Drexel University to Collaborate With SCIenergy, Mitsui USA, and Pennsylvania Treasury Department, Blue Hill Partners on $6.6 Million Project to Curb Energy, Emissions and Costs

PHILADELPHIA, PA--(Marketwired - Mar 11, 2014) -  Drexel University and a consortium of partners today announced the launch of a $6.6 million initiative to upgrade buildings on its campus and lower energy consumption and costs through SCIenergy's unique Managed Energy Service Agreement (MESA). Lead investment in the project came from Mitsui USA and the Campus Energy Efficiency Fund ("CEEF"), an innovative program of the Pennsylvania Treasury Department managed by Blue Hill Partners. Additional investment came from The Reinvestment Fund and Philadelphia Industrial Development Corporation.

The project was co-developed by SCIenergy and Blue Hill Partners and is one of the largest energy-efficiency-as-a-service projects to date.

The project will reduce energy consumption by over 25% in three science and two mixed use campus buildings -- the Lebow Engineering Center, the Center for Automation Technology, the Bossone Research Center, Nesbitt Hall and the Paul Peck Problem Solving and Research Center -- which cumulatively account for over 430,000 square feet of building space. The upgrades will cut energy consumption by approximately 19.4 billion BTUs per year, or approximately the same amount of energy consumed annually by 142 U.S. families, and recovers the costs through savings on Drexel's energy bills. Some of the highlights of the project include:

• Controls Upgrade of Three Science Buildings - The project includes state of the art lab controls for three buildings totaling over 62 lab spaces -- the LeBow Engineering Center, the Center for Automation Technology, and the Bossone Research Enterprise Center -- saving over 46% of the energy used to operate the lab spaces.
• Complete Mechanical Upgrade of Research Center - The project includes a complete mechanical upgrade of the 101,000 sq. ft. Peck Problem Solving and Research Center (PPSRC), installing a new, 300-ton chiller, replacing 11 air handling units, and new ductwork, reducing the Heating, Ventilation, and Air Conditioning (HVAC) load by 35%. The mechanical upgrade at the PPSRC will allow Drexel to save over $200,000 per year on temporary cooling equipment and greatly improve occupant comfort.
• Supplemental Energy Efficiency Investment for a Building Renovation - Due to budget constraints, energy efficiency measures were at risk of being excluded from a major renovation project at the 89,000 sq. ft. Nesbitt Hall. The project includes an investment in energy efficiency improvements such as variable volume air handling units, supply air distribution systems, new lighting, and new controls.

"This innovative project reflects Drexel's ongoing commitment to environmental stewardship," said James R. Tucker, Drexel's senior vice president for Student Life and Administrative Services. "We are grateful to a forward thinking Pennsylvania Treasury Department that values both energy efficiency and investment in higher education and to SCIenergy for providing a unique transaction structure that helps eliminate the barriers that can impede projects like this."

Dallas-based SCIenergy created MESA, an innovative business model that turns energy efficiency into an asset. Under MESA, SCIenergy analyzes the potential for energy savings in commercial and industrial buildings and then implements a strategy that can encompass everything from simple process changes like changing temperature set-points to replacing major building systems. SCI and Mitsui USA then fund the improvements, recovering project costs through lower energy expenses and steadily improving performance over time with SCIWatch, SCI's cloud-based platform for optimizing building performance.

By leveraging efficiency, SCI is able to lock in energy savings for its customers that will continue for decades and integrate capital improvements without impacting balance sheets or debt covenants. The project is the second for the SCIenergy-Mitsui USA joint venture, which anticipates several additional projects in 2014.

"All too often universities face tradeoffs between the need to upgrade aging infrastructure and the imperative to devote resources to growth and academic excellence," said Steve Gossett Jr., CEO of SCIenergy. "Performance contracts and other kinds of conventional debt do not solve this problem. A structure like MESA can leverage savings operations to fund major improvements without sacrificing resources schools need for the core mission -- education."

The Drexel project is the first in a series of projects spearheaded by the Pennsylvania Campus Energy Efficiency Fund (CEEF); a program created by Blue Hill Partners and Pennsylvania Treasury designed to help universities lower their operating expenses through innovative energy projects. CEEF expects to lead up to $45 million in investments on behalf of 10 to 12 universities in the commonwealth. When fully invested, the fund will save Pennsylvania universities an estimated $150 million over 20 years.

"I am enormously proud of the Campus Energy Efficiency Fund. It is an innovative, profitable public-private partnership that helps colleges and universities in our state to upgrade their buildings while reducing their environmental footprint and energy costs. The Fund also provides a new model for other universities in Pennsylvania and around the U.S. to improve operations and spend less on overhead and more on hands-on education," said Rob McCord, State Treasurer of Pennsylvania. "This project will enable Drexel to reduce energy consumption and emissions, upgrade five key buildings, increase comfort and safety in labs and classrooms, and lower overall operating costs. We are particularly excited that Drexel, which is already a national leader in campus sustainability, found that CEEF provided a smart and attractive vehicle for making even more smart, profitable improvements."

"Science buildings are often overlooked when searching for energy efficiency projects, but innovative facilities managers, like those at Drexel, recognize the huge potential savings opportunity that these buildings represent. Due to their ventilation requirements, science buildings are the largest energy user on campuses and consume dramatically more energy than other buildings on a per square foot basis," said Joyce Ferris, Managing Partner at Blue Hill Partners. "The upgrades, which reduce energy consumption while improving lab safety, are an excellent example of the types of impactful, proven solutions that CEEF invests in."

About Drexel University
Drexel is a comprehensive global research university ranked among the top 100 in the nation by U.S. News & World Report. With approximately 25,000 students, Drexel is one of America's 15 largest private universities. The University has built its global reputation on core achievements that include: leadership in experiential learning through its cooperative education program; a history of academic technology firsts; and recognition as a model of best practices in translational research initiatives. It is one of Philadelphia's top 10 employers, and a major engine for economic development in the region. For more information, visit www.drexel.edu

About SCIenergy
SCIenergy is the global leader in leveraging energy efficiency as an asset. By combining cloud-based analytics, Intelligent Retro-commissioning™ and Managed Energy Service Agreements (MESA) for financing capital improvements through energy savings, SCI can elevate building performance and drive down cost in a balance sheet neutral way. For more information, visit www.scienergy.com.

About Blue Hill
Blue Hill Partners is an energy services company and investment firm that provides specialty energy efficiency retrofits as a fully funded, turnkey service. Blue Hill is the manager of the Campus Energy Efficiency Fund, a partnership with Pennsylvania Treasury Department. Blue Hill teams with best-in-class technology, engineering and construction partners to fund and manage the entire energy retrofit process including; assessment, engineering, funding, installation, and commissioning. Blue Hill specializes in science building energy efficiency upgrades and outdoor lighting retrofits. For more information visit www.bluehillpartners.com.

About Mitsui USA
Mitsui USA was incorporated in 1966 in New York as a wholly owned subsidiary of Mitsui & Co., Ltd., Tokyo, Japan, a leading international trade and investment company operating with an extensive global network. Beyond traditional trading, the Company's newer emphasis is on project development and management, business investment, and comprehensive services capabilities. Mitsui USA aspires to meet the needs of its customers as "Your Global Business Partner®," while committed to sustainable growth and good corporate citizenship.

About the Reinvestment Fund of Philadelphia
The Reinvestment Fund of Philadelphia is a Community Development Financial Institution that manages over $706 million in capital and has made over $1.25 billion in community investments, financing over 2,800 projects since its inception in 1985. In pursuit of its mission to build wealth and opportunity for low-wealth people and places through the promotion of socially and environmentally responsible development, TRF finances community businesses using loan, equity and other financing tools.