HomeMy WebLinkAboutIR 9346INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9346
To the Mayor and Members of the City Council January 4, 2011
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r SUBJECT: CITY ENERGY CONSERVATION PROGRAM UPDATE
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The purpose of this Informal Report is to inform the Mayor and Council of the status of the
City's Energy Conservation Program conducted in response to the City's goal of Improved
Mobility and Air Quality. In coming weeks, City staff will be recommending 1) adoption of an
Appropriation Ordinance of revenues and expenditures in the Special Trust Fund of utility
incentives secured through program projects, and 2) authorization of Energy Savings
Performance Contract (ESPC) Amendment No.7 (Phase VI -b) to be funded largely through the
federal Energy Efficiency & Conservation Block Grant (EECBG). Following is a presentation of
Program Background, Project Scope, Project Funding, and Pending Projects.
Program Background
The City's Energy Conservation Program continues to implement projects both in service of the
above - stated Council goal, and in response to the State's goal of improved environmental air
quality as forwarded through the passage of Texas Senate Bills 5 (S135/77 Legislature, 2001)
and 12 (SB12/80th Legislature, 2006.) Both bills provide amendments to Local Government
Code Chapter 302, Energy or Water Conservation Measures for Local Governments. The
current goal is to achieve electricity usage reductions of 5- percent annually through 2012,
using 2007 as the baseline year.
In fiscal year 2002, staff identified ESPCs as a technically, financially, and legally viable vehicle
to implement conservation projects. To this end, the City developed and issued a Request for
Proposal (RFP) to identify qualified Energy Services Companies ( ESCos.) Johnson Controls,
Inc. (JCI) was ultimately selected to assist the City in implementing ESPCs for City facilities.
The Department of Transportation & Public Works' (TPW) Facilities Management Group is
responsible for managing these and other Energy Conservation Program efforts. The following
table summarizes project information for the current program, including contract reference,
general scope, funding source(s), construction cost, and cost savings.
ESPC Phase I C- 19739, 02SEP03 29110 Comfort Loan +Lease S 3,063,090 S 259.647
ESPC Phase 11
C- 21289, 07FEB06
33347
Comfort
Loan
S 2,395,659
$ 342.855
ESPC Phase Ill
C- 21737, 26SEP06
34222
Comfort
Loan +Cash
S 5.198,937
S 711,324
LED Signals
C- 77063, 17APR07
35252
Process
Lease
S 1,959,678
S 536.624
ESPC Phase IV
C- 72868, 17JUN08
37266
Comfort
Lease
S 9,248,307
S 944.814
ESPC Ph. V, Sec.I
C- 24070, 02FEB10
29110 -A4
Process
Cash
S 13,652,350
S 829,428
ESPC Ph. V, Sec.2
C- 24360, 20JUL10
29110 -A5
Process
Lease +Cash
S 17,889,397
S 1,528,971
ESPC Phase V1 -a
C- 24406, 17AUG10
29110 -A6
Comfort
Grant
S 1,815,526
S '05,939
ESPC Phase VI -b
FBD
FBD
Comfort
Grant-Cash
S 3.3iO,000
5 167500
!il- Prujrw 14al I
S 58.5'..944
S 0,5.7.102
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
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To the Mayor and Members of the City Council
No. 9346
January 4, 2011
Page 2 of 4
SUBJECT: CITY ENERGY CONSERVATION PROGRAM UPDATE
Please note that italicized Construction Costs and Annual Cost Savings tabulated above (*)
represent current estimates for ESPC Phase VI -b, and guaranteed amounts for previously
contracted projects. Significantly, actual post- construction cost avoidance for ESPC Phases I
through IV, and LED Signals projects total over $8.4M cumulatively through FY10, exceeding
the projected performance savings.
Proiect Scopina
The scope of Energy Conservation Program projects continues to be developed as most cost -
effective to the City. During project development, actual utility billing history is evaluated
relative to an existing facility's function and occupancy. Scoping includes consideration of all
energy consuming devices relative to current available technology. Project scope mostly
involves retrofitting current equipment with newer technologies proven to be more energy
efficient, with the final scope being negotiated between City staff and the selected ESCo.
Typically, follow -on service contracts are part of project scoping, including those for
Performance Guarantee, Preventative Maintenance and Field Technicians.
Following are the two (2) basic approaches utilized in Energy Conservation Program scoping:
Comfort scope includes facility improvement measures such as high - efficiency lighting (e.g.
lamps, ballasts), air - conditioning (e.g. chillers, boilers, pumps, fans, motors), control
(occupancy sensors, building management systems (BMS)) systems and equipment; and
➢ Process scope includes improvement measures for water reclamation facility systems (e.g.
supervisory control & data acquisition (SCADA), aeration basins, anaerobic digesters, gas
turbines, fluid pumps, air blowers, motors), and transportation facility systems (e.g. lamps,
lenses).
Project Funding-
The funding of Energy Conservation Program projects continues to be developed as budget -
neutral, or better, to the City. Projects are funded such that utility, operations, and
maintenance savings accumulate to recover all project costs, including any necessary finance
and follow -on service contract costs. During construction of these projects, progress payments
are made to contractors as approved by City staff while cost savings accrue to City accounts.
The ESCo effectively guarantees projected ESPC cost savings to the City, tracking and
reporting these avoided costs during the subsequent project performance period through a 3`d-
party- approved measurement and verification (M&V) plan.
Following are the four (4) basic approaches utilized in Energy Conservation Program funding:
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
�'IITt�O
L
To the Mayor and Members of the City Council
No.9346
January 4, 2011
Page 3 of 4
SUBJECT: CITY ENERGY CONSERVATION PROGRAM UPDATE
➢ Loans such as "LoanSTAR" (Loan Saving Taxes & Resources) are low- interest project
financing instruments available competitively through the Texas State Energy Conservation
Office (SECO);
➢ Leases such as Municipal Equipment Lease - Purchase (MELP) financing are available
competitively in the financial services marketplace;
➢ Cash such as available from reserves within City fund accounts (e.g. Commercial Paper
Sewer Fund, Public Events Fund, Special Trust Fund); and
➢ Grants such as the American Resource & Reinvestment Act of 2009's (ARRA) EECBG, are
available either as formula- or competitively -based through the United States' Department
of Energy (DOE).
In Fiscal Year 2008, to assist with future funding of Energy Conservation Program initiatives, a
Conservation Reserve Account was established within the City's Special Trust Fund. Utility
incentive monies from Oncor Electric Delivery, the City's regulated electricity utility, continue to
fund this account. Currently, this account has $432,469.27 available in support of future
projects, as recommended by the Facilities Management Group. A utility incentive of
$233,333.03 is anticipated for receipt later this (JAN11), as qualified and approved after
implementation of ESPC Phase IV.
Pending Proiects
In June 2009, M &C C -23554 authorized application for and acceptance of an EECBG award
funding approved activities identified within the federal Energy Independence & Security Act of
2007 (EISA.) Since the September 2009 grant award (CSC No.39311), City staff have been
working with JCI and the federal Department of Energy (DOE) in development of two ESPC
amendments: Phase VI -a for Water Fund facilities, and Phase VI -b for General Fund facilities.
In May 2010, M &C C -24229 authorized execution of a Project Development Agreement with
JCI to conduct a Detailed Energy Study of DOE - approved EECBG activities for General Fund
facilities. In coming weeks, City staff plan to forward two (2) M &Cs critical to the success of our
EECBG, 1) adoption of an Appropriation Ordinance of revenues and expenditures in the
Special Trust Fund of utility incentives secured through program projects, and 2) authorization
of ESPC Amendment No.7 (Phase VI -b) to be funded largely through the federal EECBG.
This fiscal year (FY11), TPW plans to work with other City departments to develop and publish
an RFP in newly qualifying ESCos in the marketplace. This RFP will allow City staff to
determine best -value ESCo services necessary to develop and implement future ESPCs for
City facilities. City staff is also preparing a proposal to budget funding for future sustainability
and growth of the Energy Conservation Program by redirecting a portion of cost avoidance
after project cost repayment to a dedicated program fund account.
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
�r,1{Ti�O
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To the Mayor and Members of the City Council
No. 9346
January 4, 2011
Page 4 of 4
SUBJECT: CITY ENERGY CONSERVATION PROGRAM UPDATE
Several other Energy Conservation Program initiatives are under development, and Council will
be briefed as plans progress. If you have any questions, please contact Sam Steele,
Sustainability Administrator, in the Transportation and Public Works Department (TPW), at
817.392.1276.
Tom Higg'
Interim City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS