PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       5d 
ACTION ITEM             Date of Meeting    July 9, 2013 

DATE:    June 28, 2013 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Joe McWilliams, Managing Director, Real Estate 
Paul Meyer, Manager, Seaport Environmental 
SUBJECT:  Marine Energy Efficiency Project 

Amount of This Request:  $100,000        Source of Funds: General Fund 
ACTION REQUESTED: 
Request Commission authorization to (1) proceed with the Marine Energy Efficiency Project; (2)
spend up to $100,000 for an energy audit for the project; and (3) for the Chief Executive Officer
to advertise and execute an energy savings performance-based contract, as defined in Chapter
39.35A RCW. 
SYNOPSIS: 
The Real Estate and Seaport operating Divisions are seeking authority for the Marine Energy
Efficiency Project. The Port will select an energy services company (ESCO) in accordance with
RCW 39.35A. This ESCO company will perform energy audits identifying energy efficiency
improvements and propose specific energy conservation construction projects at Shilshole Bay
Marina and Fishermen's Terminal. The Seaport division has not identified any specific facilities 
at this time, but may identify opportunities to perform energy conservation projects under this
authorization. The Port is not obligated to continue with any of the projects identified in the
energy audit.
There are two cost elements for this project: (1) energy audit and (2) cost of construction. The
Port will spend up to $100,000 to attain energy audits. Construction costs are unknown at this
time and Port staff would return to Commission to seek authority to move forward with
construction contracts. Preliminary assumptions for the cost of lighting upgrades at Shilshole
Bay Marina and Fishermen's Terminalcould range between $500,000 to $1,000,000. Both
facilities have several outdoor lighting systems operated by the Port (docks, parking, outdoor
work lighting) that will be evaluated as part of the audit. The upgrades assume conversion of
parking lights, outdoor fixtures and dock lighting to LED fixtures. Shilshole Bay Marina will
review over 82 walkway and parking lot fixtures and 1400 dock lights. Fishermen's Terminal
has over 60 upland parking lot and work lighting fixtures and 95 dock lights to evaluate. The 
range in costs depends on the total number of fixtures included in the project and the nature and

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 28, 2013 
Page 2 of 6 
extent of lighting controls to be included. Until audit results are available, the  cost for
construction is estimated. The ESCO contractor is responsible for both design and construction.
One interesting feature of RCW 39.35A and ESCO contracts is that the Port may have the ESCO
contractor finance the actual construction project with the Port reimbursing the ESCO contractor
from the energy savings.
RCW 39.35A allows municipalities to negotiate energy savings performance contracts to achieve
energy and water conservation without the need for capital outlay. The ESCO will perform an
energy audit and propose specific projects, identifying associated energy savings. The ESCO
model reduces risk by guaranteeing savings and reduces impacts to capital budgets by using
energy savings from newly installed equipment to pay the full cost of project.
Port staff has identified particular potential projects that will improve the energy performance of
lighting systems and lighting controls at the facilities to be assessed. These projects would result
in a number of sustainable improvements to the assessed facilities including utility cost-savings,
safer working environments, and reduced environmental footprint. Very preliminary in-house
estimates of energy savings for selected lighting projects total nearly 2 million kWh (kilowatthours
) per year that could reduce energy costs by $127,000 annually. These reductions would
help the Port meet state and local mandates that require facilities to reduce energy and water use.
The request amount was not included in the 2013 operating budget, but is expected to be offset
by lower spending on tenant improvements and related costs. 
BACKGROUND: 
The ESCO selected by the Port will have the capability to evaluate need, retrofit facility
electrical equipment,  and measure results that will result in a number of conservation 
improvements to the assessed facilities.  Chapter 39.35A RCW provides the authority to
negotiate a performance-based contract for energy management systems to reduce energy use or
energy cost of an existing building or facility; and the services associated with the equipment,
materials or supplies. The Port will use its own competitive selection process to select an ESCO
using a request for qualifications with established criteria and a request for proposals.
Following the selection of the ESCO, sufficient expense funding is available to perform an
investment grade audit of selected electrical subsystems including lighting systems; heating,
ventilation, and cooling (HVAC) systems and control; electro-mechanical equipment and
controls; and addition of renewable energy sources. The audit will concentrate on upgrades of
lighting systems.  The investment grade effort will lead to the implementation of facility
improvement measures. The study will provide all the details necessary for implementation of
viable initiatives detailing all the associated savings, costs, potential utility funding, government
and utility incentives and grants, and return-on-investment scenarios.
Upon receipt of the investment grade audit, selection of proposed improvements will be made in
coordination with the Port of Seattle and any affected tenants based on pre-selected financial and
consumption goals. Commission approval will be required prior to moving forward to the next
phase of design and construction.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 28, 2013 
Page 3 of 6 
The ESCO will guarantee the minimum savings and maximum cost of the projects. The
performance of the new equipment will be guaranteed by the ESCO within the contract, and
verified by annual measurement and verification over the life of the contract. Construction,
operation, and maintenance for the term of the contract will be subject to negotiation at time of
contract. Our current plan is to have the ESCO finance the initial design and construction and
the Port will reimburse the ESCO contractor based on savings.
PROJECT JUSTIFICATION: 
The upgrades and energy-efficiency strategies proposed by the ESCO will result in conservation 
improvements that would include utility cost-savings, safer working environments, and a
reduced environmental footprint. In-house estimates of energy savings for selected lighting
projects are very preliminary but indicate nearly 2 million kWh per year that could reduce annual
energy costs by nearly $127,000.
Project Objectives: 
Reduce energy consumption at the facilities by 10% or more. 
Total cost of ownership of project for each facility meets a financial objective of simple
payback between five to eight years and seven percent return on investment, subject to
negotiation.
No negative interference with the current performance of any related and existing
systems. 
All costs related to project audit, design, materials and installation, implementation and
measurement and verification will be paid from energy cost savings produced by the new
equipment. 
No impact on current operations of the tenant or the Port. 
Installed systems will be fully compliant with federal OSHA, Washington State Labor
and Industry standards and other applicable regulations and standards for design and
construction. 
PROJECT SCOPE OF WORK AND SCHEDULE: 
Scope of Work: 
Phase I: Prepare investment grade audit 
o  Establish base line energy use profile 
o  Develop energy saving alternatives 
o  Prepare life cycle analysis of energy savings alternatives 
o  Formulate a strategy between Port, tenants and ESCO to facilitate upgrades 
Phase 1: Design & Construction (future phase) 
o  Engineering Design 
o  Construction 
Measurement and Verification (future phase) 
The following facilities are being considered to be included within the scope of the final
proposal. The expected areas of cost effective energy efficiency upgrades are listed if known,

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 28, 2013 
Page 4 of 6 
although additional areas may be included based on cost effectiveness and energy savings
discovered during the audit. 
Facility                Suggested upgrades                     Control 
Shilshole Bay Marina     Parking lighting, Exterior admin building     Port 
lighting, dock lighting, lighting controls,
Admin building (Port control portion) 
Fishermen's Terminal     Parking lighting, Exterior common lighting,   Port 
dock lighting, lighting controls, interior net
sheds 
Schedule: 
Commission authorization to execute contract              July 2013 
Procure ESCO                            August 2013 
Phase I pre-assessment                           September, 2013 
Phase I Audit                               October 2013 
Evaluate Audit                              October 2013 
Recommendations for energy efficiency                December 2013 
FINANCIAL IMPLICATIONS: 
Budget/Authorization Summary:            Capital      Expense   Total Project 
Current request for authorization                 $0      $100,000      $100,000 
Total Authorizations, including this request          $0      $100,000      $100,000 
Remaining budget to be authorized (cost of
selected improvements)                    $TBD        $TBD       $TBD 
Total Estimated Project Cost                 $TBD        $TBD       $TBD 
Project Cost Breakdown:                   This Request         Total Project 
Investment Grade Energy Audit                 $100,000           $100,000 
Design, Construction, Implementation                  $0             $TBD 
State & Local Taxes (estimated)                       $0              $TBD 
Total                                     $100,000              $TBD 

Budget Status and Source of Funds: 
The 2013 Seaport Environmental Services Operating Budget includes $50,000 for the Energy
Efficiency program for a Seaport property. The additional $100,000 requested for Real Estate
properties was not anticipated in the 2013 Operating Budget, but will be offset by lower
spending on tenant improvement and related costs. At this time, there are no plans to evaluate
Seaport properties as part of the investment grade audit, but opportunities may arise to use the
ESCO to evaluate specific facilities using this contract in the future

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 28, 2013 
Page 5 of 6 

Financial Analysis and Summary: 
CIP Category             Not applicable 
Project Type              Environmental  Energy Efficiency 
Risk adjusted discount rate     Not applicable 
Key risk factors              Will audits provide solutions to meaningfully reduce
energy costs and thus achieve the project objectives 
Will recommended projects be suitable for the needs
of the facilities 
Project cost for analysis        TBD 
Business Unit (BU)          Recreational Boating, Fishermen's Terminal, Commercial
Properties Seaport Properties, TBD 
Effect on business performance  Per stated objectives, the goal of the identified energy
saving projects will be to achieve a simple payback of
investment in 5 to 8 years. 
IRR/NPV             Not applicable 
STRATEGIC AND OBJECTIVES: 
The Port'sCentury Agenda defines a strategic goal to meet future growth in energy usage
through conservation and renewable resources. The affected facilities will eventually reduce
operational costs with reduced electrical energy usage after completing payback with savings.
Electrical infrastructure for the facility will be updated and modernized.  Reducing energy
consumption and associated reduction in greenhouse gas emissions from deferred energy
generation helps meet a number of state and local mandates that require facilities to reduce their
energy and water use. City of Seattle Ordinance # 123226 requires owners of nonresidential
buildings to measure and disclose energy efficiency performance  (SMC 22.920).  RCW
70.235.020 requires the state to reduce greenhouse gas emissions to 1990 level by 2020 and
reduce emissions by 35% from 1990 levels by 2035. 
ENVIRONMENTAL SUSTAINABILITY: 
This project demonstrates environmental sustainability by improving existing Port assets and better
utilizing existing resources. This project has a positive effect on the environment through reduction
in energy consumption, which in turn reduces greenhouse gas emissions through deferred electrical
generation. 
BUSINESS PLAN OBJECTIVES: 
This project is consistent with the Real Estate and Seaport business strategy of being the global
leader among seaports in demonstrating environmental stewardship and reducing the
environmental impact of our operations. The projects meet local state and federal regulations as
effectively and efficiently as possible and demonstrate collaboration with industry to reduce
environmental impacts while reducing operational costs leading to enhanced competitive

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 28, 2013 
Page 6 of 6 
advantage. The projects will upgrade existing assets and invest in new developments to sustain
and enhance economic viability of Real Estate and Seaport assets. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED: 
ALTERNATIVE 1: Execute the contract with an ESCO and have the ESCO perform an
investment grade audit at Shilshole Bay Marina, Fishermen's Terminal, andother potential
properties. The audit will define the energy savings initiatives that meet our energy consumption
and financial metrics. This is the recommended action. 
ALTERNATIVE 2: Do nothing: Leave the electrical facilities systems at the identified facilities
unchanged. Electrical utility costs will follow a 3% to 6% increase yearly, increasing port
operation costs. This action is not recommended. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
None 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
None