2
Evaluation of Consultant-Generated Options

The committee makes three general statements at the outset:

  • First, several committee members noted at both meetings that the 70% Report (AOC, 2009) makes no mention of the unique characteristics of the U.S. Capitol Complex and of the opportunities presented to serve as an example to the nation.

  • Second, based on the material in the 70% Report and two face-to-face meetings, the committee provided recommendations to bring the 70% Report to 100 percent completion, including suggestions for additional analyses and for the development of indices to evaluate the options.

  • Third, all options presented in the 70% Report retain essentially all of the institutional, environmental, political, and economic constraints under which the CPP and the distribution system currently operate. This issue is taken up later in this chapter.

STRENGTHS IDENTIFIED BY THE COMMITTEE

This section describes strengths that the committee noted in its review of the 70% Report, in its tour of the CPP, and in the presentations by the AOC staff and the consultants.

AOC Staff

The committee was impressed with the competence and dedication of the AOC staff, especially in consideration of the challenges being faced. It was clear that the staff was sincerely seeking feedback from the committee and is willing to improve the outcome of the planning effort. This has been clearly demonstrated by the additional work evaluating CO2 and hazardous air pollutant emissions that was completed between the first and second committee meetings.

The challenges for the AOC staff include providing critical utilities services with a partially obsolete infrastructure; responding to its various and diverse constituents; and the sheer magnitude of the changes required to move the infrastructure into the new energy environment of the 21st century. The staff has recognized the many constraints on the CPP and has focused its efforts on providing highly reliable utility services to the U.S. Capitol Complex.

The AOC staff provided the committee as much operating data as it could within the security limitations in force. In the two meetings in which the committee had the opportunity to review the information, interact with the staff, and have access to the facilities, it appeared that some information might not have been released to the committee for security reasons or might not have been available due to a lack of metering or instrumentation, or that it is simply not collected.

To the credit of the AOC staff, according to the AOC Web site the largest single contribution to the energy reduction efforts in the U.S. Capitol Complex is owing to



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2 Evaluation of Consultant-Generated Options The committee makes three general statements at the outset: • First, several committee members noted at both meetings that the 70% Report (AOC, 2009) makes no mention of the unique characteristics of the U.S. Capitol Complex and of the opportunities presented to serve as an example to the nation. • Second, based on the material in the 70% Report and two face-to-face meetings, the committee provided recommendations to bring the 70% Report to 100 percent completion, including suggestions for additional analyses and for the development of indices to evaluate the options. • Third, all options presented in the 70% Report retain essentially all of the institutional, environmental, political, and economic constraints under which the CPP and the distribution system currently operate. This issue is taken up later in this chapter. STRENGTHS IDENTIFIED BY THE COMMITTEE This section describes strengths that the committee noted in its review of the 70% Report, in its tour of the CPP, and in the presentations by the AOC staff and the consultants. AOC Staff The committee was impressed with the competence and dedication of the AOC staff, especially in consideration of the challenges being faced. It was clear that the staff was sincerely seeking feedback from the committee and is willing to improve the outcome of the planning effort. This has been clearly demonstrated by the additional work evaluating COand hazardous 2 air pollutant emissions that was completed between the first and second committee meetings. The challenges for the AOC staff include providing critical utilities services with a partially obsolete infrastructure; responding to its various and diverse constituents; and the sheer magnitude of the changes required to move the infrastructure into the new energy environment of the 21st century. The staff has recognized the many constraints on the CPP and has focused its efforts on providing highly reliable utility services to the U.S. Capitol Complex. The AOC staff provided the committee as much operating data as it could within the security limitations in force. In the two meetings in which the committee had the opportunity to review the information, interact with the staff, and have access to the facilities, it appeared that some information might not have been released to the committee for security reasons or might not have been available due to a lack of metering or instrumentation, or that it is simply not collected. To the credit of the AOC staff, according to the AOC W eb site the largest single contribution to the energy reduction efforts in the U.S. Capitol Complex is owing to 11

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improvements made at the CPP. This is typical of experiences on large institutional campuses in the United States where investments in district energy systems similar to that serving the U.S. Capitol Complex have provided efficiency improvements greater than those realized through improvements in the buildings on the campuses that are served. However, recent and proposed legislation coupled with activities such as the “Green the Capitol Initiative” (Beard, 2007) now require further attention to energy efficiency and reduction of greenhouse gas emissions. Consulting Services The committee was impressed with the number of options considered for the CPP and the routing of the distribution system in the 70% Report. The consulting teams demonstrated considerable knowledge and experience in the types of systems that exist to serve the U.S. Capitol Complex and the current and viable technologies for the energy infrastructures of the future. The AOC staff directed the consultants to evaluate the potential impact of pending greenhouse gas (GHG) emissions regulations on the cost-benefit analysis of the options. The committee believes it is highly likely that GHG emissions legislation/regulation will be enacted within the life of the proposed energy infrastructure replacements; therefore this analysis is very important and probably has helped to shift the project requirements in a direction compatible with GHG regulations. In particular, it has become clear that using biomass or fuel cells as options to replace the CPP are not viable optionsfor the near term even when the potential impact of GHG legislation is considered. In addition, in response to a request by the committee, a thorough CO2 accounting was added to the 70% Report. In the 70% Report, consideration has been given to viable energy distribution tunnel rehabilitation and steam and chilled water line routing options, as well as options for multiple central plants and stand-alone equipment located closer to the buildings being served. Multiple paths for the distribution systems were developed and analyzed, as were the possible reuse and the replacement of the existing tunnels. For replacement options, new tunnels, direct buried piping, and covered trenches have been thoroughly evaluated. Consultants’ Report The AOC specifically requested that the committee act as a second-level reality check against fatal flaws in the AOC methodology or strategic development. Within the parameters of the 70% Report, the committee did not find any fatal flaws in the analyses presented. SHORTCOMINGS IDENTIFIED BY THE COMMITTEE This section describes the shortcomings identified by the committee in the presentations at the workshop and in the 70% Report. The section that follows discusses the actions that the committee recommends be taken as theStrategic Long Term Energy Plan is carried from 70% to 100 percent completion, to overcome some of the identified shortcomings. Other shortcomings described in this section are undoubtedly beyond the scope of this activity. They can be addressed only as part of the broader set of analyses recommended by the committee, as presented in Chapter 3. 12

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The identified shortcomings are as follows: 1. Lack of a clear statement of assessment criteria for the alternatives presented; 2. Lack of a holistic systems approach; 3. Acceptance of all current constraints as immutable; 4. Acceptance of all current relationships as permanently binding; and 5. Demand projections not supported by firm data and not reflective of applicable mandates for energy consumption reduction. Lack of a Clear Statement of Assessment Criteria The 70% Report culminates with a number of options for the CPP, each characterized by assessment criteria—such as cost, security, or environmental impact—and the corresponding index values. The committee assumes that there are similar capsule characterizations of the distribution system alternatives (the limited time available to examine the sensitive material did not allow for ascertaining this fact). The committee could not find a clear statement in the 70% Report describing which criteria will be considered pertinent for assessing or ranking the proposed options for the CPP and the distribution network. Nor did the 70% Report present the full set of indices that will be used to assess the pertinent criteria. In principle, several sets of assessment criteria and their indices may be involved for the (a) consultants’ recommendations for ranking the options; (b) AOC’s internal evaluation and ranking of the consultants’ recommendations; and (c) evaluation and ultimate decision making by the funding entities. These assessment criteria are especially significant given the high probability that criteria for very high (up to 100 percent) reliability or existing constraints on the CPP’s operations will dominate, as discussed below. Lack of a Holistic Systems Approach The 70% Report immediately proceeds to the compilation of assumptions and background information concerning the CPP and the distribution system. It does not present an overarching holistic systems approach to the problem at hand. The committee is not aware of the contractual relationship between the AOC and its consultants, and therefore does not know whether the elements listed below ought to be part of the consultants’ report or ought to be generated by the AOC itself. In any case, a holistic system approach would encompass, among possible others, the following elements: • A mission statement—a description of the AOC’s mission with respect to providing heating, cooling and, potentially, electricity to the U.S. Capitol Complex, and its role in balancing priorities among the many possible performance criteria for the CPP; • A vision statement—how the AOC intends to meet its intended mission; • A clear statement of criteria and priorities that are to be satisfied, such as reliability and security, providing utilities services to new buildings, increased energy efficiency, avoidance of obsolescence, satisfaction of regulatory requirements, reduction of environmental impacts, contribution to the Green the Capitol Initiative, and reduction of greenhouse gas emissions; • A system optimization methodology, formal or informal, for resolving potentially conflicting criteria in the selection of the CPP and distribution system option; 13

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• A global reliability target—a clear statement of the level of service for reliability that the AOC intends to meet; • A prioritization scheme of customers—definition of a process that the AOC would use to assign priority of service to the various jurisdictions it serves in the event of various types of emergencies wherein steam and/or chilled water outages would occur; • An explicitly stated planning horizon for the CPP and distribution system solutions to be implemented—for example, a plant and distribution system that will handle at least 30 years of service and tunnels that can accommodate 100 years of service; • A recommended approach for the phasing of capital outlays for both the CPP and the distribution system to meet the timing of increasing demands and to decrease net present costs; • A justification of the need for a diversity of fuel types so as to maintain or increase CPP reliability and security; • A clear statement of need for addressing major CPP equipment redundancies and multiple utility service connections for facilities; • An approach that will allow the systems to be adapted to accommodate future changes in the operating environment (e.g., new greenhouse gas emissions legislation) and the development of new technologies; and • An approach to the possibility of enclosing additional space now in both the CPP and the distribution system tunnels to accommodate additional equipment or utility lines in the future and avoid future costs. Acceptance of Current Constraints as Immutable The committee’s evaluation of the 70% Report led it to infer that the report is based on the assumption that all current constraints concerning the project are immutably fixed, as opposed to being amenable to review, negotiation, and modification that may result in improved solutions. Some of the constraints listed below may indeed be immutable, as for example the insistence on well-proven, mature technologies in view of the criticality of providing reliable service to the U.S. Capitol Complex. Nonetheless, any such constraints should be explicitly stated. This would allow the AOC and others to periodically revisit the constraints and assess possible changes in the extent and implications of each constraint. The constraints that appear so bounded include: • Current rights-of-way and alignments of the Metro subway system, railroad, gas, water , storm drainage, and sewer lines. The 70% Report does not consider any option to realign some of these lines in order to improve the long-term efficiency or redundancy of the CPP distribution system alignments. • Use of or connection to other nearby federally owned district energy systems. The General Services Administration (GSA) and the U.S. Navy operate district energy systems in proximity to the U.S. Capitol Complex. The report does not consider options that would use or connect to these systems or the possible costs and benefits of doing so. • Current interpretation of the agreement negotiated with the Office of Compliance concerning the distances between points of egress to facilitate worker safety in the distribution tunnels. Because the report treats this agreement as immutable, it does not fully consider the possibility of new or substantially modified tunnel configurations (particularly larger-diameter, deep-bore tunnels) that would offer 14

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increased worker comfort and safer evacuation routes. Egress points in deep-bore tunnels may be placed farther apart than currently agreed to and would require renegotiating the Office of Compliance agreement in accordance with relevant Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), and National Fire Protection Association (NFPA) regulations. • Current interaction with the District of Columbia government and the communities surrounding the tunnels and the CPP concerning access, noise limits, construction restrictions in extent and duration, and other factors of mutual concern. Relaxation of some of the existing regulations or agreements could make additional alignments feasible or permit alternative construction and tunneling methods or logistics to be considered. • Use of a design-bid-build method for project delivery. The report does not consider alternate methods for the procurement of the CPP and distribution system components, such as outsourcing or variants of design-build-operate-maintain contracts. • Current location of the CPP . The report does not consider alternate outlier locations for the CPP. • Current insistence on fully “warrantable” technologies for consideration and the required high level of technology demonstration prior to consideration for adoption. The report does not consider the future use of potentially beneficial renewable technologies (e.g., solar) except for biomass, once they are more fully developed and could be available to serve the peak load. • The apparent current focus on security and very high (up to 100 percent) reliability of services. The report gives relatively little consideration to other performance criteria for the CPP or of alternative configurations of the tunnel system to address issues of redundancy. Acceptance of All Current Relationships as Permanently Binding The committee does not know whether the elements listed below ought to be part of the consultants’ final Strategic Long Term Energy Plan or ought to be generated by the AOC itself. The report appears to take all current relationships within the AOC, other than the CPP and the 17 jurisdictions served by the CPP that constitute the larger Capitol community, as permanently binding. An alternate approach favored by the committee is to view the current project and the current emphasis on energy efficiency and reduction of greenhouse gas emissions, as well as cost constraints, as an opportunity to explore fully the potential effect of modified or redefined relationships on elements such as: • Increased coordination with the participants listed in the U.S. Capitol Complex Master Plan Sustainability Framework Plan on the implementation of the plan and other current and potential future statutory mandates for energy consumption reduction; • Increased liaison with the managers of building retrofit projects to assess alternatives designed to decrease energy use or, at least, lessen increases required by new regulations or planned uses of the space; • Collaboration with other U.S. Capitol Complex entities in developing a climate action plan for the complex that summarizes current levels of GHG and hazardous air 15

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pollutant emissions, describes the results of analyses, defines chosen mitigation strategies, and reports the results of implementation; • Exploration of shutting down portions of the power plant on a rotating basis during the nonheating months, within reason and within mechanical integrity and safety guidelines, to allow for maintenance and reduce emissions during the critical summer ozone season. Such an approach might also provide for extending the service life of steam generation equipment, an improved energy balance, reduced ozone emissions, opportunities for conducting preventive maintenance during down times, and improved worker safety and comfort; and • Improved coordination and closer relationships among all divisions of the AOC and with other entities responsible for building maintenance on issues such as: expedited implementation of energy metering programs; o possible load reductions as a result of compliance of the U.S. Capitol Complex o buildings with further energy reduction targets; possible heat recovery in buildings; o consideration of chilled water storage and chilling of the water during off-peak o hours to improve the overall energy balance and system reliability; possible reductions in winter demand for chilled water; o potential alternate means of humidification; o potential alternate supplies of hot water; o efforts to increase the condensate return rate; o possible beneficial use of grey or reclaimed water; o establishing energy audits and measuring performance against o conservation/efficiency goals; and potentially establishing awards for annual energy conservation/efficiency and o cost-effectiveness. Demand Projection Analysis A large part of Division 3 of the 70% Report deals with current and future energy demands of the U.S. Capitol Complex served by the CPP and the distribution system. The committee notes that: • Because metering of actual steam and chilled water is being upgraded, current individual building demands are calculated on a percentage of square foot basis; • Projected future demands will require further evaluation considering all the known requirements on the system and, specifically, the statutory mandates for energy consumption reduction; • A 20 percent increase is required for future steam and chilled water demands for renovated space based on current building codes and increased air changes above current standards; and • 1 Projected global climate change impacts are not considered in the report. 1 New reports on the possible impacts of global climate change are being issued. For example a recent report by the U.S. Global Change Research Program and the National Oceanic and Atmospheric Administration projects that the Washington, D.C., region’s average annual temperatures will rise between 4.5 degrees and 9 degrees by the end of this century (U.S. Global Change, 2009). Such changes will have an impact on heating and cooling requirements. 16

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The committee lacks the expertise to further assess these forecasts but recommends that the AOC further investigate the projected increases. ADDITIONAL WORK RECOMMENDED The 70% Report presents and evaluates 10 different options for the CPP, the decentralization of certain functions of the CPP , and options for the tunnel distribution system. The committee recommends that additional work be conducted in the strategic areas described below to bring the 70% Report to 100 percent completion as theStrategic Long-Term Energy Plan and to support and justify the consultants’ recommendations for the selected option(s), as follows: 1. Articulate the methodology used for evaluating and selecting the option(s); 2. Develop additional indices to be used to evaluate the options; 3. Integrate construction phasing with the energy demand planning horizons; 4. Conduct more comprehensive environmental evaluations of the options; 5. Evaluate the likelihood that the options would meet regulatory requirements; 6. Perform sensitivity analyses for different CO allowances and fuel availabilities and 2 prices, given the uncertainty in future greenhouse gas regulations and energy supplies/prices; 7. Evaluate distribution tunnel layouts; and 8. Summarize the results and rationale for the selected option(s). Articulate Evaluation and Selection Methodology for Options Division 3 of the 70% Report provides a summary of the assumptions and background information for the analysis of the various options. This information includes the current and future energy demands of the U.S. Capitol Complex; the fuel characteristics and current and future fuel costs for the CPP; utilities supplied by outside entities (electricity provided by PEPCO and water provided by the District of Columbia Water and Sewage Authority (W ASA); the environmental framework for CO and hazardous air pollutants; and the current status of the CPP. 2 Division 4 presents the CPP options and Division 5 presents the distribution system options. However, there is no discussion in the 70% Report of the methodology that will be used to evaluate and narrow down the option(s). In order to ensure that the AOC and its consultants are aligned in their methodology, and that the report audience understands the basis for the selection of the recommended option(s), the final report should articulate the methodology used to evaluate and select it (them). The methodology should also consider the differential cost impacts of the various options. Develop Additional Evaluation Indices The 70% Report appears to be using several different indices to rank options. These include: • Life-cycle costs—including initial capital costs, present value of ongoing costs, and total present value; 17

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• Environmental impacts—limited to greenhouse gas emissions (local and regional impacts) and hazardous air pollutant emissions; • Energy rating—the efficiency of conversion of energy input (fuels) to energy output calculated as energy output/energy input; and • Security impact—related to the capability of the CPP to continue to operate and provide utilities if externally supplied electricity and water are interrupted. Although these indices are determined for each option, the 70% Report is silent on the acceptable level(s) for these indices and on how these indices were selected. In conjunction with the proposed articulation of the methodology for evaluating and selecting option(s), the committee recommends that the consultants evaluate the appropriateness of the indices identified in the 70% Report, determine whether these indices are sufficient and whether other indices may be appropriate, and determine the acceptable level(s) for these indices. For example, additional indices could include construction lead time; extent and duration of disruptions to the Complex and the surrounding communities; sensitivity to risk of construction delays and disruptions; potential for adoption of future technologies; and fit with load reduction programs for existing and new buildings. In addition, the committee recommends that the report further refine and define its evaluation of the security impacts of outside utility disruptions (i.e., electricity and water) and develop a realistic index of system reliability of the options commensurate with the indices chosen. Integrate Construction Phasing with the Energy Demand Planning Horizons The committee applauds the consultants for providing a breakdown of future energy demands in the 70% Report according to three planning horizons: • Near-term: 0 to 5 years; • Intermediate-term: 6 to 10 years; and • Maximum growth: 11 to 25 years. The 70% Report provides a breakdown of future steam, chilled water, electricity, and domestic water consumption. In addition, the 70% Report identifies when future demands for steam and chilled water will exceed current CPP capacity (including current planned modifications). These planning horizons provide an additional level of detail to the report’s analysis of CPP expansion requirements. However, the energy demand planning horizons do not appear to be integrated with the planning horizons for the CPP and distribution system options. For instance, the report indicates that a significant portion of the future growth in demand will be located away from the CPP on the north end of the U.S. Capitol Complex. The report does not account for potential phasing of construction in its evaluation of the Non-CPP or Additional Plant Strategy Options (CPP Options P-1 to P-6). The committee recommends that the report integrate the energy demand planning horizons into the evaluation and selection of option(s) for both generation and distribution of steam and chilled water. 18

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Conduct More Comprehensive Environmental Evaluations of the Options The committee applauds the consultants and the AOC for augmenting the GHG and 2 hazardous air pollutant emissions analysis of each option in the 70% Report, as suggested during the committee’s meeting in December 2008. The life-cycle cost analyses for the alternatives 3 incorporate quantified CO2 allowance costs for greenhouse gas emissions. This will provide an important basis for more detailed climate action planning for the final and selected options. However, the quantified hazardous air pollutant emissions do not appear to be used in the evaluation of options. The committee recommends that these results be used to quantify potential incremental risk impacts on the surrounding community. Further, a more comprehensive analysis of the potential environmental impacts of the options should be discussed in the final report. For instance, a number of options contemplate using an alternate fuel mixture such as 100 percent natural gas versus the current fuel mix that includes coal. The 100 percent natural gas alternative could have positive environmental benefits (some quantifiable) from eliminating coal ash disposal, eliminating coal transport emissions, and reducing hazardous air pollutant impacts on the surrounding community. However, using only one type of fuel would make the CPP more vulnerable to disruptions in supply or fluctuations in the price of that fuel. Other options (e.g., the use of biofuels) will have different environmental impacts and may provide additional flexibility in the event of price fluctuations and provide additional security in the face of supply disruptions. Evaluate Likelihood That Options Would Meet Regulatory Requirements Based on the results of a more comprehensive environmental evaluation, the AOC and its consultants should determine the “permittability” of the options, the potential lead time required for permitting, and the potential hurdles to permitting, including potential community opposition to noise, traffic, visual, direct environmental, and other impacts from each option. Options such as waste-to-energy or coal gasification would likely result in significant public opposition and possibly result in a permitting timeline extending several years, with less than 100 percent certainty that permits would ever be issued. In addition, warmer temperatures caused by global climate change could accelerate ozone production. In addition, the report should discuss how each option could be adapted to meet more stringent air quality standards, such as may be imposed if the District of Columbia fails to attain ambient air quality standards within a specified timetable. Such issues could impact the selection of viable option(s) and should be clearly identified in the report. 2 The calculation of carbon emissions for each option accounted for local emissions from fuel combustion at the CPP; regional emissions from the purchase of electricity by the CPP and the AOC; and mitigating impacts of purchase of Renewable Energy Certificates (RECs). CO2 emissions from fuels combustion were treated as positive emissions at both the local and the regional levels, with the exception of the option using biomass, which was “zeroed out.” Emissions factors for each fuel were obtained from the Climate Registry’s General Reporting Protocol of May 2008. The calculation of hazardous air pollutant (HAP) emissions for each option included local emissions based on fuels combusted by the CPP and regional emissions based on purchased electricity. Emissions from CPP fuel combustion were estimated using generally accepted emissions factors, such as EPA ’s AP-42 compilation of emission factors. 3 Three analyses were conducted to project CO2 allowance and electricity prices: analyses by the American Council for Capital Formation/National Association of Manufacturers; the EPA; and the U.S. Department of Energy’s Energy Information Administration. These analyses projected that carbon allowance prices in the United States could range between $15 and $98 per metric ton in 2020 and between $24 and $271 per metric ton in 2030. The cost impact of each CPP option was estimated in the report by conservatively assuming (1) that all combustion emissions (other than biomass combustion) will involve costs to purchase allowances equivalent to the quantity of CO2 emissions; and (2) no deduction of baseline emissions. 19

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Perform Sensitivity Analyses to Different CO Allowances and Fuel Prices 2 The 70% Report does not provide the base assumptions for CO allowances and future 2 fuel prices. In addition, while the focus of proposed legislation has been on a cap-and-trade system, there has been discussion of a different structure such as a carbon tax. A carbon tax could have significantly different implications for power plants using conventional fossil-fuel-fired equipment and power plants designed around renewable fuels (e.g., biomass or solar) than would a cap-and-trade system for greenhouse gas credits. Given the uncertainty in future greenhouse gas regulations and the potential variability in future fuel prices (either as a result of the inherent variability in fuel prices or as the result of a carbon tax), the committee suggests that the life- cycle costs include an analysis of sensitivity to variations in CO allowances and fuel prices. 2 Because implementation of certain options will be phased in over time, the impacts of variations in CO2 allowances and fuel prices may differ over the life of each option. Evaluate Distribution Tunnel Layouts The 70% Report discusses only one deep tunnel option for the utility distribution system. In order to provide an adequate basis for comparing options, it is suggested that a study be made of potential distribution tunnel layouts and available construction methods (e.g., microtunneling, horizontal directional drilling) to assess the best approaches for minimizing disruptions to the surface, traffic, and the community while optimizing the efficiency, phasing, and redundancy of the system, and improving the safety of the tunnel environment for workers conducting maintenance and repair activities. As noted above, such options may require renegotiating current agreements with the Office of Compliance regarding maximum distances between egress points. Summarize the Results and Rationale for the Selected Option(s) The final report should provide a concise summary of the results and rationale for the selected option(s). The methodology and indices (including the acceptable level(s) for these indices) used for evaluating and selecting the appropriate option(s) should be included. 20