will affect HVAC system maintenance costs. If baseline cost data will be 

adjusted, the reasoning and methodology should be included. 

It is necessary to define how actual costs will be accounted for during the performance period. 

Specify what, if any, additional management oversight or logs will be maintained, the nature and 

frequency of entries, and how the results will be interpreted. Examples include logging of 

equipment failures and frequencies, equipment down time, and complaints. 

Best practice is to use standard accounting procedures that allow for direct comparison of 

baseline to performance period costs (apples to apples). Another option may be to use a “control 

group” facility which is similar to the project site to determine what the O&M costs would have 

been in the absence of the ECM. 

4.4 Defining Ongoing Verification Activities 

The M&V plan defines all ongoing verification activities and should include the following: 

• How savings persistence will be ensured 

• How compliance with performance standards for the facility will be verified 

• What will occur if performance standards are not met 

• How savings will be counted if site behavior changes, and what will occur if actual O&M 

costs increase 

• How long O&M savings will last. (Often, cost savings should only be scheduled for part of 

the contract period.) 

5. Annual Reports 

O&M and R&R savings must be adequately verified and reported during the performance period. 

The Annual Report outline for Super ESPC projects contains the following section for 

documenting the O&M savings for each ECM: 

Excerpt from SuperESPC Annual Report Outline for each ECM: 

2.4 Details of O&M and Other Savings (if applicable) 

2.4.1 Describe source of savings, if applicable. 

 Describe verification activities. 

 Provide performance period O&M savings adjustment factors, if applicable. 

2.4.2 Describe source of other savings, if applicable. 

 Describe verification activities. 

 Provide performance period adjustment factors, if applicable. 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 7 
5.1 Verifying and Reporting Savings 

Although not explicitly called-out in the Annual Report outline, adequate documentation should 

include the following: 

• Dates and times of on-site verification activities (including government witnessing if 

appropriate) 

• Review of key variables affecting the realization of savings 

• Verification that standards of performance have been met 

Baseline budgets and service contract fees may be escalated to account for inflation during the 

contract term. Escalation rates need to be documented and should come from sources such as the 

National Institute of Standards and Technology, which estimates such factors for life-cycle 

costing. Guidance on performance period adjustment factors, which are intended to account for 

inflation, are provided through FEMP.8 

6. Example Scenarios 

Three example scenarios are provided to illustrate some of the common sources of O&M savings 

in ESPC projects: 

1. Elimination of a maintenance contract 

2. Reduction in government’s staff 

3. Decreased need for replacement equipment 

6.1 Example 1: O&M savings from elimination of a maintenance 

contract 

Prior to the implementation of the ESPC, space conditioning at the facility was provided by 

aging boilers and chillers that were maintained by a third party under a maintenance contract. 

The ESPC replaces the aging equipment with newer, more efficient equipment, which the ESCO 

maintains for the life of the contract. 

This is probably the easiest type of O&M savings to verify, and the least controversial. Since a 

maintenance contract will be eliminated, O&M cost savings can be claimed. The annual O&M 

savings will the cost of the maintenance contract during the baseline year, inflated by a constant 

amount each year to account for price inflation, as outlined in the eliminated service contract. 

There can be little disagreement that these cost savings are achieved, since the former equipment 

is no longer in service and no longer requires maintenance. O&M savings are calculated using 

the following equation: 

O&M Cost Savings = {Adjusted Baseline O&M Costs} – {Actual O&M Costs} 

8

 NIST includes the rates in two tools it produces for FEMP annually every April, the Building Life-Cycle Cost 

(BLCC) tool and the Energy Escalation Rate Calculator (EERC). Both BLCC and the EERC can be downloaded 

from the FEMP website, listed under software tools 

(http://www1.eere.energy.gov/femp/information/download_blcc.html). 

8 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
The O&M savings is then the difference between the annual cost of the old contract, adjusted for 

inflation, and the actual maintenance costs, which will be zero. The first step is to determine the 

site’s current costs for the service contract that will be eliminated. A review of the service 

contract showed costs of $22,250 in the baseline year, with an annual increase in fees of 1.5%. 

During the performance period, the adjusted baseline costs will be the current costs inflated by a 

constant amount each year (1.5%). The actual O&M costs for these staff in the performance 

period are expected to be zero. The savings stream from these savings for a ten-year period is 

shown in Error! Reference source not found.Table 1. 

Table 1: O&M Maintenance Savings from Eliminated Service Contract 

Annual System Maintenance Cost 

Year Existing Cost Post-Install Cost Net Savings 

0 $22,250 

1 $22,806 $0 $ 22,806 

2 $23,376 $0 $ 23,376 

3 $23,961 $0 $ 23,961 

4 $24,560 $0 $ 24,560 

5 $25,174 $0 $ 25,174 

6 $25,803 $0 $ 25,803 

7 $26,448 $0 $ 26,448 

8 $27,109 $0 $ 27,109 

9 $27,787 $0 $ 27,787 

10 $28,482 $0 $ 28,482 

 $255,507 

Verification of these savings includes confirmation that the equipment and related O&M contract 

was eliminated in the post-installation or year 1 report. All following performance reports will 

thoroughly document the source of savings. 

6.2 Example 2: O&M savings from reduction in government’s O&M 

staff 

Prior to the implementation of the ESPC, space conditioning at the facility was provided by 

aging boilers and chillers that were maintained by government employees. The ESPC replaces 

the aging equipment with newer, more efficient equipment, which the ESCO will maintain. As a 

result of this retrofit, three of the Agency’s maintenance staff members will no longer be 

required. Two staff members will be taking retirement, while one other will be transferred to 

another division within the Agency. 

Since there will be a reduction in the government’s maintenance staff, O&M savings can be 

claimed. O&M savings are calculated using the following equation: 

O&M Cost Savings = {Adjusted Baseline O&M Costs} – {Actual O&M Costs} 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 9 
The first step is to determine the site’s current costs for the staff members that will be eliminated. 

A review of the site’s accounting records indicates that the salaries and benefits of the three 

eliminated employees cost the agency $200,500 the last year. This is the baseline costs for year 

0. During the performance period, the adjusted baseline costs will be the sum of the annual 

salaries and benefits of the staff members who will be eliminated inflated by a constant amount 

each year (2% in this case). The actual O&M costs for these staff in the performance period are 

expected to be zero. 

The savings stream from these savings for a ten-year period is shown in Table 2, which assumes 

that a 2% annual salary increase would have occurred. 

Table 2 : Labor Cost Savings for 10 Year Contract 

Annual System Labor Costs 

Year Existing Cost Post-Install Cost Net Savings 

0 $200,500 

1 $204,510 $0 $204,510 

2 $208,600 $0 $208,600 

3 $217,028 $0 $217,028 

4 $221,368 $0 $221,368 

5 $225,796 $0 $225,796 

6 $230,311 $0 $230,311 

7 $234,918 $0 $234,918 

8 $239,616 $0 $239,616 

9 $244,408 $0 $244,408 

10 $249,297 $0 $249,297 

 $2,275,852 

The first-year or post-installation verification of the O&M savings will confirm maintenance 

staff reductions and that the ESCO has assumed prescribed O&M activities. All following 

performance reports will thoroughly document the source of savings and confirm that the ESCO 

is continuing to perform the O&M activities. 

A problem could arise if the maintenance staff is not reduced. Then it would be necessary to 

determine what new O&M responsibilities the facility has taken on, or savings should not be 

claimed. For example, it could be that a new building was constructed. During the performance 

period, it is important to establish that any increased maintenance was not due to the equipment 

installed under the ESPC. In some cases this may require examination of service call records 

from before and after the implementation of the ESPC. 

6.3 Example 3: O&M savings from decreased need for replacement 

equipment 

Material-related savings frequently result from lighting and lighting controls projects. In this 

example, the agency is responsible for maintenance both before and after the equipment 

10 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
installation. Although there is no reduction in staff for which to claim labor savings, there will be 

cost savings on replacement materials. 

For this project, lighting maintenance savings will result from the following: 

1. Reduced material requirements (e.g., lamps, ballasts) 

• Reduced operating time — Control measures increase equipment life by reducing 

the burn time of lamps and ballasts. 

2. Warranty-related savings — Newly installed lamps, ballasts, and fixtures come with a 

manufacturer warranty of 3 years. 

The reduction in equipment costs is determined by calculating the difference between what 

replacement parts for the baseline would cost and what parts for the new lighting system cost. 

O&M Cost Savings = {Adjusted Baseline O&M Costs} – {Actual O&M Costs} 

For this project, the following assumptions apply: 

1. Lamp and ballast costs and expected lifetimes are defined in Table 3. 

Table 3: Costs and Lifetimes for Lighting Equipment 

Equipment 

Rated Life 

(hours) Cost per unit 

4' T12 lamp (existing) 20,000 $ 1.98 

2 lamp EE magnetic ballast 

(existing) 100,000 $ 15.63 

2 lamp RO electronic ballast (new) 75,000 $ 12.30 

4' T8 lamp (new) 24,000 $ 2.19 

2. Increased cycling of the lights resulting from the occupancy sensors has a negligible 

effect on lamp/ballast life. 

3. The entire project (including all other measures) has a performance period of 10 years. 

4. Escalation of materials costs will be 2.5% per year. 

The first step is to determine the site’s costs for replacement lighting equipment. A review of the 

site’s records indicated that replacement lighting equipment for the fluorescent T12s totaled 

$5100 and $5450 the last two years, with an average of $5275. A reality check based on the 

expected useful service life of the equipment and known operating hours was then conducted to 

confirm that this value is reasonable, as shown in Table 4. 

Table 4 : Predicted Baseline Material Costs 

Baseline Qty Cost 

Lighting equipment (2-Lamp T-12 fixtures w/ 

EE magnetic ballast): 5,000 

Run Hours: 3,000 

Lamp replacements per year: 1,500 $ 2,970 

Ballast replacements per year: 150 $ 2,345 

Annual Cost: $ 5,315 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 11 
The third step is to estimate the expected replacement equipment costs for the post-installation 

scenario. These calculations are shown in Table 5. 

Table 5: Predicted Post-Installation Material Costs 

Post-Install Qty Cost 

Lighting equipment (2-Lamp T-8 fixtures w/ 

Electronic ballast): 5,000 

Run Hours (with occupancy controls): 2,250 

Lamp replacements per year: 938 $ 2,051 

Ballast replacements per year: 150 $ 1,845 

Annual Cost: $ 3,896 

Next, the cash-flow from the material savings are determined, accounting for the lamp and 

ballast warranty that comes with the new lighting system. Under this warranty, all replacement 

lamps and ballasts will be provided by the equipment manufacturer at no cost for the first three 

years. Using the inflation rate of 2.5% for material costs, the material maintenance cost savings 

for the 10-year project term would vary year to year, as shown in Table 6. 

Annual verification of the O&M savings will include the Agency reporting the actual number 

and cost of replacement lighting equipment to the ESCO, who will compare the data to what 

would have been required in the baseline case. 

12 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
Table 6: Annual Cost Savings on Replacement Parts 

Annual System Equipment Cost 

Note Year 

Existing 

Cost 

PostInstall 

Cost 

Net 

Savings 

0 $5,275 

Warranty Period 1 $5,407 $0 $5,407 

Warranty Period 2 $5,542 $0 $5,542 

Warranty Period 3 $5,681 $0 $5,681 

Yr 0 costs ($3,896) escalated to Year 4 4 $5,823 $4,300 $1,522 

5 $5,968 $4,408 $1,560 

6 $6,117 $4,518 $1,599 

7 $6,270 $4,631 $1,639 

8 $6,427 $4,747 $1,680 

9 $6,588 $4,865 $1,722 

10 $6,752 $4,987 $1,766 

 $ 28,120 

7. Lessons Learned 

Some lessons learned from other projects provide some key points to keep in mind: 

 An agency’s decision to commit ongoing funds from O&M budgets towards ESPC project 

payments has a long-term impact and must be documented adequately for future agency staff 

in both the M&V plan and the annual reports. Information should include why a specific 

method was chosen, what data was available and used, and how cost savings were 

determined. 

 Operations & maintenance budget baselines cannot be based on what the agency should be 

spending for proper O&M; baseline expenditures must be based on what the agency is 

spending. The agency’s O&M expenditures after implementation need to decrease for 

savings to be considered real. 

 A graded approach towards measuring and verifying O&M and R&R savings is advised 

according to (a) the value of the project and its expected benefits, and (b) the risk in not 

achieving the benefits. 

 Agencies should maintain O&M cost records that will be needed to document baseline O&M 

costs. These records should be included in the Super ESPC proposal. 

 ESCOs should include detailed information in annual reports to clearly convey the source of 

O&M savings as well as sufficient data to verify any savings calculations performed. 

 Escrow accounts can help alleviate R&R risk for both the ESCO and agency. 

 Variable annual savings and cost streams can be accommodated and will need to be reflected 

in the DO schedules. 

 Using an Option B or continuous measurement approach to tracking ongoing O&M savings 

can be cumbersome to the agency because of the required record keeping and accounting for 

ongoing changes at the site. 

FEMP Appendix C – O&M Savings in Federal Energy Savings Performance Contracts 13 
14 Appendix C – O&M Savings in Federal Energy Savings Performance Contracts FEMP 
Appendix D M&V Plan and Reporting Outlines 

FEMP Appendix D – M&V Plan and Reporting Outlines D-1 
D-2 Appendix D – M&V Plan and Reporting Outlines FEMP 
M&V Plan and Savings Calculation Methods Outline 

v. 1.0, Nov. 2004 

[Note: All content c

alle

d for in this outline is required (if applicable), except items noted as opti

1. Executive Summary / M&V Overview & Proposed Savings Calculations 1.1 Proposed Annual Savin

gs Overview 

Table 1. Proposed Annual Savin

gs Overview 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric de

mand, natural gas, fuel oil, c

ECM 

Total energy 

savings 

(MBtu/yr) 

Electric energy 

savings 

(kWh/yr) 

Electric demand 

savings 

(kW/yr)* 

Natural gas 

savings 

(MBtu/yr) 

Water savings 

(gallons/yr) 

Other energy 

savings 

(MBtu/yr) 

Total energy & 

water cost 

savings, Year 1 

($/yr) 

Oth

rela

cos

Ye

Total savings 

First Year Guaranteed Cost Savings: $ 

Notes 

*A

nnual electric demand savings (

kW/yr) is the s

u

m of t

he monthl

y demand savi

ngs. 

MBtu=1

06 Btu. 

If energ

y is reported in units other than MBtu, 

provide a con

version factor to MBtu for li

n

k to 

delivery order schedules (e.g., 0.003413 

D-3 Appendix D – M&V Plan and Reporting Outlines 
1.1.1 Site Use and Savings Overview (Optional) 

• Fill in Table 1A or provide equivalent information. 

Table 1A. Site Use and Savings Overview (Optional) 

Total energy (MBtu/yr) Electric energy (kWh/yr) Electric demand (kW/yr)* Natural gas (MBtu/yr) Water (gallons/yr) 

Total proposed project savings Usage for entire site** % Total site usage saved Project square footage (KSF) Total site square footage (KSF) % Total site area affected Notes 

MBtu=106 Btu 

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. **Define usage period. KSF = 103 square feet. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g., 0.003413 

D-4 Appendix D – M&V Plan and Reporting Outlines 
1.2 M&V Plan Summary 

Table 2. M&V Plan Summary 

ECM. ECM Description M&V Option 

Used* Summary of M&V Plan 

* M&V options include A, B, C, and D. Guidelines include M&V Guidelines: Measurement & Verification for 

Federal Energy Projects, Version 2.2 (www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm); and 

International Performance Measurement & Verification Protocol (IPMVP), Volume I, March 2002 

(www.ipmvp.org). 

2. Whole Project Data / Global Assumptions 

2.1 Risk & Responsibility 

2.1.1 Summarize allocation of responsibility for key items related to M&V. 

• Reference location of Risk & Responsibility Matrix1 (if required). 

2.2 Energy, Water, and Operations & Maintenance (O&M) Rate Data 

2.2.1 Detail baseline energy and water rates. 

2.2.2 Provide performance period rate adjustment factors for energy, water, and O&M cost 

savings, if used. 

2.3 Schedule & Reporting for Verification Activities 

2.3.1 Define requirements for witnessing of measurements during: 

• Baseline development 

• Post-installation verification activities 

• Performance period 

2.3.2 Define schedule of verification reporting activities. 

Table 3. Schedule of Verification Reporting Activities 

Item aRecommended time of submission 

a

Owner’s review and 

acceptance period 

Post-Installation Report 30 to 60 days after acceptance 30 days 

Annual Report 30 to 60 days after annual 

performance period 

30 days 

a

Times are recommended based on industry practice; modify as needed. 

1

 The Risk/Responsibility Matrix is Attachment 5 of the Super ESPC IDIQ contract and is also available on FEMP’s 

web site at www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-5 
2.3.3 Define content and format of reports: 

• Post-installation report. 

Use Post-Installation Report Outline1

. 

• Annual M&V reports. 

Use Annual Report Outline1

. 

• Interval M&V reports 

Develop report outline if needed. 

2.4 Operations, Preventive Maintenance, Repair, and Replacement Reporting Requirements 

2.4.1 Define Government and ESCO reporting requirements: 

• Summarize key verification activities and reporting responsibilities of government 

and ESCO on operations, preventive maintenance, repair, and replacement items 

from details in ECM specific M&V Plans. 

• Define content of reports and reporting schedule. 

2.5 Construction Period Savings 

2.5.1 Provide overview of how construction period savings will be calculated, if applicable. 

2.6 Status of Rebates 

• Include if applicable. 

2.6.1 Provide a summary of the source of any third-party rebates or incentives provided on this 

project. 

2.6.2 Provide status of any third-party rebates or incentives. 

2.7 Dispute Resolution 

2.7.1 Describe plan for resolving disputes regarding issues such as baseline, baseline 

adjustment, energy savings calculation, and the use of periodic measurements. 

1

 Electronic copies of Post-Installation Report Outline and Annual Report Outline are available at www. 

eere.energy.gov/femp/financing/superespcs_mvresources.cfm. 

D-6 Appendix D – M&V Plan and Reporting Outlines FEMP 
3. ECM [Name / #] M&V Plan and Savings Calculation Methods 

• Develop section for each ECM. 

3.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM 

3.1.1 Summarize the scope of work, location, and how cost savings are generated. 

• Describe source of all savings including energy, water, O&M, and other (if 

applicable). 

3.1.2 Specify the M&V guideline and option used1

. 

3.1.3 Provide an overview of M&V Activities for ECM. 

• Explain intent of M&V plan, including what is being verified. 

3.1.4 Provide an overview of savings calculations methods for ECM. 

• Provide a general description of analysis methods used for savings calculations. 

3.2 Energy and Water Baseline Development 

3.2.1 Describe in general terms how the baseline for this ECM is defined. 

3.2.2 Describe variables affecting baseline energy or water use. 

• Include variables such as weather, operating hours, set point changes, etc. 

• Describe how each variable will be quantified, i.e. measurements, monitoring, 

assumptions, manufacturer data, maintenance logs, engineering resources, etc. 

3.2.3 Define key system performance factors characterizing the baseline conditions. 

• Include factors such as comfort conditions, lighting intensities, temperature set 

points, etc. 

3.2.4 Define requirements for government witnessing of measurements if different than whole 

project data requirements included in Section 2.3. 

3.2.5 Provide details of baseline data collected, including: 

• Parameters monitored/measured 

• Details of equipment monitored, i.e. location, type, model, quantity, etc. 

• Sampling plan, including details of usage groups and sample sizes 

• Duration, frequency, interval, and seasonal or other requirements of measurements 

• Personnel, dates, and times of measurements 

• Proof of government witnessing of measurements (if required) 

1

 Guidelines include M&V Guidelines: Measurement & Verification for Federal Energy Projects, Version 2.2 

(www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm); and International Performance Measurement 

& Verification Protocol (IPMVP), Volume I, March 2002 (www.ipmvp.org). M&V options include A, B, C, and D. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-7 
• Monitoring equipment used 

• Installation requirements for monitoring equipments (test plug for temperature 

sensors, straight pipe for flow measurement, etc.) 

• Certification of calibration / calibration procedures followed 

• Expected accuracy of measurements/monitoring equipment 

• Quality control procedures used 

• Form of data (.xls, .cvs, etc.) 

• Results of measurements (attach appendix and electronic forma as necessary) 

• Completed data collection forms, if used 

3.2.6 Provide details of baseline data analysis performed, including: 

• Analysis using results of measurements 

• Weather normalized regressions 

• Weather data used and source of data 

3.3 Proposed Energy & Water Savings Calculations and Methodology 

3.3.1 Provide detailed description of analysis methodology used. 

• Describe any data manipulation or analysis that was conducted prior to applying 

savings calculations. 

3.3.2 Detail all assumptions and sources of data, including all stipulated values used in 

calculations. 

3.3.3 Include equations and technical details of all calculations made. (Use appendix and 

electronic format as necessary.) Include description of data format (headings, units, etc.). 

3.3.4 Details of any savings or baseline adjustments that may be required. 

3.3.5 Detail energy and water rates used to calculate cost savings. 

• Provide performance period energy and water rate adjustment factors, if different 

from in section 2.2.2. 

3.3.6 Detail proposed annual savings for this energy conservation measure for performance 

period. 

• Summarize information in Table 4. 

3.4 Operations and Maintenance and Other Cost Savings 

3.4.1 Provide justification for O&M cost savings, if applicable. 

• Describe how savings are generated 

• Detail cost savings calculations. 

• Provide performance period O&M cost savings adjustment factors, if different from 

in section 2.2.2. 

D-8 Appendix D – M&V Plan and Reporting Outlines FEMP 
3.4.2 Provide justification for other cost savings, if applicable. 

• Describe how savings are generated. 

• Detail cost savings calculations. 

• Provide performance period adjustment factors, if different from in section 2.2.2. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-9 
3.5 Proposed Annual Savings For ECM 

Table 4. Proposed Annual Savings For ECM 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

Total 

energy use 

(MBtu/yr) 

Electric 

energy use 

(kWh/yr) 

Electric 

energy 

cost, Year 

1 ($/yr) 

Electric 

demand* 

(kW/yr) 

Electric 

demand 

cost, Year 

1 ($/yr) 

Natural gas 

use 

(MBtu/yr)* 

Natural gas 

cost, Year 

1 ($/yr) 

Water use 

(gallons/yr) 

Water cost, 

Year 1 

($/yr) 

Other 

energy use 

(MBtu/yr) 

Oth

ener

cost, 

1 ($/

Baseline use Postinstallation use Savings Notes

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. MBtu = 106 Btu.If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g., 0.003413 MBtu/kWh).

D-10 Appendix D – M&V Plan and Reporting Outlines 
3.6 Post-Installation M&V Activities 

3.6.1 Describe the intent of post-installation verification activities, including what will be 

verified. 

3.6.2 Describe variables affecting post-installation energy or water use. 

• Include variables such as weather, operating hours, set point changes, etc. 

• Describe how each variable will be quantified, i.e. measurements, monitoring, 

assumptions, manufacturer data, maintenance logs, engineering resources, etc. 

3.6.3 Define key system performance factors characterizing the post-installation conditions 

such as lighting intensities, temperature set points, etc. 

3.6.4 Define requirements for government witnessing of measurements if different than whole 

project data requirements included in Section 2.3. 

3.6.5 Provide details of post-installation data to be collected, including: 

• Parameters to be monitored 

• Details of equipment to be monitored (location, type, model, quantity, etc.) 

• Sampling plan, including details of usage groups and sample sizes 

• Duration, frequency, interval, and seasonal or other requirements of measurements 

• Monitoring equipment to be used 

• Installation requirements for monitoring equipment 

• Calibration requirements / procedures 

• Expected accuracy of measurements/monitoring equipment 

• Quality control procedures to be used 

• Form of data to be collected (.xls, .cvs, etc.) 

• Sample data collection forms (optional) 

3.6.6 Detail data analysis to be performed. 

3.7 Performance Period Verification Activities 

3.7.1 Describe variables affecting performance period energy or water use. 

• Include variables such as weather, operating hours, set point changes, etc. 

• Describe how each variable will be quantified, i.e. measurements, monitoring, 

assumptions, manufacturer data, maintenance logs, engineering resources, etc. 

3.7.2 Define key system performance factors characterizing the performance period conditions. 

• Include factors such as comfort conditions, lighting intensities, temperature set 

points, etc. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-11 
3.7.3 Describe the intent of performance period verification activities – what will be verified. 

3.7.4 Provide detailed schedule of performance period verification activities and inspections. 

3.7.5 Define requirements for government witnessing of measurements if different than whole 

project data requirements included in Section 2.3. 

3.7.6 Provide details of performance period data to be collected, including: 

• Parameters to be monitored 

• Details of equipment to be monitored (location, type, model, quantity, etc.) 

• Sampling plan, including details of usage groups and sample sizes 

• Duration, frequency, interval, and seasonal or other requirements of measurements 

• Monitoring equipment to be used 

• Installation requirements for monitoring equipment 

• Calibration requirements/procedures 

• Expected accuracy of measurements/monitoring equipment 

• Quality control procedures to be used 

• Form of data to be collected (.xls, .cvs, etc.) 

• Sample data collection forms (optional) 

3.7.7 Detail data analysis to be performed. 

3.7.8 Define operations, preventive maintenance, repair, and replacement reporting 

requirements. 

• Detail verification activities and reporting responsibilities of government and ESCO 

on operations, preventive maintenance, repair, and replacement items. 

• Define contents of report and reporting schedule, if different than in global section 

2.4. 

D-12 Appendix D – M&V Plan and Reporting Outlines FEMP 
Post-Installation Report Outline 

v. 1.0, Nov. 2004 

[Note: All content called for in this outline is required (if applicable), 

except items noted as optional.] 

Contract # / Delivery Order # / Task #/ Modification #: (include as appropriate) 

Performance Period Dates Covered: ___________ to_____________ 

1. Executive Summary 

1.1 Project Background 

1.1.1 Provide an overview of project background, including: 

• Contract # / Delivery Order # / Task # / Modification # (as appropriate) 

• Dates of relevant delivery order modifications 

• Performance period dates covered 

• Project acceptance date (actual or expected) 

1.2 Brief Project and ECM Descriptions 

1.2.1 Provide an overview what was done and how savings are generated. 

1.2.2 Note any changes in project scope between the Final Proposal (including any relevant 

delivery order modifications) and as-built conditions. 

1.3 Proposed and expected energy and cost savings for Year 1 of the performance period 

1.3.1 Compare expected savings for first performance year to first year guaranteed cost 

savings. State whether guarantee is expected to be fulfilled for first year. If not, provide 

detailed explanation. 

1.3.2 Summarize information in Table 1 and Table 2. 

Note: Expected savings are prediction for first year based on post-installation M&V activities. 

Verified savings for first year of performance period will be documented in annual report. The 

proposed savings for each ECM are included in schedule DO-4 of the delivery order. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-13 
Table 1. Proposed Annual Savings Overview 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

ECM 

Total energy 

savings 

(MBtu/yr) 

Electric energy 

savings 

(kWh/yr) 

Electric demand 

savings 

(kW/yr)* 

Natural gas savings 

(MBtu/yr) 

Water savings 

(gallons/yr) 

Other energy 

savings 

(MBtu/yr) 

Total energy & 

water cost 

savings, Year 1 

($/yr) 

O

re

c

Y

Total savings 

First year guaranteed savings: $ 

Notes 

MBtu=106 Btu. 

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g., 0.003413 Guaranteed cost savings for project are defined in schedule DO-1 in delivery order. The proposed savings for each ECM are included in schedule DO-4 in delivery order. 

Table 2. Expected Savings Overview for First Performance Year 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

ECM 

Total energy 

savings 

(MBtu/yr) 

Electric energy 

savings 

(kWh/yr) 

Electric demand 

savings 

(kW/yr)* 

Natural gas savings 

(MBtu/yr) 

Water savings 

(gallons/yr) 

Other energy 

savings 

(MBtu/yr) 

Total energy & 

water cost 

savings, Year 1 

($/yr) 

O

re

co

Y

Total savings 

Notes 

MBtu=106 Btu. 

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g., 0.003413 

D-14 Appendix D – M&V Plan and Reporting Outlines 
1.4 Energy, Water, and O&M Rate Data 

1.4.1 Detail energy and water rates used to calculate cost savings for this period. 

1.4.2 Provide performance period rate adjustment factors for energy, water, and O&M cost 

savings, if used. 

1.4.3 Report actual energy and water rates at site for same period (optional). 

1.5 Savings Adjustments 

1.5.1 Provide summary of any energy and/or cost savings adjustments required between Final 

Proposal (including any relevant delivery order modifications) and as-built conditions. 

1.5.2 Describe the impact in changes between the Final Proposal (including any relevant 

delivery order modifications) and as-built conditions based on post-installation M&V 

results. 

1.6 Construction Period Savings 

1.6.1 Provide a summary of construction period savings, if applicable. 

1.6.2 Provide overview of how construction period savings are calculated. 

1.7 Status of Rebates 

• Include if applicable. 

1.7.1 Provide a summary of the source of any third-party rebates or incentives provided on this 

project. 

1.7.2 Provide status of any third-party rebates or incentives. 

2. ECM [Name / #] M&V Activities and Expected First Year Savings 

• Develop section for each ECM. 

2.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM 

2.1.1 Summarize the scope of work, location, and how cost savings are generated. 

• Describe source of all savings including energy, water, O&M, and other (if 

applicable). 

FEMP Appendix D – M&V Plan and Reporting Outlines D-15 
2.1.2 State M&V guideline and option used1

. 

2.1.3 Provide an overview of M&V activities for ECM. 

• Explain the intent of M&V plan, including what is being verified. 

2.1.4 Provide an overview of savings calculation methods for ECM. 

• Provide a general description of analysis methods used for savings calculations. 

2.2 Installation Verification 

2.2.1 Detail any changes between Final Proposal (including any relevant delivery order 

modifications) and as-built conditions. 

2.2.2 Provide details of energy and cost savings impact from changes between Final Proposal 

(including any relevant delivery order modifications) and as-built conditions based on 

post-installation M&V results. Summarize information in Table 4. 

2.2.3 Describe construction period savings (if applicable). Include date ECM was in effect, and 

reference acceptance documentation. 

2.2.4 Detail savings calculations for construction period savings. 

1 M&V options include A, B, C, and D. Guidelines include M&V Guidelines: Measurement & Verification for Federal Energy 

Projects, Version 2.2 (www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm); and International Performance 

Measurement & Verification Protocol (IPMVP), Volume I, March 2002 (www.ipmvp.org). 

D-16 Appendix D – M&V Plan and Reporting Outlines FEMP 
Table 4. Impact to energy and cost savings from changes between final proposal and as-built condition

Total 

energy 

savings 

(MBtu/yr) 

Electric 

energy 

savings 

(kWh/yr) 

Electric 

energy cost 

savings, 

Year 1 

($/yr) 

Electric 

demand 

savings* 

(kW/yr) 

Electric 

demand 

cost 

savings, 

Year 1 

($/yr) 

Natural gas 

savings 

(MBtu/yr)* 

* 

Natural gas 

cost 

savings, 

Year 1 

($/yr) 

Water 

savings 

(gallons/yr) 

Water cost 

savings, 

Year 1 

($/yr) 

Other 

energy 

savings 

(MBtu/yr) 

Ot

energ

sav

Ye

($/

Proposed Expected Variance 

Notes 

MBtu = 106 Btu. *Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g. 0.003413 MBtu/kWh). 

Note: Expected savings are prediction for first year based on post-installation M&V activities. Verified savings for first year of performdocumented in annual report. The proposed savings for each ECM are included in schedule DO-4 of the delivery order. D-17 Appendix D – M&V Plan and Reporting Outlines 
2.3 Post-Installation M&V Activities Conducted 

• Detail measurements, monitoring, and inspections conducted in accordance with M&V plan: 

2.3.1 Measurement equipment used 

2.3.2 Equipment calibration documentation 

2.3.3 Dates/times of data collection or inspections, names of personnel, and documentation of 

government witnessing 

2.3.4 Details to confirm adherence to sampling plan 

2.3.5 Include all post-installation measured values. Include periods of monitoring and durations 

and frequency of measurements. (Use appendix and electronic format as necessary). 

Include description of data format (headings, units, etc.). 

2.3.6 Describe how performance criteria have been met. 

2.3.7 Detail any performance deficiencies that need to be addressed by ESCO or Government. 

2.3.8 Note impact of performance deficiencies or enhancements on generation of savings. 

2.4 Expected Savings Calculations and Methodology 

2.4.1 Provide detailed description of analysis methodology used. 

• Describe any data manipulation or analysis that was conducted prior to applying 

savings calculations. 

2.4.2 Detail all assumptions and sources of data, including all stipulated values used in 

calculations. 

2.4.3 Include equations and technical details of all calculations made. (Use appendix and 

electronic format as necessary.) Include description of data format (headings, units, etc.). 

2.4.4 Details of any baseline or savings adjustments made. 

2.4.5 Detail energy and water rates used to calculate cost savings. 

• Provide performance period energy and water rate adjustment factors, if used. 

• Report actual energy and water rates at site for same period (optional). 

2.4.6 Detail expected savings for this energy conservation measure for first year. 

• Summarize information in Table 5. 

D-18 Appendix D – M&V Plan and Reporting Outlines FEMP 
2.5 Details of O&M and Other Savings (if applicable) 

2.5.1 Describe source of O&M savings, if applicable. 

• Describe verification activities. 

• Provide performance period O&M cost savings adjustment factors, if applicable. 

2.5.2 Describe source of other savings, if applicable. 

• Describe verification activities. 

• Provide performance period adjustment factors, if applicable. 

Note: Expected savings are prediction for first year based on post-installation M&V activities. Verified 

savings for first year of performance period will be documented in the annual report. The proposed 

savings for each ECM are included in schedule DO-4 of the delivery order. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-19 
Table 5. Expected Year 1 Savings for ECM 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

Total 

energy use 

(MBtu/yr) 

Electric 

energy use 

(kWh/yr) 

Electric 

energy 

cost ($/yr) 

Electric 

demand* 

(kW/yr) 

Electric 

demand 

cost ($/yr) 

Natural 

gas use 

(MBtu/yr) 

Natural 

gas cost 

($/yr) 

Water use 

(gallons/yr) 

Water cost 

($/yr) 

Other 

energy use 

(MBtu/yr) 

Oth

ener

cost ($

Baseline use Post-installation use Savings 

Notes 

MBtu = 106 Btu. 

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g. 0.003413 M

D-20 Appendix D – M&V Plan and Reporting Outlines 
Annual Report Outline 

v. 1.0, Nov. 2004 

[Note: All content called for in this outline is required (if applicable), 

except items noted as optional.] 

Contract # / Delivery Order # / Task #: (include as appropriate) 

Performance Period Dates Covered: ___________ to_____________ 

Contract year #: ___________ 

1. Executive Summary 

1.1 Project Background 

1.1.1 Provide an overview of project background, including: 

• Contract # / Delivery Order # / Task # / Modification # (as appropriate) 

• Dates of relevant delivery order modifications 

• Performance period dates covered 

• Project acceptance date 

1.2 Brief Project and ECM Descriptions 

1.2.1 Provide an overview what was done and how savings are generated. 

1.2.2 Note any changes in project scope between the Final Proposal (including any relevant 

delivery order modifications) and as-built conditions as recorded in post-installation 

report. 

1.3 Summary of Proposed and Verified Energy and Cost Savings 

1.3.1 Compare verified savings for Performance Year # to Guaranteed Cost Savings for Year 

#. State whether guarantee is fulfilled for year. If not, provide detailed explanation. 

1.3.2 Define performance period. 

1.3.3 Summarize information in Table 1 and Table 2. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-21 
Table 1. Proposed Annual Savings Overview 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

ECM 

Total energy 

savings 

(MBtu/yr) 

Electric energy 

savings 

(kWh/yr) 

Electric 

demand 

savings 

(kW/yr)* 

Natural gas 

savings 

(MBtu/yr) 

Water savings 

(gallons/yr) 

Other energy 

savings 

(MBtu/yr) 

Total energy 

& water cost 

savings, Year 

# ($/yr) 

Ot

re

co

Y

Total Savings 

Year [#] guaranteed cost savings: $ 

Notes 

MBtu = 106 Btu. *Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. 

If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g., 0.003413 Guaranteed cost savings for project are defined in cost schedule DO-1 in delivery order. The proposed savings for each ECM are included in schedule DO-4 in the delivery order. 

Table 2. Verified Savings for Performance Year [ # ] 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

ECM 

Total energy 

savings 

(MBtu/yr) 

Electric energy 

savings 

(kWh/yr) 

Electric 

demand 

savings 

(kW/yr)* 

Natural gas 

savings 

(MBtu/yr) 

Water savings 

(gallons/yr) 

Other energy 

savings 

(MBtu/yr) 

Total energy 

& water cost 

savings, Year # 

($/yr) 

Ot

re

co

Y

Total savings 

Notes 

MBtu = 106 Btu. *Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g. 0.003413 MBtu/kWh). 

D-22 Appendix D – M&V Plan and Reporting Outlines 
1.4 Savings Adjustments 

• Provide summary of any energy and/or cost savings adjustments required. 

1.5 Performance and O&M Issues 

• Note impact of operating deficiencies or enhancements on generation of savings. 

• Note impact of maintenance deficiencies on generation of savings. 

• Detail any deficiencies that need to be addressed by ESCO or Government. 

1.6 Energy, Water, and O&M Rate Data 

1.6.1 Detail energy and water rates used to calculate cost savings for this period. 

1.6.2 Provide performance period rate adjustment factors for energy, water and O&M cost 

savings, if used. 

1.6.3 Report actual energy and water rates at site for same period (optional). 

1.7 Verified Savings To Date 

• Summarize information in Table 3. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-23 
Table 3. Verified Savings for Performance Period To Date 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

Year # 

Total energy 

savings 

(MBtu/yr) 

Electric 

energy 

savings 

(kWh/yr) 

Electric 

demand 

savings 

(kW/yr)* 

Natural gas 

savings 

(MBtu/yr) 

Water 

savings 

(gallons/yr) 

Other energy 

savings 

(MBtu/yr) 

Total energy & 

water cost 

savings ($/yr) 

Other energyrelated O&M 

cost savings 

($/yr) 

T

Total savings 

Notes 

MBtu = 106 Btu. 

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to cost schedules (e.g., 0.003413 MBtu/kW

D-24 Appendix D – M&V Plan and Reporting Outlines 
2. Details for ECM [name / #] 

• Develop section for each ECM. 

2.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM 

2.1.1 Summarize the scope of work, location, and how cost savings are generated. 

• Describe source of all savings including energy, water, O&M, and other (if 

applicable). 

2.1.2 Discuss any changes in scope / results recorded in post-installation M&V report. 

2.1.3 State M&V guideline and option used1

. 

2.1.4 Provide an overview of M&V activities for ECM. 

• Explain the intent of M&V plan, including what is being verified. 

2.1.5 Provide an overview of savings calculation methods for ECM. 

• Provide a general description of analysis methods used for savings calculations. 

2.2 M&V Activities Conducted This Period 

• Detail measurements, monitoring, and inspections conducted this reporting period in 

accordance with M&V plan. 

2.2.1 Measurement equipment used 

2.2.2 Equipment calibration documentation 

2.2.3 Dates/times of data collection or inspections, names of personnel, and documentation of 

government witnessing 

2.2.4 Details to confirm adherence to sampling plan 

2.2.5 Include all measured values for this period. Include periods of monitoring and durations 

and frequency of measurements. (Use appendix and electronic format as necessary). 

Include description of data format (headings, units, etc.). 

2.2.6 Describe how performance criteria have been met. 

2.2.7 Detail any performance deficiencies that need to be addressed by ESCO or Government. 

2.2.8 Note impact of performance deficiencies or enhancements on generation of savings. 

1

 M&V options include A, B, C & D. Guidelines include M&V Guidelines: Measurement & Verification for 

Federal Energy Projects, Version 2.2 (www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm); and 

International Performance Measurement & Verification Protocol (IPMVP), Volume I, March 2002 

(www.ipmvp.org). 

FEMP Appendix D – M&V Plan and Reporting Outlines D-25 
2.3 Verified Savings Calculations and Methodology 

2.3.1 Provide detailed description of analysis methodology used. 

• Describe any data manipulation or analysis that was conducted prior to applying 

savings calculations. 

2.3.2 Detail all assumptions and sources of data, including all stipulated values used in 

calculations. 

2.3.3 Include equations and technical details of all calculations made. (Use appendix and 

electronic format as necessary.) Include description of data format (headings, units, etc.). 

2.3.4 Details of any baseline or savings adjustments made. 

2.3.5 Detail energy and water rates used to calculate cost savings. 

• Provide performance period energy & water rate adjustment factors, if used. 

• Report actual energy and water rates at site for same period (optional). 

2.3.6 Detail verified savings for this energy conservation measure for performance year. 

• Include Table 4. 

2.4 Details of O&M and Other Savings (if applicable) 

2.4.1 Describe source of savings, if applicable. 

• Describe verification activities. 

• Provide performance period O&M savings adjustment factors, if applicable. 

2.4.1 Describe source of other savings, if applicable. 

• Describe verification activities. 

• Provide performance period adjustment factors, if applicable. 

D-26 Appendix D – M&V Plan and Reporting Outlines FEMP 
Table 4. Verified Annual Savings For ECM for Performance Year # 

[Include all applicable fuels / commodities for project, e.g., electric energy, electric demand, natural gas, fuel oil, c

Total 

energy use 

(MBtu/yr) 

Electric 

energy use 

(kWh/yr) 

Electric 

energy 

cost, Year 

# ($/yr) 

Electric 

demand* 

(kW/yr) 

Electric 

demand 

cost, Year 

# ($/yr) 

Natural gas 

(MBtu/yr)* 

Natural gas 

cost, Year 

# ($/yr) 

Water use 

(gallons/yr) 

Water cost, 

Year # 

($/yr) 

Other 

energy use 

(MBtu/yr) 

Other 

energy 

cost, Yea

# ($/yr) 

Baseline use Performance Year # use Savings Notes 

MBtu = 106 Btu. 

*Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to cost schedules (e.g., 0.003413 MBtu/kW

D-27 Appendix D – M&V Plan and Reporting Outlines 
2.5 O&M and Other Activities 

2.5.1 Operating requirements: 

• State organization(s) responsible for equipment operations. If appropriate, detail how 

responsibilities are shared. 

• Summarize key operating procedures and any related verification activities. 

• Detail any deficiencies that need to be addressed by ESCO or Government. 

• Note impact of operating deficiencies or enhancements on generation of savings. 

2.5.2 Preventive maintenance requirements: 

• State organization(s) responsible for performing maintenance. If appropriate, detail 

how responsibilities are shared. 

• Verification of scheduled maintenance items completed by ESCO or Government. 

• Detail any deficiencies that need to be addressed by ESCO or Government. 

• Note impact of maintenance deficiencies on generation of savings. 

2.5.3 Repair and replacement requirements: 

• State organization(s) responsible for repair and replacement. If appropriate, detail 

how responsibilities are shared. 

• Summary of activities conducted this period by ESCO or Government. 

• Detail any deficiencies that need to be addressed by ESCO or Government. 

• Note impact of equipment deficiencies on generation of savings. 

FEMP Appendix D – M&V Plan and Reporting Outlines D-28 
Appendix E Reviewing Measurement & Verification Plans 

FEMP Appendix E – Reviewing Measurement & Verification Plans E-1 
E-2 Appendix E – Reviewing Measurement & Verification Plans FEMP 
Reviewing Measurement & Verification Plans 

for Federal ESPC Projects 

8 October 2007 

Version 3.0 

DRAFT FOR REVIEW 

Federal Energy Management Program (FEMP) 

Office of Energy Efficiency and Renewable Energy 

U.S. Department of Energy 

This document was developed for the U.S. Department of Energy’s Federal Energy Management 

Program by Nexant, Inc., and Lawrence Berkeley National Laboratory. This document WILL BE posted 

on FEMP’s web site at www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm. 

Comments should be submitted to DASartor@lbl.gov 

Contents 

Section Page 

Section 1 Measurement and Verification Plan Checklist ...................................................... 1 

1.1 Step 1– Prepare Custom Report and Checklist from Template ...................................... 1 

1.2 Step 2– Review Project Documentation ......................................................................... 1 

1.3 Step 3– Determine Level of Savings for Each ECM ...................................................... 1 

1.4 Step 4 – Complete Content Checklist ............................................................................. 2 

1.5 Step 5 – Evaluate M&V Approach ................................................................................. 2 

1.6 Step 6 – Finalize Report.................................................................................................. 3

1.7 Step 7 – Provide Written Review to Agency and DOE.................................................. 4 

1.8 Step 8 – Ensure Action Taken on Key Issues................................................................. 4 

Section 2 Review of Measurement and Verification (M&V) Plan........................................ 5 

2.1 Section 1: Executive Summary....................................................................................... 5 

2.2 Section 2: Background.................................................................................................... 5 

2.3 Section 3: Summary of Findings..................................................................................... 6 

2.4 Section 4: M&V Plan and Savings Calculation Methods - Checklists (v. 2.0) .............. 8 

FEMP Appendix E – Reviewing Measurement & Verification Plans iii 
iv Appendix E – Reviewing Measurement & Verification Plans FEMP 
Section 1 Measurement and Verification Plan Checklist 

The purpose of this document is to provide a framework for implementing uniform and 

consistent reviews measurement and verification (M&V) plans for Federal ESPC projects. These 

procedures will help provide uniform review approaches, M&V plans, produce standardized 

reviews, and enable centralized tracking of project metrics. 

Evaluating M&V plans is an inexact science that requires technical expertise and experience. 

Ideally, the reviewer will have been involved in the project development phase and has an 

intimate understanding of the Agency’s goals, the agree-upon allocation of project risks, site 

specific issues, as well as the objectives and constraints for each ECM. 

1.1 STEP 1– PREPARE CUSTOM REPORT AND CHECKLIST FROM TEMPLATE 

Create a copy of the M&V Plan Review Template and customize by adding project specific 

information in the Tables provided: 

 Table 1: Summary of Project Data 

 Table 2: Distribution List of Review 

 Table 3: Summary of Savings from Proposed ECMs 

Customize the M&V Plan Content Review Checklists. The checklists have 2 parts: M&V Plan – 

Project Level Checklist and M&V Plan – ECM Level Checklist 

Add an ECM level checklist for each Energy Conservation Measure (ECM). A placeholder for 

one ECM has been provided. Make a copy for each ECM. 

1.2 STEP 2– REVIEW PROJECT DOCUMENTATION 

Acquire and review project documents. Make note of relevant documentation that is available 

during the review. Generally, the entire Final Proposal, including the Detailed Energy Survey 

(DES) and all technical appendices, is required to thoroughly review an M&V plan and the 

associated savings calculations. 

1.3 STEP 3– DETERMINE LEVEL OF SAVINGS FOR EACH ECM 

Determine the % of overall cost savings contributed by each ECM in the project (from cost 

schedule DO-4). Determine the % of energy and water cost savings (not including O&M cost 

savings) contributed by each ECM. 

Evaluate savings streams from each ECM, noting the source(s) of cost savings for each measure 

(O&M, electricity, demand, natural gas, water, etc.) in the appropriate sections of the M&V Plan 

Review Template. O&M cost savings are generally determined and verified separately from 

energy & water savings. 

Principal review efforts should be focused on the measures providing the largest portion of the 

cost savings for the project. This strategy of reviewing the principal cost saving measures first 

will help the reviewer spend the smallest amount of time while maximizing the value of the 

FEMP Appendix E – Reviewing Measurement & Verification Plans 1 
review, and is especially helpful when review time is limited. Provide a detailed review of the 

M&V strategy for each measure if possible. 

1.4 STEP 4 – COMPLETE CONTENT CHECKLIST 

Read through the M&V Plan while checking off topics and making notes in the customized 

M&V Plan Checklists. Note the location of key items in the first column of the checklists 

(labeled “Reference page”). The inability to comment on an item suggests that relevant 

information may be missing or not in complete form. 

Some of the items in the checklist are marked “Evaluation”. This indicates that additional 

qualitative assessment is necessary. These items are posed as questions, where as the required 

content items are statements. 

Items in the checklist that require follow-up should be flagged by placing an “X” in the last 

column of the checklist (labeled “Follow-Up?”). 

Include the completed Checklists as part of the written review. 

The inclusion of all items on the checklist does not indicate the appropriateness of the M&V 

approach. Each item requires qualitative assessment, and tips for evaluating the M&V approach 

is discussed in the next step. 

1.5 STEP 5 – EVALUATE M&V APPROACH 

Note source(s) of savings from measure. Ensure M&V activities are adequate for all significant 

savings streams. 

Review Risk & Responsibility matrix (R&R). Ensure M&V strategy for each measure conforms 

to agreed-upon risk allocation 

Evaluate quality of baseline developed: 

 Were key variables affecting energy use measured for each ECM (e.g. watts/fixture 

and hours/yr)? 

 Are all assumptions / stipulations reasonable, and includes source of data? 

 Were system performance characteristics recorded (e.g. lighting intensities, 

temperature set points) 

Are savings estimates sound & reasonable? 

 Where energy calculations closely reviewed? 

 Were utility or weather based models validated? 

 Were ECM savings compared to system usage? 

 Were project level savings compared to overall site usage? (optional) 

2 Appendix E – Reviewing Measurement & Verification Plans FEMP 
Evaluate quality of performance period activities: 

 What is the likelihood for success for this measure? More rigorous M&V strategies 

are warranted for ECMs with substantial uncertainty and/or technical complexity. 

 Is meaningful ongoing performance period data going to be used to calculate savings? 

− What is being verified? Is this sufficient to support the guarantee? 

− Will key variables affecting energy use be measured for each ECM? How often? 

 Will single post-installation measurements apply to all years in the performance 

period? If so, how valuable are the data used? 

− How likely is this data to change over the performance period? Based on which 

party has accepted ongoing responsibility for each item, is this approach 

appropriate? 

Do the M&V strategies allocated support the concepts included in Risk & Responsibility Matrix?

Were all objectives and constraints of the project considered? 

Were all objectives and constraints of the ECM considered? 

Review the strategy for conducting O&M for ECMs. Who is going to perform the routine O&M 

tasks, and how often. 

 Are O&M activities sufficiently detailed to demonstrate level of effort? 

 Are responsibilities allocated as suggested by R&R Matrix? 

 Are reporting requirements adequately defined? 

Evaluate overall project assumptions: 

 Are contracted energy rates based on actual rates, including time-of-use rates and 

peak demand ratchets? Are marginal (not blended) energy rates used?

 Are proposed escalation rates based on latest NIST data? 

Are M&V costs reasonable? Do costs align with planned activities? 

 See DO-2 for Initial M&V cost for each measure 

 See DO-4 for performance period M&V costs 

1.6 STEP 6 – FINALIZE REPORT 

The written review should follow the format of the M&V Plan Review Template and include the 

completed M&V Plan Content Checklists. The format of the report can be modified as needed to 

meet the specific project needs. 

 Section 1: Executive summary 

 Section 2: Background 

 Section 3: Summary of Findings 

 Section 4: M&V Plan Checklists 

FEMP Appendix E – Reviewing Measurement & Verification Plans 3 
After reading the M&V Plan and filling out the project specific M&V Plan Checklists, 

summarize the findings from the review in the appropriate sections of the Report. 

Instructions, placeholder text to be customized, as well as final report text are included within the 

Report Review Template. Placeholder text that need to be customized are underlined italics, 

while instructions to the reviewer are in red italics. 

Complete all the sections and customize placeholder text included in the Report Review 

Template. Delete any instructions after a section has been adequately completed. 

Include the completed Checklists as part of the written review 

1.7 STEP 7 – PROVIDE WRITTEN REVIEW TO AGENCY AND DOE 

Once completed, the review of the M&V plan should be provided to the Agency staff, as well the 

DOE representative, who will archive it for project records. Discussion with the Agency on the 

review is usually warranted. 

1.8 STEP 8 – ENSURE ACTION TAKEN ON KEY ISSUES 

After the review is submitted, it is CRITICAL to ensure adequate action is taken to implement or 

address the recommendations. 

Often, the review process is iterative. After an initial review, subsequent revisions of the M&V 

plan must be assessed to determine if adequate modifications have been made. Written 

evaluations of these subsequent M&V plans are needed to document follow-up actions taken. 

M&V Plan Review Template starts on the next page. 

4 Appendix E – Reviewing Measurement & Verification Plans FEMP 
Section 2 Review of Measurement and Verification (M&V) Plan 

<DATED> for ESPC <AGENCY, SITE NAME, DO#> 

2.1 SECTION 1: EXECUTIVE SUMMARY 

• Provide a short summary of the key findings, including: 

• Overall adequacy of the M&V plan reviewed, including technical quality of the 

baseline and performance period activities 

• Overall risk allocation of project and M&V plan’s adherence to description in 

Risk & Responsibility Matrix for project 

• Bullet chief action items on M&V Plan 

2.2 SECTION 2: BACKGROUND 

This review of the M&V plan for this ESPC project was performed to ensure: 

 M&V conforms to agreed-upon risk allocation; 

 M&V is adequate for all significant savings streams; 

 The baseline is adequately defined; 

 The savings estimates are sound & reasonable; 

 Performance period activities are meaningful and adequate to support the guarantee; 

Overall project assumptions are reasonable. 

Table 1: Summary of Project Data 

Project name: 

Location: 

Delivery Order #: 

Date of proposal: 

FEMP Appendix E – Reviewing Measurement & Verification Plans 5 
Table 2: Distribution List of Review 

Reviewer: 

Reviewer Contact Information: 

Date of Review: 

Agency Contact info: 

Date review was provided to Agency contact: 

DOE Contact info: 

Date review was provided to DOE contact: 

Table 3: Summary of Savings from Proposed ECMs 

ECM # ECM Name / Description 

Annual Energy & 

Water Cost 

Savings ($) 

Annual O&M Cost 

Savings ($) % Total Savings 

% Total Energy & 

Water Savings 

2.3 SECTION 3: SUMMARY OF FINDINGS 

• Include all recommendations resulting from review. Summarize where appropriate using 

references to completed checklists. 

• Note any missing or deficient items from the Project level Checklist. 

o Discuss reasonableness of overall project assumptions 

• Discuss the overall risk allocation, and the level of correspondence to the risk and 

responsibility matrix 

• Are initial and ongoing M&V costs for this project reasonable? Do costs align with planned 

activities? 

• Make a sub-section for each ECM if needed. Summarize any issues for each ECM identified 

during review. Evaluate all items listed in Step 5 for all ECMs. Note any missing or deficient 

items from the ECM Checklists 

• For each measure, provide a qualitative assessment of 

o Measurement and verification approach; 

o General risk allocation and if supported by the concepts included in Risk & 

Responsibility Matrix; 

6 Appendix E – Reviewing Measurement & Verification Plans FEMP 
o Adequacy of the baseline defined; 

o If savings calculation methods are sound & reasonable; 

o Accuracy of energy savings computations; 

o Meaningfulness of the performance period activities ; 

o Adequacy of M&V activities for all sources of savings 

o strategy for conducting O&M 

o Are Initial M&V costs for this ECM reasonable? Do costs align with planned 

activities? 

FEMP Appendix E – Reviewing Measurement & Verification Plans 7 
2.4 SECTION 4: M&V PLAN AND SAVINGS CALCULATION METHODS - CHECKLISTS (V. 2.0) 

M&V Plan - Project Level Checklist 

Reference 

Page Project level Item Included? Note any d

1. Executive Summary / M&V Overview & Proposed Savings Calculations 1.1 Proposed Annual Savings Overview 

Table showing the projected savings by ECM broken out by O&M savings, energy units, energy cost, and other savings values as applicable. Include all applicable fuels / commodities for project, such as: electric energy, electric demand, natural gas, fuel oil, coal, water, etc. 

First Year Guaranteed Cost Savings 

Site Use and Savings Overview - Include approximate % total site usage saved (for year 1) by energy source type for site (optional) 

Evaluation Were project level savings compared to overall site usage? Are savings levels reasonable? 

1.2 M&V Plan Summary 

Table presenting M&V Option (from M&V guideline) used and summary of M&V approach for each ECM 

2. Whole Project Data / Global Assumptions 2.1 Risk & Responsibility 

Summarize allocation of responsibility for key items related to M&V.  Reference location of Risk & Responsibility Matrix 

Evaluation Do all M&V strategies included in Plan support the concepts included in Risk & Responsibility Matrix? 

2.2 Energy, Water, and Operations & Maintenance (O&M) Rate Data 

Details of baseline energy and water rates included 

Evaluation Are contracted energy rates based on actual rates, including time-of-use rates and peak demand ratchets? Are marginal (not blended) energy rates used? 

Provide performance period rate adjustment factors for energy, water, and O&M cost savings, if used. 

Evaluation Are proposed escalation rates based on latest NIST data? 

2.3 Schedule & Reporting for Verification Activities Define requirements for witnessing of measurements during:  Baseline development  Post-installation verification activities 

 Performance period Define schedule of verification reporting activities, including: 

8 Appendix E – Reviewing Measurement & Verification Plans 
Reference 

Page Project level Item Included? Note any d

 Post-Installation Report  Annual Report Define content and format of reports:  Post-installation report (Use Post-Installation Report Outline.)  Annual M&V reports (Use Annual Report Outline) 

 Interval M&V reports (Develop report outline if needed) 

Evaluation 

Are M&V costs reasonable? Do costs align with planned activities? 

 See DO-2 for Initial M&V cost for each measure 

 See DO-4 for performance period M&V costs 

2.4 Operations, Preventive Maintenance, Repair, and Replacement Reporting Requirements Define Government and ESCO reporting requirements: Summarize key verification activities and reporting responsibilities of government and ESCO on operations, preventive maintenance, repair, and replacement items from details in ECM specific M&V Plans. 

Define content of reports and reporting schedule. 

2.5 Construction Period Savings 

Provide overview of how construction period savings will be calculated, if applicable. 

2.6 Status of Rebates Provide a summary of the source of any third-party rebates or incentives provided on this project. 

Provide status of any third-party rebates or incentives 

2.7 Dispute Resolution 

Describe plan for resolving disputes regarding issues such as baseline, baseline adjustment, energy savings calculation, and the use of periodic measurements. 

9 Appendix E – Reviewing Measurement & Verification Plans 
M&V Plan - ECM Level Checklist #1 (Copy for each ECM) 

Reference Included? Note an

Page ECM LEVEL ITEM ECM # / N

% Project Total Cost Savings: X% 

% Project Energy & Water Cost Savings: Y% 

3. ECM [Name / #] M&V Plan and Savings Calculation Methods 3.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM Summarize the scope of work, location, and how cost savings are generated. 

 Describe source of all savings including energy, water, O&M, and other (if applicable). Specify the M&V guideline and option used 

Evaluation Do M&V activities match declared M&V option? 

Provide an overview of M&V Activities for ECM. 

 Explain intent of M&V plan, including what is being verified. 

Provide an overview of savings calculations methods for ECM. 

 Provide a general description of analysis methods used for savings calculations. 

3.2 Energy and Water Baseline Development 

Describe in general terms how the baseline for this ECM is defined. 

Describe variables affecting baseline energy or water use.  Include variables such as weather, operating hours, set point changes, etc. 

 Describe how each variable will be quantified, i.e. measurements, monitoring, assumptions, 

manufacturer data, maintenance logs, engineering resources, etc. 

Define key system performance factors characterizing the baseline conditions such as comfort conditions, lighting intensities, temperature set points, etc Define requirements for government witnessing of measurements if different than whole project data requirements included in Section 2.3. 

Provide details of baseline data collected, including:  Parameters monitored/measured  Details of equipment monitored, i.e. location, type, model, quantity, etc.  Sampling plan, including details of usage groups and sample sizes  Duration, frequency, interval, and seasonal or other requirements of measurements  Personnel, dates, and times of measurements 

 Proof of government witnessing of measurements (if required) 

10 Appendix E – Reviewing Measurement & Verification Plans 
Reference Included? Note an

Page ECM LEVEL ITEM ECM # / N

% Project Total Cost Savings: X% 

% Project Energy & Water Cost Savings: Y% 

 Monitoring equipment used  Installation requirements for monitoring equipments (test plug for temperature sensors, straight pipe for 

flow measurement, etc.) 

 Certification of calibration / calibration procedures followed  Expected accuracy of measurements/monitoring equipment  Quality control procedures used  Form of data (.xls, .cvs, etc.)  Results of measurements (attach appendix and electronic format as necessary)  Completed data collection forms, if used Provide details of baseline data analysis performed, including:  Analysis using results of measurements  Weather normalized regressions 

 Weather data used and source of data 

Evaluation 

Evaluate quality of baseline developed: 

 Were key variables affecting energy use measured for each ECM (e.g. watts/fixture and hours/yr)? 

 Are all assumptions / stipulations reasonable, and includes source of data? 

 Were system performance characteristics recorded (e.g. lighting intensities, temperature set points) 

3.3 Proposed Energy & Water Savings Calculations and Methodology Provide detailed description of analysis methodology used. 

 Describe any data manipulation or analysis that was conducted prior to applying savings calculations. Detail all assumptions and sources of data, including all stipulated values used in calculations. Include equations and technical details of all calculations made. (Use appendix and electronic format as necessary.) Include description of data format (headings, units, etc.). Details of any savings or baseline adjustments that may be required 

Detail energy and water rates used to calculate cost savings. 

 Provide performance period energy and water rate adjustment factors, if different from in section 2.2.2. 

Evaluation Are savings estimates sound & reasonable? 

 Where energy calculation methodologies closely reviewed? 

 Did the reviewer check the math in the energy calculations? 

11 Appendix E – Reviewing Measurement & Verification Plans 
Reference Included? Note an

Page ECM LEVEL ITEM ECM # / N

% Project Total Cost Savings: X% 

% Project Energy & Water Cost Savings: Y% 

 Were utility or weather based models validated?  Were ECM savings compared to system usage? Are they reasonable? 3.4 Operations and Maintenance and Other Cost Savings Provide justification for O&M cost savings, if applicable  Describe how savings are generated  Detail cost savings calculations. 

 Provide performance period O&M cost savings adjustment factors, if different from in section 2.2.2. 

Provide justification for other cost savings, if applicable.  Describe how savings are generated.  Detail cost savings calculations. 

 Provide performance period adjustment factors, if different from in section 2.2.2. 

Evaluation 

Review the strategy for conducting O&M for this ECM.  Are O&M activities sufficiently detailed to demonstrate level of effort? 

 Are responsibilities allocated as suggested by R&R Matrix? 

 Are reporting requirements adequately defined? 

3.5 Proposed Annual Savings For ECM 

Table detailing proposed annual savings for this energy conservation measure for performance period: including the baseline energy use, post-install energy use, and projected savings for ECM. Detail energy units, energy cost, O&M savings, and other savings values as applicable. Include all applicable fuels / commodities for project, such as: electric energy, electric demand, natural gas, fuel oil, coal, water, etc. 

3.6 Post-Installation M&V Activities 

Describe the intent of post-installation verification activities, including what will be verified. Describe variables affecting post-installation energy or water use.  Include variables such as weather, operating hours, set point changes, etc.  Describe how each variable will be quantified, i.e. measurements, monitoring, assumptions, 

manufacturer data, maintenance logs, engineering resources, etc. 

Define key system performance factors characterizing the post-installation conditions such as lighting intensities, temperature set points, etc. 

12 Appendix E – Reviewing Measurement & Verification Plans 
Reference Included? Note an

Page ECM LEVEL ITEM ECM # / N

% Project Total Cost Savings: X% 

% Project Energy & Water Cost Savings: Y% 

Define requirements for government witnessing of measurements if different than whole project data requirements included in Section 2.3. 

Provide details of post-installation data to be collected, including:  Parameters to be monitored  Details of equipment to be monitored (location, type, model, quantity, etc.)  Sampling plan, including details of usage groups and sample sizes  Duration, frequency, interval, and seasonal or other requirements of measurements  Monitoring equipment to be used  Installation requirements for monitoring equipment  Calibration requirements / procedures  Expected accuracy of measurements/monitoring equipment  Quality control procedures to be used  Form of data to be collected (.xls, .cvs, etc.) 

 Sample data collection forms (optional) 

 Detail data analysis to be performed 

3.7 Performance Period Verification Activities Describe variables affecting performance period energy or water use.  Include variables such as weather, operating hours, set point changes, etc. 

 Describe how each variable will be quantified, i.e. measurements, monitoring, assumptions, 

manufacturer data, maintenance logs, engineering resources, etc. 

Define key system performance factors characterizing the performance period conditions such as comfort conditions, lighting intensities, temperature set points, etc Describe the intent of performance period verification activities – what will be verified. Provide detailed schedule of performance period verification activities and inspections. Define requirements for government witnessing of measurements if different than whole project data requirements included in Section 2.3. 

13 Appendix E – Reviewing Measurement & Verification Plans 
Reference Included? Note an

Page ECM LEVEL ITEM ECM # / N

% Project Total Cost Savings: X% 

% Project Energy & Water Cost Savings: Y% 

Provide details of performance period data to be collected, including:  Parameters to be monitored  Details of equipment to be monitored (location, type, model, quantity, etc.)  Sampling plan, including details of usage groups and sample sizes  Duration, frequency, interval, and seasonal or other requirements of measurements  Monitoring equipment to be used  Installation requirements for monitoring equipment  Calibration requirements/procedures  Expected accuracy of measurements/monitoring equipment  Quality control procedures to be used  Form of data to be collected (.xls, .cvs, etc.) 

 Sample data collection forms (optional) 

Detail data analysis to be performed  Define operations, preventive maintenance, repair, and replacement reporting requirements.  Detail verification activities and reporting responsibilities of government and ESCO on operations, 

preventive maintenance, repair, and replacement items. 

 Define contents of report and reporting schedule, if different than in global section 2.4. 

Evaluate quality of performance period activities: What is the likelihood for success for this measure?  Is there substantial uncertainty and/or technical complexity? If so, is M&V robust? 

Evaluation 

Is meaningful ongoing performance period data going to be used to calculate savings? 

 What is being verified? Is this sufficient to support the guarantee? 

 Will key variables affecting energy use be measured for this ECM? How often? 

 Will single post-installation measurements apply to all years in the performance period? If so, how 

valuable are the data used? 

 How likely is this data to change over the performance period? 

14 Appendix E – Reviewing Measurement & Verification Plans 
Reference Included? Note an

Page ECM LEVEL ITEM ECM # / N

% Project Total Cost Savings: X% 

% Project Energy & Water Cost Savings: Y% 

 Based on which party has accepted ongoing responsibility for each item, is this approach appropriate? 

Evaluation Are M&V costs shown in DO-2 reasonable for this ECM? Do costs align with planned activities? Evaluation Note all source(s) of savings from measure. Evaluation Are M&V activities are adequate for all significant savings streams? Evaluation Review Risk & Responsibility matrix (R&R). Does M&V strategy for this measure conform to agreed-upon risk allocation? 15 Appendix E – Reviewing Measurement & Verification Plans 
16 Appendix E – Reviewing Measurement & Verification Plans 
Appendix F Reviewing Post-Installation and Annual Reports 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports F-1 
F-2 Appendix F – Reviewing Post-Installation and Annual Reports FEMP 
Reviewing Post-Installation and Annual Reports 

For Federal ESPC Projects 

8 October 2007 

Version 3.0 

Federal Energy Management Program (FEMP) 

Office of Energy Efficiency and Renewable Energy 

U.S. Department of Energy 

This document was developed for the U.S. Department of Energy’s Federal Energy Management 

Program by Nexant, Inc., and Lawrence Berkeley National Laboratory. This document WILL BE posted 

on FEMP’s web site at www.eere.energy.gov/femp/financing/superespcs_mvresources.cfm. 

Contents 

Section Page 

Section 1 Post-Installation Report Review Checklist............................................................ 1

1.1 Step 1– Prepare Custom Report and Checklists from Template..................................... 1 

1.2 Step 2– Review Project Documentation ......................................................................... 2 

1.3 Step 3 – Complete Checklists ......................................................................................... 2 

1.4 Step 4 – Finalize Report.................................................................................................. 3

1.5 Step 5 – Provide Written Review to Agency and DOE.................................................. 3 

1.6 Step 6 – Ensure Action Taken on Key Issues................................................................. 3 

Section 2 Review of ESPC Annual Report # or Post-Installation Report # <DATED> 

for <AGENCY, SITE NAME, DO#> .......................................................................................... 4

2.1 Section 1: Executive Summary....................................................................................... 4 

2.2 Section 2: Background.................................................................................................... 4 

2.3 Section 3: Summary of Findings..................................................................................... 6 

2.4 Section 4: ESPC Performance Report Checklists (v 2.0) ............................................... 7 

2.5 Post-Installation Report Checklists................................................................................. 8 

2.5.1 Post-Installation Report - Project Level Checklist................................................ 8 

2.5.2 Post-Installation Report - ECM Level Checklist #1 (Copy for Each ECM).......... 9 

2.6 Annual Report Checklists ............................................................................................. 12 

2.6.1 Annual Report Project Level Checklist ................................................................ 12 

2.6.2 Annual Report - ECM Level Checklist #1 (Copy for Each ECM) ....................... 13 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports i 
ii Appendix F – Reviewing Post-Installation and Annual Reports FEMP 
Section 1 Post-Installation Report Review Checklist 

The purpose of this document is to provide a framework for implementing uniform and 

consistent reviews of Post-Installation and Annual Reports for Federal ESPC projects. These 

procedures will allow for consistent evaluations of performance reports, produce standardized 

reviews, and enable centralized tracking of ongoing project performance. 

This document lays out a seven-step process, and includes content checklists and a standard 

report template for written reviews. The steps include instructions and tips to the reviewer, and 

there are sample and placeholder text in the report template. These reviews are intended to 

provide assurance that Federal ESPC projects are meeting contractual obligations and continue to 

perform. The reviews should summarize important results and recommendations, including 

identifying missing or incomplete information. 

The Report Review Template applies to both Post-Installation and Annual Reports. The 

difference in content of these reports is captured in the Report Content Checklists. PostInstallation Reports confirm proper installation and estimate the savings expected to be realized 

in Contract Year 1, whereas Annual Reports detail the actual savings realized during the 

completed contract year. 

Adequate review of the Post-Installation Report is especially critical for ensuring the 

performance of projects using M&V Option A. These methods take measurements only once 

following installation. Subsequent activities may be limited to inspections to verify ‘potential to 

perform.’ 

An important note to reviewers: These reviews are intended to ensure all parties have complied 

with the contract requirements for the SuperESPC project. Judgments about the measurement 

and verification (M&V) strategies that have been agreed upon in the Delivery Order contribute 

little and usually detract from the purpose and clarity of the review. 

1.1 STEP 1– PREPARE CUSTOM REPORT AND CHECKLISTS FROM TEMPLATE 

Create a copy of the report review template and customize by adding project specific information 

in the Tables provided: 

 Table 1: Summary of Project Data 

 Table 2: Distribution List of Report Review 

 Table 3: Documents Available During Review 

 Table 4: Overall Project Savings Summary for Performance Year <NUMBER> 

 Table 5: Overview of Energy Conservation Measures (ECMs) 

Customize the appropriate set of Review Checklists (either for a Post-Installation Report or an 

Annual Report) and delete those that are not applicable: 

 Post-Installation Report Checklists: 

− Post-Installation - Project Level Checklist 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports 1 
− Post-Installation - ECM Level Checklists 

 Annual Report Checklists: 

− Annual Report - Project Level Checklist 

− Annual Report - ECM Level Checklists 

Create an ECM Level Checklist for each Energy Conservation Measure (ECM) by copying & 

pasting a blank ECM Level Checklist. Checklists for one ECM has been provided. Make a copy 

for each ECM. 

Determine the scheduled cost savings for each ECM in the project (from cost schedule DO-4), 

and compare to the reported values. Determine the percentage of reported cost savings 

contributed by each ECM. 

Principal review efforts should be focused on the measures providing the largest portion of the 

cost savings for the project, and on ECMs that may be having performance problems. 

This strategy of reviewing the principal cost saving measures will help the reviewer spend the 

smallest amount of time while maximizing the value of the review, and is especially helpful 

when review time is limited. 

1.2 STEP 2– REVIEW PROJECT DOCUMENTATION 

Acquire and review project documents. Make note of relevant documentation that is available 

during the review in Table 3 of the Report Review Template. 

Generally, the entire Delivery Order, the Post-Installation Report, and previous Annual Reports 

are required to adequately review an Annual Report. At a minimum for any ESPC project report 

review, the M&V plan, the final cost schedules, any contract modifications, and the PostInstallation Report (for review of Annual Reports) should be on hand. Missing documentation 

can cause confusion and lead to incorrect conclusions. 

Keep in mind that many applications of M&V Option A methods, measurements are only taken 

once following installation. Subsequent activities may be limited to inspections to verify 

‘potential to perform.’ The Post-Installation Report is therefore a critical document for projects 

using an Option A approach. 

1.3 STEP 3 – COMPLETE CHECKLISTS 

Read through the Post-Installation or Annual Report while checking off topics and making notes 

in the customized Review Checklists. Note the location of key items in the first column of the 

checklist (labeled “Reference Page”) for cross-referencing, and assess the adequacy of each item. 

The inability to comment on an item suggests that relevant information may be missing or not in 

complete form. 

Some of the items in the checklist are marked “Evaluation”. This indicates that additional 

qualitative assessment is necessary. These items are posed as questions, where as the required 

content items are statements. 

2 Appendix F – Reviewing Post-Installation and Annual Reports FEMP 
Items in the checklist that require follow-up should be flagged by placing an “X” in the last 

column of the checklist labeled “Follow-Up?”. 

The M&V plan from the Delivery Order must be reviewed to ensure all activities and reporting 

requirements were fulfilled. 

1.4 STEP 4 – FINALIZE REPORT 

The written review should follow the format of the Report Review Template and include the 

completed Report Checklists. The format of the report can be modified as needed to meet the 

specific project needs. The outline provided is: 

 Section 1: Executive Summary 

 Section 2: Background 

 Section 3: Summary of Findings 

 Section 4: Review Checklists 

After reading the Post-Installation or Annual Report and filling out the project specific 

Checklists, summarize the findings from the review in the appropriate sections of the report. 

Instructions, placeholder text to be customized, as well as final report text are included within the 

Report Review Template. Placeholder text that need to be customized are underlined italics, 

while instructions to the reviewer are in red italics. 

Complete all the sections and customize placeholder text included in the Report Review 

Template. Delete any instructions after a section has been adequately completed. 

Include the completed Checklists as part of the written review. 

1.5 STEP 5 – PROVIDE WRITTEN REVIEW TO AGENCY AND DOE 

Once completed, the review of the M&V plan should be provided to the Agency staff, as well the 

DOE representative for project records. Additional discussion with the Agency is usually 

warranted. 

1.6 STEP 6 – ENSURE ACTION TAKEN ON KEY ISSUES 

After the review is submitted, it is CRITICAL to ensure adequate action is taken to implement or 

address the recommendations. 

Document follow-up actions taken. 

Report Review Template starts on the next page. 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports 3 
Section 2 Review of ESPC Annual Report # or Post-Installation Report 

# <DATED> for <AGENCY, SITE NAME, DO#> 

2.1 SECTION 1: EXECUTIVE SUMMARY 

Provide a short summary of the key findings, including: 

 Overall adequacy of the report reviewed 

 Overall financial & energy performance of project; note any ECMs whose savings 

levels have changed significantly 

 Key items regarding the installation or ongoing performance of project; Note any 

performance problems, O&M issues, or deficiencies that need to be addressed 

 Bullet chief action items on M&V Plan 

2.2 SECTION 2: BACKGROUND 

Populate Tables 1 - 5 from data from the Report and other project documents. Modify by adding 

rows as needed. 

This is a written review of the Post-Installation Report or Annual Report for the project detailed 

in Table 1. 

Table 1: Summary of Project Data 

Project Name: 

Location: 

Delivery Order #, Date: 

Report Date: 

Dates of Performance Period: 

Project Acceptance Date: 

Performance Year: 

The goal of this review is to verify the submitted ESPC performance report includes all key 

items, and that any important issues are adequately addressed, including: 

 Was the content of the report complete? 

 Were the guaranteed savings for the project met? 

 Were the correct utility and escalation rates used? 

 Were all activities required by the M&V Plan followed? 

 Were variations between the estimated and the reported savings explained? If not, 

why not and what corrective actions will or should be taken? By whom? 

 Did the report provide useful feedback on the performance of each measure? 

 Did the report verify the potential of the ECMs to save in future? 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports 4 
The distribution list for the parties receiving this review is included in Table 2. 

Table 2: Distribution List of Report Review 

Reviewer: 

Reviewer Contact Information: 

Date of Review: 

Agency Contact: 

Date review was provided to Agency Contact: 

DOE Contact: 

Date review was provided to DOE contact: 

The project materials that were available to the reviewer are shown in Table 3. 

Table 3: Documents Available During Review 

Entire Delivery Order: 

ECM 

Descriptions 

M&V Plan DO 

Schedules 

Technical 

Appendices 

Post 

Installation 

Report 

Cx Report Performance 

Reports Other (note) 

<YEAR #s> 

Table 4: Overall Project Savings Summary for Performance Year <NUMBER> 

Savings 

Total 

Energy 

Savings 

(MBTU/yr) 

Electric 

Energy 

(kWh) 

Demand 

(kW/mo) 

Natural Gas 

(MBTU/yr) 

Water 

(kGAL/yr) 

Other energyrelated & 

O&M cost 

savings 

($/yr) 

Total Cost 

Savings 

Estimated: $ $ 

Guaranteed: $ 

Reported: $ $ 

ESPC Savings terms used: 

Estimated: Savings originally estimated for each ECM as listed in the Final Proposal Schedule DO-4. 

Guaranteed: Cost savings guaranteed for each performance year and shown in the Final Proposal Schedule DO-1. Only the 

total cost savings for the entire project are guaranteed. Guaranteed savings can only be adjusted through a Contract 

Modification. 

Reported: Actual savings as demonstrated by M&V activities detailed in the Annual Reports; or Expected savings for the first 

performance year reported in the Post-Installation Report. 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports 5 
Determine what percentage these values have changed compared to those scheduled in DO-4. 

For Annual Reports, include a comparison to the previous year’s report to ascertain any 

changes in performance*. 

 Note that ECMs using Option A methods may not show a change even if there are 

performance problems. 

Table 5: Overview of Energy Conservation Measures (ECMs) 

ECM # ECM Description 

Estimated Cost 

Savings 

Reported Cost 

Savings 

% Change 

from DO-4 

% Reported Cost 

Savings 

% Change 

from Last 

Year* 

1 Lighting $425,345 $435,005 +2.2.% 80% 

2 EMCS $88,500 $87,005 -1.6% 20%

 TOTALS $513,845 $522010 +1.0% 

2.3 SECTION 3: SUMMARY OF FINDINGS 

 Include all recommendations resulting from review. Summarize where appropriate, 

using references to completed Checklists. 

 Discuss financial performance of project (briefly). Have savings levels increased or 

decreased significantly from year to year? 

 Comment on adequacy of report and the level of fulfillment of contract 

responsibilities as outlined in the M&V plan: 

o Note any missing or deficient items from the Review Checklists. 

o Note any changes in scope or performance, or results that differ from the PostInstallation or previous year’s report. 

 Summarize any issues for each ECM. Note any performance problems, O&M issues, 

or deficiencies that need to be addressed. Make a sub-section for each ECM if 

needed. 

Post-Installation and Annual Report Review Template starts on the next page. 

6 Appendix F – Reviewing Post-Installation and Annual Reports FEMP 
2.4 SECTION 4: ESPC PERFORMANCE REPORT CHECKLISTS (V 2.0) 

Customize and complete the appropriate checklists, and delete those that are not applicable. 

Checklists included in this section are: 

 Post-Installation Report Checklists: 

o Post-Installation - Project Level Checklist 

o Post-Installation -ECM Level Checklists 

 Annual Report Checklists: 

o Annual Report - Project Level Checklist 

o Annual Report - ECM Level Checklists 

FEMP Appendix F – Reviewing Post-Installation and Annual Reports 7 
2.5 POST-INSTALLATION REPORT CHECKLISTS 

[Note: All content is required (if applicable), except items noted as optional.] 2.5.1 Post-Installation Report - Project Level Checklist Reference 

Page 

Item from Post-Installation Report Included? 

Note any deficiencomments. 

1. Executive Summary 1.1 Project Background 

Contract # / Delivery Order # / Task # / Modification # (as appropriate) Dates of relevant delivery order modifications Performance period dates covered Project acceptance date (actual or expected) 

1.2 Brief Project and ECM Descriptions 

Provide an overview what was done and how savings are generated. Note any changes in project scope between the Final Proposal (including any relevant delivery order modifications) and as-built conditions. 

Summary of Proposed Energy and Cost Savings Summary of Expected Energy and Cost Savings 

Guaranteed cost savings for 1st Performance Year 

1.3 Summary of Proposed and Verified Energy and Cost Savings 

Evaluation If guarantee is not expected to be fulfilled for Year 1, provide detailed explanation. 

Table showing the expected savings for each ECM for the First Year based on post-installation M&V activities. 

Data should be presented by O&M cost savings, energy units, energy cost/unit, and other savings values as applicable. Include all fuels / commodities for project, such as: electric energy, electric demand, natural gas, fuel oil, coal, water, etc. 

Table showing the proposed savings for each ECM from the final proposal, as detailed above. 

1.4 Energy, Water, and O&M Rate Data 

Detail energy and water rates used to calculate cost savings for this period. 

Provide performance period rate adjustment factors for energy, water, and O&M cost savings, if used. 

Evaluation Were rates shown in the final proposal used, and were rate adjustment factors applied correctly? Evaluation If savings result from rate changes, have the baseline and new rates been reported? 

Report actual energy and water rates at site for same period. (Optional content requirement) 

1.5 Savings Adjustments 

Provide summary of any energy and/or cost savings adjustments required between Final Proposal (including any relevant delivery order modifications) and as-built conditions. 

8 Appendix F – Reviewing Post-Installation and Annual Reports 
Reference 

Page 

Item from Post-Installation Report Included? 

Note any deficiencomments. 

Describe the impact in changes between the Final Proposal (including any relevant delivery order modifications) 

and as-built conditions based on post-installation M&V results. 

1.6 Construction Period Savings 

Provide a summary of construction period savings, if applicable. Provide overview of how construction period savings are calculated. 

1.7 Status of Rebates (if applicable) 

Provide a summary of the source of any third-party rebates or incentives provided on this project. 

Provide status of any third-party rebates or incentives. 

2.5.2 Post-Installation Report - ECM Level Checklist #1 (Copy for Each ECM) 

Reference 

Page 

Details should be included for each ECM Included? Note a

or issues 

ECM # / 

% Cost Savings: x% 

% Project Energy & Water Cost Savings: y% 

2. M&V Activities and Expected First Year Savings 2.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM Summarize the scope of work, location, and how cost savings are generated. 

 Describe source of all savings including energy, water, O&M, and other (if applicable). State M&V guideline and option used. 

Evaluation Do M&V activities match declared M&V option? 

Provide an overview of M&V activities for ECM. Explain the intent of M&V plan, including what is being verified. Provide an overview of savings calculation methods for ECM. Provide a general description of analysis methods used for savings calculations. 

2.2 Installation Verification 

Detail any changes between Final Proposal (including any relevant delivery order modifications) and as-built conditions. Table showing details of energy and cost savings impacts from changes between Final Proposal (including any 

relevant delivery order modifications) and as-built conditions based on post-installation M&V results. Proposed and Expected energy and cost savings broken out by commodity/saving source should be included. 

Evaluation Do Expected cost savings vary by 10% or more from Proposed savings? Evaluation Is explanation of why changes occurred in savings values sufficient? 9 Appendix F – Reviewing Post-Installation and Annual Reports 
Reference 

Page 

Details should be included for each ECM Included? Note a

or issues 

ECM # / 

% Cost Savings: x% 

% Project Energy & Water Cost Savings: y% 

Describe construction period savings (if applicable). Include date ECM was in effect, and reference acceptance 

documentation. 

Detail savings calculations for construction period savings. 

2.3 Post-Installation M&V Activities Conducted 

Detail measurements, monitoring, and inspections conducted in accordance with M&V plan: Measurement equipment used Equipment calibration documentation 

Dates/times of data collection or inspections, names of personnel, and documentation of government 

witnessing Details to confirm adherence to sampling plan Include all post-installation measured values. Include periods of monitoring and durations and frequency of measurements. (Use appendix and electronic format as necessary). Include description of data format (headings, units, etc.). 

Evaluation Have all activities prescribed in the Final Proposal been conducted? 

Describe how performance criteria have been met. Detail any performance deficiencies that need to be addressed by ESCO or Government. Note impact of performance deficiencies or enhancements on generation of savings. 

2.4 Expected Savings Calculations and Methodology 

Provide detailed description of analysis methodology used.  Describe any data manipulation or analysis that was conducted prior to applying savings calculations. Detail all assumptions and sources of data, including all stipulated values used in calculations. 

Include equations and technical details of all calculations made. (Use appendix and electronic format as 

necessary.) Include description of data format (headings, units, etc.). Details of any baseline or savings adjustments made. 

Evaluation Is the basis for the adjustment valid, and have adjustment been consistently and uniformly applied? 

Detail energy and water rates used to calculate cost savings. 

 Provide performance period energy and water rate adjustment factors, if used. 

Report actual energy and water rates at site for same period (Optional – not required content) 

Evaluation Were rates shown in the final proposal used, and were rate adjustment factors applied correctly? Evaluation If savings result from rate changes, have the baseline and new rates been reported? Evaluation Did the reviewer verify the math in the savings calculations? 

Detail expected savings for this energy conservation measure for first year. 

10 Appendix F – Reviewing Post-Installation and Annual Reports 
Reference 

Page 

Details should be included for each ECM Included? Note a

or issues 

ECM # / 

% Cost Savings: x% 

% Project Energy & Water Cost Savings: y% 

Table showing the expected savings for ECM, including baseline and expected first year usages based on 

post-installation M&V results. Data should be detailed by O&M cost savings, energy units, energy cost/unit, and other savings values as applicable. Include all fuels / commodities for project, such as: electric energy, electric demand, natural gas, fuel oil, coal, water, etc. 

2.5 Details of O&M and Other Savings (if applicable) Describe source of O&M savings, if applicable. Describe verification activities. 

Provide performance period O&M cost savings adjustment factors, if applicable. 

Evaluation Have the cost savings adjustment factors from the Final Proposal been used, and were they properly applied? 11 Appendix F – Reviewing Post-Installation and Annual Reports 
2.6 ANNUAL REPORT CHECKLISTS 

[Note: All content is required (if applicable), except items noted as optional.] 2.6.1 Annual Report Project Level Checklist 

Reference 

Page 

Project Level Item Included? 

Note any deficien

1. Executive Summary 1.1 Project Background 

Contract # / Delivery Order # / Task # / Modification # (as appropriate) Dates of relevant delivery order modifications Performance period dates covered Project acceptance date Contract year #: ___________ 

1.2 Brief Project and ECM Descriptions 

Provide an overview what was done and how savings are generated. 

Note any changes in project scope between the Final Proposal (including any relevant delivery order 

modifications) and as-built conditions as recorded in post-installation report. 

Summary of Proposed Energy and Cost Savings Summary of Verified Energy and Cost Savings 

Guaranteed cost savings for this Performance Year 

1.3 Summary of Proposed and Verified Energy and Cost Savings 

Evaluation If guarantee is not fulfilled for year, provide detailed explanation 

Table showing the Verified savings for each ECM, including baseline and performance year usages. Data 

should be detailed by O&M cost savings, energy units, energy cost/unit, and other savings values as applicable. Include all fuels / commodities for project, such as: electric energy, electric demand, natural gas, fuel oil, coal, water, etc. 

Table showing the Proposed savings for each ECM from the final proposal, as detailed above. 

1.4 Savings Adjustments 

Provide summary of any energy and/or cost savings adjustments required. 

Evaluation Is the basis for the adjustment valid, and have adjustment been consistently and uniformly applied? 

1.5 Performance and O&M Issues 

Note impact of operating deficiencies or enhancements on generation of savings. Note impact of maintenance deficiencies on generation of savings. Detail any deficiencies that need to be addressed by ESCO or Government. 

1.6 Energy, Water, and O&M Rate Data 

Detail energy and water rates used to calculate cost savings for this period. 

Provide performance period rate adjustment factors for energy, water and O&M cost savings, if used. 

12 Appendix F – Reviewing Post-Installation and Annual Reports 
Reference 

Page 

Project Level Item Included? 

Note any deficien

Evaluation Were rates shown in the final proposal used, and were rate adjustment factors applied correctly? Evaluation If savings result from rate changes, have the baseline and new rates been reported? 

Report actual energy and water rates at site for the same period. (Optional – Not required content) 

1.7 Verified Savings To Date 

Table Summarizing verified savings for each year during Performance Period To Date. Include energy savings, 

water savings (gallons/yr), energy & water cost savings ($/yr), O&M cost savings ($/yr), Total cost savings ($/yr), and Guaranteed cost savings for year. 

2.6.2 Annual Report - ECM Level Checklist #1 (Copy for Each ECM) 

Reference 

Page 

ECM Level Item Includ

Note any de

ECM # / 

% Project Total Cost Savings: x% 

% Project Energy & Water Cost Savings: y% 

2. M&V Activities and Verified Savings for Year #___ 2.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM Summarize the scope of work, location, and how cost savings are generated. 

 Describe source of all savings including energy, water, O&M, and other (if applicable). 

Discuss any changes in scope / results recorded in post-installation M&V report. 

State M&V guideline and option used. 

Evaluation Do M&V activities match declared M&V Option? 

Provide an overview of M&V activities for ECM. Explain the intent of M&V plan, including what is being verified. Provide an overview of savings calculation methods for ECM. Provide a general description of analysis methods used for savings calculations. 

2.2 M&V Activities Conducted This Period 

Detail measurements, monitoring, and inspections conducted this reporting period in accordance with M&V 

plan. 

Measurement equipment used Equipment calibration documentation Dates/times of data collection or inspections, names of personnel, and documentation of government 

witnessing 

Details to confirm adherence to sampling plan 

13 Appendix F – Reviewing Post-Installation and Annual Reports 
Reference 

Page 

ECM Level Item Includ

Note any de

ECM # / 

% Project Total Cost Savings: x% 

% Project Energy & Water Cost Savings: y% 

Include all measured values for this period. Include periods of monitoring and durations and frequency of 

measurements. (Use appendix and electronic format as necessary). Include description of data format (headings, units, etc.). 

Evaluation Have all activities prescribed in the Final Proposal been conducted? 

Describe how performance criteria have been met. Detail any performance deficiencies that need to be addressed by ESCO or Government. Note impact of performance deficiencies or enhancements on generation of savings. 

2.3 Verified Savings Calculations and Methodology 

Provide detailed description of analysis methodology used. 

 Describe any data manipulation or analysis that was conducted prior to applying savings calculations. 

Detail all assumptions and sources of data, including all stipulated values used in calculations. 

Include equations and technical details of all calculations made. (Use appendix and electronic format as 

necessary.) Include description of data format (headings, units, etc.). 

Evaluation Did the reviewer verify the math in the savings calculations? 

Details of any baseline or savings adjustments made. 

Detail energy and water rates used to calculate cost savings. 

 Provide performance period energy & water rate adjustment factors, if used. 

Evaluation Were rates shown in the final proposal used, and were rate adjustment factors applied correctly? Evaluation If savings result from rate changes, have the baseline and new rates been reported? 

Report actual energy and water rates at site for same period (Optional –not required content) 

Detail verified savings for energy conservation measure for this performance year. Table detailing baseline and verified annual savings for this energy conservation measure for the performance 

period: including the baseline energy use, post-install energy use, and projected savings for ECM. Detail energy units, energy cost, O&M savings, and other savings values as applicable. Include all applicable fuels / commodities for project, such as: electric energy, electric demand, natural gas, fuel oil, coal, water, etc. 

Evaluation Do verified savings vary by more than 10% when compared to last year’s savings? Evaluation Is sufficient explanation provided for the change in savings? 

2.4 Details of O&M and Other Savings (if applicable) 

Describe source(s) of savings Describe verification activities Provide performance period savings adjustment factors, if applicable. 

Evaluation Were adjustment factors shown in the final proposal used, and were the factors applied correctly? 14 Appendix F – Reviewing Post-Installation and Annual Reports 
Reference 

Page 

ECM Level Item Includ

Note any de

ECM # / 

% Project Total Cost Savings: x% 

% Project Energy & Water Cost Savings: y% 

2.5 O&M and Other Activities Operating requirements: 

State organization(s) responsible for equipment operations. If appropriate, detail how responsibilities are 

shared. 

Summarize key operating procedures and any related verification activities. Detail any deficiencies that need to be addressed by ESCO or Government. Note impact of operating deficiencies or enhancements on generation of savings. 

Evaluation Is follow-up required by the Agency or ESCO on operating issues? 

Preventive maintenance requirements: 

State organization(s) responsible for performing maintenance. If appropriate, detail how responsibilities are 

shared. 

Verification of scheduled maintenance items completed by ESCO or Government. Detail any deficiencies that need to be addressed by ESCO or Government. Note impact of maintenance deficiencies on generation of savings. 

Evaluation Is follow-up required by the Agency or ESCO on preventive maintenance? 

Repair and replacement requirements: 

State organization(s) responsible for repair and replacement. If appropriate, detail how responsibilities are 

shared. 

Summary of activities conducted this period by ESCO or Government. Detail any deficiencies that need to be addressed by ESCO or Government. Note impact of equipment deficiencies on generation of savings. 

Evaluation Is follow-up required by the Agency or ESCO on repair or replacement issues? 15 Appendix F – Reviewing Post-Installation and Annual Reports 
16 Appendix F – Reviewing Post-Installation and Annual Reports 
Appendix G Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

G-1 
G-2 Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 
Standard Measurement & Verification Plan 

for 

Lighting Equipment Retrofit or Replacement Projects 

Conducted Under DOE’s Super ESPC Program 

Revised January 15, 2007 

Federal Energy Management Program (FEMP) 

Office of Energy Efficiency and Renewable Energy 

U.S. Department of Energy 

This document was developed for the U.S. Department of Energy’s Federal Energy Management Program 

by Nexant, Inc., and Lawrence Berkeley National Laboratory. This document WILL BE posted on FEMP’s 

web site at http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html. 

Comments should be sent to dasartor@lbl.gov. 

Contents 

Section Page 

Section 1 Background ............................................................................................................... 1 

Section 2 How to use this Guide............................................................................................... 2

2.1 User Notes....................................................................................................................... 2 

2.2 Risk and Responsibility Matrix ...................................................................................... 2 

2.3 Instrumentation Requirements........................................................................................ 3 

2.4 M&V Plan Summary ...................................................................................................... 3 

Section 3 Lighting Retrofit M&V Plan and Savings Calculation Methods ......................... 5 

3.1 Overview of ECM, M&V Plan, and Savings Calculation .............................................. 5 

3.2 Energy and Water Baseline Development ...................................................................... 6 

3.2.1 Lighting Levels ....................................................................................................... 6 

3.2.2 Fixture Power Consumption ................................................................................... 6 

3.2.3 Usage Groups for Operating Hours ........................................................................ 7 

3.2.4 Sample Sizes ........................................................................................................... 8 

3.2.5 Results................................................................................................................... 11 

3.3 Proposed Energy & Demand Savings Calculation Methodology................................. 13 

3.4 Operations and Maintenance and Other Cost Savings.................................................. 14 

3.5 Proposed Annual Savings for ECM.............................................................................. 14 

3.6 Post-Installation M&V Activities ................................................................................. 14 

3.7 Performance Period Verification Activities.................................................................. 15 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

iii 
List of Tables 

Table Page 

Table 1 Example Instrumentation Specifications .......................................................................... 3

Table 2 Summary of Key Elements in Standard M&V Plan for Lighting Retrofits...................... 4

Table 3 Fixture Power Measurements – Types, Monitoring Points, Results............................... 11

Table 4 Usage Group Descriptions, Monitoring Points & Results.............................................. 12

Table 5 Example Calculation Table............................................................................................. 13

Table 6 Proposed Annual Savings for ECM 1- Lighting............................................................. 14

iv Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 
Section 1 Background 

This document provides a comprehensive framework for a measurement and verification (M&V) 

Plan for lighting projects performed via an energy performance contract. A working group of 

industry and private sector parties involved with DOE’s Super ESPC Program developed this 

document. It should serve the following purposes: 

 Provide a foundation for an M&V plan for a lighting retrofit utilizing a “best 

practice” approach, which considers risk allocation, engineering accuracy, and costeffectiveness. This document provides a base document that must be customized for 

individual applications. 

 Reduce development and review times on individual projects. 

 Provide guidance to Agencies on what is essential for robust M&V plan for lighting 

projects. 

 Provides an example of an M&V Plan for one of the most common measures that 

complies with the requirements set forth in the FEMP M&V guidelines, Version 2.21, 

and 

 Provides an example of the format for M&V Plans for Federal ESPC projects, as 

detailed by the M&V Plan Outline.2

This document contains the basis for M&V Plan for lighting retrofit measures, using Option A 

method LE-A-02 with some modifications. This methodology is recommended for most lighting 

retrofit projects, as outlined in Section 2.1. 

1 FEMP M&V Guideline V 2.2 available at http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html 

2 Based on V1.0 M&V Plan Outline for FEMP Super ESPC projects is available at 

http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

1 
Section 2 How to use this Guide 

2.1 USER NOTES 

The M&V approach outlined herein contains many specific parameters. The prescribed 

methodologies were developed with consideration for technical accuracy, cost effectiveness, and 

appropriate risk allocation. 

This draft plan is intended to be used as a starting point, and must be customized for each 

project. This plan only covers section three, M&V Plan and Savings Calculation Methods, of the 

M&V Plan Outline3, and must be used with the first two sections Executive Summary / M&V 

Overview & Proposed Savings Calculations and Whole Project Data / Global Assumptions. 

All text highlighted in yellow indicates data that should be customized for the project. In some 

locations, footnotes or text-boxes are included to provide additional instructions. Instructions 

should not be included in the M&V plan. 

For projects that deviate from the prescribed methodologies, the ESCO is expected to document 

the deviations from the base plan, which: 

 Allows government staff to easily assess the M&V approach; and 

 Helps to ensure a minimum level of rigor is maintained on individual projects in order 

to maintain the integrity of the DOE program. 

This approach is suitable for projects that: 

 Consist of lighting fixture retrofits and / or replacements; 

 Do not generate savings through reductions in operating hours (e.g., day lighting 

controls or occupancy sensors) 

 Projects where lighting saving are more than $100,000 per year and lighting savings 

comprise more than 30% of total project savings 

 Projects where the agency seeks rigorous verification of savings regardless of savings 

amount. 

2.2 RISK AND RESPONSIBILITY MATRIX 

The risk and responsibility matrix provides an overview of risk allocation in a Super ESPC 

contract. Since the matrix must align with the M&V plan, the following are key items that need 

to be properly addressed in the Risk and Responsibility matrix for this ECM: 

Operating Hours: 

 Operating hours are based on monitored baseline data described in this plan. The 

post-retrofit period operating hours are stipulated to be the same as the baseline 

3 op cit 

Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 

2 
period. The Agency is responsible for any changes in operating hours, and the 

verified savings will be based on the baseline operating hours. 

Equipment Performance: 

 ESCO is responsible for ensuring that the new lamps and ballasts are as specified, and 

meet the expected performance parameters, which should be defined in the M&V 

plan 

2.3 INSTRUMENTATION REQUIREMENTS 

The sample M&V plan specifies the minimum accuracy requirements of the instrumentation to 

be used for measurements. Specific instrumentation identified in the sample plan are provided as 

examples of the type of measurement device which should be used. Include the actual 

specifications and measurement accuracies of any equipment used. If the accuracy is much less 

than prescribed, the measurements from equipment may not be suitable as they introduce 

additional error into the energy calculations. 

Table 1 Example Instrumentation Specifications 

Equipment

Type Purpose Accuracy of Measurement Example Brand Names 

Light level meter Establish functional 

performance of baseline 

and new lighting 

equipment 

± 5%  Extech 

 Amprobe 

 Greenlee 

Power meter Establish true RMS power 

draw of baseline and new 

lighting equipment 

± 3%  Fluke 39/41/41B 

 Extech 4KC20 

 AEMC 3910 

Light on/off data 

logger 

Measure run time of 

lighting fixtures 

Time measurements are ±1 

minute / week; Light 

threshold adjustment range 

10 – 1,000 lumens / m2 

 Onset Computer Hobo 

Loggers 

 Dent Instruments SmartLogger 

 Omega OM-53 

2.4 M&V PLAN SUMMARY 

Table 2 summarizes the key elements present in this Standard M&V plan for Lighting 

Equipment Retrofits. The content is organized into four sections: Baseline M&V Activities, PostInstallation M&V Activities, Annual / Periodic M&V Activities, and Energy Use and Savings 

Calculations. 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

3 
Table 2 Summary of Key Elements in Standard M&V Plan for Lighting Retrofits 

ECM – Lighting Equipment Retrofit 

Brief ECM Description: Retrofit existing fluorescent, incandescent, and HID lighting fixtures with more efficient lamps 

and ballasts. Savings will result from reduced fixture power consumption. Operating hours are not affected by this ECM 

M&V Option: Option A Protocol: FEMP M&V Guidelines V 2.2 

Baseline M&V Activities: 

(Summary of Measurements Performed, Assumptions, Other Sources of Data, Baseline Energy Use Calculation Methodology) 

 Baseline fixture power measured for lamp ballast combinations (LBC) representing a total of 75% of the baseline connected 

load. Sampling plan requires ±10% uncertainty at a confidence level of 90%. 

 Baseline Operating Hours measured for usage groups representing at least 75% of the energy savings. Sampling plan requires 

±20% uncertainty at a confidence level of 80%. 

 Operating hours for usage groups not measured are based on data provided by facility 

 Fixture powers for LBCs not measured are based on manufacturer’s data. 

 HVAC interactions are negligible 

 Fixture counts from lighting audit 

 Baseline energy use based on product of the baseline fixture power consumption, operating hours, and fixture quantities for 

each line item in the lighting audit 

Baseline demand based on product of the baseline fixture power consumption, demand coincidence factor (based on operating 

hours and peak building demand period), and fixture quantities for each line item in the inventory 

Post-Installation M&V Activities 

Summary of Inspections, Measurements to be performed, Reporting Requirements and Submittals 

 Lighting audit and inspection to confirm final fixture counts 

 Fixture power measurements for lamp ballast combinations representing a total of 75% of the post-installation connected load. 

Sampling plan requires ±10% uncertainty at a confidence level of 90%. 

 Operating hours assumed to be the same as baseline operating hours 

 Verified post-installation energy use based on product of the verified post-installation fixture power consumption, operating 

hours, and fixture quantities for each line item in the inventory 

 Verified post-installation demand based on product of the verified post-installation fixture power consumption, demand 

coincidence factor (based on operating hours and peak building demand period), and fixture quantities for each item in 

inventory 

 Use Proposed Savings Calculations methodology, using verified post-installation fixture powers 

 Post-Installation report in accordance with IDIQ Requirements. 

Annual or Periodic M&V Activities: 

(Summary of Inspections, Measurements to be performed, Reporting Requirements and Submittals) 

 Inspect approximately 1% of the floor area retrofitted annually. 

 Select areas to be inspected randomly, and avoid inspecting same areas each year. 

 No additional measurements required 

 Verified savings based on post-installation M&V results 

 Report deficiencies that affect energy savings to facility when they are identified, and summarize issues and response in 

Annual Report 

 O&M data to be provided by facility and included in Annual Report 

 Annual Report in accordance with IDIQ Requirements. 

Energy Use and Savings Calculations: 

(Summary of Savings Calculation Method) 

 Proposed post-installation energy use based on product of the post-installation fixture power consumption (based on postinstallation M&V results), operating hours, and fixture quantities for each line item in the inventory 

 Proposed post-installation demand based on product of the post-installation fixture power consumption (based on postinstallation M&V results), demand coincidence factor (based on operating hours and peak building demand period), and fixture 

quantities for each item in inventory 

 Savings are the difference between the baseline and post-installation energy use and demand. 

Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 

4 
Section 3 Lighting Retrofit M&V Plan and Savings Calculation Methods 

3.1 OVERVIEW OF ECM, M&V PLAN, AND SAVINGS CALCULATION 

A complete retrofit of the lighting equipment in the Federal Center is planned as a part of the 

ESPC agreement. The existing fixtures (specify quantity) will be retrofitted/replaced with more 

efficient equipment. Energy savings and demand savings will result from this project. 

Option A has been selected for this measure due to the high confidence with which the fixture 

demand and operating hours may be determined. Equipment numbers and locations will not vary 

and operating hours are not projected to change after the project is implemented. 

The Measurement and Verification Plan for the lighting efficiency retrofit at the Federal Center 

will follow FEMP M&V Option A, Method LE-A-02 (with modifications) using DOE’s 

Standard Measurement & Verification Plan for Lighting Equipment Retrofit or Replacement 

Projects dated December 8, 2006. The modifications to the Standard Plan include the following 

items: 

 No changes4 

The variables affecting savings from this lighting project are fixture power consumptions, hours 

of operation, and level of coincident operation (what portion of the connected lighting load is 

operating when the building peak demand is set). Fixture power consumptions were measured on 

a sample of the most common fixture types. For less common fixture types, fixture powers were 

based on a table of standard fixture powers or manufacturer’s data. Tables and specifications 

used in this project are provided in the Appendix. 

Operating hours have been measured on a sample of space types during the Detailed Energy 

Survey. The measured hours will be used to estimate the energy and demand savings during 

performance period and will not be adjusted even if the actual operating schedules change. 

The Measurement and Verification Plan for this retrofit assumes: 

 Operating hours will be measured during the Detailed Energy Survey, prior to 

contract signing. The hours for the lighting fixtures will be the same before and after 

the equipment retrofit for the purpose of energy savings calculations. 

 Fixture power consumptions before and after the retrofits or replacements will be 

measured. 

 Interactive effects on heating and cooling equipment from the lighting retrofit will not 

be considered since heating and cooling interactions effectively cancel each other 

out5. 

4 INSTRUCTIONS: If any changes have been made from the details in the template approach, detail them here. 

5 INSTRUCTIONS: Energy interactions should be accounted for if the effect of heating and cooling penalties are not of similar magnitudes. In

some electrically heated (or re-heated) buildings, the heating penalty can have a dramatic effect on energy usage and should be accounted 

for in the M&V plan. 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

5 
 Lighting levels will not decrease as a result of the lighting equipment retrofit, unless 

explicitly specified for an individual area. Existing lighting levels have been 

measured and recorded for representative spaces and areas of concern. Results are 

included in the equipment inventory. 

3.2 ENERGY AND WATER BASELINE DEVELOPMENT 

During the Detailed Energy Survey, which took place during April 2006, a comprehensive 

lighting audit was completed. A room-by-room inventory of fixture counts, types, and circuits 

was made. This inventory of all existing lighting equipment, including baseline lighting levels is 

provided in the Appendices. 

In all cases, burned out fixtures and lamps are noted in the room-by-room inventory. During the 

survey, x% of fixtures had one or more burned out lamps or ballasts. This was accounted for in 

the baseline and in the savings calculations by [Describe actions or adjustments.] 

3.2.1 Lighting Levels 

Lighting levels will not decrease as a result of the lighting equipment retrofit, unless explicitly 

specified for an individual area. Baseline lighting levels have been measured and recorded for 

representative spaces and areas of concern. The areas for which baseline and post-installation 

lighting levels will be documented have been agreed upon and include the following: 

Space Type Locations Notes 

Typical private office One on each exposure N, E, S, W 

Typical hallway One per floor 

Typical open office 

Mechanical equipment shop Basement Existing light levels are insufficient 

Main conference room 2nd floor, room 230 

Lighting level measurements were made so they are repeatable before and after the equipment 

replacement. The calibration certificate for the Amprobe lighting meter model xxyy (dated 

x/y/cccc) is included in the Appendix. At a minimum, all light level measurements include the 

following for each space: 2 measurements will be recorded - 1 directly underneath a fixture, and 

one in between fixtures, both 30” off floor. If possible, measurements will be made when the 

contribution from daylight is minimal. 

3.2.2 Fixture Power Consumption 

During the lighting survey, fixture types (lamp/ballast combinations or LBCs) present in this 

facility were identified, and are called ‘fixture type groups6.’ Samples of the most common 

fixture type groups were measured to determine the fixture power consumption under actual 

operating conditions. The measured fixture type groups represent more than 75%7

 of the affected 

baseline connected lighting load. A total of [number] fixture type groups were identified, which 

include at least 75% of the affected lighting connected load, as shown in Table 3 Section 3.2.5. 

6 Lamp / ballast combination or LBC is acceptable terminology as well. 

7 INSTRUCTIONS: 75% is the recommended amount, but there may be situations where it is not practical to measure sufficient fixture types

that represent 75% of the new load. Such a situation may arise where there are numerous fixture types, each of which is only a small portion 

of the connected load. If applicable, note changes made and why in 3.1 Overview of ECM, M&V Plan, and Savings Calculation section. 

Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 

6 
For the remaining fixture types that were not measured, fixture powers were taken from a table 

of standard fixture powers or manufacture’s data. The table of fixture powers to be used is from 

[reference data source8]. 

After the fixtures are replaced, power measurements will again be taken on a sample of fixture 

type groups that represent more than 75% of the new connected load. For new equipment, power 

measurements will be made after at least 100 hours of operation on each fixture. In all cases, 

fixtures will operate for at least one hour prior to measurement in order to achieve typical 

operating temperature. For the remaining fixture types that are not measured, fixture power 

consumptions will be taken from a table of standard fixture powers or from manufacturer’s 

specifications. 

In all cases, the number of power measurements taken is sufficient to achieve a +10% precision 

at 90% confidence using a Usage Group Sampling technique as discussed in Section 3.2.4. Since 

similar fixtures have similar powers, normally only a few measurements would be necessary to 

achieve this high degree of precision. However, some buildings have fixture populations that are 

not homogeneous due to lamp and ballast replacement over time or from localized remodeling. 

The assumption of a homogeneous population was not valid and additional measurements were 

required to achieve the desired accuracy level including [specify affected fixture groups]. 

Where it is impractical to measure power directly at the fixture, fixture circuits may be measured 

if no other loads are on the circuit. The total power divided by the number of fixtures represents 

the average fixture power, but multiple circuits must be measured in order to calculate the 

standard deviation of the measurement and thus show that confidence and precision criteria have 

been met. The results of the baseline measurements are presented in Table 4 in section 3.2.5. The 

results of the post-installation measurements will be included in the Post-Installation Report. 

A Fluke Model 39 True RMS Power Meter was for all measurements, which has a true RMS 

power measurement accuracy of ±2%. A Fluke Model 80i-110s current probe with an accuracy 

of ±3% was used when measuring power on individual fixtures, or on groups of fixtures when 

the total current was less than 5A. A Fluke Model i200s current probe with an accuracy of ±2% 

was used when measuring power on circuits where the current was at least 5 Amps. The most 

recent calibration certificate for the Fluke equipment dated x/y/cccc is included in the Appendix. 

The power meter measured true RMS power, accounting for Volts, Amperes, power factor, and 

total harmonic distortion9. 

3.2.3 Usage Groups for Operating Hours 

A separate set of lighting usage groups were identified based on space functionality and 

estimated operating hours. For usage groups that represented more than 5% of the energy 

savings, fixture operating hours were monitored to determine the typical operating hours10 using 

8 INSTRUCTIONS: Reference specific source of data, such as a utility company’s lighting wattage chart. Provide source data in Appendix if 

feasible. 

9 INSTRUCTIONS: True RMS power measurements are required to ensure that the measurements are accurate. This is a particular concern 

where harmonics may be present. It is not necessary to record the THD, but the meter used must be able to accurately measure the true 

RMS power when harmonic distortion is present, which may be the case when measuring electronic ballasts. 

10 INSTRUCTIONS: In the event there are a large number of usage groups, each of which comprises only a small amount of the savings, it is 

recommended that the Building Level Sampling Approach (a.k.a. stratified sampling) described in Appendix D.3.1 of the FEMP M&V 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

7 
a Usage Group Sampling technique as discussed in Section 3.2.4. Groups that represent 5%11

 or 

less than the expected energy savings were not metered; operating hours were based on typical 

hours of occupancy. However, sufficient usage groups were monitored to account for at least 

75%12 of the total energy savings (kWh). A total of number of usage groups were identified, 

which include X% of the affected lighting energy savings, as shown in Table 4 in section 3.2.5. 

During the audit, the operating hours for a sample of lighting fixtures in each usage group was 

measured over a three-week period. The monitored operating hours were used to estimate the 

annual operating hours for each of the usage groups with an intended precision of +20% at 80% 

confidence. The purpose of monitoring the operating hours is to reduce uncertainty in the final 

savings estimate. However, the ESCO is not responsible for uncertainty in or changes to the 

operating hours, so additional monitoring will not be required if the intended precision criteria is 

not met. The measured operating hours for each usage group will be used as the annual operating 

hours during the performance period. 

Hobo lighting loggers were installed inside the lighting fixtures. These loggers record the time of 

the change-of-state between on and off. In addition to the total operating hours recorded, logger 

data was evaluated to determine the number of hours that a fixture was operating during the 

building’s peak demand period, between 1:00 and 4:00 PM13. This information was used to 

estimate the probability that fixtures in each usage group would be operating coincident with the 

building peak load. This data was used to determine an overall peak coincidence factor for the 

lighting, which ensures demand savings are not overestimated. The results of the measurements 

are presented in Table 4 in Section 3.2.4. 

The specification of the loggers used includes: light threshold adjustment range from 10 to 100 

lumens/m2 (fluorescent light) and record on-off times with an accuracy of ±1 minute per week). 

These new data loggers were calibrated by the manufacturer. The results of the metered data are 

summarized in Section 3.2.5 and all metered data are included in the Appendix. 

3.2.4 Sample Sizes 

Appendix D.3.2, Usage Group Sampling, in the FEMP M&V Guidelines (V 2.2, 2000) describes 

the details of the method used to determine the sample size for each usage group or fixture type 

measurement14. These procedures apply to groups used to determine operating hours and fixture 

powers. Precision and confidence criteria were selected based on experience with previous 

Guidelines version 2.2 be used, rather than the Usage Group sampling approach described herein. This will result in a total sample size 

much smaller than usage group sampling, but without necessarily compromising the overall uncertainty. Despite the name “Building Level 

Sampling Approach”, it can be applied to campuses and bases where different buildings have similar schedules. 

11 INSTRUCTIONS: It is recommend that operating hours for all usage groups that account for more than 5% of the energy savings should be 

measured. If this is not practical, this should be noted in Section 3.1, and a justification for the deviation provided in Section 3.2.3. Building 

Level Sampling (also called Stratified Sampling) may be used to reduce the total number of samples required. 

12 INSTRUCTIONS: 75% of kW is the recommended amount, but there may be situations where it is not practical to measure sufficient usage 

groups that represent 75% of the load. Such a situation may arise where there are numerous usage types, each of which is only a small 

portion of the connected load. If applicable, note changes made and why in Overview of ECM, M&V Plan, and Savings Calculation section. 

13 INSTRUCTIONS: Use the actual time frame that corresponds to the site’s peak usage. 

14 INSTRUCTIONS: If Building Level Sampling is used for operating hours, base the sample size on 20% precision at 80% confidence and 

ignore the sample size discussion contained in this section. Assume a Cv of 0.5 for each group unless better information is available. 

Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 

8 
projects and represent a reasonable compromise between desired precision and costeffectiveness. 

A sample of monitoring points for each usage groups was determined by the following 

procedure: 

1. Define the desired precision and confidence for each measured parameter. For measuring 

fixture powers, +10% precision at 90% confidence is desired. A high degree of precision is 

required because new fixture powers are subtracted from the existing fixture powers. Both 

need to be known with a high degree of precision in order to reduce the uncertainty in the 

difference. For measuring usage group operating hours, +20% precision at 80% confidence 

was selected because: 1) the ESCO is not responsible for usage characteristics, and; 2) it is 

not cost-effective to reduce uncertainty further. 

2. Since sample size required to meet stated precision and confidence criteria is dependent on 

the actual measurement results, assume an initial coefficient of variation for each measured 

parameter. For existing fixture power, use Cv = 0.2; for new fixtures, use Cv = 0.1; for 

operating hours, use Cv = 0.5. 

3. Using the stated assumptions and Equation D.3 from the FEMP M&V Guidelines15, estimate 

the sample size n for the power and operating hour measurements. Given the assumed large 

size of fixtures and usage group spaces, ignore the finite population correction and use the 

following standard statistical equation for estimating sample sizes: 

Z2C2 

v n = 2 Equation 1 

p 

where: 

Z = Z statistic for desired confidence interval 

p = desired precision 

Cv = coefficient of variation 

n = sample size after rounding up to the next integer 

The coefficient of variation (Cv) is simply the standard deviation of the measurement divided 

by the average measurement value. 

Cv = σ Equation 2 

x 

where: 

σ = standard deviation of the measurement 

σ = ∑(x − x)

2

 Equation 3 

n −1 

x = individual measured values 

15 See Appendix D – Sampling Guidelines, pages 321 & 322 of M&V Guidelines: Measurement and Verification for Federal Energy Projects, 

Version 2.2. 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

9 
x = average measured value of n samples 

Note: the standard deviation function is provided on all scientific calculators and spreadsheet 

software. 

4. Using the stated precision and confidence levels from Step 1, determine the sample size for 

each fixture type and operating hour usage group as follows: 

Measured Value Precision Confidence Z Assumed Cv Sample Size, n 

Power, W (baseline) +10% 90% 1.645 0.2 11 

Power, W (new) +10% 90% 1.645 0.1 3 

Hours +20% 80% 1.282 0.50 11 

The selection of assumed Cv for each measurement type is based on experience with previous 

projects. Power measurement sample size may be increased if field results indicate 

significant variability in the measurements. 

If a population of fixture types or usage groups is less than 100, refer to the FEMP 

Guidelines 2.2, Appendix D, equations D.3 and D.4 and Table D.2 for a discussion of how to 

adjust samples sizes for small populations. 

5. When taking power measurements in the field, it is not expected that the metering technician 

will calculate the actual Cv of the power measurements. Instead, the metering technician will 

compare the lowest measured value to the highest for each fixture type. If the highest 

measured value is more than twice the lowest measured value, the number of field 

measurements will be doubled for that fixture type group16. 

6. Using the actual Cv , calculated using Equation 1, the resultant precision can be calculated 

from the previous equations after some simple algebraic manipulation. The measurement 

precision can be calculated as follows: 

ZC 

p = v Equation 4 

n 

7. Fixture powers will be based on the average of the measured values. Usage group operating 

hours will be based on the average of the measured values. The coincidence factor (CF, 

portion of that lighting operation that coincides with building peak) for each usage group will 

be based on the operating hours between the building’s likely peak demand period of 1:00 

and 4:00 PM as follows: 

CFUsageGroup = Measured Operating Hours during Building Peak Period Equation 5 

Number of hours in building Peak Period 

16 This is not an arbitrary rule, but an observation that a population with a Cv of 0.2 has a range if about 2:1 between the highest and lowest 

values. If the ratio is greater than 2:1, it is very probable that the Cv is greater than 0.2. 

10 Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 
8. Using the demand savings and measured operating hours, estimate the annual energy savings 

from each usage group. 

3.2.5 Results 

Fixture power measurements are listed in Table 3 below. The number of fixtures in each group, 

the contribution to the total connected load (for baseline fixtures only), power from standard 

table, power measurements, sample size, and precision are all provided. 

If a table of standard fixture powers is used for the non-measured fixtures, providing the table 

power and measured power allows assessing the ability of the table to provide reliable fixture 

powers. If measured values are consistent with table values, it can be assumed that the table is 

reliable. If there are significant differences between the table and the measured values, they 

could be caused by fixture misidentification, mixed fixture types, atypical operating conditions, 

over- or under-Voltage conditions, or other factor(s) that should be investigated. 

Table 3 Fixture Power Measurements – Types, Monitoring Points, Results 

Fixture 

Type 

Number of 

fixtures 

% of 

Baseline 

Lighting

kW 

Table 

Power, 

W 

Number of 

Measurements 

Average 

Measured 

Power, W 

Std 

Dev, W 

Actual 

Cv 

Precision at 

90% 

confidence 

F41ES 73 2% 48 11 52 8 0.15 8% 

F42ES 60 2% 82 11 86 10 0.12 6% 

F44ES 1,339 87% 144 11 140 18 0.13 6% 

I75/1 103 4% 75 11 73 5 0.07 3% 

Totals 1,575 97% 

[codes and numbers are illustrative only] 

The operating hours for the usage groups were monitored for a three-week period in April – May 

2006. The average annual operating hours for each usage group are shown in Table 4, along with 

the actual Cv of each group. Where the reported Cv is less than 0.2 (the originally assumed value 

for baseline fixtures), it is safe to conclude that the precision criterion has been met. If the Cv is 

greater than 0.2, the actual precision will be greater than the intended value. 

The demand reduction listed in Table 4 is based on a reduction in the connected load multiplied 

by the coincidence factor for that group. The coincidence factor for each usage group represents 

the fraction of fixtures operating when the building peak demand is set and therefore represents 

that usage group’s contribution to the demand reduction seen at the utility meter. For groups 

where the hours (and therefore the coincidence factor) are unmeasured, a coincidence factor will 

be estimated from the same schedule used to estimate the operating hours. 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

11 
Table 4 Usage Group Descriptions, Monitoring Points & Results 

Usage 

Group 

Number 

of 

fixtures 

Circuits 

(N) 

Measured 

Points (n) 

Connected 

load 

reduction, 

(kW) 

Annual 

operating

hours 

Energy 

savings, 

kWh 

% of total 

savings 

Actual 

Cv 

Precision 

at 80% 

confidence 

C

24 Hour - Exit 69 21 0 0.82 8,760 7,169 4% 24 Hour - Misc 30 9 5 1.78 8,760 15,598 8% 0.2 7.6% Closed Office Areas 673 204 22 22.96 1,900 43,377 23% 0.65 16.8% Common 

581 176 11 37.39 2,800 104,343 56% 0.43 16.1% 

Conference Rooms 43 13 0 2.75 1,600 4,436 2% Halls and Common areas 131 37 0 1.56 3,000 4,633 2% Storage, comp. closets 218 66 0 5.57 1,200 6,850 4% Totals 1745 526 38 72.83 186,406 100% Office Areas 

[groups and numbers are illustrative only] 12 Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 
3.3 PROPOSED ENERGY & DEMAND SAVINGS CALCULATION METHODOLOGY17 

Lighting energy savings (kWh) are based on the difference between the baseline and post-retrofit 

power (Watts), the fixture quantities, and the hours of operation. For this M&V plan, it is 

assumed that the operating hours remain constant during the performance period. Fixture 

demand savings are calculated as the difference between the baseline and post-retrofit power 

(Watts) multiplied by the coincidence factor defined in Section 3.2.4. 

The proposed lighting energy and demand savings are calculated for each line item in the 

lighting audit inventory using Equations 6 and 7 below:18 

ES = [(FPBase x N Base) - (FPPost x N Post )] x H Equation 6 

DS = [(FPBase x N Base) - (FPPost x N Post )] x CF x 12 Equation 7 

Where: 

ES = Annual electric energy savings (in kWh) 

DS = Annual electric demand savings (in kWh) 

FPBase = Baseline fixture power consumption (in kW/fixture) 

FPPost = Post-installation fixture power consumptions (in kW/fixture) 

NBase = Number of baseline fixtures 

NPost = Number of post-installation fixtures.

H = Annual operating hours 

CFj = Coincidence factor 

Table 5 Example Calculation Table 

Line 

Item 

Baseline 

Fixture 

Power 

(FPBase) 

Number 

of 

baseline 

Fixtures 

(Nbase) 

PostInstallation 

Fixture 

Power 

(FPPost) 

Number 

of PostInstall 

fixtures 

(Npost) 

Annual 

Operating 

Hours (H) 

Coincident 

Factor 

(CF) 

Annual 

Demand 

Savings 

(DS) 

Energy

Savings 

(ES) 

1 0.100 100 0.085 100 3200 0.75 13.5 4,800 

2 0.075 10 0.025 10 8760 1 6.0 4,380 

17 INSTRUCTIONS: The approach described assumes a simple electric rate. If the rate uses a time-of-use periods, the approach shown can be 

modified by calculating the energy and demand savings separately for each time-of-use period. More complex rates, such as demand 

ratchets, may require additional calculations. 

18 The calculation method shown here is based on calculating savings for each line item separately. 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

13 
Total energy and demand savings are the sum of the energy and demand savings for each line 

item. The total annual cost savings will be determined using Equation 8: 

ECSTotal = ES Total x ER + DS Total x DR Equation 8 

Where: 

ECSTotal = Total annual energy cost savings (in dollars) 

ER = Electric energy rate (in $/kWh) 

DR = Electric demand rate (in $/kW) 

The electric energy and demand rates are outlined in Whole Project Data / Global 

Assumptions19. 

As described in the Responsibility Matrix, no alterations or renovations to the office spaces are 

planned. Should the Agency make any changes, it assumes the risk that the savings calculated by 

this plan may not materialize. 

3.4 OPERATIONS AND MAINTENANCE AND OTHER COST SAVINGS 

O&M savings are not being claimed for this ECM. 

3.5 PROPOSED ANNUAL SAVINGS FOR ECM 

The detailed lighting inventory and retrofit specifications are included with the detailed savings 

calculations in the Appendices. 

Table 6 Proposed Annual Savings for ECM 1- Lighting 

Total energy 

use 

(MegBtu/yr)* 

Electric 

energy use

(kWh/yr) 

Electric 

demand 

(kW-yr) 

Electric 

energy 

cost, Year 1 

($/yr) 

Electric 

demand 

cost, Year 

1 ($/yr) 

O&M 

costs, 

Year 1 

($/yr) 

Total 

costs, 

Year 1 

($/yr) 

Baseline use NA 

Post-installation 

use NA 

Savings $0 

* 0.003413 MegBTU = 1 kWh 

The unit of demand reduction— kW-yr— is the sum of the monthly demand reductions. 

3.6 POST-INSTALLATION M&V ACTIVITIES 

Upon completion, an as-built inventory of post-installation lighting fixtures will be supplied, 

including the lighting ballasts and lamps actually installed, and lighting illumination levels (foot– 

candles) in the areas specified. Lighting level measurements will be made in the same fashion as 

baseline measurements, and will be taken after at least 100 hour of fixture use. Current 

19 INSTRUCTIONS: Utility rates are provided in section 2 of the M&V Plan outline, Whole Project Data / Global Assumptions. This document 

only addresses the ECM Specific M&V Plan (Section 3). If the rate uses a time-of-use periods, the approach shown can be modified by 

calculating the energy and demand savings separately for each time-of-use period. More complex rates, such as demand ratchets, may 

require additional calculations. 

14 Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 
calibration certificates for the meter used will be provided. Savings predictions will be corrected 

based on as-built data and will be reported in the Post-Installation Report. 

Immediately following installation, fixture power consumption will be measured in a manner 

identical to that for the baseline fixtures, after the fixtures have burned for at least 100 hours. 

Sample sizes for measurements and procedures are described in Section 3.2.4. These 

measurements will be used to calculate actual expected energy savings, and will be detailed in 

the Post-Installation Report. 

3.7 PERFORMANCE PERIOD VERIFICATION ACTIVITIES 

Once per year, for each year of the contract, ESCO will conduct a site visit, during which the 

lighting system will be inspected to verify proper operation, ensure that it has been maintained, 

and continues to have the potential to generate the expected savings. 

A minimum of 1% of affected floor space will be visually inspected to ensure presence of 

specified lighting equipment. Lighting replacement stock will be inspected during the annual site 

visit to ensure that the proper replacement equipment is available. 

The Annual Report will detail the results of annual inspections, noting significant problems such 

as burned-out lamps and ballasts and deviations with the expected number of operating fixtures, 

etc. The following will be data will be included in the annual report: 

 Dates and times of site visits; 

 ESCO and Agency Staff involved; 

 Areas inspected and findings from inspections; 

 Evaluation of lighting replacement inventory and purchase orders to determine if 

consistent with ESCO installed equipment; 

 Number of lamp and ballast replacements made over the performance year; 

 Any problems identified with the lighting systems by ESCO or Agency; 

 Any major changes in facility that affect this ECM; 

 Any changes in usage of lighting systems 

The Agency is required to track and report to the ESCO the following items each year: 

 Number of lamp and ballast replacements made over the performance year; 

 Any problems identified with the lighting systems by Agency; 

 Any major changes in facility that affect this ECM; 

 Any changes in usage of lighting systems 

FEMP Appendix G – Standard Measurement & Verification Plan 

for Lighting Equipment Retrofit or Replacement Projects 

15 
16 Appendix G – Standard Measurement & Verification Plan FEMP 

for Lighting Equipment Retrofit or Replacement Projects 
Appendix H Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

H-1 
H-2 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Standard Measurement & Verification Plan 

for 

Chiller Replacement Projects 

Conducted Under DOE’s Super ESPC Program 

FINAL DRAFT 

For Approval by ESPC Steering Committee 

2/21/08 

Federal Energy Management Program (FEMP) 

Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy

This document was developed for the U.S. Department of Energy’s Federal Energy Management Program 

by Nexant, Inc. This document will be posted on FEMP’s web site at 

http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html. 

Comments should be sent to lwebster@nexant.com 

Contents 

1. BACKGROUND .................................................................................................................................................1

2. HOW TO USE THIS GUIDE ............................................................................................................................1

2.1 NOTES TO THE USER ..................................................................................................................... 1

2.2 RISK AND RESPONSIBILITY MATRIX ............................................................................................. 2

2.3 INSTRUMENTATION REQUIREMENTS............................................................................................. 3

2.4 M&V PLAN SUMMARY ................................................................................................................. 3

3. CHILLER RETROFIT M&V PLAN AND SAVINGS CALCULATION METHODS ...............................6

3.1 OVERVIEW OF ECM, M&V PLAN, AND SAVINGS CALCULATION FOR ECM................................ 6 

3.2 ENERGY AND WATER BASELINE DEVELOPMENT ......................................................................... 7 

3.3 PROPOSED ENERGY & WATER SAVINGS CALCULATIONS AND METHODOLOGY........................ 13 

3.4 OPERATIONS AND MAINTENANCE AND OTHER COST SAVINGS ................................................. 15 

3.5 PROPOSED ANNUAL SAVINGS FOR ECM.................................................................................... 17 

3.6 POST-INSTALLATION M&V ACTIVITIES ..................................................................................... 18 

3.7 PERFORMANCE PERIOD VERIFICATION ACTIVITIES.................................................................... 19 

4. APPENDIX MATERIALS...............................................................................................................................22

ENGINEERING SUPPLEMENT TO FEMP’S STANDARD M&V PLAN FOR CHILLER REPLACEMENT 

PROJECTS................................................................................................................................................. 22

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

iii 
iv Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
1. BACKGROUND 

This document provides a comprehensive framework for a measurement and verification (M&V) plan for 

chiller replacement projects performed via an energy savings performance contract. A working group of 

industry and private-sector parties involved with DOE’s Super ESPC Program developed this document. 

It should serve the following purposes: 

 Provide a foundation for an M&V plan for a common chiller replacement project utilizing a “best 

practice” approach, which considers risk allocation, engineering accuracy, and cost-effectiveness. 

This document provides a base document that must be customized for individual applications. 

 Reduce development and review times on individual projects. 

 Provide guidance to Federal agencies on what is essential for a robust M&V plan for chiller 

replacement projects. 

 For one of the most common measures in ESPCs, provide an example of an M&V Plan that 

complies with the requirements set forth in the FEMP M&V guidelines. 

 Provide an example of the format for M&V plans for Federal ESPC projects, as detailed in the 

M&V Plan Outline.1 

This M&V plan for chiller replacement projects relies on an M&V Option A retrofit isolation approach 

using periodic on-site measurements. This methodology is recommended for most one-for-one chiller 

replacement projects, as outlined in this section. 

2. HOW TO USE THIS GUIDE 

2.1 Notes to the User 

The M&V approach outlined herein contains many specific parameters. The prescribed methodologies 

were developed with consideration for technical accuracy, cost-effectiveness, and appropriate risk 

allocation. 

This draft plan is intended to be used as a starting point and must be customized for each project. This 

plan only covers section three, M&V Plan and Savings Calculation Methods, of the M&V Plan Outline, 

and must be used in conjunction the first two sections, Executive Summary / M&V Overview & Proposed 

Savings Calculations and Whole Project Data / Global Assumptions. 

All text highlighted in yellow indicates data that should be customized for the project. In some locations, 

footnotes or text boxes are included to provide additional instructions. Instructions should not be included 

in the M&V plan. 

For projects that deviate from the prescribed methodologies, the ESCO is expected to document the 

deviations from the base plan. This approach will serve the following purposes: 

 Allow government staff to easily assess the M&V approach, and 

 Help to ensure that a minimum level of rigor is maintained on individual projects in order to 

maintain the integrity of the Super ESPC program. 

The methodology included herein is suitable for the following projects: 

 Projects that consist of one-for-one replacements of medium and large size chillers. 

 Projects in which risks and responsibilities are to be allocated as indicated in Table 1. 

1 Based on v1.0 M&V Plan Outline for FEMP Super ESPC projects, available at 

http://www1.eere.energy.gov/femp/financing/superespcs_mvresources.html 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

1 
 Projects where energy cost saving of approximately $30,000 per year or more result from the 

chiller replacement. If savings are less, economize on M&V activities. If savings are more, 

enhance M&V activities. 

▫ These annual M&V activities are estimated to amount to about 80 hours of engineering 

labor, with an additional 25 hours for annual O&M activities (sensor calibrations or 

replacements). 

▫ Most projects will also include additional initial M&V costs for installing the permanent 

instrumentation required to conduct these activities. 

2.1.1 Companion Document: Engineering Supplement to the Standard Chiller M&V Plan 

A companion document, Engineering Supplement to FEMP’s Standard Chiller M&V Plan, is attached as 

an appendix. The Engineering Supplement provides an outline of the analyses required to implement this 

M&V plan. 

2.2 Risk and Responsibility Matrix 

The Super ESPC Risk and Responsibility Matrix2 provides an overview of risk allocation in a Super 

ESPC contract. In order to use this standard M&V plan, the project must allocate risks and 

responsibilities that align with the plan. The risk allocation herein is based on the typical arrangement for 

Super ESPC projects. Table 2-1 outlines the key items that need to be included in the project’s Risk and 

Responsibility Matrix for this ECM. 

Table 2-1: Summary of Risk and Responsibility Matrix Items For This ECM 

Item of Responsibility Description of Allocation 

1. Financial: 

a. Interest rates: N/A 

b. Energy prices: ESCO is not responsible for changes in energy rates. 

c. Construction costs: N/A 

d. M & V costs: Included in project costs. First year M&V cost estimated at $6150. 

e. Non-Energy Cost Savings: 

Inclusion is optional based on project parameters. This example includes $2000 annual 

cost savings for non-routine maintenance as a place holder. 

f. Delays: N/A 

g. Major changes in facility: See Load, below 

2. Operational: 

a. Operating hours: See Load, below 

b. Load: ESCO is not responsible for changes in load. 

c. Weather: ESCO is not responsible for weather. 

d. User participation: See Operations, below 

3. Performance: 

a. Equipment performance: ESCO responsible for equipment performance, as defined by kW/ton 

2 The Super ESPC Energy Savings Contract Risk, Responsibility and Performance Matrix, available at 

http://www1.eere.energy.gov/femp/financing/superespcs_espcbasicsp2.html 

Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 

2 
Item of Responsibility Description of Allocation 

b. Operations: 

Customer must comply with operational sequence installed with ECM. ESCO is 

responsible for oversight. 

c. Preventive Maintenance: 

Customer must comply with ESCO specifications for preventive maintenance and 

manufacturer’s requirements. ESCO is responsible for oversight. 

d. Equipment Repair and 

Replacement: 

Responsibility for equipment repair and replacement is negotiable specific to Agency 

policy. 

2.3 Instrumentation Requirements 

For the use of this standard M&V plan to be successful, the sensors used for baseline and post-installation 

measurements must meet minimum accuracy requirements and must be properly calibrated, as shown in 

Table 2-2. If the accuracy of any instrument is less than prescribed, the measurements may not be 

suitable, as they will introduce unacceptable levels of error into the energy calculations. 

The instrumentation accuracy requirements are designed to ensure that overall energy and cost estimates 

are reasonable. Although error analysis is not required by Super ESPC projects, it is important to keep in 

mind that the inaccuracies introduced by the instrumentation will likely be the greatest source of 

uncertainty in calculated savings. For a chiller project, the most important measurements are the chilled 

water temperatures. Additional care should be taken to ensure these sensors have the recommended 

accuracies. 

Table 2-2: Required Instrumentation Accuracies3 

Equipment Type Purpose 

Accuracy of 

Instrumentation 

Flow meter Chilled water flow (GPM) ±2% 

Immersion temperature sensors Chilled water temperatures (oF) ±0.3oF 

Immersion temperature sensors Condenser water temperatures (oF) ±0.5oF 

Power meters True RMS Power ±2% 

Outdoor air relative humidity / wet-bulb 

temperature sensors Outdoor air wet-bulb temperatures ±3% 

Outdoor air temperature sensors Outdoor air dry-bulb temperatures ±1.0oF 

The actual specifications and measurement accuracies of any equipment used should be included in the 

M&V plan. Specific instrumentation types identified herein are provided as examples of the measurement 

devices that should be used. Other important factors that must be considered in selecting proper 

instrumentation are locations, installation requirements, signal outputs, and calibration requirements. 

2.4 M&V Plan Summary 

The following table summarizes the key elements present in this standard M&V plan for chiller 

replacements. The content is summarized in Table 2-3 into four sections: Baseline M&V Activities, PostInstallation M&V Activities, Annual / Periodic M&V Activities, and Energy Use and Savings 

Calculations. 

3 See ASHRAE Guideline 14-2002 for additional information on instrumentation selection. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

3 
Table 2-3 : Summary of Key Elements in Standard M&V Plan for Chiller Replacement 

ECM – Chiller Replacement 

Brief ECM Description: 

M&V Option: Option B Protocol: IPMVP 2007 

Baseline M&V Activities: 

(Summary of measurements performed, assumptions, sources of data, baseline energy use calculation methodology) 

 Confirm baseline meter calibration and accuracy 

 Collect baseline data across expected range of operating conditions (e.g., load, outside air temperature and 

humidity), including both shoulder and peak months (either April – July or August – October). Parameters 

measured include: 

o Chiller electric demand (kW) and energy use (kWh) 

o Chilled water load (tons), calculated from coincident measurements of chilled water flow 

(gpm), chilled water supply and return temperatures (oF), 

o Condenser water supply and return temperatures (oF), 

o Pump and cooling tower demand (kW) and energy use (kWh) (if affected), cooling tower fan 

kWs (if affected), 

o Outdoor air temperature and humidity. 

 Calculate chilled performance (kW/ton) across expected range of operating conditions (e.g., load, outside 

air temperature and humidity)., extrapolate short term cooling load measurements to annual cooling load 

profile for baseline conditions, and verify cooling tower performance (Approach and Range), chilled water 

and condenser water setpoints , chiller sequencing and other baseline parameters 

 Collect baseline documentation: nameplate data, operating schedules, chiller ages and condition, loads 

served, location. 

 Document assumptions including: baseline weather conditions (based on TMY2 weather data for nearest 

site with similar weather conditions), seasonal operating schedules, Month and time of day of peak building 

demand 

Post-Installation M&V Activities 

(Summary of inspections, measurements to be performed, reporting requirements and submittals) 

 Confirm post-installation meter accuracy and calibration 

 Conduct post-installation performance test for two weeks. Parameters to be measured include: 

o Chiller electric demand (kW) and energy use (kWh), 

o Chilled water load (tons), calculated from coincident measurements of chilled water flow 

(gpm), chilled water supply and return temperatures (oF), 

o Condenser water supply and return temperatures (oF), 

o Pump (if affected) and cooling tower fan (if affected) demand (kW) and energy use (kWh), 

o Outdoor air temperature and humidity. 

 Measured pump demand (kW) and energy (kWh) (if affected), cooling tower fan demand (kW) and energy 

use (kWh) (if affected) 

 Post-Installation report in accordance with IDIQ requirements 

Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 

4 
Annual or Periodic M&V Activities 

(Summary of inspections, measurements to be performed, reporting requirements and submittals) 

 Confirm meter accuracy and perform calibrations 

 Perform system performance test using permanently installed metering 

 Parameters to be measured include: 

o Chiller electric demand (kW) and energy use (kWh), 

o Chilled water load (tons), calculated from coincident measurements of chilled water flow 

(gpm), chilled water supply and return temperatures (oF), 

o Condenser water supply and return temperatures (oF), 

o Pump (if affected) and cooling tower fan (if affected) demand (kW) and energy use (kWh), 

o Outdoor air temperature and humidity. 

 Calculate chiller performance (kW/Ton) and compare to proposed chiller performance values 

 Calculate performance period energy use and savings using measured values applied to baseline load 

profile 

 Annual Report in accordance with IDIQ requirements. 

 O&M data to be provided by facility and included in Annual Report 

 Verify O&M has been properly executed, including periodic calibration of instrumentation to prescribed 

accuracies 

Energy Use and Savings Calculations 

(Summary of savings calculation method) 

 Use baseline measured data to determine existing operational efficiency curve and load profiles. 

 Determine baseline load relation to outside air temperature (assume linear relationship). Apply to 8760 

typical meteorological year (TMY) weather data to normalized baseline. 

 To account for interactions (reductions in load) from other measures, loads saved will be subtracted to 

arrive at the adjusted baseline. 

 Each year, measured kW/ton of chillers will be applied to adjusted baseline load to determine energy and 

demand savings. 

 Apply stipulated demand and energy rates to determine cost savings. 

 There will be minimal savings from reduced replacement parts. 

CHILLER M&V PLAN STARTS ON THE NEXT PAGE 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

5 
3. CHILLER RETROFIT M&V PLAN AND SAVINGS 

CALCULATION METHODS 

3.1 Overview of ECM, M&V Plan, and Savings Calculation for ECM 

Three 225-ton centrifugal chillers using R-11 refrigerant will be replaced with three high-efficiency 225­

ton centrifugal chillers using R-134a refrigerant. ECM scope includes recovery of the R-11 refrigerant as 

well as demolition and removal of the old chillers. Related ECMs include ECM #1 - Lighting Retrofit and 

ECM#2 - EMCS (energy management control system upgrade). Both these ECMs will reduce the load on 

the central plant. All central plant peripheral equipment such as pumps, piping, and cooling towers will 

be reused4. 

The chilled water plant uses a constant volume primary loop and a secondary variable flow pumping 

system to supply 46o F chilled water during the months of April to October. The plant is off-line during 

November through March of each year. Existing control sequences for the central plant will be 

maintained5. For example, both the new and old chillers will use condenser water temperatures of down 

to 70oF when available, and will maintain chilled water temperatures at 46oF. Chiller staging strategies 

will also remain the same. 

Capital investment for this ECM is $1,215,000 ($1,800/ton), and first year energy cost savings are 

estimated to be $35,000/yr. O&M savings of $2,000 are being claimed based on documented replacement 

parts and purchased R-11 that will be eliminated. The SPB of 33 years is long, but necessary, due to the 

need to replace the aging chillers and to convert refrigerants. The other measures in this project help to 

shorten the overall payback of the project. 

This measure uses FEMP/IPMVP M&V Option B, retrofit isolation with all parameter measurement. This 

is an Option B approach since the energy use is measured periodically and is used to directly calculate 

performance period savings. Performance period savings will be normalized to average weather 

conditions. 

The M&V plan for this ECM is based on thorough baseline and post-installation data collection and 

analysis. The purpose of collecting baseline chiller data was to define three models: 

1) the cooling loads experienced by the plant based on outdoor air temperatures and other 

variables as needed, and 

2) the existing chillers’ efficiencies (i.e., kW/ton), 

3) key operating conditions of the chiller plant (e.g. condenser water supply temperatures, chilled 

water supply temperatures, chiller sequencing). 

Baseline metering was conducted for a period of three months which covered both peak cooling loads and 

swing month conditions. The baseline cooling load model was applied to average weather data (Typical 

Meteorological Year or TMY) for the site to determine the typical annual cooling load profile for the 

facility. 

Immediately after installation and commissioning is complete, the data from the post-installation 

performance test shall be used to develop a performance model for each of the chillers. Once validated, 

these models will be applied to the hourly load profile and compared to the baseline conditions to predict 

the energy and demand savings for performance Year 1. 

4 INSTRUCTIONS: If peripheral equipment will be modified, include description here and expand all other sections to discuss related impacts. 5 INSTRUCTIONS: If sequences of operation will be modified, discuss specific changes. 

Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 

6 
During August of each year in the contract period the ESCO will perform an annual chiller plant sensor 

calibration and chiller performance testing. The performance test period will start immediately after 

annual calibration is completed and will last for 2 to 8 weeks. 

After the first year, measured data will be collected and used to create chiller models for the current 

performance period. The new chiller performance models will be validated and applied to the hourly load 

profile to determine savings. 

Key operating parameters of the chiller plant will be recorded hourly by the EMCS, and reviewed 

monthly by the ESCO. Data collected will include chilled water supply and return temperatures, chiller 

status, condenser water supply temperature, and outdoor air temperature. Periodic verification is required 

to ensure the proper operating sequences continue to be implemented by facilities staff. 

Energy and demand savings calculations will be based on measured baseline chiller demands, key plant 

operating parameters, and the average cooling load profile for the site. The new chiller performance 

models, developed and verified using measured values, will be applied to the average cooling load profile. 

Baseline and post-installation model results are compared for each hour of the year, and energy and 

demand savings are calculated from the coincident time periods. The annual energy savings are the sum 

of the hourly energy savings, and the peak demand savings are determined for each month during the time 

period which corresponds to the times when the building’s peak demand is typically set. 

3.2 Energy and Water Baseline Development 

Continuous baseline data collection occurred from April 3 to July 17, 2006. Data collected included each 

of the existing chillers’ power use and key operating parameters, discussed below. The nameplate data for 

the existing chillers is summarized in Table 3-1. 

Table 3-1: Summary of Nameplate Data for Baseline Chillers 

Item Chiller #1 Chiller #2 Chiller #3 

Brand Trane Cetravac Trane Cetravac Trane Cetravac 

Model Model F-GD2-GO2 Model F-GD2-GO2 Model F-GD2-GO2 

Capacity 225 tons 225 tons 225 tons 

Rated kW 194 kW 194 kW 194 kW 

Serial # N/A N/A N/A 

The key independent variables affecting baseline chiller efficiency and energy use are total building 

cooling load, chiller sequencing or staging, leaving (or supply) chilled water temperature, entering (or 

supply) condenser water temperature. Primary chilled water and condenser water flow rates affect the 

performance of the chillers but are essentially constant for the existing chiller plant. 

The key system performance factors that characterize the baseline conditions are chilled water supply 

temperature and maximum chiller capacity. 

Baseline chiller plant metering utilized both the EMCS data and stand-alone loggers. Prior to starting 

baseline data collection, the accuracy of the EMCS sensors were evaluated and were then calibrated or 

replaced with new calibrated sensors to ensure precision. The sensors used are shown in Table 3-2, and 

completed calibration forms and certificates are included in the Appendix. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

7 
Table 3-2: Chiller Baseline Data Collection Instrumentation Accuracies 

Data point 

Location of 

Sensor(s) Sensor 

Accuracy of 

Sensor 

Data Acquisition 

& Storage 

Measurement 

Interval 

Chilled water supply 

temperature 

CH-1 

CH-2, & 

CH-3 

Precon STW-24 Thermister +0.3oF EMCS 15 minutes 

Chilled water return 

temperature 

CH-1 

CH-2, & 

CH-3 

Precon STW-24 Thermister +0.3oF EMCS 15 minutes 

Condenser water supply 

temperature 

Common 

supply 

header 

Veris TI HC1F2 +0.2oC EMCS 15 minutes 

Condenser water return 

temperature 

Common 

supply 

header 

Veris TI HC1F2 +0.2oC EMCS 15 minutes 

Chilled water flow rate 

CH-1 

CH-2, & 

CH-3 

Siemens SITRANS 

FUP1010 

+2.0% flow 

rate 

Siemens 

SITRANS 

FUP1010 

5 minutes 

Chiller power and energy 

use (kW & kWh) 

CH-1 

CH-2, & 

CH-3 

DENT ELITEpro PolyPhase Power Meters +2% 

DENT ELITEpro 

Poly-Phase 

Power Meters 

5 minutes 

Outdoor air temperature Roof JCI TE-6363 P-1 Outdoor 

Air Temperature Sensor +1.0oF EMCS 15 minutes 

Outdoor air wet-bulb 

temperature Roof Veriteq Spectrum 200 +3% EMCS 15 minutes 

An excerpt of the measured data is shown in Table 3-3, and all data were submitted in spreadsheet format 

along with this M&V plan. 

Requirements for government witnessing of measurements are as defined in whole project data 

requirements earlier in the M&V plan. The baseline measurements for the chiller were witnessed and 

certified by Facilities Supervisor Don Wong on 7/17/06, and documentation is included in the Appendix. 

Table 3-3 : Excerpt from Baseline Data Collected 

Outside Air Chiller 1 Chiller 2 Chiller 3 

# 

Chill 

Date/Time Tdb Twb 

ers 

On 

CWR 

T CWST 

CH-1 

On 

CH 

Flow 

CHWST 

CH-1 

CHWRT 

CH-1 CH-1 kW 

CH-1 

Tons 

CH-2 

On 

CH 

Flow 

CHWST 

CH-2 

CHWRT 

CH-2 

CH-2 

kW 

CH-2 

Tons 

CH-3 

On 

CH 

Flow 

CHWST 

CH-3 

CHWRT 

CH-3 

CH-3 

kW 

CH-3 

Tons 

4/10/2006 10:00 60 50 1 84.2 75.0 1 540 43.0 46.5 69.20 79 - - 43.0 46.5 - 0 - - 43.0 46.5 - 0 

4/10/2006 10:15 57 49 1 84.0 75.0 1 541 43.0 46.5 68.90 79 - - 43.0 46.5 - 0 - - 43.0 46.5 - 0 

4/10/2006 10:30 58 50 1 84.2 75.1 1 541 43.2 46.7 69.10 79 - - 43.2 46.7 - 0 - - 43.2 46.7 - 0 

4/10/2006 10:45 59 50 1 84.0 75.0 1 540 43.0 46.5 69.00 79 - - 43.0 46.5 - 0 - - 43.0 46.5 - 0 

The baseline data was analyzed to determine 1) building cooling load profile, 2) performance of the 

existing chillers, and 3) chiller plant operating parameters. 

3.2.1 Building Cooling Load Profile 

The baseline data was manipulated to calculate tons of cooling for each chiller at each 15-minute time 

interval, per Equation 1. 

Equation 1: 

TONSt = (CHWF)(500)(CHWRT – CHWST) / (12,000) 

Where: 

CHWF Chilled water flow in gallons per minute (GPM) for chiller 

CHWRT Entering chilled water temperature (return temperature, °F) 

Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 

8 
CHWST Leaving chilled water temperature (supply temperature, °F) 

500 Conversion from GPM to Btu per hour-degree Fahrenheit 

12,000 Conversion from Btuh to tons 

The calculated baseline cooling loads were correlated to measured outdoor air temperature6, as shown in 

Figure 1. Although the correlation of tons to temperature had a coefficient of variation (R2

) less 0.5, this 

correlation is sufficient to predict the annual cooling loads. The load profile of the facility was then 

applied to hourly TMY data from WBAN 947287 weather site to determine annual loads. 

Figure 1: Measured Tons and Outdoor Air Temperature 

Measured Cooling Load and OAT 

y = 8.5456x - 332.75 

R2

 = 0.5212 

-

200 

400 

600 

800 

- 20 40 60 80 100 

Outside Air Temperature 

Tons 

The cooling loads calculated to be saved from the other measures (ECM #1 - Lighting and ECM #2 - 

EMCS) included in this project were then subtracted to determine the adjusted cooling loads. The 

occupancy schedule of the facility was applied to the hourly model, and loads during unoccupied hours 

were deleted. The baseline adjustments made and resulting monthly loads are in Table 3-4. 

Table 3-4: Baseline TMY Loads and Adjustments Made 

Month 

Baseline 

Cooling Load 

(ton-hours) 

ECM #1- Lighting 

Cooling Ton-Hours 

Saved 

ECM #2- EMCS 

Cooling TonHours saved 

Total Cooling TonHours Adjusted 

Adjusted Baseline 

Cooling Load (TonHours) 

1 - - -

2 

3 

4 30,022 1,382 - 1,382 28,640 

5 139,150 1,382 685 2,067 137,082 

6 200,709 1,382 992 2,374 198,335 

7 240,920 1,382 1,192 2,574 238,346 

8 220,390 1,382 1,090 2,472 217,918 

9 181,667 1,382 897 2,279 179,388 

10 81,881 1,382 - 1,382 80,499 

11 

12 

Totals: 1,094,738 9,674 4,855 14,529 1,080,209 

6 INSTRUCTIONS: If possible, use outdoor air conditions (dry-bulb and wet-bulb temperatures) measured at a nearby government weather 

station for the same period. A good source of weather data includes NOAA through http://www.ncdc.noaa.gov/oa/climate/stationlocator.html. 

Weather station data should be validated with site data to ensure it is applicable. 7 Site - New York Central Park; http://rredc.nrel.gov/solar/old_data/nsrdb/tmy2/State.html 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

9 
The monthly reduction in cooling load due to ECM#1- Lighting Retrofit was estimated from 

monthly kWh savings. Based on Rundquist8 method and location, 35% of the lighting energy 

saved during cooling months was attributed to the cooling load reduction. The cooling load 

reductions due to ECM #2 - EMCS are detailed in the M&V plan for that measure. 

3.2.2 Performance of the Existing Chillers 

A chiller performance model was developed for each chiller using the metered data and applied to 

the following component-based model9: 

Equation 2: 

Power = A0 + A1 × TCHW+ A2 × TCHW 

2

+ A3 × TCW + A4 × TCW

2

+ A5 × PLR+ A6 × PLR2 + A7 × 

TCHW × TCW+ A8 × TCHW × PLR + A9 × TCW × PLR 

Where:

TCHW = Chilled Water Supply Temperature 

TCW = Condenser Water Supply Temperature

PLR = Part-load ratio (rated tons/actual tons)

A0 - A9= Coefficients determined from measured data

Metered data from was used to determine the coefficients A0 through A9 for the existing chillers. 

Although the chillers are identical and are operated in parallel, a performance model for each 

chiller was developed. This approach ensures any differences in the performance of the existing 

units are captured. The coefficients in Equation 2 were determined using Microsoft Excel’s 

regression function. The calculated coefficients A0 – A9 for each chiller are shown in Table 3-5. 

Table 3-5: Baseline Chiller Model Coefficients 

Coefficient CH1 CH2 CH3 

A0 456.0386 70.45294 15.51836 

A1 -9.43391 -1.43935 -0.02565 

A2 0.01412 0.004126 -0.00018 

A3 -6.20574 -0.9671 -0.38504 

A4 0.007466 0.002007 0.002305 

A5 143.6792 0 0 

A6 -55.2703 -55.1646 -33.4058 

A7 0.107666 0.013987 0.000566 

A8 0.360037 1.882767 1.531132 

A9 0.499539 1.364763 1.38086 

8 Rundquist, et al. Calculating Lighting and HVAC Interactions, ASHRAE Journal 1993. 9 INSTRUCTIONS: See Engineering Supplement for details on the two chiller performance models recommended. 

10 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Figure 2: Measured and Predicted kW for Chiller 1 

Measured and Predicted Baseline Chiller Demand 

50.0 

75.0 

100.0 

125.0 

150.0 

175.0 

200.0 

225.0 

5/9/04 

4:48 

5/9/04 

9:36 

5/9/04 

14:24 

5/9/04 

19:12 

5/10/04 

0:00 

5/10/04 

4:48 

Date 

De

mand (kW) 

kW Predicted kW measured 

Model Validation Procedures 

Because the energy use of the chillers is fundamental to the savings guarantee, these models must 

be validated as sufficiently accurate. Four statistical parameters are checked to verify that the 

models will not introduce an unacceptable level of uncertainty into the calculated saving. 

Data points excluded from this analysis include all measurements within 30 minutes of a chiller 

start and any measurements taken after a chiller has been taken off-line. Four statistical 

parameters will be checked to verify that the models will not introduce an unacceptable level of 

uncertainty into the calculated saving. The parameters evaluated and the recommended acceptable 

values for these chiller models are shown in Table 3-6Error! Reference source not found.. The 

calculation methodologies for these parameters are detailed in the Engineering Supplement in the 

Appendix. 

Table 3-6 : Statistical Validations Guidelines 

Parameter evaluated Suggested acceptable values 

Coefficient of variation (R2) > 0.75 

CV(RSME) < 15% 

t-statistic > 2 

Mean bias error < + 7% 

Baseline Model Validation Results 

The parameters evaluated, the recommended acceptable values, and the actual values determined 

for these baseline chiller models are shown in Table 3-7. The calculation methodologies for these 

parameters are detailed in the Engineering Supplement in the appendix. 

These models have a close fit to measured data, as shown in Figure 2 above. The detailed 

statistical results of the analyses of the baseline chillers are included in the electronic Appendix 

materials. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

11 
Table 3-7: Statistical Validation Guidelines and Results10 

Parameter evaluated Suggested 

acceptable values 

Actual values 

CH-1 CH-2 CH-3 

Coefficient of Variation (R2) > 0.75 0.84 0.82 0.78 

CV (RSME) < 15% 9.6% 8.9% 10.6% 

t-statistics 

TCHW 10 2 18 

TCHW^2 -10 -2 -3 

TCW 3 3, -2 

TCW^2 -9 2, -23 

PLR Absolute value > 2 3 8 27 

PLR^2 4 65535 655 

TCHW*TCW 193 -204 -581 

TCHW*PLR 11 2 3 

TCW*PLR 0.511 33 646 

TCHW 7 34 869 

Mean Bias Error < + 7% 4.2% -5.5% -6.4% 

3.2.3 Chiller Plant Operating Parameters 

Since the sequences of operation for the chiller plant impacts overall plant efficiency and energy 

use, the baseline model must include chilled and condenser water temperatures and flows as well 

as the chiller staging sequences. Actual baseline sequences of operation were confirmed using 

metered data. The appropriate values for these parameters were then incorporated into the hourly 

chiller model, and baseline energy and demand usage were then determined. Table 3-8 shows the 

baseline operating parameters that were determined and then applied. 

Table 3-8: Baseline Operating Parameters 

Item Description of sequences Baseline values used 

Chilled water 

temperatures 

Chilled water supply temperature is kept at a constant 

46oF. 

46oF 

Chilled water flow rates Chilled water flow rates based on flow measurements at 

each chiller 

~540 GPM / Chiller up to 

1620 GPM & field testing 

Condenser water 

temperatures (cooling 

tower performance) 

Cooling tower approach (outdoor air wet-bulb 

temperature — condenser water supply temperature) 

was determined to be 7 oF. Minimum temperature 

allowed is 75oF. 

75oF to 83oF based on 

TMY wet-bulb 

temperatures 

Condenser water flow 

rates 

Constant condenser water flow rate based on design 

data and number of pumps operating 

675 GPM / Chiller up to 

2025 GPM 

Chiller staging Chillers 1, 2, & 3 are rotated evenly based on run-time. 

Additional chillers are staged on at a maximum PLR of 

0.80 and are taken off-line at a minimum PLR of 0.5. 

10 See ASHRAE Guideline 14-2002 and IPMVP Volume 1 (EVO 10000-1.2007) for additional information on statistical validation techniques. 11 As the T-statistic for this parameter is low, it could be eliminated to help reduce uncertainty. Since it is only low for one of the chillers, and the 

validation criteria are met, it has been kept in all of the chiller models. 

12 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
3.3 Proposed Energy & Water Savings Calculations and Methodology 

As detailed in the previous section, a performance model of each chiller was developed from measured 

data, and the building’s cooling loads were determined under typical weather conditions. The estimated 

savings were determined by comparing energy used by the baseline chiller plant to the manufacturer’s 

published data on the energy use of the new chillers under the same conditions for each hour of the year. 

The conditions assumed in both the baseline and post-installation cases include appropriate chiller plant 

operating conditions and TMY cooling loads. 

Based on the TMY cooling loads and plant operating conditions, baseline chiller plant demand use was 

calculated for each hour of the year. Using the same 8760 hour model, the post-installation chiller plant 

demand was estimated from manufacturer’s data. Demand savings were determined for each hour, and 

peak periods were identified. The peak demand savings were calculated for each utility billing month, and 

the year’s total energy savings were estimated, as described by Equations 3 & 4 below. 

Table 3-9: Data Calculation Excerpt 

Existing New 

Date 

weekday/ 

Saturday Peak Occ? 

TMY drybulb (F) Total 

Tons TMY 

Tons 

CH-1 

Tons 

CH-2 

Tons 

CH-3 

CH-1 

kW 

CH-2 

kW 

CH-3 

kW 

Total 

Chiller 

kW CH-1 kW 

CH-2 

kW 

CH-3 

kW 

Total 

Chiller 

kW 

Peak kW 

Saved 

10/7/04 12:00 1 FALSE 1 62 197 99 98 0 85.1 88.0 - 173.1 54.5 53.8 - 108.2 -

10/7/04 13:00 1 TRUE 1 65 222 111 110 0 95.6 99.0 - 194.6 61.2 60.5 - 121.7 73.0 

10/7/04 14:00 1 TRUE 1 66 231 115 115 0 99.3 103.9 - 203.2 63.5 63.5 - 127.0 76.2 

10/7/04 15:00 1 TRUE 1 66 231 115 116 0 99.3 104.4 - 203.7 63.5 63.8 - 127.3 76.4 

10/7/04 16:00 1 TRUE 1 67 239 119 120 0 102.3 108.4 - 210.8 65.5 66.3 - 131.7 79.1 

10/7/04 17:00 1 FALSE 1 66 231 114 117 0 98.0 105.2 - 203.3 62.7 64.3 - 127.0 -

10/7/04 18:00 1 FALSE 0 64 214 - - 0 - - - - - - - - -

10/7/04 19:00 1 FALSE 0 63 205 0 - 0 - - - - - - - - -

An electronic version of the savings calculations were submitted with this report and are summarized in 

Table 3-10. 

Table 3-10: Estimated Chiller Use and Savings by Month 

Month Ton Hours 

Baseline 

Peak kW 

Baseline 

kWh 

PostInstallation 

Peak kW 

PostInstallation 

kWh 

Peak 

kW 

saved kWh Saved 

1 - - - - - - -

2 - - - - - - -

3 - - - - - - -

4 28,640 262 21,389 160 13,647 102 7,742 

5 137,082 349 104,262 212 66,525 137 37,738 

6 198,335 372 153,629 222 98,023 150 55,606 

7 238,346 393 186,370 238 118,914 155 67,456 

8 217,918 345 168,766 201 107,681 144 61,085 

9 179,388 312 137,562 185 87,771 127 49,790 

10 80,499 264 59,881 159 38,207 105 21,674 

11 - - - - - - -

12 - - - - - - -

Totals: 1,080,209 2,297 831,860 1,377 530,769 920 301,091 

Key assumptions included in this approach are the following. 

 Chilled water flow is measured individually for each chiller. 

 Condenser water flows are based on design data. 

 TMY weather data used accurately depicts a “typical” weather year for the site. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

13 
 The load profile that was determined from measured data during baseline development and 

applied to the TMY data accurately depicts the load profile for the facility. 

 The baseline chiller performances are accurately depicted in the mathematical models 

developed. 

 After installation, new chiller performance will be similarly modeled from periodic 

performance test data. The manufacturer’s published data accurately estimated performance 

of the new chillers. 

 Cooling tower performance (approach and range) measured during baseline development will 

remain constant during the performance period. 

 Baseline chiller staging sequence as well as chilled and condenser water temperatures are 

defined from metered baseline data. 

 Performance period chiller staging sequence as well as chilled and condenser water 

temperatures will be periodically confirmed from metered data. 

 Factory performance testing will be performed on the new chillers. 

 Building peak demand is driven by the chiller plant, and is coincident with the chillers’ peak 

usage. 

The energy and demand savings are calculated using Equations 3 and 4. 

Equation 3: 

Energy Savings (kWh) = Σt (kWht, baseline – kWht, post ) 

Where: 

kWht, baseline = Energy that the baseline chillers would have used under 

the average TMY load conditions encountered for hour 

interval t in the post-installation period 

kWht, measured, post = Energy required by the new chillers under the average 

TMY load conditions encountered for hour interval t in 

the post-installation period 

Equation 4: 

Monthly Demand Savings (kW) = {(kW baseline) – (kW post)}t-peak 

Where: 

Time period (t-peak) is defined as the one-hour interval during the building’s peak period 

(between 1 and 4 PM on weekdays) for that billing month during which the highest 

baseline demand is set by the chillers. Billing months are defined by the serving electric 

unity. 

(kW baseline) is the demand for the baseline chillers predicted during time t 

(kW post) is the demand of the new chillers predicted during the same interval t 

Annual cost savings will be calculated using Equation 5. 

Equation 5: 

14 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Annual Cost Savings = Energy Savings (kWh) × RatekWh + 

Σmonth(Monthly Demand Savings × RatekW) 

Since the savings are normalized to average conditions, the chiller load and performance baseline is fixed 

for the duration of the contract and will not be adjusted. These parameters are defined in Table 3-4 and 

Table 3-5. Performance period savings may vary from year to year if the measured energy performance 

of the chillers varies significantly. Initial savings estimates used manufacturer’s data to predict postinstallation chiller performance, which are included in the Appendix. 

The energy and demand rates used to calculate cost savings are based on actual utility cost structures, and 

discussed in the Whole Project Data / Global Assumptions section of this M&V plan. The peak demand 

charges apply to the maximum peak demand set for the building, which corresponds to the chiller peak 

load. Therefore, chiller demand savings will only be considered during those hours. 

These energy and demand rates will be escalated at a rate of 2.2% per year as shown in Table 3-11. 

Table 3-11: Performance Period Energy and Demand Rates12 

Performance Year Energy $/kWh Peak Demand $/kW 

0 $ 0.0725 $ 11.25 

1 $ 0.0741 $ 11.50 

2 $ 0.0757 $ 11.75 

3 $ 0.0774 $ 12.01 

4 $ 0.0791 $ 12.27 

5 $ 0.0808 $ 12.54 

6 $ 0.0826 $ 12.82 

7 $ 0.0844 $ 13.10 

8 $ 0.0863 $ 13.39 

9 $ 0.0882 $ 13.68 

10 $ 0.0901 $ 13.98 

11 $ 0.0921 $ 14.29 

12 $ 0.0941 $ 14.61 

13 $ 0.0962 $ 14.93 

14 $ 0.0983 $ 15.26 

15 $ 0.1005 $ 15.59 

16 $ 0.1027 $ 15.94 

17 $ 0.1050 $ 16.29 

18 $ 0.1073 $ 16.64 

19 $ 0.1096 $ 17.01 

20 $ 0.1120 $ 17.38 

The proposed annual savings for this ECM for the performance period and cost savings for year 1 are 

Summarize information in Table 10. 

3.4 Operations and Maintenance and Other Cost Savings 

O&M cost savings will result from the replacement of the chillers. The savings will be due to reduced 

replacement parts, specifically refrigerant R-11. The existing chillers all have small leaks in the 

evaporator bundles, which have made quarterly refrigerant recharges mandatory for the last 3 years. 

Refrigerant purchase data from the site from the last two years was reviewed to determine actual costs. 

12 Energy rates are typically included in the Whole Project Data/Global Assumptions section of the M&V plan. It is included here for clarity. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

15 
The historical costs and analysis are presented in Table 3-12. The total baseline costs that will be offset 

by the installation of the new chillers averaged $2,315 per year. 

Table 3-12: Baseline Chiller Refrigerant Costs 

Date 

Amount purchased 

(lb) Cost 

1/12/04 150 $922.50 

6/6/05 150 $934.75 

1/6/05 100 $622.00 

3/31/05 100 $622.00 

7/1/05 100 $675.00 

12/15/05 100 $675.00 

3/22/06 100 $688.00 

6/6/06 100 $688.00 

Total Purchased: 900 $5,827.25 

Amount remaining 

(7/30/06): 

150 

 $971.21 

Total Used: 750 $4,856.04 

Average Cost / LB: $6.47 

Number of Months: 28 

Ave. Cost per Month $173.43 

Cost per year: $2,081.16 

Annual O&M savings adjustment factors will be calculated at a rate of 2.0% per year, as detailed in the 

Whole Project Data / Global Assumptions section of this M&V plan. 

No other O&M cost savings will be generated by this measure. 

16 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
3.5 Proposed Annual Savings For ECM 

Table 3-13: Proposed Annual Savings for ECM 

Total energy use (MBtu/yr) 

Electric energy use (kWh/yr) 

Electric energy cost, Year 1 ($/yr) 

Electric demand* (kW/yr) 

Electric demand cost, Year 1 ($/yr) 

Natural gas use (MBtu/yr) * 

Natural gas cost, Year 1 ($/yr) 

Water use (gallons/yr ) 

Water cost, Year 1 ($/yr) 

Other energy use (MBtu/yr) 

Other energy cost, Y1 ($/yr

Baseline use 2,839 831,860 $ 61,637 2,297 $ 26,410 0 $­ 0 $­ 0 $2,3Post-installation use 

 1,812 530,769 $ 39,327 1,377 $ 15,832 0 $­ 0 $­ 0 $- 

Savings 1,028 301,091 $ 22,309 920 $ 10,578 - $­ - $­ - $2,3Notes *Annual electric demand savings (kW/yr) is the sum of the monthly demand savings. MBtu = 106 Btu. 

If energy is reported in units other than MBtu, provide a conversion factor to MBtu for link to delivery order schedules (e.g., 0.003413 MBtu/kWh). 

17 Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 
3.6 Post-Installation M&V Activities 

The intent of the post-installation verification activities is to verify that the ECM has been installed as 

intended and has the capacity to generate the expected savings. This will be confirmed by developing 

post-installation performance models of the chillers using measured chiller performance, and then using 

those models to calculate expected energy savings. 

Included in the report will be a summary of the specifications for the installed equipment as well as an 

inventory of installed control sensors, including their measurement accuracy and confirmation of 

calibration. The Post-Installation report will follow IDIQ requirements and will include factory test results

for the new chillers. A separate commissioning report will also be submitted.

The key independent variables affecting post-installation chiller efficiency and energy use are total 

building cooling load, chiller sequencing, chilled water temperature leaving the chiller, and condenser 

water temperature entering the chiller. Primary chilled water and condenser water flow rates affect the 

performance of the chillers but will be essentially constant for the new chiller plant. 

The key system performance factors that characterize the post-installation period conditions are chilled 

water supply temperature and maximum chiller capacity. 

Requirements for government witnessing of post-installation measurements are the same as the whole 

project data requirements included in Whole Project Data / Global Assumptions section of this M&V 

plan. 

Post-installation data collection for M&V purposes will focus on modeling the performance of the new 

chillers and confirming expected energy and demand savings. Commissioning activities will be conducted 

and are reported separately.

The EMCS system will be used to collect post-installation data, as all necessary calibrated 

instrumentation will be installed with the new chillers. Requirements for instrumentation are detailed in 

Table 3-14. 

Table 3-14: Summary of Post-Installation Instrumentation Requirements 

Equipment Type Purpose 

Accuracy of 

Instrumentation 

Flow meter Chilled water flow (GPM) ±2% 

Immersion temperature sensors Chilled water temperatures (oF) ±0.3oF 

Immersion temperature sensors Condenser water temperatures (oF) ±0.5oF 

Power meters True RMS Power ±2% 

Outdoor air relative humidity / wet-bulb 

temperature sensors Outdoor air wet-bulb temperatures ±3% 

Outdoor air temperature sensors Outdoor air dry-bulb temperatures ±1.0oF 

Coincident 15-minute performance data, similar to what was collected for the baseline, will be collected 

for a period of at least two weeks after commissioning is completed. The data collection format will be 

the same as used in the baseline (Table 3-3). 

New chiller performance models will be developed for each chiller using the metered data using the same 

component-based model used in the baseline: 

Equation 6: 

Power = A0 + A1 × TCHW+ A2 × TCHW

2

+ A3 × TCW + A4 × TCW

2

+ A5 × PLR+ A6 × PLR2 + A7 × TCHW × TCW+ 

A8 × TCHW × PLR + A9 × TCW × PLR 

18 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Metered data will be used to determine the coefficients A0 through A9 for the new chillers, following the 

same procedures used in developing the baseline. 

The model validation procedures described for the baseline chiller model will be use. Once validated, the 

models of the new chiller will be used to calculate expected energy and demand use of the new system. 

The updated models will be applied to the stipulated load profile that is based on TMY data and compared 

hour-by-hour to the baseline model to calculate expected savings for the first performance year. 

If normal operating conditions for the chiller plant are not present at the time of project completion, the 

post-installation performance testing and model development may be deferred. In this case, the factory 

test results of the chillers’ performance should be used to calculate expected savings for year 1. 

3.7 Performance Period Verification Activities 

The key independent variables affecting performance period chiller efficiency and energy use are total 

building cooling load, chiller sequencing, chilled water temperature leaving the chiller, and condenser 

water temperature entering the chiller. Primary chilled water and condenser water flow rates affect the 

performance of the chillers but are essentially constant for the existing chiller plant. 

The key system performance factors that characterize the performance period conditions are chilled water 

supply temperature and maximum chiller capacity. 

The intent of performance period verification activities is to verify that the new chillers are performing 

properly by comparing the measured performance to the expected performance. Validated performance 

models based on actual measured chiller performance will be used to calculate energy savings. For 

informational purposes only, the total monthly ton-hours measured during the performance period will be 

reported and compared to the stipulated cooling loads. 

Field calibration and performance testing of the chillers will occur in the last weeks of August. The 

annual performance report will be submitted by September 30 each year. 

Requirements for government witnessing of performance period measurements are the same as specified 

in Whole Project Data / Global Assumptions section of this M&V plan. The annual report will include 

certification of the data by an appropriate Agency representative. 

The EMCS system will be used to collect performance period data, as all necessary instrumentation has 

been installed with the new chillers. Prior to collecting any data for the annual performance report, all 

related sensors will be verified to be of sufficient accuracy and will be field calibrated by the ESCO. 

Equipment to be calibrated each year is listed in Table 3-15. 

Table 3-15 : Summary of Annual Instrumentation Requirements 

Equipment Type Purpose 

Accuracy of 

Instrumentation 

Flow meter Chilled water flow (GPM) ±2% 

Immersion temperature sensors Chilled water temperatures (oF) ±0.3oF 

Immersion temperature sensors Condenser water temperatures (oF) ±0.5oF 

Power meters True RMS Power ±2% 

Outdoor air relative humidity / wet-bulb temperature 

sensors Outdoor air wet-bulb temperatures ±3% 

Outdoor air temperature sensors Outdoor air dry-bulb temperatures ±1.0oF 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

19 
Coincident 15-minute performance data, similar to what was collected in developing the baseline, will be 

collected each year for a period covering two to eight weeks immediately after sensor calibration has been 

completed. The data collection format will be the same as used in the baseline (Table 3-3). 

Each year, new chiller models shall be developed and validated, per the post-installation procedures. The 

accuracy of the new models will be validated by comparing the kW predicted by the model to measured 

kW from each chiller, per the post-installation procedures. 

The updated model will be applied to the stipulated load profile that is based on TMY data to calculate 

savings for that performance period. 

The Agency or ESCO is responsible for preventive maintenance, repair, and replacement as agreed upon 

in the project’s Risk & Responsibility matrix. A part of this responsibility requires the Agency/ESCO to 

track and report all related activities conducted each performance year. Since the ESCO is responsible 

for equipment performance, they must be sure that all operations and maintenance activities are suitable 

and sufficient. 

 Detail verification activities and reporting responsibilities of government and ESCO on 

operations, preventive maintenance, repair, and replacement items.

 Annual maintenance reports from the Agency/ESCO will be submitted to the ESCO/Agency by 

August 1 of each year. The maintenance reports shall document the completion of all required 

preventive maintenance as defined in the O&M manuals and summarized below. The ESCO will 

report in the annual report on the adequacy of the chiller maintenance performed. 

Table 3-16: Summary of Required Chiller Maintenance Items and Frequency 

Quarterly Operation & Maintenance Tasks for Chillers 

Organization 

responsible 

for the activity 

Frequency 

Required 

Check vane control settings 

Check settings per manufacturer’s 

specifications Agency 

Every 3 

months 

Verify motor load limit control 

Check settings per manufacturer’s 

specifications Agency 

Every 3 

months 

Verify load balance operation 

Check settings per manufacturer’s 

specifications Agency 

Every 3 

months 

Check chilled water reset settings and 

function 

Check settings per sequence of 

operation Agency 

Every 3 

months 

Annual Operation & Maintenance Tasks for Chillers 

Check chiller lockout setpoint 

Check settings per manufacturer’s 

specifications Agency 

Every 12 

months 

Clean condenser tubes 

Clean tubes at least annually as part 

of shutdown procedure Agency 

Every 12 

months 

Eddy current test condenser tubes 

As required, conduct eddy current 

test to assess tube wall thickness Agency 

Every 12 

months 

Clean evaporator tubes 

Clean tubes at least annually as part 

of shutdown procedure Agency 

Every 12 

months 

Eddy current test evaporator tubes 

As required, conduct eddy current 

test to assess tube wall thickness Agency 

Every 12 

months 

Compressor motor and assembly 

• Check all alignments to 

specification 

• Check all seals, provide lubrication 

where necessary Agency 

Every 12 

months 

20 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Quarterly Operation & Maintenance Tasks for Chillers 

Organization

responsible 

for the activity 

Frequency 

Required 

Compressor oil system 

• Conduct analysis on oil and filter 

• Change as required 

• Check oil pump and seals 

• Check oil heater and thermostat 

• Check all strainers, valves, etc. Agency 

Every 12 

months 

Electrical connections 

Check all electrical 

connections/terminals for contact 

and tightness Agency 

Every 12 

months 

Water flows 

Assess proper water flow in 

evaporator and condenser Agency 

Every 12 

months 

Check refrigerant level and condition 

Add refrigerant as required. Record 

amounts and address leakage 

issues. Agency 

Every 12 

months 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

21 
4. APPENDIX MATERIALS 

Instructions: The following are called for within the M&V Plan and should be included in the appendix: 

 Baseline sensor calibration forms 

 Statistical results for baseline chiller models 

 Measured baseline chiller data 

 Manufacturer’s performance data for new chillers 

 Documentation of Government Witnessing of Baseline Measurements 

Engineering Supplement to FEMP’s Standard M&V Plan for Chiller 

Replacement Projects 

This is a step-by-step overview of the data collection and analysis that is required to implement FEMP’s 

Standard Chiller M&V Plan. Instructions are included for executing the M&V activities during the 

Baseline Phase, Post-Installation Phase, and Annual M&V Phase. This overview is supplemental 

information to help facilitate the proper use of the Standard Chiller M&V Plan. 

1. Baseline Phase 

Data Collection 

Baseline Step 1 

Document the make, model, and locations of existing sensors. Ensure that sensors are properly located 

and that manufacturer’s rated accuracies of sensors are sufficient, per requirements below. If not, replace 

sensors. 

Baseline Step 2 

Verify and document the accuracy and calibration of all instrumentation. 

Table 4-1: Instrumentation Accuracy Requirements 

Equipment Type Purpose 

Accuracy of 

Instrumentation 

Flow meter Chilled water flow (GPM) ±2% 

Immersion temperature sensors Chilled water temperatures (oF) ±0.3oF 

Immersion temperature sensors Condenser water temperatures (oF) ±0.5oF 

Power meters True RMS Power ±2% 

Outdoor air relative humidity / wet-bulb temperature 

sensors Outdoor air wet-bulb temperatures ±3% 

Outdoor air temperature sensors Outdoor air dry-bulb temperatures ±1.0oF 

22 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Baseline Step 3 

Ensure that all required data points are collected. Install submeters or permanent metering, as appropriate, 

that adheres to accuracy requirements. Metered data should include RMS power (kW) for each chiller, 

cooling tons for each chiller (chilled water flow, chilled water supply and return temperatures), condenser 

water supply and return temperatures, and outdoor air dry-bulb and wet-bulb temperatures. 

Flow and temperature measurements should be from each chiller to determine actual loads. 

Baseline Step 4 

Perform baseline data collection during shoulder and peak months (either April – July or August – 

October). Fifteen-minute trends should be used, with synchronized readings from data loggers and 

EMCS. (More frequent data logger readings, i.e. 5 minutes, can help.) Data collection should be 

continuous, and periodic verification of the data is strongly recommended. 

Baseline Step 5 

Document additional plant information: nameplate data, operating schedules, chiller age and condition, 

loads served, locations, and peripheral equipment details. 

Data Analysis 

Baseline Step 6 

Determine building cooling load profile. Correlate outdoor air temperatures with measured cooling loads 

using regression analysis. If possible, use outdoor air conditions measured at a nearby government 

weather station for the same period, as site-measured outdoor air temperatures can be unreliable. Off-site 

weather data, however, should be verified as applicable to actual site conditions. A good source of 

weather data is NOAA through http://www.ncdc.noaa.gov/oa/climate/stationlocator.html. 

It is typical for cooling load models to have rather poor statistical results ( R2 < 0.75).13 A non-linear 

relationship and/or additional variables may be included to define the load profile as needed, such as day 

of week or occupied status. 

Other sources of data (plant shut-down schedules, air-side/water-side economizer use, etc.) should be 

considered to ensure that chiller plant load profile is accurate. 

Baseline Step 7 

Determine and document current chiller plant operating parameters and control sequences, including 

chilled water setpoints, chiller sequencing, condenser water setpoints, and actual temperatures. Actual 

operations should be verified from trend data, as they can vary from written sequences. 

If condenser water setpoints are not maintained, determine cooling tower approach (outdoor air wet-bulb 

temperature - condenser water return temperature) in order to predict condenser water temperatures from 

outdoor air wet-bulb temperatures. Confirm operations using trend graph or scatter plot. 

Baseline Step 8 

Determine which calculation method (Option 1 or Option 2 below) will be used. Initial selection of the 

appropriate option should be based on the level of variation expected in the operating parameters of the 

chiller. There are several component-based models that work well with metered chiller data, and two 

13 See ASHRAE Guideline 14-2002 and IPMVP Volume 1 (EVO 10000-1.2007) for additional information on statistical validation techniques 

and regression analysis. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

23 
options are presented herein. For systems utilizing fairly constant chilled and condenser water 

temperatures, a simplified linear model (Option 1) may be appropriate. For systems using more dynamic 

operating conditions, a temperature-dependent model (Option 2) should be used. 

If the results of the selected analysis option do not meet the statistical criteria presented in Table 4-4, 

Statistical Validations Guidelines and Results, then the other analysis option should be evaluated for 

viability. The option providing the best statistical results should be used. 

Analysis Option 1 

For systems using fairly constant chilled and condenser water temperatures, a simplified linear model is 

appropriate. Measured data should be used to determine the coefficients C1 to C0. The resulting equation 

can then be applied to the load profile and baseline operating conditions (COP, Load). 

1/COP = C1 × (1/Load) + C0 

Where: 

COP =Coefficient of performance (COP = 3.516 / kW/Ton) 

Load = Cooling load in tons (12,000 Btu) 

C1, C0 = Coefficients determined from measured data 

This approach offers a simplified regression technique by using the reciprocal values of COP and Load. 

The coefficients C1 and C0 can be determined from measured data. The final equation can be manipulated 

and used to predict actual COP, and then kW/ton. 

Analysis Option 2 

For systems using more dynamic operating conditions, a temperature-dependent model should be used. 

Measured data should be used to determine the coefficients A0 to A9. The resulting equation can then be 

applied to the load profile and baseline operating conditions (TCHW, TCW, PLR). 

Power = A0 + A1 × TCHW+ A2 × TCHW

2

+ A3 × TCW + A4 × TCW

2

+ A5 × PLR+ A6 × 

PLR2 + A7 × TCHW × TCW+ A8 × TCHW × PLR + A9 × TCW × PLR 

Where: 

TCHW = Chilled Water Supply Temperature 

TCW = Condenser Water Supply Temperature 

PLR = Part-load ratio (rated tons/actual tons) 

A0 - A9 = Coefficients determined from measured data 

Baseline Step 9 

Apply cooling load model to TMY weather data set to create hourly model of baseline chiller energy use, 

considering all of the chiller plant operating parameters documented in Baseline Step 7. If using Option 2, 

the model will include additional parameters. 

Baseline Step 10 

Quantify any reductions in cooling loads from other ECMs planned to ensure that post-installation loads 

are not overestimated. Adjust hourly TMY cooling loads used to predicted chiller energy use accordingly. 

Baseline Step 11 

Build performance model(s) of the existing chiller(s). An independent model of each chiller is required. 

The first step is to clean up the data set to remove transient values. Data points that are within 30 minutes 

24 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
of a chiller’s startup should be discarded. Similarly, all data points after a chiller’s stop should be 

eliminated prior to performing the analysis for either option below. 

1. Option 1 

1/COP = C1 × (1/Load) + C0 

Where: 

COP =Coefficient of performance (COP=3.516 / kW/Ton) 

Load = Cooling load in tons (12,000 Btu)

C1, C0 = Coefficients determined from measured data

▫ Set up a spreadsheet of the metered data for the chiller in question. Depending on 

instrumentation, individual chiller loads may be calculated from total plant load and 

chiller sequencing. 

▫ Calculate COP (COP = 3.516 / kW/Ton) and load on chiller (tons = 500 × GPM ×

(TCHWreturn - TCHWsupply)) for each metered interval 

▫ Correlate (1/COP) to (1/Load). Use regression analysis to determine C1 and C0. 

2. Option 2 

Power = A0 + A1 × TCHW+ A2 × TCHW

2

+ A3 × TCW + A4 × TCW

2

+ A5 × PLR+ A6 × PLR2 

+ A7 × TCHW × TCW+ A8 × TCHW × PLR + A9 × TCW × PLR 

Where: 

TCHW = Chilled water supply temperature 

TCW = Condenser water supply temperature 

PLR = Part-load ratio (rated tons/actual tons) 

A0 - A9= Coefficients determined from measured data

▫ Set up a spreadsheet of the metered data for the chiller in question. 

Table 4-2: Example Spreadsheet Layout for Raw Data 

Outside Air Chiller 1 Chiller 2 Chiller 3 

Date/Time Tdb Twb 

# 

Chill 

ers 

On 

CWR 

T CWST 

CH-1 

On 

CH 

Flow 

CHWST 

CH-1 

CHWRT 

CH-1 CH-1 kW 

CH-1 

Tons 

CH-2 

On 

CH 

Flow 

CHWST 

CH-2 

CHWRT 

CH-2 

CH-2 

kW 

CH-2 

Tons 

CH-3 

On 

CH 

Flow 

CHWST 

CH-3 

CHWRT 

CH-3 

CH-3 

kW 

CH-3 

Tons 

4/10/2006 10:00 60 50 1 84.2 75.0 1 540 43.0 46.5 69.20 79 - - 43.0 46.5 - 0 - - 43.0 46.5 - 0 

4/10/2006 10:15 57 49 1 84.0 75.0 1 541 43.0 46.5 68.90 79 - - 43.0 46.5 - 0 - - 43.0 46.5 - 0 

4/10/2006 10:30 58 50 1 84.2 75.1 1 541 43.2 46.7 69.10 79 - - 43.2 46.7 - 0 - - 43.2 46.7 - 0 

4/10/2006 10:45 59 50 1 84.0 75.0 1 540 43.0 46.5 69.00 79 - - 43.0 46.5 - 0 - - 43.0 46.5 - 0 

▫ Paste values from all rows with non-zero energy usage into a new spreadsheet 

page. Arrange and manipulate data as shown in Table 4-3. Use regression 

analysis, such as Microsoft Excel’s Regression Function, to determine 

coefficients A0 to A9 as well as some statistical results. Example results from 

Excel’s Regression Function are shown in Table 4-5. 

Table 4-3: Example Spreadsheet Layout for Data Analysis of One Chiller 

Tons (CH-1) TCHW TCHW^2 TCW TCW^2 PLR (CH-1) PLR^2 TCHW*TCW TCHW*PLR TCW*PLR 

180.0 52 2704 80 6400 0.8 0.64 4160 41.6 64 

180.0 52 2704 80 6400 0.8 0.64 4160 41.6 64 

180.0 52 2704 75 5625 0.8 0.64 3900 41.6 60 

180.0 52 2704 75 5625 0.8 0.64 3900 41.6 60 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

25 
Baseline Step 12 

Verify that the performance models of the chillers are valid by evaluating the statistical results for each 

model.14 Compare the metered kWs to those predicted by the model(s) created above and perform 

statistical analysis on the results. 

Table 4-4: Statistical Validations Guidelines and Results 

Parameter evaluated Suggested acceptable values 

CV(RSME) < 15% 

t-statistic > 2 

Mean bias error < + 7% 

The four statistical parameters that need to be evaluated for each model are: 

 Coefficient of variation (R2) — see results from regression analysis. Lower R2 values may 

indicates independent variables may be missing. 

 t-statistic — See results from regression analysis. The absolute value of the t-stat for each 

coefficient included should be greater than 2 for the independent variable to be considered 

significant. 

 CV(RSME) — coefficient of variation of the root-mean-squared error. This value is always 

positive. 

 Mean bias error — Overall indicator of bias in regression estimate. Positive values indicate 

higher than actual values, while negative value indicates that regression under-predicts values. 

Most regression analysis tools will include some of the statistical parameters that need to be evaluated, 

typically R2 and t-statistic. Instructions for calculating Cv(RMSE) and mean bias error are detailed below. 

14 See ASHRAE Guideline 14-2002 and IPMVP Volume 1 (EVO 10000-1.2007) for additional information on statistical analysis and validation 

techniques. 

26 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Table 4-5: Example Results from Excel’s Regression Function 

SUMMARY OUTPUT 

Regression Statistics 

Multiple R 

R Square 

Adjusted R Square 

Standard Error 

Observations 

0.844689122 

0.844378342 

0.844377702 

1.317321242 

8640 

ANOVA 

df SS MS F ignificance F 

Regression 9 24410099.47 2712233.274 1562945 0 

Residual 8750 15184.18347 1.735335253 

Total 8759 24425283.65 

Coefficients Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%Upper 95.0% 

Intercept 456.0385594 42.77053583 10.66244672 2.21E-26 372.1983 539.8789 372.1983 539.8789 

TCHW -9.433907762 0.894461966 -10.5470195 7.49E-26 -11.18726 -7.680552 -11.18726 -7.680552 

TCHW^2 0.014119931 0.00444351 3.177652452 0.00149 0.00541 0.02283 0.00541 0.02283 

TCW -6.205740642 0.668904963 -9.27746239 2.15E-20 -7.516952 -4.89453 -7.516952 -4.89453 

TCW^2 0.007465609 0.002741032 2.723648885 0.006469 0.002093 0.012839 0.002093 0.012839 

PLR 143.6792396 36.06737752 3.983634227 6.84E-05 72.9787 214.3798 72.9787 214.3798 

PLR^2 -55.2703061 0.285036808 -193.905856 0 -55.82905 -54.71157 -55.82905 -54.71157 

TCHW*TCW 0.107665923 0.010005493 10.76068149 7.77E-27 0.088053 0.127279 0.088053 0.127279 

TCHW*PLR 0.360037224 0.672732872 0.535186014 0.592535 -0.958677 1.678752 -0.958677 1.678752 

TCW*PLR 0.49953947 0.071551625 6.981525139 3.13E-12 0.359281 0.639797 0.359281 0.639797 

Note: The absolute value all of the t-stats are above 2 except for TCHW × PLR. This is acceptable for this 

example. Any coefficient that has a t-stat out of acceptable range can be dropped from the model, which 

may improve the statistical results. 

 Calculate Cv(RMSE): 

2 

∑(YY ) ˆ 

i − i

− − Cv (RMSE ) = np 1 

Y 

Where: 

Yi = Measured energy value at time i

Yˆ 

i = Predicted energy value at time i

Y = Mean measured energy value 

n = number of data points 

p = number of independent variables used 

 Calculate Mean Bias Error: 

∑(YY ) ˆ 

i − i MBE = n 

Baseline Step 13 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

27 
Determine energy use of the baseline and post-installation chillers: 

Calculate hourly baseline energy use of the chiller plant: apply the validated chiller performance 

model(s) to the hourly cooling load model (TMY 8760 data, adjusted in Baseline Step 10 for 

reductions in cooling loads) considering key operating parameters determined in Baseline Step 7 to 

predict energy use of each chiller, and the total for all chillers, for each hour of the year. 

Using the same 8760 hour model, calculate the post-installation demand for the new chiller(s) from 

manufacturer’s data, considering the key operating parameters of the new chiller plant. 

Baseline Step 14 

Calculate proposed energy and demand savings for year 1: 

Determine kW savings (predicted baseline kW – predicted post-install chiller energy use) for each 

hour of the year. 

Identify all data that falls within the utility / building’s peak period (defined in the M&V plan) and 

further delineate data by monthly utility billing periods. For each utility billing period, the “peak” 

period, typically the highest one hour demand for predicted for the baseline chiller plant that occurs 

during the utility’s peak period. This assumes the building peak demand is coincident with the chiller 

plant’s peak demand use. 

Apply savings equations: 

Monthly Demand Savings (kW) = {(kW baseline) – (kW post)}t-peak 

Where: 

Time period (t-peak) is defined as the one-hour interval during the building’s peak period 

(between 1 and 4 PM on weekdays15) for that billing month during which the highest baseline 

demand is set by the chillers. Billing months are defined by the serving electric unity. 

(kW baseline) is the demand for the baseline chillers predicted during time t 

(kW post) is the demand of the new chillers predicted during the same interval t 

Baseline Step 15 

Calculate proposed cost savings for year 1: 

Annual Cost Savings = Energy Savings (kWh) × RatekWh + 

Σmonth(Monthly Demand Savings × RatekW) 

2. Post-Installation M&V Activities 

Data Collection 

Post-Install Step 1 

Data collection should follow Baseline Step 1 through Step 3 including sensor verification and 

calibration. Install submeters or permanent metering, as appropriate, that adhere to accuracy 

requirements. Typically permanent metering equipment will be installed with the new chillers. 

15 This is defined in the project specific M&V Plan. 

28 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Conduct metering immediately following installation and commissioning. Collect data for a minimum of 

two weeks, longer if possible. If chiller plant is off line or typical operating conditions are not present at 

time of project completion, post-installation metering may be deferred. In this case, the expected year 1 

savings estimates included in the Post-installation Report will be based on the Factory Performance test 

results reported by the manufacturer. 

Ensure that all required data points are collected. If peripheral equipment in the plant has been affected, 

additional points will be required. 

Table 4-6: Post-Installation Data Required for Analysis 

Points Needed for Analysis 

Chilled water flow (GPM) per chiller 

Condenser water supply temperatures (oF) 

Chilled water supply temperatures (oF) 

Chilled water return temperatures (oF) 

True RMS Power (kW) per chiller 

Chiller on/off Status 

Synchronize readings from data loggers and EMCS to collect trends in 15-minute intervals. (More 

frequent data, i.e. 5 minute, logger readings can help.) Data collection should be continuous, and periodic 

verification of the data is strongly recommended. 

Post-Install Step 2 

Document additional information on post-installation conditions: nameplate data, operating schedules, 

chiller age and condition, loads served, locations, and peripheral equipment details. 

Data Analysis 

Post-Install Step 3 

Follow Baseline Step 7 to determine post-installation chiller plant operating parameters and controls 

sequences. Document results including: chilled water setpoints, chiller sequencing, condenser water 

setpoints and actual temperatures. All operational parameters should be verified with trended field data. 

Post-Install Step 4 

Follow Baseline Step 11 to build a performance model of each of the new chillers. Typically, the 

performance calculation option selected in Baseline Step 8 should be used. 

Post-Install Step 5 

Follow Baseline Step 12 to verify that performance models of the new chillers are statistically valid. 

Post-Install Step 6 

Apply new chiller performance models developed in Post-Install Step 4 to the hourly TMY cooling loads 

developed and adjusted during Baseline Step 10. Use the new chiller operating parameters determined in 

Post-Install Step 3 to predict the hourly post-installation chiller energy use. 

Post-Install Step 7 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

29 
Calculate the expected demand and energy savings for year 1 by following Baseline Step 14. 

Post-Install Step 8 

Calculate expected cost savings for year 1 by following Baseline Step 15. 

Post-Install Step 9 

Draft Post-Installation Report in accordance with IDIQ requirements. Include all analysis, metered data, 

and Factory performance test results on the chiller(s) per the M&V plan. 

3. Annual M&V Activities 

Data Collection 

Annual Step 1 

Collect metered data to develop performance models of each chiller for this performance period. Data 

collection should follow Baseline Step 1 through Baseline Step 3 including sensor verification and 

calibration. 

Collect data for a minimum of two weeks and up to eight weeks if possible while cooling loads and 

typical operating conditions are present. Any variations in operating conditions expected over the year 

should be used during the test period to ensure the models developed will adequately cover those 

conditions. This may require adjusting normal operating set point to achieve seasonal any variations, such 

as cooling tower temperatures. 

Data Analysis 

Annual Step 2 

Using the data collected, create a chiller performance model for each chiller by following Baseline Step 

11. Typically, the performance calculation option selected in Post-Installation Step 4 should be used. 

Verify the validity of the models by following Baseline Step 12. If results from the statistical analyses are 

acceptable, then the post-installation performance model(s) are still valid. If results are not acceptable, 

then new models shall be developed using Baseline Step 11 and validated and Baseline Step 12. 

Annual Step 3 

Using the data collected, verify that key operating parameters documented during the post-installation 

phase are still valid by following Baseline Step 7. Current operating conditions may be different than in 

the post-installation case. 

Annual Step 4 

Using the validated chiller performance models and key operating conditions in the current performance 

period, develop an hourly energy use model of the chillers 

Apply new chiller performance models developed in Annual Step 3 to the hourly TMY cooling loads 

developed and adjusted during the baseline. Use the new chiller operating parameters determined in 

Annual Step 3 to predict the hourly post-installation chiller energy use. 

Annual Step 5 

30 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Calculate the verified demand and energy savings for year 1 by following Baseline Step 14. 

Annual Step 6 

Calculate verified cost savings for year 1 by following Baseline Step 15. 

Annual Step 7 

Verify that O&M activities have been properly executed. Gather documentation from the party 

responsible, and compare to O&M requirements specified in the contract. 

Annual Step 8 

Develop Annual Report in accordance with IDIQ Requirements and M&V plan details. provide all 

analysis and metered data in electronic format. Data on O&M activities should be included in Annual 

Report. 

FEMP Appendix H – Standard Measurement & Verification Plan 

for Chiller Replacement Projects 

31 
32 Appendix H – Standard Measurement & Verification Plan FEMP 

for Chiller Replacement Projects 
Appendix I Including Retro-Commissioning In 

 Federal Energy Saving Performance Contracts 

The documents here-in were produced by the FEMP Retro-Commissioning Working Group in 

October 2003. The purpose of the group was to provide guidance to the FEMP team to help 

facilitate retro-commissioning in Federal ESPCs. The scope included identifying inherent 

difficulties in incorporating retro-commissioning into performance contracts, as well as ways to 

overcome those barriers. The language used in reference to the Super ESPC program in this 

document may be outdated. 

INCLUDING RETRO-COMMISSIONING IN FEDERAL ENERGY SAVING PERFORMANCE CONTRACTS 

Retro-commissioning generally reduces operating and maintenance costs, improves building 

occupant comfort, and meets changing operational needs. When retro-commissioning (retro-Cx) 

is partnered with an energy saving performance contract such as Super ESPC, which focuses on 

equipment replacement and other capital improvements, a facility can greatly improve overall 

operations and dramatically reduce operating costs. 

Including retro-commissioning in Federal performance contracting projects can provide 

substantial benefits. Retro-Cx can shorten the contract length of an ESPC by maximizing the 

project’s cost savings. Retro-Cx activities commonly discover low-cost energy saving measures 

that may have otherwise been overlooked. Generally, retro-commissioning requires data logging 

of equipment operations, which provides additional documentation of the pre-retrofit baseline 

conditions and contributes to more robust M&V. 

A project implemented at a large Federal facility in Atlanta is one retro-commissioning success 

story. A retro-commissioning project implemented for a total cost of about $120,000 will 

generate annual cost savings of approximately $250,000. Had this measure been included in the 

average Federal ESPC project ($3.1 million initial investment, 14 year contract) it would 

effectively shortened the project’s overall simple payback by more than 5 years. 

When including retro-commissioning with other facility retrofits a graded approach should be 

used to determine the appropriate scope of retro-commissioning activities. An example scope of 

work for retro-commissioning has been developed for use in Federal ESPC projects. This 

Example Retro-Commissioning Scope of Work provides a comprehensive scope of work that can 

be modified for use in individual projects, and is available through http://ateam.lbl.gov/mv/. 

ESPC 

Energy Saving Performance Contract 

Examples of Federal ESPC contract mechanisms include the Department of Energy’s Super 

ESPC and UESC contracts. The Air Force and Army also have similar contract mechanisms. 

ESCo 

Energy Services Company 

FEMP Appendix I – Including Retro-Commissioning In 

Federal Energy Saving Performance Contracts 

I-1 
Commissioning 

Commissioning is a process for achieving and verifying performance of building systems. 

Typically, commissioning is a part of any new or retrofit construction project. The purpose of 

commissioning is to ensure systems are designed, installed, functionally tested, and capable of 

being operated and maintained to perform in compliance with the design intent. More 

information on commissioning is available at 

http://www.eere.energy.gov/femp/techassist/bldgcomgd.html. 

Retro-Commissioning 

Retro-Commissioning (Retro-Cx) is the commissioning of existing building systems to meet 

current building operating criteria. The retro-Cx process systematically reviews the condition 

of building systems and returns equipment that has fallen out of desired operating parameters 

back into appropriate tolerances. Retro-commissioning is the process of optimizing an existing 

building’s operation and maintenance through the implementation of low-cost and no-cost 

improvements, and does not involve equipment replacement. 

Retro-Cx focuses on energy using equipment such as mechanical systems, controls, and 

sometimes lighting. These systems are functionally tested and adjusted to meet the current 

needs of the building. In addition to adjusting for changing building criteria or operational 

goals, retro-Cx can also provide updated maintenance requirements for building systems. For 

additional information see “A Practical Guide for Commissioning Existing Buildings” by PECI 

and ORNL available through http://eber.ed.ornl.gov/commercialproducts/retrocx.htm. 

TIMING OF RETRO-CX WITHIN THE ESPC PROCESS 

Conducting retro-commissioning as part of a Federal ESPC process can be accomplished in a 

variety of ways, depending on the conditions present at the facility, the availability of funding, 

and the preferences of the Agency. The most likely scenario for incorporating retro-Cx into the 

FEMP Super ESPC process is outlined below. Comprehensive explanations of the steps for 

implementing retro-Cx in a Super ESPC are included in the Example Retro-Commissioning 

Scope of Work. Although the Super ESCP process is detailed, a similar procedure will apply to 

other Federal performance contracting mechanisms. 

Initial Proposal (IP) Phase 

The Agency should inform the ESCo of their interest in retro-commissioning at the initial project 

kick-off meeting prior to beginning the preliminary site survey for the Initial Proposal. The 

ESCo would then gauge the level of retro-commissioning opportunities at the site and report 

these in the Initial Proposal. The Agency should consider providing the Example RetroCommissioning Scope of Work to the ESCo for modification and inclusion in the Initial Proposal. 

Detailed Energy Survey (DES) Phase 

The most effective way to determine retro-Cx opportunities is to identify opportunities in 

conjunction with building system measurements for baseline determination. Intent to proceed 

with the DES from the Agency should include clear instructions to the ESCO to include retro-Cx 

I-2 Appendix I – Including Retro-Commissioning In FEMP

Federal Energy Saving Performance Contracts
activities (see Example Retro-Commissioning Scope of Work). This will ensure audit costs 

associated with the identification of retro-Cx projects will be recoverable as a part of the project 

development costs, even if the energy conservation measure (ECM) is not implemented. After 

scoping, the cost savings and implementation costs for viable retro-Cx measures are included as 

an ECM. 

ECM Implementation 

Energy saving retro-Cx measures identified can be established as an ECM. The project baseline 

would be unaffected by the retro-Cx activities. Savings from the retro-Cx measures are 

attributed to the project, and implementation costs are included in the total contract cost. 

Performance Period 

Measurement and verification activities should include provisions to ensure the permanence of 

the savings during the performance period. Inclusion of ongoing retro-Cx services or periodic 

system check-ups as part of M&V activities will help ensure the persistence of the savings 

generated, and can be funded by the annual savings of the ECM bundle. 

MEASUREMENT & VERIFICATION OF RETRO-CX 

Measurement and verification strategies for retro-Cx projects must be developed on a project-byproject basis. In general, the energy savings from retro-commissioning measures can be 

determined using typical M&V strategies, such as developing calibrated engineering models of 

the affected systems. Accounting for savings generated from retro-Cx will be dependent on the 

scope of the retro-Cx work, as well as the M&V strategies chosen for other ECMs. 

In some cases, the modifications made during retro-Cx activities may be reversed over time by 

building occupants and maintenance staff. The persistence of the changes can be addressed 

through checking performance benchmarks, conducting periodic tune-ups, or a more aggressive 

commissioning approach. This ongoing commissioning effort will improve building performance 

by optimizing building systems though ongoing tracking and adjustment of systems rather than a 

one-time fix. Typically, systems are benchmarked through measurements, and continuous 

monitoring is used to ensure the systems continue to operate as expected. 

PRICING & PAYMENT FOR RETRO-CX 

The cost of retro-Cx is dependent on the scope of work and must be negotiated on a project-byproject basis. Including retro-Cx activities as part of the detailed energy survey (DES) will 

increase the cost of the survey. Developing a detailed scope of work and a fixed price for this 

work is important to eliminate risk to the Agency and the ESCo. Including a detailed scope of 

work in the Initial Proposal eliminates ambiguity in the retro-Cx work to be performed. 

Establishing a fixed price for the entire DES ensures that the incremental cost for these retro-Cx 

services will be covered as a part of the development costs for the overall project, whether or not 

viable measures are identified and ultimately implemented. 

OTHER KEY ISSUES 

Other important items to consider, discuss, and agree upon when including retro-Cx with a 

Federal performance contract are outlined below. 

FEMP Appendix I – Including Retro-Commissioning In 

Federal Energy Saving Performance Contracts 

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• Determine the level of retro-commissioning services desired and identify the systems / 

equipment to be included in retro-Cx. 

• Establish the level of involvement of facility staff and other contractors in initial retro-Cx 

scoping activities. 

• Develop appropriate M&V strategies, including assessing the need for periodic tune-ups 

or a continuous commissioning approach. 

• Ascertain the level of occupant and staff training needed. 

• Assign on going service responsibilities. 

I-4 Appendix I – Including Retro-Commissioning In FEMP

Federal Energy Saving Performance Contracts
Example Retro-Commissioning Scope of Work 

To Include Services As Part of Super ESPC Detailed Energy 

Survey 

BACKGROUND 

Agency requests that ESCo perform retro-commissioning services1, as detailed herein, as a part 

of performing the Detailed Energy Survey (DES) for site. The incremental cost for these 

services will be covered as a part of the project development cost for the Super ESPC project, 

whether or not viable measures are identified and ultimately implemented. 

It is the intent of the Agency to expand the work that will be performed during the DES. 

Leveraging the DES to complete a thorough scoping of retro-commissioning opportunities will 

substantially enhance the value of the ESCO services by ensuring that fundamental building 

systems are calibrated and operating as required to deliver functional and efficient performance. 

This work will also result in written system operation sequence for the included systems, which 

help train facility staff. Additional documentation of operating conditions prior to implementing 

retrofits will be valuable. 

The cost effective measures identified it the Final Retro-Commissioning Report shall be included 

in the Final Proposal for a Super ESPC Delivery Order. The Agency agrees to credit the verified 

savings identified from these measures to the overall project, even if the measures are 

implemented by Agency staff prior to award of the Delivery Order (DO). 

OBJECTIVES 

The primary objectives for conducting these activities are: 

o Enhance documentation of the operational and maintenance (O&M) requirements for the 

equipment and systems included 

o Document baseline operating conditions through trending of performance measurements 

o Optimize control systems through calibration of critical sensors, review metered data and 

trend logs, and functional equipment testing 

o Identify operational and maintenance enhancements that result in improvements in 

energy efficiency, occupant comfort, or indoor air quality. 

o Identify O&M staff training needs 

SYSTEMS TO BE INCLUDED 

(If it is not possible to include all major building systems and equipment, select the critical items 

for inclusion. Generally, the largest energy using equipment as well as systems known for 

1 Background information on retro-commissioning is available in A Practical Guide for Commissioning Existing Buildings through 

http://eber.ed.ornl.gov/commercialproducts/retrocx.htm. 

FEMP Appendix I – Including Retro-Commissioning In 

Federal Energy Saving Performance Contracts 

I-5 
having problematic controls, or operational and comfort problems should be included in the 

study. Refer to Continuous Commissioning Guidebook2 for example measures and technical 

guidance.) 

For all buildings included in the DES, the following systems should be included: 

o Building automation system, including controlled devices, sensors, control loops, and 

logic 

o Cooling systems 

Æ Central cooling plant 

Æ Primary air-handling units (AHUs) 

Æ Terminal units 

Æ DX systems 

o Heating systems 

Æ Central boiler plant 

Æ Primary heating systems 

o Fire safety / smoke purge aspects of the HVAC system 

o Lighting systems 

o Domestic hot water equipment 

o Humidity control equipment 

o Building pressurization controls 

PROJECT STEPS 

OVERVIEW OF PROJECT STEPS 

The following summarizes the project steps, which are detailed in the following sections. 

1. Review existing systems and related documentation 

2. Develop Retro-Commissioning Plan 

3. Perform calibration and maintenance checks 

4. Implement diagnostic monitoring / trending 

5. Perform functional tests 

6. Analyze the monitoring / trending and test data 

2 FEMP Continuous Commissioning Guidebook for Federal Energy Mangers by Texas A&M University, October 2002 is available through 

http://ateam.lbl.gov/mv. 

I-6 Appendix I – Including Retro-Commissioning In FEMP

Federal Energy Saving Performance Contracts
7. Asses and document the current operating strategies and sequences of operation for 

all systems and equipment included 

8. Document O&M improvement opportunities 

9. Calculate energy impacts and develop implementation cost estimates for O&M 

opportunities 

10. Develop and deliver the Final Retro-Commissioning Report 

11. Include cost-effective measures in final proposal with other opportunities identified 

during the DES. 

DETAILED PROJECT STEPS 

The following sections detail each of the project steps. 

Review Existing Systems & Documentation 

o Attending meetings through out the process including a retro-commissioning kick-off 

meeting in preparation for the site investigation. 

o Interview Agency support staff and review the existing building documentation to 

determine the original specifications, design intent, and their relevance to current owner / 

user requirements. The following lists the documentation that needs to be gathered and 

reviewed: 

Æ Sub-metered utility data and energy bill (electric and gas) information for at least 

12 months along with rate schedules 

Æ Drawings and specifications relevant to the systems scheduled for 

commissioning, especially control drawings and sequences of operation 

Æ Existing control points list for each building 

Æ Operating strategies programmed into the Energy Management and Controls 

System (EMCS) 

Æ Equipment list with nameplate information for equipment controlled by the 

EMCS 

Æ Existing O&M and system manuals for equipment 

Æ Test and balance (TAB) reports; sensor calibration documentation 

Develop Retro-Commissioning Plan 

Develop a Retro-Commissioning Plan for testing and reporting on the pertinent systems, 

including documentation strategies. The Retro-Commissioning Plan should include the 

following: 

o Equipment , systems, or specific measures to be included, or selection criteria for 

inclusion 

o Plan for reviewing existing systems and related documentation 

FEMP Appendix I – Including Retro-Commissioning In 

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o Define current operational requirements from original design documents and interviews 

with Agency staff 

o Detailed plan for equipment calibrations, including calibration forms 

o Maintenance checks to be performed 

o Detailed plan for diagnostic monitoring / trending, including data archival 

o Functional tests to be performed 

o Methods to be used in analyzing the monitored / trended data 

o Plan to asses and document the current operating strategies and sequences of operation 

for all systems and equipment included 

o Strategies to be used in calculating energy impacts and implementation cost estimates for 

opportunities identified 

o Implementation schedule 

o Define the content the Final Retro-Commissioning Report 

Perform Calibration and Maintenance Checks 

A list of sensors and actuators for calibration will be developed following a points list review. 

Using the trending capability of the control system for troubleshooting, testing and data 

gathering is a cost effective approach but only if the commissioning provider and building staff 

is confident that the sensors are reading properly. The appropriate amount of calibration work 

will depend on the level of confidence in the existing equipment and the history of problems with 

the controls equipment at an individual site. The calibration plan may include a compressive list 

of sensors and actuators, or critical components for select systems can be chosen. Example of 

critical control sensors include static pressure, outside air temperature, return air temperatures, 

mixed air temperature, discharge temperature, variable frequency drive (VFD) speed, flow 

meters, damper actuators, valve actuators, humidity sensors, and space temperature sensors. 

Appropriate calibration procedures and required documentation should be included in the RetroCommissioning Plan, including the following items: 

• Test equipment used for calibration should have traceable calibration documentation 

provided in the final report. 

• Document test equipment readings versus the EMCS sensor readings prior to adjustment. 

• Document the adjustments made to match the EMCS sensor readings to the test 

equipment readings. 

• A minimum of two points of calibration to check both slope and intercept is 

required for sensors seeing a wide range of conditions such as the outside air 

temperature sensors. Adjusting the off set may be sufficient for sensors seeing a 

narrow range of conditions. 

• Document test equipment readings versus the EMCS sensor readings following 

adjustment (calibration) and note date and time of the adjustments made. 

I-8 Appendix I – Including Retro-Commissioning In FEMP

Federal Energy Saving Performance Contracts
Two options for providing the needed labor and staffing to accomplishing the calibration 

procedures are outlined below, and summarized in Table 1. Both of the options require 

participation by Agency operating staff. 

Option A: Commissioning Provider (ESCO) & Agency Staff Conduct Calibrations 

Using forms and procedures developed by the Commissioning Provider (ESCO), the ESCO and 

Agency operating staff will investigate, document, and remedy any maintenance issues and 

perform calibrations as specified in the Commissioning Plan. 

Successful completion of the calibrations is required prior to starting any monitoring, trending, 

and functional testing. This option is the least cost, but its viability depends on the level of 

expertise of Agency staff as well as their availability. This option is recommended. It provides 

the highest assurance of quality control and will help educate agency staff. 

Option B: Controls Contractor and Agency Staff Conduct Calibrations 

Using forms and procedures developed by the Commissioning Provider, the Controls Contractor 

and Agency staff would accomplish the calibration tasks specified in the Commissioning Plan. 

The Agency would cover the cost of the Controls Contractor. This option may appear the most 

expensive (by hourly rate), but may actually take less time due to the Controls Contractor 

experience. 

Table 1: Options to Accomplish Calibration of Critical Sensors 

Option Responsible Parties Task Description Cost Implication 

A Commissioning Provider 

(ESCO) assisted by Agency staff 

Using forms and procedures 

developed ESCO, in-house 

support staff would work with 

Commissioning Provider 

(ESCO) to accomplish the 

calibration taskswould be 

participating with staff 

Least cost depending on level of 

knowledge of staff and ability to 

make computer adjustments. 

Provides high level of quality 

control along with education for 

Agency staff 

B Controls Contractor assisted by 

Agency staff 

Using forms and procedures 

developed Commissioning 

Provider (ESCO), the Controls 

Contractor, and Agency staff 

would accomplish the tasks 

Most expensive by hourly rate 

but may be off set by taking less 

time due to Controls Contractor 

experience 

Implement Monitoring and Testing 

The commissioning provider provides a detailed request for required trend logs from the EMCS 

to the Agency staff or to the Controls Vendor, who executes the trends and provides the data to 

the commissioning provider (ESCO) in the specified electronic format. 

If data loggers are required, the commissioning provider (ESCO) will provide and program the 

data loggers, which will be installed with the assistance of the facility staff. Facility staff may 

actually install current transformers and watt transducers on wiring inside electrical cabinets. 

Facility staff may also be responsible for removing the sensors and data loggers, packaging them 

and sending them back to the provider for analysis after the end of the monitoring period. 

Functional Testing 

The commissioning provider (ESCO) oversees and conducts functional tests on selected 

equipment as specified in the Commissioning Plan, with the assistance of facility staff and 

Controls Vendor as required. Functional tests will be comprised of changing parameters, setFEMP Appendix I – Including Retro-Commissioning In 

Federal Energy Saving Performance Contracts 

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points or conditions and observing and documenting the actual system or equipment response 

through various modes and conditions (both simulated and real). Tests should be developed on a 

case-by-case basis to ensure functionality across normal operating conditions. 

For equipment that is being monitored with sufficient points, manual testing may be 

accomplished by changing the parameters, etc. during the monitored period. The monitored data 

is then examined and used to document and verify correct or incorrect operation. Visual 

verification of equipment functionality may be required in instances that feedback from the 

control system is not available. 

Analyze Monitoring and Testing Data 

Once the data is gathered from monitoring and testing, the commissioning provider analyzes the 

findings by comparing actual equipment operation to appropriate operation and to the existing 

control sequences. Issues and potential improvements are identified and documented. Energy 

calculations are performed for those operational measures that appear to have the most impact to 

comfort, energy, or indoor air quality. Implementation costs for the measures will be estimated, 

and results will be presented in the Final Commissioning Report. 

Assess and Document Current Operating Strategies 

Commissioning provider will work with the Agency staff to develop a comprehensive building 

operations plan for the equipment and systems included in this scope of work, based on the 

original building specifications and current operational needs of the site. 

Document and Analyze O&M Improvements 

The Commissioning provider will document improvement opportunities identified. For the most 

promising measures, energy impacts will be calculated and implementation cost estimates 

developed. 

Develop Final Retro-Commissioning Report 

The Final Retro-Commissioning Report shall be issued once commissioning scoping activities 

are completed. This will be a separate deliverable from DO proposal, documenting the actions 

specified herein. 

A Final Retro-Commissioning Report shall include the following information: 

o Executive summary 

o Project background and scope of the commissioning project 

o Overview of activities conducted 

o Details of all potential improvements identified and other findings, including: 

 Documentation of equipment conditions 

 Identify any needed facility staff training 

 Missing critical documentation 

o The estimated implementation costs and the energy impacts for each improvement 

I-10 Appendix I – Including Retro-Commissioning In FEMP

Federal Energy Saving Performance Contracts
o Current system operation sequences for all equipment and systems included 

In Appendix: 

o The Retro-Commissioning Plan 

o The EMCS / data logger trended data, analysis, and annotated results. Electronic copies 

of the data should be provided. 

o Completed calibration worksheets 

o Documentation of government witnessing, as required 

Include Recommended Measures in Final DES Proposal 

The Final Retro-Commissioning Report will be presented once all activities are completed, and 

will precede the presentation of the DES or Final Proposal. The cost effective measures 

identified it the Final Retro-Commissioning Report shall be included in the Final Proposal for a 

Super ESPC Delivery Order, including a detailed measurement and verification strategy for each 

one. Functional tests of all operational modifications should be included as part of the final 

acceptance procedures for each measure in the DO. 

The Agency agrees to credit verified savings identified from these measures to the overall 

project, even if measures are implemented by Agency staff prior to award of the Delivery Order. 

ROLES & RESPONSIBILITIES 

The following is an overview of the responsibilities for the team members, including Agency 

Lead Representative, Agency Technical Support Staff, the Commissioning Provider, and the 

Controls Contractor. 

Agency Lead Representative 

Provides overall supervision of this project 

Is the party referred to as the “owner” 

Develops contractual agreements 

Ensures the participation of Agency staff 

Funds the participation of the controls contractor as needed 

Attends meetings as necessary 

Agency Technical Support Staff - Building Operator / Engineer 

Attends meetings as necessary 

Reviews and accepts commissioning plan developed by Commissioning Provider 

Ensures the participation of building personnel and controls contractors as needed 

Assists in gathering the building documentation as needed 

Provides input into the investigation process through interviews 

FEMP Appendix I – Including Retro-Commissioning In 

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Provides government witnessing of activities 

Assists with implementation of sensor calibration 

Performs or assists with setting up data trends in the EMCS 

Performs or assists with the installation and removal of diagnostic equipment such as data 

loggers, as needed 

Assists with performing functional tests 

Ensures maintenance items affecting the project are remedied, such as replacing failed 

sensors 

Controls Contractor 

Attends project Kick-Off meeting to coordinate work 

Assists with gathering data and setting up trends as needed 

Assists with performing functional tests 

Assists the Commissioning Provider in identifying and understanding the control sequences 

and programming of the EMCS 

Commissioning Provider (ESCO) 

Is the technical lead for this project 

Conducts the Kick-Off meeting 

Develops the Retro-Commissioning Plan 

Reviews required documentation such as energy bills, sequences of operation, drawings, 

specifications, etc. 

Conducts the operations site investigation including interviews, observations and analysis 

Oversees all monitoring diagnostic planning and execution 

Oversees any manual functional testing planning and execution 

Conducts the engineering analysis and energy calculations 

Develops the Final Retro-Commissioning Report 

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Federal Energy Saving Performance Contracts
April 2008