Name: A facility uses utility steam to produce hot water for preheating outdoor air, lavatories, and janitorial services. Option Number 1: No changes in system Present Annual Cost for Steam = $9,400 Estimated Escalation Rate = 5% Present Annual OM&R Cost = $1,400 Estimated Escalation Rate = 3% Present Annual Water & Sewer Cost = $1,500 Estimated Escalation Rate = 4% Estimated Building Life = 15 years Annual Interest Rate = 8% 1. Calculate the present value of the utility steam costs. (3) 2. Calculate the present value of the OM&R costs. (3) 3. Calculate the present value of the water and sewer costs. (3) 4. Calculate the life cycle costs for this option. (Assume no residual value or disposal (3) cost) Option Number 2: Change steam traps and improve insulation Cost of Improving Steam Distribution System = $15,000 Present Annual Cost for Steam = $6,110 Escalation Rate = 5% Present Annual OM&R Cost = $800 Escalation Rate -3% Present Annual Water & Sewer Cost = $1,500 Escalation Rate = 4% Estimated Building Life = 15 years Annual Interest Rate = 8% 5. Calculate the present value of the utility steam costs. (3) 6. Calculate the present value of the OM&R costs. (3) 1 7. Calculate the present value of the water and sewer costs. (3) 8. Calculate the life cycle costs for this option. (Assume no residual value or disposal cost) (3) Option Number 3: Install a boiler and disconnect utility steam supply Cost of Installing Oil Fired Steam Boiler = $16,100 Cost of Installing Oil Storage and Supply System = $3,000 Cost of Installing Mechanical Equipment Room Components = $10,000 Cost of Installing Boiler Venting System = $2,500 Cost of Engineering Fees and Building Permits = $12,000 Present Annual Cost for Fuel Oil = $4,000 Escalation Rate = 5% Present Annual OM&R Cost = $2,000 Escalation Rate = 3% Present Annual Water & Sewer Cost = $250 Escalation Rate = 4% Present Annual Cost of Boiler Insurance = $1,000 Escalation Rate = 4% Estimated Building Life = 15 years Annual Interest Rate = 8% 9. Calculate the present value of the fuel oil costs. (3) 10. Calculate the present value of the OM&R costs. (3) 11. Calculate the present value of the water and sewer and insurance costs. (3) 12. Calculate the life cycle costs for this option. (Assume no residual value or disposal cost) (3) 13. Which of the three options would you recommend? 14. Why would you recommend it? (2) (2) A single boiler in a large residential building produces steam to heat the building and provide domestic hot water. Both the boiler and its burner, which uses number 6 fuel oil, need to be replaced. To reduce the heating load, new windows with low infiltration rates and low U factors will be installed and the building's roof will be insulated. Low flow fixtures will also be added to reduce domestic hot water usage. Option Number 1: Install a No. 2 oil fired scotch marine steam boiler Cost of Installing Boiler = $54,200 Cost of Installing Oil Storage and Supply System = $12,000 Cost of Installing Mechanical Equipment Room Components = $20,000 Cost of Installing Boiler Venting System = $7,000 2 Cost of Engineering Fees and Building Permits = $18,000 Cost of Boiler Operating Permit = $1,800 Escalation Rate = 0% (Renewed every 3 years) Present Annual Cost for Fuel Oil for Heat = $111,490 Escalation Rate -5% Present Annual Cost for Fuel Oil for Hot Water = $74,060 Escalation Rate = 5% Present Annual OM&R Cost = $12,000 Escalation Rate = 3% Present Annual Water & Sewer Cost = $850 Escalation Rate = 4% Present Annual Cost of Boiler Insurance = $2,500 Escalation Rate = 4% Estimated Building Life = 20 years Annual Interest Rate = 8% 15. Calculate the present value of the fuel oil costs for heat. (3) $ 16. Calculate the present value of the fuel oil costs for hot water. (3) $ (3) (3) 17. Calculate the present value of the OM&R costs. 18. Calculate the present value of the water and sewer costs. 19. Calculate the present value of the insurance costs. 20. Calculate the present value of the boiler operating permit. (3) (3) 21. Calculate the life cycle costs for this option. (Assume no residual value or disposal cost) (3) Option Number 2: Install a scotch marine steam boiler with a dual fuel burner Cost of Installing Boiler = $64,200 Cost of Installing Oil Storage and Supply System = $12,000 Cost of Installing Natural Gas Supply Piping and Controls = $25,000 Cost of Installing Mechanical Equipment Room Components = $20,000 Cost of Installing Boiler Venting System - $7,000 Cost of Engineering Fees and Building Permits = $20,000 Cost of Boiler Operating Permit = $1,800 Escalation Rate = 0% (Renewed every 3 years) Present Annual Cost for Fuel for Heat - $86,930 Escalation Rate -5% Present Annual Cost for Fuel for Hot Water = $59,120 Escalation Rate = 5% Present Annual OM&R Cost = $13,000 Escalation Rate = 3% Present Annual Water & Sewer Cost = $850 Escalation Rate = 4% Present Annual Cost of Boiler Insurance = $3,000 Escalation Rate = 4% 3
