service customer presentation 013113

7/28/2019 Service Customer Presentation 013113

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Service Customer Offerings

Dallas, Texas

1/31/13


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Agenda

Customer Purchase Criteria Customer Economics

Potential Service Offerings Testing of Offerings Immediate Plan Potential Add-on Offerings Budget Implications


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Customer Purchase Criteria

Services Offerings


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Service Customer Purchase Criteria

Perceived Need Escalating operating costs Sustainability agenda Operating personnel capabilities Management knowledge of plant equipment Increasing equipment maintenance issues

Budget Constraints Limited capital Annual time horizon

Value Proposition Risk vs. reward


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Customer Economics


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Customer Economics

Most customers looking at the payback Payback calculated as upfront cost divided by

electrical savings Electrical savings calculations consist of

Kwh rate Assumed improvement Ton hours produced Starting efficiency measurement


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Current EffTrack Economics

Larger systems are the only ones that areviable

Large upfront cost to get equipment installed Upfront cost based on number of chillers Annual cost based on tonnage

Must assume at least 15% improvement Need utilization rates over 24% Situations where electric rates are below $.07

kwH are very difficult to justify


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Plant Scenarios Typical EffTrackInstallations

Tonnage 2000 2000 2000 2000Initial Cost 70,000$ 70,000$ 70,000$ 70,000$

Annual Cost 12,000$ 12,000$ 12,000$ 12,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 153 55 27 16

Tonnage 4000 4000 4000 4000Initial Cost 112,000$ 112,000$ 112,000$ 112,000$Annual Cost 18,000$ 18,000$ 18,000$ 18,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 121 43 22 11

Tonnage 8000 8000 8000 8000Initial Cost 170,000$ 170,000$ 170,000$ 170,000$Annual Cost 30,000$ 30,000$ 30,000$ 30,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%

Improvement 5% 10% 15% 20%Payback (Months) 94 34 17 9


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Potential Service Offerings


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Potential Service Offerings

EffTrack EffTrack Lite

ChillSmart Analysis Ongoing ChillSmart Analysis Assessment Offerings Modified Shared Savings Arrangements


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The Hudson Services Funnel Go for the Full Monte first!

Earn an upfront margin and secure high margin recurring revenue ie. Sell the traditional EffTrack equipment and monitoring service

Take less upfront margin but secure monitoring service of thechillers, ie. EffTrack Lite

Go for some recurring revenue, ie. Ongoing ChillSmart Demonstrate our Brilliance, ie. Assessment or ChillSmart

Use the Assessment as our foot in the door and refund some of thecost if we can later up sell to a full monitoring solution

Try to get some remediation work Make sure customer understands all Hudson Services


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EffTrack Install components on chiller

4 temperature sensors 2 differential pressure sensors (flow) 2 refrigerant pressure sensors Electrical CT to gather volts, amps power factor Data gathering panel at each chiller, Master for each 6 chillers

Transmit data in 15 min. intervals to Tulsa Calculate efficiency Review for alarms Generate reports

Advise customer of operating issues Costs

Upfront ~ $25K per chiller Ongoing ~ $5 per ton per year Payback between 1 and 3 years


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EffTrack Lite Lower upfront cost to customer by using

customer existing equipment Have customer recalibrate existing sensors

and have customer add any additional sensors Gather information from BAS systems and/or

existing energy management systems

Charge customer a one-time set-up fee, aquarterly fee per plant and a quarterly fee perton


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Plant Scenarios EffTrack LiteTonnage 2000 2000 2000 2000Initial Cost 10,000$ 10,000$ 10,000$ 10,000$Annual Cost 9,000$ 9,000$ 9,000$ 9,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 46 11 6 3

Tonnage 4000 4000 4000 4000Initial Cost 20,000$ 20,000$ 20,000$ 20,000$Annual Cost 18,000$ 18,000$ 18,000$ 18,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 5% 10% 15% 20%Payback (Months) 46 11 6 3

Tonnage 8000 8000 8000 8000Initial Cost 20,000$ 20,000$ 20,000$ 20,000$Annual Cost 30,000$ 30,000$ 30,000$ 30,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%

Improvement 5% 10% 15% 20%Payback (Months) 33 7 4 2


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ChillSmart

Use stand alone ChillSmart product if we cantsell other recurring service

Charge for ChillSmart in three tier formatbased on size of chiller (prices per chiller)

700 tons or less charge $3,500 700 to 1,000 tons charge $5,000 Greater than 1,000 tons charge $6,000

Use one free refrigerant and oil analysis for amulti site client demonstration of service


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Plant Scenarios ChillSmartTonnage 2000 2000 2000 2000Initial Cost 10,500$ 10,500$ 10,500$ 10,500$

Annual Cost -$ -$ -$ -$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 7% 7% 7% 7%Payback (Months) 12.2 8.7 6.6 5.1

Tonnage 4000 4000 4000 4000Initial Cost 20,000$ 20,000$ 20,000$ 20,000$Annual Cost -$ -$ -$ -$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 7% 7% 7% 7%Payback (Months) 11.6 8.3 6.2 4.9

Tonnage 8000 8000 8000 8000Initial Cost 36,000$ 36,000$ 36,000$ 36,000$Annual Cost -$ -$ -$ -$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%

Improvement 7% 7% 7% 7%Payback (Months) 10.5 7.5 5.6 4.4


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Ongoing ChillSmart

Contract for 2 years of basic ChillSmart analysis Analysis includes full chemistry tests every six

months, and reports once a quarter Manual data sheets sent in once per week that

include at least 3 readings if the chiller was operating Annual charge in three tiers (prices / year / chiller)

700 tons or less charge $4,500 700 to 1,000 tons charge $6,000 Greater than 1,000 tons charge $7,500


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Scenarios Ongoing ChillSmartTonnage 2000 2000 2000 2000Initial Cost -$ -$ -$ -$

Annual Cost 13,500$ 13,500$ 13,500$ 13,500$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 10% 10% 10% 10%Payback (Months) 11 7.9 5.9 4.6

Tonnage 4000 4000 4000 4000Initial Cost -$ -$ -$ -$Annual Cost 24,000$ 24,000$ 24,000$ 24,000$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 10% 10% 10% 10%Payback (Months) 9.8 7.0 5.2 4.1



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Assessments

Offering includes 5 task process System Overview and Data Collection Fluid Chemistry

System Modeling & Energy Assessment Engineering Optimization Analysis Final Presentation & Report

Objectives of Assessment Show customer that we can save them money Introduce customer to Hudson capabilities Create a recurring revenue stream


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Modified Shared Savings No upfront cost to customer Charge customer a monthly fee that roughly equates to our

costs plus 20% profit over first two years (no term toagreement)

Year three and beyond charge is $6K per year per plant and$3.00 per ton per year

Customer agrees to pay 20% of identified or actual electricalsavings over 4 year period (whichever is larger) providingpayback is less than 2 years

Applicable for EffTrack and EffTrack Lite services Circumvents the annual budget cycl


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Scenarios Shared SavingsTonnage 2000 2000 2000 2000

Initial Cost -$ -$ -$ -$Annual Cost 33,380$ 33,380$ 33,380$ 33,380$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%Improvement 15% 15% 15% 15%Payback (Months) 36.3 25.9 9.7 7.6


Tonnage 8000 8000 8000 8000Initial Cost -$ -$ -$ -$Annual Cost 86,880$ 86,880$ 86,880$ 86,880$Electrical Rate $0.060 $0.070 $0.080 $0.090Utilization 20% 24% 28% 32%

Improvement 15% 15% 15% 15%Payback (Months) 11.8 8.4 6.3 4.9


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Testing of Offerings

EffTrack Childrens Hospital of Phil.,Honeywell

EffTrack Lite Aria Health, Hershey Medical,Toyota

ChillSmart Teva Ongoing ChillSmart None yet. Assessments P&G


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Immediate Plan Resurrection!!!

Customer EffTrack reports caught up Derrick Get JL&L satisfied with the Honeywell account - Jim Re-engage CBRE Jim

Formalize simplistic data gathering format for ChillSmart analysis Fully define the Ongoing ChillSmart offering Sell one/two accounts each from the agreed services to iron out the operational

details Train existing Hudson employees on EffTrack offering

Riyaz and Charlotte person to go to Rocky Mount Senthil and Steve to go to Tulsa

Send legacy EffTrack employees on a reclamation job Hire one dedicated customer service engineer Put one more distributor/rep in mid-Atlantic region


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Potential Add-on Sales

Refrigerant sales Reclamation work Consulting services Additional chemistry tests Additional Assessments Increased device monitoring (later)

Boilers Air compressors Pumps Electrical equipment


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Budget Implications

service customer presentation 013113

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