CITY OF RALEIGH’S CLIMATE / ENERGY ACTION PLAN
TECHNICAL DOCUMENTATION – VOLUME ONE: PROJECT REPORT
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Similarly, the Finance Teamwas responsible for providing input to the “Realistic/
Implementable” decision criterion as related to the City’s financial operations as:
Can be incorporated into the way the City does business from a procurement
standpoint
Ability exists to not have to procure the lowest first-cost equipment
Ability exists to use a 3
rd
party such as a public-private partnership or an energy
service company (ESCO)
The needed technology possesses a comfortable level of market maturity (i.e., it is
proven on the market as successful and is widely available and utilized )
6.2.2
Financial Metrics
As described above, it was necessary for the Finance Team to develop the overall financial
metrics that would be applied to the CEAP development, since the City does not use
common metrics and Departments evaluate costs differently. Exhibit 13 shows the financial
metrics that were discussed at the second Team Workshop and approved for use in the
CEAP by the Finance Team.
EXHIBIT 13
Financial Metrics
Partial Cost of Ownership Components
Capital Cost (first cost)
Total O&M
Total Savings
Full Cost of Ownership Components
Notes/Selected Values
Return on Investment
City does not use a standard value
Payback Period
City does not use a standard value;
Team elected to use simple payback
Life Cycle Costs (Net Present Worth)
Nominal Discount rate
4.5% (
US OMB)
Escalation
1.8% (
US OMB)
Salvage Values
Include
Evaluation Period
30
years
Renewal Schedule
5
years at 2/3’s of capital cost
Replacement Schedule
Infrastructure specific
Cost of Capital
Reserve fund
Issuance cost 2-4%
Revenue Generation
Benefit/Cost
Energy cost savings and
O&M cost savings