Recommissioning (RCx) Guide for Building Owners and Managers

Chapter 2 - Investing in Recommissioning

Costs of Recommissioning

While recommissioning is cost effective for most buildings, it is important to understand its costs, as well as the strategies for reducing them, to ensure the greatest return. This section summarizes typical expected costs for a project and highlights cost-saving strategies.

It is important to bear in mind that recommissioning costs, like the process itself, are unique to each project. Variables affecting both include:  

• Scope of the project
• Number and complexity of systems
• Size of the facility
• Equipment age and condition
• Commissioning service provider costs
• Level of on-site staff knowledge interfacing with the project
• Presence of an extensive O&M program and documentation

The recommissioning provider's fee is the most obvious cost. Additional costs include other team members (internal staff and/or outside contractors) participating in the process and the cost of correcting the identified problems. Lawrence Berkeley National Laboratory's study of 100 existing buildings²⁰ (varying in type and size) found that recommissioning provider fees ranged from 35% to 71% of the total recommissioning costs, with a median value of 67%. As shown in Figure 4, the largest percentage of costs for a project was for the investigation and planning phase activities (69%), followed by the actual implementation of measures (27%).

Budgeting for Recommissioning

Often, recommissioning will identify quick fixes that can be implemented without significant additional investment. For example, energy savings are commonly found by identifying equipment that is running when it is not needed. A simple change in the control system is all that it takes to capture these savings. The provider, however, may also identify measures that cannot be paid for in the current operations and maintenance budget. In these cases, the recommissioning provider can assist in prioritizing improvements, and owners can actively plan in their upcoming budget cycles to accommodate the opportunity.

While it is possible to stage implementation of measures, it is most cost effective to conduct a recommissioning investigation that continues on to implementation. It is therefore advisable, where possible, to plan for the costs of larger measures from the start of the project, so that recommissioning services can be most effectively utilized and the greatest savings realized. There may be financial incentives available from utilities in your area, which may cover part of the cost of recommissioning. These incentives should be a factor in any analysis of the overall cost of the project and recoverable and non-recoverable expenses.²¹

Strategies to Reduce Costs of Recommissioning²²

There are strategies that owners can use to reduce the costs of recommissioning and increase the effectiveness of the project. These include sharing costs with tenants and reducing recommissioning costs by involving building staff in the projects.

Recommissioning as a Capital Expense

When recommissioning is undertaken in the context of an energy-saving capital improvement project, the cost of recommissioning may be rolled into the cost of the project itself, and therefore be treated as a capital expense. In an income-producing property, it may be possible to pass capital expenses through to tenants, depending on the lease structure in place.

Recommissioning as an Operating Expense

The cost of recommissioning can also be considered an operating expense, since it focuses on improving the operation of energy-using systems. Where the purpose of recommissioning is to address tenant complaints about comfort or respond to abnormally high energy costs, the owner may choose to pay the full cost of recommissioning. If investing in recommissioning and any related capital improvements would likely produce significant savings for all tenants, an owner might choose to claim a portion of the recommissioning expense, and then pass the rest through to the tenants (along with the cost of any recommended capital improvements) to the fullest extent permitted by the lease.²³

Involving Facility Staff to Save Time and Money

Leveraging facility staff's first-hand knowledge of the building can reduce the time needed by the recommissioning provider to uncover building inefficiencies. There are many tasks that skilled staff can undertake to help streamline the process and increase the effectiveness of the recommissioning provider's time.

Provide a List of Opportunities

Building operators know their buildings best and are often aware of the problem systems as well as opportunities that exist for improving performance. During the initial phase of the project, the facility staff should develop a list of existing potential improvements and known problems to share with the recommissioning provider. This can help focus the investigation activities and reduce the time required by the RCx provider. It is beneficial for the operators to be involved with the process so that they can have greater understanding and involvement in the ongoing commissioning process.

Gather Documentation

One of the 1^st steps in recommissioning is to compile an up-to-date building documentation package including any written sequences of operation. Facility staff can assist with gathering available documentation. The more complete the documentation, the less time the recommissioning provider needs to fill in the gaps. Often, documentation may not be available or the documentation that is available may not accurately reflect the current operating condition of the building or its equipment. If documentation is not up-to-date, building staff should, if possible, revise it prior to the initiation of the project or be prepared to discuss the undocumented changes with the recommissioning provider. The provider should be given available documentation prior to the site visit in order to learn as much as possible about the building ahead of time. At a minimum, all building documentation should be made available on-site for the recommissioning provider during the site visit.

Perform Scheduled Preventative Maintenance

Facility staff or an outside maintenance service contractor should complete scheduled preventive maintenance before the recommissioning Investigation Phase begins so simple maintenance issues don't delay the process. Delays in the recommissioning process because of dirty filters, loose belts, broken dampers, or loose electrical connections can increase costs.

Assist with Diagnostic Monitoring, Trend Logging, and Functional Testing

It may be useful to have facility staff members assist with the short-term diagnostic monitoring, trend logging, and functional testing that occurs during the investigation phase of the project. This can reduce project costs, as well as provide the building staff with experience that they can apply later. If building staff are trained to initiate trend logs using the building's energy management control system (EMCS), a recommissioning provider can reduce time spent on the task, and the owner will not need to hire a controls contractor for this task when the project is finished. Depending on availability, knowledge, and capabilities, facility staff also may be trained to assist with the installation and removal of portable data loggers used for short-term diagnostics and carrying out functional test plans. In addition to reducing costs, this exposes staff to different approaches for troubleshooting problems and investigating and verifying equipment performance. Observing diagnostic trending and testing will improve staff understanding of equipment and control strategies and enable them to retest or recommission systems periodically as part of the facility's ongoing O&M program.

Perform Repairs and Improvements

Recommissioning costs also can be reduced by using facility staff to perform repairs and improvements that would otherwise require outside contractors. The success of this approach hinges on staff training, knowledge, and time availability to carry out the work. Facility staff workloads should be assessed to determine how schedules and workloads might accommodate any additional work brought on by recommissioning.

Selling Recommissioning from Within

Facility managers or directors will need to sell recommissioning to the building owner, property managers, or other senior level decision makers to get approval or "buy in" for the project. Managers faced with this challenge have a much better chance of generating support and obtaining the desired approvals if they present decision makers with a proposal that provides a solid business case for recommissioning.

An effective case for a recommissioning project clearly demonstrates how the benefits of recommissioning outweigh the costs. Thus, it is important that proposals for recommissioning present information that clearly lays out the project's estimated costs and benefits. A strong proposal also identifies cost reduction strategies when outlining the associated costs, and highlights how the energy savings and other benefits can offer the owner a short payback period on the investment.  

Keep the following points in mind when making the case for a recommissioning project:

Typical Benefits of Recommissioning

• Identifies and addresses system inefficiencies that can cause the building owner and/or tenants to incur high operating and maintenance costs, as well as premature replacement costs
• Improves the building's overall performance by optimizing energy-efficient design features and directly addressing issues like equipment performance and system integration
• Helps drive down building operating expenses – generating a higher Net Operating Income (NOI) and an increased asset value for the property
• Reduces comfort complaints that lead to tenant turnover
• Identifies potential indoor environmental quality issues and helps alleviate occupant complaints
• Ensures that building operations meet owner expectations.
• Provides benefits beyond energy cost savings that can generate associated revenue. These benefits include extended equipment life, improved thermal comfort and indoor air quality, labour savings, increased productivity/safety, and liability reduction
• Verifies that building staff are well trained and have the documentation they need to effectively and efficiently operate and maintain the building
• Provides indirect cost savings and improvements – owners and building managers benefit from improved equipment performance and system operations, and building staff receive training and improved documentation

Associated Costs of Recommissioning

• Recommissioning provider's fee for planning, investigating, implementing and closing RCx project.
• Facility staff time and cost of including other professionals in the recommissioning process.
• Cost of correcting the problems identified by recommissioning.
• While costs vary depending on the complexity of the systems and project goals, recent studies show typical recommissioning project costs to be about²⁴ $2.90/m².
• Restorative maintenance costs to return equipment or systems to proper operation
• Control system software upgrades, printers and sometimes PCs

Cost Reduction Strategies

• Using facility staff to undertake tasks to help streamline the process and increase the effectiveness of the commissioning provider's tim
• Sharing costs with building tenants where possible under lease terms

Demonstrating Cost-Effectiveness

• Recommissioning costs are most often offset by energy cost savings. Energy-saving improvements can yield simple paybacks typically ranging from 2 months to 2 years.
• It has been estimated that the dollar value of recommissioning non-energy benefits can offset the cost of a project by 50%.²⁵

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²⁰ Ibid., p.13
²¹ See the US-EPA Guide related case study "Retrocommissioning at Marriott" in Appendix G
²² See the US-EPA Guide related case study "The Hatfield Courthouse" in Appendix G
²³ Information summarized in part from the following publication: Jewell, Mark. RealWinWin, Inc. "Understanding the Value of Commissioning in Income-Producing Office Buildings", Proceedings of the National Conference on Building Commissioning, Palm Springs, CA, May 20 – 22, 2003
²⁴ I bid 13; recommissioning costs include investigation and implementation.
²⁵ I bid 13; data on non-energy benefits are from 10 buildings.