4.  COMPARING ACTUAL CONSUMPTION OF ENERGY WITH TARGET

4.1  By no later than 10 Business Days after the submission by Project Co of a certificate referred to in paragraph 6 in respect of the quarter ending on an Annual Review Date, the parties shall calculate the amount by which Adjusted Energy Consumption for the Energy Year ending on the Annual Review Date is greater than or less than the Annual Energy Target for the same period.

4.2  If Adjusted Energy Consumption is not less than 97% and not greater than 103% of the Annual Energy Target for the same period, no adjustment to Monthly Service Payments shall be made.

4.3  If Adjusted Energy Consumption is between 97% and 87% the Annual Energy Target for the same period, a Gainshare Adjustment shall be made to the Monthly Service Payments, calculated in accordance with paragraphs 4.6 and 4.7 below.

4.4  If Adjusted Energy Consumption is between 103% and 113% the Annual Energy Target for the same period, a Painshare Adjustment shall be made to the Monthly Service Payments, calculated in accordance with paragraphs 4.8 and 4.9 below.

4.5  If Adjusted Energy Consumption is identified at any time as less than 87% or greater than 113% of the Annual Energy Target for the same period, then the variance in Energy Consumption shall be regarded as extraordinary and deserving of investigation. An independent expert (being an appropriately qualified representative of CIBSE) shall be commissioned at the joint equal cost of the Board and Project Co to assess and report on the cause of the variance and assess the responsibility of Project Co and the Board for that element of the Energy Consumption which is less than 87% or greater than 113% of the Annual Energy Target and to apportion (as between the Board and Project Co) the appropriate share which should be borne of any excess costs (including but not limited to the costs of obtaining additional Allowances) or savings arising from such variance being less than 87% or greater than 113% of the Annual Energy Target. The Board and Project Co shall be bound by the findings of the independent expert pursuant to this paragraph 4.5 and shall use reasonable endeavours to implement any additional recommendations that the independent expert may choose to make. The independent expert may be invited to consider making cost-effective recommendations for improving the efficiency of energy usage and/or minimising carbon emissions but such recommendations shall not be binding on Project Co or the Board.

Calculation of Gainshare Adjustment

4.6  For the purposes of paragraph 4.7 below:

(a)  "Threshold 1a" means 97% of the Annual Energy Target; and

(b)  "Threshold 2a" means 87% of the Annual Energy Target.

4.7  A Gainshare Adjustment shall be calculated in accordance with the following formula:

where:

4.7.1  GS is the Gainshare Adjustment;

4.7.2  Vg is 50% of the Units of Energy Consumption that lie between Threshold 1a and Theshold 2a; and

4.7.3  AAUC is the Average Annual Unit Cost.

Calculation of Painshare Adjustment

4.8  For the purposes of paragraph 4.9 below:

(a)  "Threshold 1b" means 103% above the Annual Energy Target; and

(b)  "Threshold 2b" means 113% above the Annual Energy Target;

4.9  A Painshare Adjustment shall be calculated in accordance with the following formula;

where:

4.9.1  PS is the Painshare Adjustment;

4.9.2  Vp is 50% of the Units of Energy Consumption that lie between Threshold 1b and Threshold 2b; and

4.9.3  AAUC is the Average Annual Unit Cost.

4.10  The Average Unit Cost shall be calculated in accordance with the following formula:

Where:

4.10.1  AUC means the Average Unit Cost of Energy

4.10.2  SC means the aggregate of all standing charges and other sums invoiced by suppliers in respect of the supply of Units of Energy during the relevant Contract Month, being sums which do not vary solely according to the amount of Units of Energy actually supplied;

4.10.3  US means the aggregate of all sums invoiced by suppliers in respect of the supply of Units of Energy during the relevant Contract Month, being, in respect of each form of Energy, a price per Unit multiplied by the number of Units of that type of Energy actually supplied; and

4.10.4  U means the aggregate number of Units of Energy actually supplied for consumption in respect of the Hospital Facilities in the course of the relevant Contract Month.

4.11  Where, pursuant to Clause 17.4 of this Agreement, it is determined that the Facilities have not, as a consequence of the design and construction of the Facilities by Project Co, satisfied the Board's Construction Requirements in respect of thermal and energy efficiency, and the solution determined, pursuant to that Clause is the payment of compensation by Project Co in respect of the additional consumption of energy which is expected to result:

4.11.1  the amount of any such payment; and

4.11.2  the equivalent number of Units of Energy which that payment represents, based on the Average Unit Cost,

shall be disregarded for the purposes of calculating if any Gainshare Adjustment or Painshare Adjustment arises pursuant to this paragraph 4 (Comparing Actual Consumption of Energy with Target). For the avoidance of doubt, Adjusted Energy Consumption will not be reduced by the relevant number of Units of Energy, the amounts included for SC and US in paragraph 4.10 (Comparing Actual Consumption of Energy with Target) will not be reduced by the amount of the relevant payment, and all Units of Energy Consumption shall be taken into account for the purposes of calculating the Average Unit Cost.

4.12  Where it is established in accordance with this paragraph 4 that a Gainshare Adjustment or a Painshare Adjustment arises, the relevant adjustment shall be given effect to in accordance with paragraph 1 of Section B of this Part 18 of the Schedule. In each case the relevant Monthly Service Payment to be adjusted shall be that covered by the Monthly Service Payment Statement issued following calculation of the adjustment. In the event that a relevant adjustment arises in respect of the final Contract Year the adjustment shall be made to the final Monthly Service Payment.

4.13  The making of any Gainshare Adjustment or Painshare Adjustment shall not affect the Annual Service Payment for the purposes of the application of Indexation pursuant to this agreement.