PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6b 
ACTION ITEM 
Date of Meeting      June 24, 2014 
DATE:    May 21, 2014 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Dave Soike, Director Aviation Facilities and Capital Program 
Wayne Grotheer, Director Aviation Project Management Group 
SUBJECT:  Airport Energy Conservation Program  Stage III Mechanical Energy
Conservation Project Analysis and Design (CIP #C800658) 
Amount of This Request:         $330,000   Source of Funds:   Airport Development
Fund and Future
Est. Total Project Cost:          $3,500,000 
Revenue Bonds 
Est. State and Local Taxes:        $230,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to proceed with the stage III
mechanical energy conservation project and execute a contract through the State Department of
Enterprise Services (DES) for an audit of mechanical systems and preliminary design of energysaving
improvements. This request is for $330,000 of an estimated total project cost of
$3,500,000. 
SYNOPSIS 
This project uses a contracting model to retain an experienced firm to perform an energy audit of
certain portions of the Airport's mechanical systems such as air conditioning units, chilled water
systems, and temperature controllers.  In general terms, the audit would propose improvements
to the systems that would save enough energy to provide a positive financial rate of return. With
Commission approval, the Port would then authorize DES to direct the firm to move ahead with
the most beneficial improvements. This is the third such mechanical conservation project that
the Airport has undertaken. This contracting model is used widely across the state by school
districts, municipalities, and other public entities. 
This requested action will fund the analysis and design work to conduct an Investment Grade
Audit, prepare the project notebook, and prepare preliminary designs of the Stage III Mechanical
Energy Conservation project to improve the energy performance of portions of the mechanical
infrastructure system at the Airport. The scope of work includes collecting data, preparing 
preliminary design proposals, preparing cost estimates with maximum allowable project costs, 
and calculating the savings internal rate of return for the proposed energy conservation measures.
A future Commission request will be made upon completion of this preliminary phase to move

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 21, 2014 
Page 2 of 6 
forward with construction of the infrastructure changes that meet or exceed 10% internal rate of
return. This will be one of several projects to offset future energy needs for projected building
square footage expansions such as the new International Arrivals Facility and the North Satellite
expansion project, and to further the Airport's goal to meet future electrical energy needs
through conservation and use of renewable power. This project was included in the 2014  2018
capital budget. 
BACKGROUND 
Seattle-Tacoma International Airport includes a terminal building complex that spans over three
million square feet. This area is both heated and cooled by the Airport central mechanical plant
and the associated heating and chilled water distribution pipes, various equipment, and air
handling ducts. 
This project is the third mechanical energy conservation initiative developed by the Port of
Seattle and we will utilize the Washington State Energy Savings Performance Contracting
Program within the Department of Enterprise Services  (DES).  The program utilizes a
partnership between the Port, DES, and the energy service company (ESCO) in order to facilitate
the most cost-effective approach to completing energy conservation measures  to existing
facilities.
All fees associated with the program are determined by the project scope and value and are not in
any way based on the energy savings achieved. The Energy Audit costs to the ESCO are applied
to the design cost for the project. The program requires that the ESCO calculate a level of
energy savings prior to construction and then measure and verify the level of savings is achieved 
after the project is complete.  The measurement and verification process provides high
confidence that the energy savings will be realized over the life of the economic analysis. The
specific energy savings, economic analysis, measurement and verification process and guarantee
will be documented in the Energy Services Audit notebook submittal which becomes the basis
for the construction contract with the ESCO. 
By utilizing the existing Interagency Agreement with the State of Washington, the DES will
contract with an ESCO to prepare conceptual designs and determine the feasibility of proceeding
with a capital project to complete the energy conservation measures. The above agreement
allows compensation for the services provided by DES and the ESCO to be paid directly by the
Port. 
PROJECT JUSTIFICATION AND DETAILS 
This project will analyze data, calculate cost estimates, and prepare preliminary design for the
Stage III mechanical energy conservation project. The budget in this request is for the ESCO
Audit, estimated State of Washington project management portion that covers the entire project, 
and also Port of Seattle costs during the audit and design.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 21, 2014 
Page 3 of 6 
Each energy conservation measure as described below will be developed through the preliminary
design phase including feasibility study for energy conservation, scope, and utility incentives and
will include estimation of maximum allowable costs of construction.  The performance
improvements and energy savings will be calculated in the Investment Grade Audit focused on
conservation measures that will provide a 10% internal rate of return. The proposed energy
conservation measures have been discussed between Port of Seattle staff and the ESCO to
determine initial feasibility. 
Project Objectives 
The over-arching objective of this work is electrical energy conservation as well as a small
savings in natural gas. 
Scope of Work 
This project will investigate and evaluate separate measures. Infrastructure modifications that
meet the 10% IRR criterion would move forward to construction. The Stage I and Stage II
projects have already completed similar measures, which added to staff confidence that this third
project will be successful. The measures include: 
Constant volume to variable volume airside optimization: Convert constant volume air
handling terminal boxes (e.g. old technology heat and cooling units above certain
ceiling areas) to more modern variable volume type as was completed in the Stage 1
and Stage 2 Mechanical Energy projects. 
Chilled water system optimization: Implement mechanical system energy measures to
(a) modify the tertiary piping system to utilize the secondary pump system and (b)
upgrade air conditioning equipment in computer/electrical rooms to use higher chilled
water cooling temperatures and augment waterside economizer mode. 
Optimize sequencing of chillers in the central plant to meet varying loads. 
Conditioned space optimization:  Implement occupancy temperature control and/or
outside air ventilation carbon dioxide demand flow response controls.  This would 
optimize controls to reduce the amount of air and energy used for cooling and heating
depending upon air temperatures and other factors. 
Main Terminal public door Ticketing, Baggage Claim, and bridge level air flow control
to reduce the heating and cooling loads. 
Recover heat from condensate return in main terminal to preheat domestic hot water. 
Schedule 
The audit and conceptual design with estimated project costs and guaranteed savings calculations
should be complete by the end of February 2015, at which time a determination will be made as

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 21, 2014 
Page 4 of 6 
to which energy conservation measures will be recommended to the Commission for final design
and construction. 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                      $3,500,000          $0    $3,500,000 
Previous Authorizations                       $0          $0          $0 
Current request for authorization              $330,000          $0      $330,000 
Total Authorizations, including this request      $330,000          $0      $330,000 
Remaining budget to be authorized         $3,170,000          $0    $3,170,000 
Total Estimated Project Cost              $3,500,000          $0    $3,500,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                                     $0         $ 2,300,560 
Construction Management                         $0         $ 210,000 
Design                                   $179,760         $ 499,440 
Project Management                         $150,240         $ 210,000
Permitting                                      $0           $50,000 
State & Local Taxes (estimated)                        $0          $ 230,000 
Total                                       $330,000         $3,500,000 
Budget Status and Source of Funds 
This project (CIP #C800658) was included in the 2014  2018 capital budget and plan of finance
as a business plan prospective project. The funding source will be the Airport Development
Fund and future bonds. Consistent with the Port's 2014  2018 plan of finance, a new revenue
bond issue will be needed in late 2014 or early 2015 to fund this project and others. 
If the Investment Grade Audit does not find savings meeting agreed criterion of 10% IRR: Port
total costs would then amount to the expended portion of the project management costs (thought
to be less than $86,000 at that point). This cost would be charged to expense. 
If the Investment Grade Audit does find savings meeting agreed criterion of 10% IRR and the
Port elects not to proceed with the work: Under the Agreement with DES a maximum fee of
$25,700 would be owed to the State plus the $179,760 ESCO Audit fee and the expended portion
of the project management costs. These costs would only need to be expensed if the audit finds
savings and the Port elects not to move forward. 
The individual energy conservation measures that are identified through this work will be
submitted to Commission in the future for authorization for final design and construction. The
total cost of the project is estimated to be $3,500,000.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 21, 2014 
Page 5 of 6 
Financial Analysis and Summary 
CIP Category             Renewal/Enhancement 
Project Type              Renewal & Replacement 
Risk adjusted discount rate     7.0% 
Key risk factors             Project costs 
Project cost for analysis        $3,500,000 
Business Unit (BU)          Terminal Building 
Effect on business performance  Operating cost savings will offset capital costs 
IRR/NPV             Positive NPV, 10% IRR (target) 
CPE Impact             Likely none, may actually lower CPE 
The financial analysis will be updated upon completion of the project notebook when the scope
and guaranteed savings can be quantified. 
Lifecycle Cost and Savings 
Mechanical systems can be improved in order to reduce electrical energy consumption and
thereby achieve cost savings. The savings are particularly important as the Airport will see
energy usage increase due to growth and with the implementation of the pre-conditioned air
project and the electrification of ground service equipment. Since the amount of electricity the
Airport can purchase at the lowest Tier 1 rate from Bonneville Power Administration is limited,
the Airport must achieve improved efficiencies in order to offset purchasing electricity at the
higher future Tier 2 rate. Some nominal natural gas savings are also expected to be achieved
from this project. Both the capital cost of this project, and the resultant anticipated 10% energy
savings would both be reflected in the Airport's rates and charges and utility charges. 
At this early stage of the project, the impact to ongoing Operations and Maintenance (O&M)
costs are undetermined. We do not expect that this project will greatly add to or remove assets
that will require maintenance, so we do not foresee a significant increase or decrease in
maintenance costs. 
STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda objective to "Be the greenest, and most energy
efficient port in North America" by evaluating energy conservation measures and developing
designs that reduce Airport energy consumption. 
TRIPLE BOTTOM LINE 
Economic Development 
This project will reduce the amount of energy consumption achieving both electrical and natural
gas cost savings.  The amount of electricity the Airport can purchase at Tier 1 rate from
Bonneville Power Administration is limited. Long-term this project will help reduce the cost of
utilities passed on to Airport tenants.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 21, 2014 
Page 6 of 6 

Environmental Responsibility 
This project will reduce the Airport's energy consumption, and supports the Port's Century
Agenda objective to "Be the greenest, and most energy efficient port in North America." 
Community Benefits 
Long-term vitality of the Airport benefits the regional economy, the local environment, and the
nearby communities.
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Perform traditional design/bid/build project without utilizing the Washington
State Energy Savings Performance Contracting Program. This approach would take longer and
cost more.  Design/Bid/Build elements include consultant selection and contracting, design and
bid processes.  Total contract costs are not known until project is bid and all change orders
accumulated. This approach would not use the expertise of prequalified state contractors and
consultants. This is not the recommended alternative. 
Alternative 2)  Do nothing. This approach would not improve energy conservation within the
Airport.  This would not enhance the Port's stewardship of financial and natural resources
through completing energy savings projects on existing facilities. This is not the recommended
alternative. 
Alternative 3)  Authorize an Addendum to the Interagency Agreement between the Port of
Seattle and the State of Washington for Energy Savings Conservation Project Management
Services to prepare a feasibility study for the next steps in the Airport energy conservation
program. This is the recommended alternative. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
Stage III Mechanical Briefing March 11, 2014 
Aviation Division Capital Budget, Commission Briefing October 1, 2013