Beyond Prop 39 Funding: Drawing More Resources for Energy Efficiency

Karly Zimmerman, Strategic Energy Innovations

Julia Zuckerman, Climate Policy Initiative

Susan Wright, San Mateo County Energy Watch

Purpose of Webinar To provide actionable next steps and resources to maximize Proposition 39 expenditures and draw

additional resources for energy efficiency projects

Webinar Agenda

1.  The benefits of a comprehensive approach to energy efficiency

2.  Resources available from CEC, PG&E and others 3.  Private finance options such as performance based

contracts, Solar PPAs, etc. 4.  Best practices to maximize Prop 39 expenditures

The Energize Schools Partnership

A collaborative of nonprofit mission-driven experts that helps school districts holistically approach energy management.

1.  Technical Support: Comprehensive planning and implementation services for your energy efficiency and renewable energy projects.

2.  Conserve: Staff and student engagement in conservation to create lasting energy savings.

3.  Educate: Curriculum and hands-on activities to turn your school buildings into real-world learning opportunities for your students.

Energize Schools delivers expert, vendor neutral guidance and technical expertise

Mission-Driven Non-Profits

SEI creates green communities by designing sustainability programs for education, housing, government, and the workforce.

Ecology Action provides innovative programs that make it easy to save energy.

PECI brings engineering expertise and a deep understanding of building science and systems.

Bay Area Climate Collaborative accelerates the clean energy economy by launching scalable market-oriented initiatives.

Energize Schools Supporters

Thank you to the following organizations for subsidizing the costs of many of our services:

**"This"program"is"funded"by"California"u6lity"customers"and"administered"by"PG&E"under"the"auspices"of"the"California"Public"U6li6es"Commission."

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BRAZIL CHINA EUROPE INDIA INDONESIA UNITED STATES

235 Montgomery St. 13th Floor San Francisco, CA 94104, USA climatepolicyinitiative.org

Targeting Proposition 39 to Help California’s Schools Save Energy and

Money

October 1, 2014

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Agenda

•  Introduction •  Findings from our study •  The benefits of combining funding sources •  Other resources available for energy-saving

projects

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Introduction

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Proposition 39

•  Approved by California voters Nov 6, 2012 •  Directs $1-2 billion over 5 years to K-12 schools

and community colleges for energy projects •  Schools can use Prop 39 money for: – Energy efficiency retrofits – Renewable energy installations – Staff Training – Energy Management, including Conservation

and Energy Education

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Targeting Proposition 39 to Help California’s Schools Save Energy and Money (May 2013)

Our goal was to inform the design of the Proposition 39 program by answering these questions: •  How are California’s school districts currently

approaching and funding energy-saving projects? •  Where are the gaps? How can Proposition 39 best

fill the gaps in existing funding sources and enable districts to achieve greater energy savings?

We talked with business officials and facilities officials from a diverse cross-section of school districts across California

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Interviews

Districts stratified based on: •  Size •  Rural status •  Climate zone •  History of issuing bonds

We selected 22 districts out of over 1,000; 15 responded •  14 phone interviews •  1 email response We also interviewed other practitioners and experts

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Modeling

Goal: Assess how different financing scenarios affect 1st-year net savings for a range of possible projects Data from Lawrence Berkeley National Laboratory and National Association of Energy Service Companies

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Findings and Recommendations

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1. Provide Technical Assistance

For many districts, the biggest barrier to achieving energy savings is a lack of technical assistance to help navigate the range of energy-saving projects and financing options available to them. •  Small districts have limited staff capacity, are

less likely to receive marketing materials •  Larger districts are targeted by vendors, need

help sorting through sales pitches

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2. Tailor Financial Support to Fit District Needs

The optimal role for Proposition 39 funds depends on which existing funding sources are available to a particular school district.

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3. Leverage Private Capital

Most districts can currently access private capital at low cost. These districts can combine loans with Proposition 39 funds to pursue projects with greater energy savings.

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Why combine Prop 39 with other funding?

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For most LEAs, Proposition 39 grants on their own can only fund small projects

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Example: Lighting-only project, funded with $50,000 annual Proposition 39 grant and utility rebates Project costs and funding sources: $310K total cost •  $250K Proposition 39 grant •  $60K utility rebates Project implemented over 5 years as grant is received

Budget impact: •  First-year budget savings: $8K •  Total over 14 years: $480K ($370K net present value)

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Combining Proposition 39 grants with other funds can make larger projects — and more budget savings — possible

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Example from our interviews: A small school district (<1,000 students) looked to energy efficiency as a way to save money after budget cuts. The project: $2.2 million total cost at 4 school sites •  Lighting retrofit •  Solar •  Trash compactor Ongoing service agreement with a major energy services company, which provided a performance guarantee

District CBO brought all the pieces together Energy Commission provided guidance; district also hired an independent vendor to review the project plan

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Two loans were used to pay the upfront cost: •  $400K loan from ECAA (12 years) •  $1.8 million municipal lease (15 years) Rebates and grants were used to pay back much of the municipal lease: •  $300K utility rebates •  $500K modernization grant •  $800K High Performance Incentive Grant This project will save $1.7 million over 25 years for the district’s general fund ($930K net present value)

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Resources Available

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Technical Assistance Available

8A CPI Brief

Targeting Proposition 39 to Help California’s Schools Save Energy and MoneyMay 2013

program funds. This function is already part of the Bright Schools program and has worked in other states.

Given that many districts can already access some degree of free energy audits through existing sources, it may make sense to target Proposition 39 technical assistance funds to the functions that are not as well-covered. These include:

• Reviewing proposals submitted to districts by ESCOs or other vendors; connecting districts with third-party firms and providing funding for third-party analysis to check ESCO savings estimates

• Helping districts select reliable ESCOs or contractors

• Reaching out proactively to the smallest districts (who are too small to be attractive ESCO customers) to help them explore potential projects and start planning

Table 2: Existing sources of technical assistance

SOURCE WHAT’S PROVIDED LIMITATIONSESCOs Free energy audits

For customers, assistance identifying funding sources and accessing funding

Usually only available for districts where ESCO believes district has a viable project of sufficient size (over ~$1 million) and can access private financingOften connected to a sales pitch, which some districts find difficult to assess independently

California Energy Commission, through the Bright Schools programa

Free energy audits (up to $20,000)Additional program assistance, such as reviewing project plans and helping select contractors

Some up-front commitment required: District’s governing board must sign a resolution that it “is willing to seek funding to implement viable energy-saving measure(s)”Limited availability at times due to funding constraintsAssistance limited to $20,000 per district

Utilities Advice and information on energy conser-vation strategiesMay provide free energy audits connected to rebate programs

Varies by utility (investor-owned utilities tend to offer more services than smaller municipal utilities)

Other, including Collaborative for High Performance Schools, Alliance to Save Energy, U.S. Department of Energy, EPA

Information and general guidance on energy efficiency options

Not project-specific

a http://www.energy.ca.gov/efficiency/brightschools/

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Funding sources in addition to Proposition 39

BRAZIL CHINA EUROPE INDIA INDONESIA UNITED STATES

235 Montgomery St. 13th Floor San Francisco, CA 94104, USA climatepolicyinitiative.org

Contact: Julia Zuckerman julia@cpisf.org 415-202-5844

Climate Policy Initiative  works to improve the most important energy and land use policies around the world, with a particular focus on finance. We support decision-makers through in-depth analysis on what works and what does not. 

Prop 39 Strategy – Accessing All Available Programs

October 1, 2014

What is an Energy Watch?

PURPOSE: Drive energy efficiency projects for “hard-to-reach” customers

PARTNERSHIP: + OVERSIGHT:

Local government partner

FUNDING: California rate payers

Statewide:

PG&E Government Partnerships

Slide provided by PG&E

San Mateo County Energy Watch

PARTNERSHIP: +

PROGRAM MANAGEMENT:

CUSTOMERS:

Added in 2014

Benchmarking Energy Assessments

Direct Install Training and Education

Humboldt County Marin County

Monterey Bay Area San Luis Obispo County

San Mateo County Santa Clara County Sierra Nevada Area

Energy Watches Serving Schools

Slide provided by PG&E

Prop 39 Strategy

1. Search for ALL energy savings

3. Consider ALL funding sources

(EE is a good investment!)

2. Access a variety of programs

1. Search for savings

Lighting Solar

HVAC

+ Controls (Building Management Systems)

2. Access programs

NO COST AUDITS: Program Details Considerations

Energy Watch Direct Install

Lighting and refrigeration. Higher rebates, installation included

May need to do RFP before choosing installer

CEC Bright Schools $20,000 in technical assistance for any kind of audits

Takes a long time to get approval. You need to know what you need first

PG&E - Enovity SMART

Data analytics-driven retro-commissioning

Building use analyzed to see if you can participate. Other areas have other similar programs

PG&E – Large Integrated Audits

Full audits. Normally only for bigger buildings, but available because of P39

Need to apply through PG&E rep

Kyoto USA Solar master plans Nonprofit organization

2. Access programs

MORE PROGRAMS: Program Details Considerations

CLEAResult – SEE Bonus

Assessments, assistance with Expenditure Plans, rebate assistance

Co-pay. Only for Alameda, Butte, Calaveras, Fresno, Kern, Kings, Madera, Mariposa, Merced, Napa, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Solano, Sonoma, Sutter, Tulare, Tuolumne, and Yuba counties

Energize Schools Audits, assistance with Expenditure Plans and implementation, behavior change, conservation education

Only for Solano, Contra Costa, Napa, Sonoma, San Joaquin, Stanislaus, and San Luis Obispo counties. First come, first served. Also fee for service.

2. Access programs

MORE PROGRAMS: Program Details Considerations

California Conservation Corps

Assessments Focuses on smaller districts

PECI – Air Care Plus Low-cost HVAC tune-up program

Not available everywhere – most of Bay Area, not Central Valley

Honeywell – Commercial Quality Maintenance

3-year quarterly service / maintenance agreement to bring units to ACCA Standard 180 Baseline

Available throughout PG&E territory

3. Funding beyond Prop 39

PG&E 0% On-bill Financing CEC 0% loan

Up to $1 million per district Up to $3 million per district

Energy efficiency projects Any energy-saving project (solar included)

Pay back on bill Pay back twice a year

Only for items with PG&E rebates

Can get over-subscribed

Assistance from an “Energy Manager”

• Most programs/assistance goes through Expenditure Plan

• Need help with implementation, reporting

• SMCEW developed template RFP/RFQ for “Energy Manager”

• Scope: • Remaining audits • Expenditure Plan development • Implementation support

Case Studies LARGE ELEMENTARY SCHOOL DISTRICT (20 schools) • Staff facility manager taking the lead • SMCEW Lighting audits (school intern provided some lighting inventory

information) • Board wants to move quickly • Planning to use PG&E 0% financing to do more, investigating CEC 0% loan • CEC Bright Schools audits for HVAC – Took a long time to get approval,

focusing on 4 schools • May get additional audits later

Case Studies SMALL ELEMENTARY SCHOOL DISTRICT (2 schools) • Superintendent and Facilities Manager working collaboratively • SMCEW Lighting audits • CEC Bright Schools audits for HVAC • Just passed bond in June • Will incorporate energy efficiency upgrades into modernization work

Additional considerations

NEW CONSTRUCTION:

PG&E Savings by Design

Zero Net Energy

WATER CONSERVATION:

Projects may be reimbursable using

Prop 39 funds

Talk to your water supplier for technical

assistance, rebates

Thank you!

Susan Wright Resource Conservation Specialist, County of San Mateo 650-599-1403 swright@smcgov.org

Q&A

Julia Zuckerman, Climate Policy Initiative

Susan Wright, San Mateo Energy Watch

And, don’t forget to sign up for the next webinar in our series!

•  Thu Oct 23, 3:30pm - Beyond The Hardware: Saving Energy Through Training & Behavior Change

Go to: www.energizeschools.org/fall-webinar-series