MILCON Analysis, ECIP Project

The ECIP module offers a simplified LCC analysis that can be used for energy-related MILCON (military construction) projects to be funded under the DoD Energy Conservation Investment Program for the retrofitting of existing energy systems. ECIP projects are prioritized for funding in decreasing order of their savings-to-investment ratio (SIR). The ECIP report Energy/Water Life Cycle Cost Analysis Summary calculates the SIR as one of the economic measures of the retrofit relative to the base case.

For ECIP studies, the analyst is generally given investment cost differences and operational cost savings for an energy conservation project rather than the corresponding total cost data for a base case and an alternative that the other BLCC modules use. In the case of a retrofit of functional equipment made entirely for reasons of energy and water use efficiency this implies that the initial capital cost of the base case may be zero and that the entire investment cost of the retrofit has to be justified by the operational savings.

There are some restrictions on the input data for the ECIP report compared with the other BLCC5 reports, which may result in small differences between the life-cycle cost results of the ECIP report and a fully developed LCC analysis using other BLCC5 modules:

Replacement costs: In the ECIP module, when computing an SIR of a single project for ranking purposes relative to other projects, you should not include project replications that may have been used to compare the LCC of multiple, mutually exclusive, alternatives. Since replications are not included, there is no place for capital replacement costs on the ECIP report. Component replacements, if any, should be entered as Non-annually Recurring Non-Energy Savings. (These will appear in the numerator of the SIR rather than in the denominator as do capital-related replacements.)

Residual values: Residual values are not included in the ECIP report. The BLCC5 comparative analysis will not agree with the ECIP analysis if a residual value is included in the data file for either the base case or the alternative in a non-ECIP MILCON analysis.

Base Date and Beneficial Occupancy Date: In the ECIP analysis all costs and savings are assumed to be incurred at the base date. Phase-in of investment costs and postponement of operational costs to the Beneficial Occupancy Date cannot be accommodated in the ECIP analysis. In the MILCON, Energy Project module, the SIR and AIRR measures are computed using the discounted present value of the phased-in capital investment costs; operational costs are assumed to be incurred only during the occupancy period. The SIR and AIRR shown in the BLCC ECIP report would agree with the BLCC comparative analysis report only if the same date is used for both the base date and BOD.

Other cost categories: SIOH (supervision, inspection and overhead), design cost, salvage value of existing equipment, and public utility company rebates, if any, are specifically identified in an ECIP report. The input screen of the BLCC5 ECIP module therefore requires you to specify the part of the project's initial investment cost (before salvage value of existing equipment and utility rebate adjustments) to be allocated to SIOH and design. Amounts of 6% of investment cost for SIOH and 10% for design may be used as default values. You must also specify the absolute amount of the salvage value from existing equipment and the utility rebate, if any for the project alternative.