HomeMy WebLinkAboutRCC AGENDA PK 2006/07/17~«r,
u_-- Resource Conservation Commission
CHUTA VISfA Staff Report
Meeting Date: JULY 17, 2006
ITEM: A THREE-YEAR GRANT AGREEMENT WITH SDG&E TO PROVIDE
ENERGY EFFICIENCY SERVICES FOR CITY, COMMERCIAL AND
RESIDENTIAL FACILITIES THROUGH DECEMBER 31, 2008,
SUBMITTED BY: Director of Conservation & Environmental Services
The proposed Grant challenges the City to provide education/outreach and marketing
support to reduce the amount of kilowatts (electricity) and therms (gas) consumed by a
targeted group of energy customers that are either not fully participating or not eligible
for existing programs. The Grant also provides funding for some additional cost
reductions for the private sector and City facilities to encourage their increased
participation. The Grant would provide $731,075 per calendar vear through December
31, 2008 ($2,193,225 total) and allows for full cost recovery of personnel, supplies and
services for participating Departments: General Services; $354,375, Community
Development; $290,000, and Conservation 8 Environmental Services (Conservation)
$86,700. Conservation will be administering the grant on behalf of the City and will
return to the City Council in December 2006 to appropriate additional funds for the 2007
calendar year grant cycle.
BACKGROUND:
Public Goods Charges are collected from a monthly utility bill surcharge of
approximately $0.052 per gas therm and $0.006 per electric kilowatt consumed by
every customer in the SDG&E service territory. The Public Goods Charges are used to
Implement Public Purpose Programs, including but not limited to residential and
commercial energy efficiency and conservation programs. The October 2004
Memorandum of Understanding between SDG&E and the City provides that SDG&E
involve the City more directly in the development and delivery of up to $2,000,000 in
Public Purpose Programs funded by Public Goods Charges to ensure that Chula Vista
residents and businesses have access to their fair share of Public Goods Programs,
and that future programs meet their needs.
Both agencies have worked with the California Public Utilities Commission (CPUC) to
directly involve the City in more effectively delivering energy efficiency, conservation,
demand management and alternative energy programs to Chula Vista residents,
businesses and City facilities. SDG&E has submitted a program model to the CPUC
that allows the City to expand its participation in energy efficiency services for targeted
residential, mixed use and small commercial energy consumers as well as City facilities.
The Grant proposal submitted by SDG&E and approved by the CPUC establishes four
program areas of responsibility:
1. Small Business, Housing and Mixed Use Energy Efficiency Project
2. City Facilities Energy Efficiency and Demonstration Project
Page: 2 of 4
Meeting Date: July 17, 2006
3. Peer-to-Peer Energy Education Project
4. Public Outreach Project
1. Small Business, Housing and Mixed Use Energv Efficiencv Proiect
Community Development will receive up to $290,000 in funds each calendar year
through 2008 to implement their component of the program. The Community
Development component focuses on upgrading the efficiency of small commercial,
mixed use and converted apartmentlcondominium properties by exceeding State
energy efficiency measures (Title 24) by at least 10%. This program component has
the most specific and strict minimum energy savings requirements, and must implement
programs that reduce energy consumption by approximately 3.8 million kilowatt hours
by 2008.
The majority of funding for the Community Development Department, $250,000 per year
is dedicated to funding for incentive payments to buy down the cost of direct assistance
to residential, mixed use and small commercial facilities. The incentive funds can be
used for equipment and infrastructure that produce substantial kilowatt savings that are
not already funded by CPUC/SDG&E programs, and for support services that reduce
kilowatts such as the Planning permit fees for energy efficiency projects. The proposed
Grant also provides $40,000 per calendar year for personnel and marketing support to
facilitate greater participation in targeted residential and small business energy
efficiency programs. Together these funds can be used to compliment but not duplicate
a number of valuable CPUC/SDG&E funded incentives that will produce net monthly
savings for a number of targeted commercial and residential facilities in a very short
period of time.
2. City Facilities Energv Efficiencv Proiect
General Services will receive up to $354,375 in funds each calendar year through 2008
to implement their component of the program. The General Services component
provides funding to hire dedicated energy staff and fill some of the gap between current
program incentives and City costs for the development and implementation of energy
efficiency and conservation for City facilities. Energy staff will also work to develop,
implement and train City personnel about best management practices (BMP's) that
improve City employee energy conservation policies and procedures.
Chula Vista has over 100 City owned buildings or facilities that consume electricity and
natural gas. The City has approximately 550 electricity and natural gas meters and
uses an estimated 18 million kW-hrs of electricity and 800,000 therms of natural gas
annually. The City's annual energy budget is approximately $3.4 million. The City's
energy use is projected to increase by at least 5% in 2006, due to addition of new City
buildings and infrastructure. The City's actual energy costs are also projected to
increase due to rising energy rates. Although the City has aggressively pursued energy
efficiency retrofits to reduce cost and meet its environmental goals there are still many
opportunities to improve how the City uses energy.
This Grant component has the most flexibility in developing and implementing projects
that produce kilowatt and therm savings, however the component still establishes some
Page: 3 of 4
Meeting Date: July 17, 2006
aggressive energy objectives. This component requires General Services to implement
projects that reduce the City's energy use by up to 5% per year for a cumulative
reduction of up to 15% by 2008 as compared to the 2005 energy use per square foot of
building or facility. These objectives are made all the more challenging by the City's
historical commitment to energy efficiency that already exceeds state efficiency
standards by up to 20%. SDG&E and the CPUC have allowed the City to fund full time
staff in recognition that throughout the state, the lack of dedicated, expert personnel is
the key barrier to developing and implementing projects with the greatest potential to
demonstrate maximum energy efficiency. This component of the Grant enables the City
to develop institutional expertise that will allow the City to manage projects and its
energy use more effectively and consistently in the short term so that it can demonstrate
the value of investing a portion of the future energy savings in staff and projects that
build on that financial and environmental efficiency model. The Department of General
Services es is proposing to add one Energy Project Manager by September 30, 2006
and one Electrician position January 1, 2007. The Energy Project Manager Position
will directly manage the City Facility Energy Efficiency Projects as described above.
The Electrician position will focus on implementation of facility energy efficiency
projects, which will produce kilowatt savings. A preliminary list of various projects
including but (NOT) limited to T8 lighting replacements, ball field lighting, pools and
pump lighting and replacement of recreational facility lighting fixtures has been
identified. The scope of this work requires the expertise of a dedicated electrician.
Due to the increase in the number of new City facilities, parks and recreational centers
existing electrical staff resources are not available. The cost of the position will be paid
for from the 2007 grant allocation and offset by future savings resulting from energy
savings.
3. & 4. Peer-to-Peer Energv Education & Public Outreach Proiects
According to SDG&E, Southbay cities have continually expressed their desire to
participate in energy efficiency programs available from SDREO and SDG&E. SDG&E
also reports that competing priorities have not allowed Southbay cities staff to dedicate
adequate time or resources to developing the institutional expertise needed to pursue
energy retrofit projects. The Peer-to-Peer Project would provide information, technical
assistance and support to access existing CPUC and SDG&E incentives and help
agencies develop their own Energy Action Plans in preparation for future funding
opportunities. The goal of the Peer-to-Peer project will include at least two targeted
workshops for decision makers and project management staff, and a mentoring
program with their Chula Vista counterparts in General Services, Community
Development and Conservation. Conservation also plans to use the trained project
interns to help South Bay Cities market SDG&E incentives for some of their targeted
business retention programs and assist with the expansion of local residential programs
like the compact fluorescent and torchiere lamp distribution programs. Conservation
has made an initial contact with south bay cities and hopes to build on future successes
by including other Chula Vista/Southbay agencies over the grant term.
The Public Outreach Component of the Grant focuses on marketing residential
programs to eligible residents in Chula Vista that are not subscribing to the programs.
The CPUC/SDG&E portfolio of residential programs provides a variety of valuable
Page: 4 of 4
Meeting Date: July 17, 2006
programs that can help reduce energy consumption, lower monthly energy costs and
contribute significantly to Chula Vista's commitment to the prevention of Global
Warming and related environmental goals. The funds for these programs come from
ratepayers and Chula Vista ratepayers are not taking full advantage of that opportunity.
Conservation will also dedicate some intern resources to providing technical assistance
to help potential residential participants access services. This component will also
identify and record the barriers to participation to make recommendations for future
program modifications that foster greater participation.
Public Purpose Charges are an investment that can be managed to help reduce energy
consumption, lower ratepayer's monthly energy costs, produce a local and regional
economic development advantage and contribute significantly to Chula Vista's long
standing commitment to the environmental and public health objectives. Broad
adoption and consistent implementation of energy conservation and efficiency
measures are a critical compliment to an effective transition away from fossil fuels to
renewable energy. Energy conservation and efficiency can reduce the demand for
energy generated with fossil fuel sources and thus reduce the C02, other green house
gases and particulates that contribute to global warming, asthma, pulmonary fibrosis
and other environmental and health impacts.
The Energy Efficiency and Conservation Outreach Program grant provides $2,193,225
in funding to recover costs for developing and implementing the program over from the
date of adoption to December 31, 2008. The attached Agreement and budget outlines
Staff's effort to recover those costs that can be covered within the grant guidelines.
Additionally, the City facilities component is projected to produce approximately
$170,000 in average annual energy savings, at today's rates, that will continue beyond
the grant term. SDG&E submitted and received grant approval from the CPUC for their
regional program based on the general program areas described above. Staff is
submitting the Agreement and the 2006 calendar year budget for Counsel's review and
approval. If Council approves Staff recommendation, Staff will implement the 2006
Grant objectives over the next five months, and return to City Council by December to
appropriate the funding for the 2007 calendar year and phase in the additional staff
needed to complete the projects. The Grant allows the City to request funding
quarterly, in advance or by reimbursement.
RECOMMENDATION: That the RCC recommend that Council adopt the resolution
authorizing staff to implement the Grant Agreement.
Please feel free to Contact, Michael T. Meacham, Director of Conservation &
Environmental Services at (619) 409-5870, (mmeacham@ci.chula-vista.ca.us) if you
have any questions.
Mtm:ROC-grant-rpt-7-14-06