District Options in Maximizing Your Opportunity

Transcription

1 Proposition 39: Saving Energy and Addressing Facility Improvements While Returning Money Back Into The Classroom District Options in Maximizing Your Opportunity Jeff Grabarek Director, Energy & Sustainability Mobile: Office: Jeff Wagner President Mobile: Office:

2 Session Goals & Objectives 1. Not a commercial for Aircon Energy. 2. Briefly review Proposition 39 allocations as it relates to CCs. 3. Review project implementation process and responsibilities. 4. Discuss District-level implementation options. 5. Discuss District-level approach options. 6. Goals: 1. Maximize Proposition 39 dollars 2. Supplement, compliment, and leverage existing energy efficiency programs 3. Fund capital improvements and accrue savings that are returned back into the classroom.

3 Proposition 39 - Overview for CCs Prop 39 expected to accrue ~ $2.65 billion in taxpayer dollars for investment in energy efficiency and job creation over 5 years. Approximately $40 million to CCs for Distributed by FTES Approximately $6 million to support energy efficiency and clean energy-related workforce training in CCs Additional $15 million in Scheduled Maintenance Funds Distributed by Chancellor s Office

4 Proposition 39 - Overview for CCs continued Approximately $28 million to Energy Conservation Assistance action (ECAA) 90% ($25 million) for no/low interest loans for K-14 Reimbursement of up to $3 million Simple Pay Back < 20 years 10% ($3 million) for Energy Partnership Program Technical assistance grants to support project identification and planning (pays up to $20,000) Administered by the California Energy Commission (CEC) Prop 39 funding can be combined with other financing and funding mechanisms to include: On-Bill Financing (OBF) programs CCC/IOU Energy Partnership incentives

5 Project Implementation Process

6 Project Responsibility Matrix

7 Step 3: Develop & Update Call for Projects Call for Projects issued by Chancellor s Office in early 2013 Districts need to continue to expand list through 2013 and beyond. Proposition 39 Master Projects List Continue to earn the money for 5 years

8 Step 3: Develop & Update Call for Projects Districts with approved projects through October Cerritos CCD $575,754 Desert CCD $258,708 Long Beach CCD $706,947 North Orange CCD $1,164,517 Sequoias CCD $303,843 Marin CCD $51,534 San Mateo CCD $157,487 Mira Costa CCD $183,899 $3,402,690

9 Step 3: Develop & Update Call for Projects Eligible projects to be implemented in accordance with State loading order: Energy Efficiency/Demand Reduction Retrofits Controls Air balancing Commissioning (MBCx & RCx) Clean Renewable Energy Solar (PV & Thermal) Wind Self-Generation Cogeneration Fuel cell Biomass Other

10 Step 3: Develop & Update Call for Projects Other foci: Metering Sub-metering Energy Management Systems Challenges: 1. Ensure CCCs maintain and/or increase its apportionment of Prop 39 funding levels 2. Thorough project identification & development 3. Accurate cost/savings calculations - Savings-to-Investment Ratio (S.I.R.) = Interface with utilities

11 Step 4: Screen & Prioritize Projects CCCs will evaluate energy projects and prepare a priority list based using the following collection of requirements: Project eligibility for CPUC approved incentives Methods for calculation of savings Proper evaluation of energy baselines Challenges: 1. Detailed energy surveys & audits 2. Accurate cost/savings calculations - Savings-to-Investment Ratio (SIR) = Bundling strategy to meet SIR criteria year after year 4. Benchmarking & Energy Use Intensity (EUI) capabilities 5. Funding for technical services deducted from annual allocations for project implementation

12 Step 5: Project Development Districts will have lead responsibility for project development activities Firm up project scope Firm up project costs Firm up project savings Estimate job creation benefits Level of detail required must meet ASHRAE Level 2 standards at a minimum Challenges: 1. Detailed energy surveys & audits 2. Accurate cost/savings calculations - Savings-to-Investment Ratio (SIR) = 1.1

13 Step 6: Submit Applications Districts will have lead responsibility for preparing and submitting funding applications to CCCCO and utilities

14 Step 6: Submit Applications Districts shall submit the following additional information: All supporting calculations and back-up documentation Completed cost effectiveness calculation worksheet

15 Step 6: Submit Applications Districts will submit a signed Project Agreement committing the District to project implementation Submittal of Proposition 39 Funding Application creates the first step in the program Measurement & Verification (M&V) process Follow general approach of International Performance Measurement & Verification Protocols (IPMVP) Challenges: 1. Separate application types for each project type Form B Retrofit projects Form C1 MBCx projects Form C2 RCx projects CSI, SGIP, SBD Forms

16 Step 9: Fully Develop Scope, Schedule & Contracts Districts will have the primary responsibility to develop the project for implementation Scopes Schedules Contracts DSA Approvals, if needed CCCCO Guidelines defer to District procurement regulations and procedures and: Require project specifications, costs and energy savings Follow contractor qualifications, licensing and certification requirements Shall not use sole-source process to award May use Best Value criteria May utilize CA Code 4217

17 Step 9: Fully Develop Scope, Schedule & Contracts Districts are required to meet all California Environmental Quality Act (CEQA) requirements Challenges: 1. Procurement administration RFPs, Contracts, Schedules 1. Limited resource availability Human Technical 2. Accurate cost/savings calculations - Savings-to-Investment Ratio (SIR) = Reconciliation Risk

18 Step 10: Energy Project Implementation Districts will be responsible for the implementation of the projects funded by Proposition 39 Challenges: 1. Project management resources 2. Coordination efforts 3. Scope changes Effecting energy savings, construction costs, or costeffectiveness revised Project Application 4. Reconciliation risk

19 Step 11: Submit Project Completion Docs Upon project completion, each District will prepare and submit proposition 39 Project Completion Form (Form E) CCCCO and utilities Challenges: 1. Administration

20 Step 13: Submit Annual Expenditure Report Between months after project completion, each District will prepare and submit an Annual Project Expenditure Report to the CCCCO containing: Final gross project cost Energy saved, accompanied by utility bill data Name plate data # of trainees # direct FTEEs and utilization Time between financial award and project completion EUIs, before and after Job creation benefits Challenges: 1. Administration

21 Project Approach Options 1. Utilize Annual Allocation & Guidelines Each Year for 5 Years Five (5) one-year projects Requires CCCCO approval 2. Develop a Five-Year Master Plan One (1) comprehensive project w/phased implementation Maximizes bundling strategies - Supports long or no-payback scope items Future energy savings are brought forward and realized sooner - No scope holdover to meet SIR requirements year-after-year Requires CCCCO approval May be scored only once 3. Develop & Finance a Single, Comprehensive Project for the Proposition 39 Program Term (5 years), or Greater Maximizes Program Stimulus Spending Sustainable Revenue Stream Requires CCCCO approval

22 Project Implementation Options 1. Self-Perform All Aspects of the Project 2. Utilize Technical Assistance for Project Identification & Development Self-Perform Construction Compete for Energy Partnership Funding ($3 million) - Cover all costs > $20,000 grant Reduce annual allocation for project implementation (<20% of FTES allocation) - Hire consulting engineering firm Utilize Proposition 39 Program Consultant - Contracted through CCCCO 3. Turnkey Contracting Utilize State-qualified Energy Service Companies (ESCO) - Project identification & development - Project construction & management - Project administration & reporting - Meets no sole-sourcing requirements 22

23 Aggregation Prop 39 Rebates Financing Savings 23

24 Financial Analysis (5-Year Term) 1. Aggregation results in 1.4X increase in project size 2. Supports bundling of non-energy saving projects 3. Generates sustainable revenue stream to be put back into the classroom TWENTY-F IVE YEAR FINANCIAL ANALYSIS Stipulated by CCCCO NAME: Community College District Date: 11/1/2013 Energy Savings and Facility Renewal Project Project Cost: $3,500,000 Initial Buydown Amount: $0 Energy Value Inflation Rate: 2.1% Financed Amount: $3,500,000 Maint. Cost Inflation Rate: 2.0% 40% LARGER Finance Term (Years): 5 Actual Payback: 13.5 Finance Rate: 3.90% Internal Rate Dollars of Return: Back To The -0.3% Total Cost: $3,500,000 Annual Lease Payment: $771,600 Classrooms ANNUAL ACCUM. LEASE PROP 39 ENERGY MAINTENANCE UTILITY CASH CASH YEAR PAYMENT ALLOCATION SAVINGS SAVINGS INCENTIVES FLOW FLOW 1 $771,600 $500,000 $225,000 $35,000 $50,000 $38,400 $38,400 2 $771,600 $500,000 $229,725 $35,700 $0 ($6,175) $32,225 3 $771,600 $500,000 $234,549 $36,414 $0 ($637) $31,588 4 $771,600 $500,000 $239,475 $37,142 $0 $5,017 $36,605 5 $771,600 $500,000 $244,504 $37,885 $0 $10,789 $47,394 6 $0 $249,638 $19,700 $0 $269,339 $316,733 7 $0 $2,500,000 $254,881 $20,094 $0 $274,975 $591,708 8 $0 $260,233 $20,496 $0 $280,729 $872,437 9 $0 $265,698 $20,906 $0 $286,604 $1,159, $0 $271,278 $21,324 $0 $292,602 $1,451, $0 $276,975 $0 $0 $276,975 $1,728, $0 $282,791 $0 $0 $282,791 $2,011, $0 $288,730 $0 $0 $288,730 $2,300, $0 $294,793 $0 $0 $294,793 $2,594, $0 $300,984 $0 $0 $300,984 $2,895, $0 $307,304 $0 $0 $307,304 $3,203, $0 $313,758 $0 $0 $313,758 $3,516, $0 $320,347 $0 $0 $320,347 $3,837, $0 $327,074 $0 $0 $327,074 $4,164, $0 $333,942 $0 $0 $333,942 $4,498, $0 $340,955 $0 $0 $340,955 $4,839, $0 $348,115 $0 $0 $348,115 $5,187, $0 $355,426 $0 $0 $355,426 $5,542, $0 $362,890 $0 $0 $362,890 $5,905, $0 $370,510 $0 $0 $370,510 $6,276,236 24

25 Financial Analysis (10-Year Term) 1. Aggregation results in 1.8X increase in project size 2. Supports increased bundling of non-energy saving projects 3. Generates increased sustainable revenue stream to be put back into the classroom TWENTY-F IVE YEAR FINANCIAL ANALYSIS Stipulated by CCCCO NAME: Community College District Date: 11/1/2013 Energy Savings and Facility Renewal Project Project Cost: $4,400,000 Initial Buydown Amount: $0 Energy Value Inflation Rate: 2.1% Financed Amount: $4,400,000 Maint. Cost Inflation Rate: 2.0% 76% LARGER Finance Term (Years): 10 Actual Payback: 16.4 Finance Rate: 3.90% Internal Rate Dollars of Return: Back To The -1.5% Total Cost: $4,400,000 Annual Lease Payment: $532,069 Classrooms ANNUAL ACCUM. LEASE PROP 39 ENERGY MAINTENANCE UTILITY CASH CASH YEAR PAYMENT ALLOCATION SAVINGS SAVINGS INCENTIVES FLOW FLOW 1 $532,069 $500,000 $225,000 $44,000 $50,000 $286,931 $286,931 2 $532,069 $500,000 $229,725 $44,880 $0 $242,536 $529,468 3 $532,069 $500,000 $234,549 $45,778 $0 $248,258 $777,726 4 $532,069 $500,000 $239,475 $46,693 $0 $254,099 $1,031,826 5 $532,069 $500,000 $244,504 $47,627 $0 $260,062 $1,291,888 6 $532,069 $249,638 $24,766 $0 ($257,664) $1,034,224 7 $532,069 $2,500,000 $254,881 $25,261 $0 ($251,926) $782,297 8 $532,069 $260,233 $25,767 $0 ($246,069) $536,228 9 $532,069 $265,698 $26,282 $0 ($240,089) $296, $532,069 $271,278 $26,808 $0 ($233,983) $62, $0 $276,975 $0 $0 $276,975 $339, $0 $282,791 $0 $0 $282,791 $621, $0 $288,730 $0 $0 $288,730 $910, $0 $294,793 $0 $0 $294,793 $1,205, $0 $300,984 $0 $0 $300,984 $1,506, $0 $307,304 $0 $0 $307,304 $1,813, $0 $313,758 $0 $0 $313,758 $2,127, $0 $320,347 $0 $0 $320,347 $2,447, $0 $327,074 $0 $0 $327,074 $2,774, $0 $333,942 $0 $0 $333,942 $3,108, $0 $340,955 $0 $0 $340,955 $3,449, $0 $348,115 $0 $0 $348,115 $3,797, $0 $355,426 $0 $0 $355,426 $4,153, $0 $362,890 $0 $0 $362,890 $4,516, $0 $370,510 $0 $0 $370,510 $4,886,750 25

26 Options Summary Self-Perform All Aspects Technical Assistance/Self Perform Turnkey Contracting Procurement Bid Spec Competitive Grant /Bid Spec Performance Process Lengthy; Ongoing Lengthy; Risky; Ongoing Simple; One-Time; RFQ Sole Source Restriction Continuous, Multiple, RFP Continuous, Multiple, RFP Satisfied For Project Duration Administration Requirements High Moderate Low Resource Requirements High Moderate Low Reconciliation Risk High Moderate Low Largest Hurdle Very Time Consuming Project Identification & Development; Scope Changes Selecting the ESCO Largest Benefit Cost Savings Project Development Single -Point-of-Accountability Program Objectives Met Met Maximized 26

27 Returning Dollars to the Classroom Accumulated cash flow can be utilized for: Increased student services/support Hiring faculty and staff Add or restore course sections/programs 27

28 References HANDBOOK.pdf 28

29 Questions 29