Hospital Energy Efficiency Program Program (HEEP) Overview for 2017-18 Presentation to LHINs and Health Service Providers Health Capital Investment Branch Health Capital Division Ministry of Health and Long Term Care September 2017
Presentation Overview 1 Purpose and Background 2. HEEP Snapshot 3. How HEEP Works 4. Overview of HEEP Processes 5. HEEP Funding Timelines 2017-18 6. The HEEP Agreement and HEEP Guidelines 7. Business Case 8. Interim Reports 9. Settlement 10. Potential Future Considerations 2
1. Purpose & Background The Ministry of the Environment and Climate Change (MOECC) released Ontario s Five Year Climate Change Action Plan (Action Plan) in June 2016. The plan complements the government s cap and trade program by guiding the reinvestment of proceeds to help households and organizations manage cost impacts. In support of the Action Plan, the ministry will be launching an evidence-based Hospital Energy Efficiency Program (HEEP) for 2017-18 to improve the energy efficiency of Ontario s public hospitals to reduce Greenhouse Gas (GHG) emissions and redirect energyrelated cost savings back into direct patient care. 3
2. HEEP Snapshot Pending confirmation of funds through the Cap and Trade program, hospitals will have the opportunity to apply for 2017-18 financial support through a dedicated grants-based fund to retrofit their facilities with energy efficient technologies. For 2017-18, the Facility Condition Assessment Program (FCAP) Data will be utilized and hospitals will be provided with a list of projects that have energy savings potential. ONLY the projects provided in the list will be considered for 2017-18 HEEP funding. Hospitals will send LHIN-Endorsed Business Cases to the MOHLTC which identify projects they would like to undertake through HEEP. o Note: Hospitals can only apply for projects they will able to complete by March 31 st 2018. Upon the Ministry s review, funding will be allocated to projects that best meet the goals of the HEEP program. Eligible projects may include: Improving or replacing building climate controls (i.e. boiler replacements, improvements to air handling units and cooling tower efficiency) Efficient lighting systems (i.e. installing wireless occupancy sensors) Building envelope upgrades (i.e. continuous roof insulation) 4
2. How HEEP Works List of FCAP Eligible Projects The Ministry will run a Requirement Report from the FCAP database to capture all Requirements at the time of report that: Are in an Asset that is FCAP eligible; Have a project status of open, in plan, or in project; Cost at least $5,000; and, Have been identified as having energy savings potential. All Requirements in the FCAP database that meet the above criteria for each hospital are added to the list of potential projects released to hospitals through the LHINs. 5
2. How HEEP Works Business Case Hospitals will have the opportunity to complete and submit Business Cases for one-time funding to undertake specific projects that appear on their list of potential projects. Hospitals must apply for specific projects provided on the list of potential projects and provide all information requested in the Business Case. Hospitals must submit completed Business Cases to the LHINs for endorsement in principle. The LHINs will send endorsed Business Cases to the ministry for review by September 20 th 2017. Business Cases submitted after the deadline will not be considered by the ministry for funding. All approved HEEP funding must be fully utilized by March 31st of the funding year. The ministry will recover any unspent funds and no consideration will be given for providing the funds in a future year. Should a project be partially implemented by March 31st of the funding year, the hospital will be responsible for completion using their own funds 6
2. How HEEP Works: Eligible Projects for HEEP From the list of potential projects Hospitals can apply for HEEP funds if a project: Is a minor infrastructure renewal project; Can be completed by March 31 st of the funding year; Is not part of an existing approved small or major health capital project funded by the Ministry, or has already been tendered and/or expensed through the HIRF program. Is a tangible asset that will have a useful life extending beyond one year and is intended to be used on a continual basis; Improves the hospital facility s quality, performance/functionality, useful life and can deliver maximum return on investment by way of: i. Reducing GHG emissions through decreased energy usage; ii. Generating energy-related cost savings; iii. Maintaining the facility in a state of good repair, and iv. Documenting a reasonable, verifiable payback period. 7
2. How HEEP Works: Project Details In addition to eligibility, hospitals will be asked to identify energy usage and estimated savings of the system (i.e., HVAC, building envelope, lighting systems) associated with a project by indicating: o Fuel Source o Total Energy Usage of System in 2016-17 o Estimated Annual Energy Savings of System (for 1 year post project completion) In the Business Case hospitals will need to indicate how their proposed facility energy retrofits align with their broader Master Plan and, if applicable, energy conservation management plans. o Within the context of energy planning, applicants should indicate how their proposed project(s) fit within recommended approaches to staging retrofits. For 2017-18 HEEP, the minimum project cost is $5,000 with no upper threshold (hospitals are required to complete projects by March 31, 2018). If submitting multiple projects, hospitals are required to prioritize projects in the business case. 8
3. Overview of HEEP Process Fall 2017 Winter 2018 Spring 2018 Requirement Report -Produces List of potential HEEP projects Business Case -LHIN endorsed business cases are submitted to the Ministry by September 20 th 2017 Transfer Payment Funding Package -Late Fall Funding Letters and Funding Agreements are released Interim Reporting -Interim Reports are due to the Ministry January 15 th 2018 -Funds that are identified as surplus/or not able to be spent will be recovered Spending Deadline - Hospitals are required to spend their 2017-18 HEEP Grant by March 31, 2018 Settlement - Unspent HEEP funds will be recovered 9
4. HEEP Funding Timelines 2017-18 ACTIVITY DETAILS DATES LEAD Eligible Requirement Report run from FCAP Database September 2017 Ministry ALLOCATION REPORT LAUNCH OF 2017-18 FUNDING INTERIM REPORTING SETTLEMENT Release List of Eligible Projects September 2017 All forms are distributed for posting to the LHIN website September 2017 Ministry & LHINs Ministry Release of 2017-18 HEEP Guidelines September 2017 Ministry LHIN endorsed Business Cases Due September 20, 2017 Release of 2017-18 Funding letters to HEEP recipients October 2017 HSPs & LHINs Ministry Interim Report must be submitted January 15, 2017 HSPs All HEEP funding must be spent March 31, 2018 HSPs All completed HEEP projects are closed in FCAP database June 30, 2018 HSPs Settlement Report must be submitted June 30, 2018 HSPs All submissions must be sent to HealthCapitalInvestmentBranch@Ontario.ca by the due date 10
5. HEEP Agreement and Guidelines Agreements Hospitals who receive funding under HEEP will be required to sign a Funding Agreement with MOHLTC HEEP Guidelines The HEEP Guidelines are intended to provide an overview of the program processes and details. Hospitals must read and be familiar with the terms and conditions of the HEEP Agreements and Guidelines in their entirety in order to fully meet all program reporting and spending requirements 11
5. HEEP Agreement and Guidelines (Cont d) Once the HEEP allocations have been finalized and the Ministry's approval process is complete, the Ministry will send each Hospital CEO & Board Chair and LHIN CEO & Board Chair a minister s funding letter, administrative letter, and the HEEP Guidelines The HEEP Agreement documents outline the following: o Funded Projects (Schedule 1 ) o HEEP Allocation (Schedule 2 ) o Initial Funding Period (Schedule 3 ) o Reporting Requirements (Schedule 4 ) o Settlement Report Template (Schedule 5 ) Hospitals must return a signed agreement to the ministry for execution prior to receive any funding. Forms and guidelines will be made available on LHIN websites 12
6. HEEP Business Case Form 13
7. Interim Reports In the Interim Report: o the hospital will identify the project(s) that have been approved by MOHLTC for HEEP funds from the list of eligible projects (Schedule 1 ); and o the costs incurred to date and estimated spending by the end of the fiscal year (March 31 st 2018) Based on the Interim Report the hospital submits, the Ministry will adjust payments to the hospital as required after obtaining written confirmation of the surplus funds from the hospital. In accordance with the HEEP Agreement, hospitals are required to submit an Interim Report to the ministry by January 15 th 2018. 14
7. Interim Report Template 15
8. Settlement In accordance with the HEEP Agreement, the hospital is required to submit a Settlement Report to the Ministry by June 30 th, 2018. o The Ministry will use the Settlement Report to reconcile the funding. The ministry will refer to the list of eligible projects (Schedule 1 ) and the 2017-18 HEEP Allocation (Schedule 2 ) to determine eligible expenses. The Ministry will recover funds at Project Settlement, in accordance with the terms of the HEEP Agreement, if a hospital: 1. is not able to spend the HEEP allocation by March 31 st, 2018; or 2. uses the HEEP allocation towards ineligible projects not outlined on Schedule 1. Hospitals must close all completed HEEP project-specific Requirements in the FCAP database by June 30 th, 2018 in order for the ministry to finalize the settlement process. 16
8. HEEP Settlement Report Template 17
9. Potential Future Considerations Renewable Energy Projects Hospitals are encouraged to consider the potential for large (non-fcap) renewable energy projects (i.e., photovoltaic solar array and geothermal power systems, etc.) at their facilities for possible implementation in future fiscal years. While large (non-fcap) renewable energy projects will not be formally evaluated for funding consideration in 2017-18, there is a section in the application for hospitals to indicate early interest to the ministry in planning and implementing renewable energy projects in a later fiscal year. Any future funding through HEEP is dependent on the availability of Cap and Trade funds. 18
9. Potential Future Considerations (Cont d) Energy Performance Benchmarking Energy Performance Benchmarking may be considered in future years as a component of HEEP. Energy Performance Benchmarking is the practice of comparing the measured performance of a device, process, facility, or organization to itself, its peers, or established norms, with the goal of informing and motivating performance improvement. Energy Performance benchmarking can provide hospitals with an understanding of their energy consumption and inform actions to improve energy efficiency. MOHLTC will be undertaking a competitive procurement to identify a qualified vendor to provide this service. 19
Q&A Please enter any questions into the chat box Should you have any further questions regarding the HEEP program please contact: HealthCapitalInvestmentBranch@Ontario.ca 20
Appendix A: Program Comparison of HIRF vs. HEEP Health Infrastructure Renewal Fund Program Hospitals submit ECP business case(s) formally endorsed by the LHIN Hospital Energy Efficiency Program Hospitals submit business case(s) endorsed in-principle by the LHIN HIRF funding eligibility tied to FCI score HEEP funding eligibility tied to GHG reductions through improved energy efficiency, not FCI score Minimum funding threshold of $5K Maximum funding threshold of $10M HIRF Agreement contains Schedule A: list of Eligible projects by FCI and FCAP priority Minimum funding threshold of $5K No maximum funding threshold HEEP Agreement contains Schedule 1: list of projects with energy savings potential, approved by the ministry based on submitted business cases ECP Grant approvals not tied to specific projects Funding tied to projects with energy savings potential as indicated in the FCAP database Hospital-owned assets, including Fund Type 2 programs eligible Same as HIRF Interim reporting in November Interim reporting in January In-year reallocations - yes In-year reallocations - no Pre-commit 50% of next year s allocation No pre-commitment as HEEP is a grants-based program and all funds must be spent by the end of the fiscal year Infrastructure projects related to revenue generating areas fully excluded from funding consideration DBFM facilities not currently captured in FCAP and only eligible for ECP grant funding Infrastructure projects related to revenue generating areas may be eligible if there is a broad benefit to the facility in terms of improving energy efficiency and/or producing renewable energy DBFM facilities not captured in FCAP and not currently eligible for retrofit funding. HIRF-funded FCAP requirements to be closed within three years External audit confirmation for Settlement Report Same as HIRF DBFM hospitals are encouraged to indicate interest in renewable energy project(s) through the HEEP Business Case Form for funding consideration in a later year. HEEP-funded FCAP requirements to be closed once project has been completed 21