Linda da Silva, Director of Construction, Maintenance and FacilitiesGreg Armendariz, Swinerton Management & ConsultingEmily Douglas, OpTerra Energy Services

Energy Services Contract Award

East Side Union High School DistrictBoard Meeting of:

August 20, 2015; Item 9.02

Background

• January 10, 2014:  District staff solicited qualifications and pricing from 

firms to design and construct cost‐effective energy performance 

improvements at District sites. 

• March 20, 2014:  Board of Trustees approved Program Development 

Agreement with Chevron Energy Solutions, Board Item 9.06, to 

determine the specific energy conservation measures that will be used 

to support an Energy Services Contract. 

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Background

• March – December 2014:  Chevron Energy Solutions (CES) performed the work of the Program Development Agreement:• Surveyed all District facilities• Reviewed as‐built construction records• Analyzed electricity, gas, water and garbage utility records to ascertain usage and 

costs• Investigated possible energy conservation measures• Solicited preliminary pricing bids from a number of trades contractors• Conducted numerous meetings with District staff for information and direction 

• September 2, 2014:  CES was sold to OpTerra Energy Services and CES assigned its interest in the Program Development Agreement to OpTerra per the contract terms; OpTerra has assumed and is performing all the rights, duties, and obligations of the Program Development Agreement.

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Special Criteria

• Government Code section 4217.10 – 4217.18 authorizes public agencies to enter into agreements with qualified energy services contract providers.  However, before awarding an energy services contract, the Governing Board must first determine and find in a public hearing that the net benefits of the energy conservation measures to be provided through the contract are greater than the expense of the contracted improvements. 

• California Clean Energy Jobs Act • Created with the approval of Proposition 39 in the November 2012 statewide 

General Election

• Allocates revenue to the Clean Energy Job Creation Fund for five fiscal years, 

beginning in fiscal year 2013/14

• Allocations are made to schools and/or districts based on enrollment

• Identify and include energy work that captures Prop 39 funding (actual and 

projected) 4

Scope Items by Site

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Sola

r Ph

otov

olta

ic

Inte

rior

Ligh

ting

Exte

rior

Ligh

ting

Site

Andrew P. Hill High School X X

Evergreen Valley High School X X

Independence High School X

James Lick High School

Mt. Pleasant High School X

Oak Grove High School X

Piedmont Hills High School

Santa Teresa High School

Silver Creek High School

William C. Overfelt High School X

Yerba Buena High School X

Calero High School X

Foothill High School X X

Independence Adult Center

Overfelt Adult Center X

121kW Solar Photovoltaic Arrays at Calero High School

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90 kW Solar Photovoltaic Arrays at Overfelt Adult Center

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Light Emitting Diode (LED) Lighting Retrofits

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4,686 Interior Light Fixture Replacements 1,545 Exterior Light Fixture Replacements

Additional Scope Evaluated But Not Pursued

Solar Thermal, 9 sites Comprehensive HVAC Replacement (~700 units audited) Electrical Infrastructure Replacements Comprehensive Interior and Exterior Lighting Upgrades Portable Classroom Controls Exterior Lighting Controls Pool Pump Controls and Pool Cover Education Center

– Solar PV– Electrical Infrastructure– Interior and Exterior Lighting

Charter school site solar and lighting

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Special Criteria – SatisfiedEnergy Savings eligible for Govt. Code 4217

• A specific package of energy saving measures has been identified.  

• Staff reviewed and verified each proposed energy conservation measure, the methodology for calculation of energy savings, and detailed reports that demonstrated that the proposed energy savings would be achieved.

• The cost of the work will be outweighed by the anticipated energy savings provided through the improvements, making it eligible for award as an Energy Services Contract under Government Code section 4217.

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Energy Savings Calculation:Solar Photovoltaics

• Useful Life• 30 years

• Energy Savings Calculation Methodology• Industry‐standard software tool, PVSyst, calculates solar savings 

based on tilt, orientation, panels and inverters for each site. Output compared with actual site energy data and PG&E rates to determine value of energy produced. 

• Energy Savings Calculation Demonstration• PVSyst output reports for proposed sites Calero High School and 

Overfelt Adult Center. 

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Energy Savings Calculation:Interior Lighting

• Useful Life• 28 years

• Energy Savings Calculation Methodology• For each replaced lamp, the new wattage is subtracted from the 

existing lamp wattage, accounting for ballast losses. Operating hours held constant, based on room use, room type and lighting control. 

• Energy Savings Calculation Demonstration• Contract Attachment J lists detailed information on every interior light 

fixture included under this measure.  Savings calculation is:  (watts per existing fixture ‐ watts per proposed fixture) x # of fixtures x operating hours x site electricity rate. 

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Energy Savings Calculation:Exterior Lighting

• Useful Life• 24 years

• Energy Savings Calculation Methodology• For each replaced lamp, the new wattage is subtracted from the 

existing lamp wattage. Operating hours held constant, based on District schedule. 

• Energy Savings Calculation Demonstration• Contract Attachment J lists detailed information on every exterior 

light fixture to be retrofitted/replaced under this measure.  Savings calculation is:  (watts per existing fixture ‐ watts per proposed fixture) x # of fixtures x operating hours x site electricity rate.

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Govt. Code 4217 Savings Compliance

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Year Net Solar Project

Savings

Energy Conservation

Rebates

Energy Conservation

SavingsO&M and

M&V CostsMaintenance

SavingsDistrict Prop 39

Funds Total SavingsCumulative Net Benefit

A B C D E F G = A+B+C+E+F-D H1 $83,677 $234,174 $10,403 $307,448 $307,4482 $87,005 $244,712 $10,785 $320,932 $628,3803 $90,466 $255,724 $11,181 $335,009 $963,3894 $94,064 $267,231 $11,592 $349,703 $1,313,0925 $97,805 $279,257 $12,018 $365,044 $1,678,1366 $101,696 $291,823 $12,461 $381,058 $2,059,1947 $105,741 $304,955 $12,919 $397,777 $2,456,9718 $109,946 $318,678 $13,395 $415,230 $2,872,2019 $114,320 $333,019 $13,889 $433,449 $3,305,650

10 $118,867 $348,005 $14,401 $452,470 $3,758,12011 $123,595 $363,665 $14,933 $472,327 $4,230,44712 $128,511 $380,030 $15,484 $493,056 $4,723,50413 $133,622 $397,131 $16,056 $514,697 $5,238,20114 $138,937 $415,002 $16,650 $537,290 $5,775,49115 $144,463 $433,677 $17,265 $560,875 $6,336,36616 $150,209 $453,193 $5,328 $598,074 $6,934,43917 $156,184 $473,587 $5,488 $624,282 $7,558,72118 $162,396 $494,898 $5,653 $651,641 $8,210,36219 $168,855 $517,168 $5,822 $680,201 $8,890,56320 $175,571 $540,441 $5,997 $710,015 $9,600,57921 $182,555 $564,761 $6,177 $741,139 $10,341,71722 $189,816 $590,175 $6,362 $773,629 $11,115,34623 $197,366 $616,733 $6,553 $807,546 $11,922,89124 $205,216 $644,486 $6,750 $842,952 $12,765,84325 $213,378 $379,211 $6,952 $585,637 $13,351,481

Total $3,474,259 $10,141,737 $264,515 $13,351,481 $146,338,533Outlay $5,225,711

Net Benefit $8,125,770

Discount Rate Test Result Over 25 Years4217 Code Compliance (Annual Method) - Positive Cash Flow on Annual Basis - Column G > 0 YES4217 Code Compliance (Life Cycle Net Cost Method) - Total Net Benefit > 0 YES $8,125,7704217 Code Compliance (NPV Method) - NPV of Column G > 0 4.0% YES $2,462,283

1.0% YES $6,297,6120.5% YES $7,168,3340.0% YES $8,125,770

Note: Columns B, E and F are not included as part of the Compliance Analysis

• Eligibility requirement of Savings‐to‐Investment Ratio (SIR) > 1.05

• The District needs a projected $4.9M of eligible energy savings measures to capture the projected funding allocation

• Staff reviewed and verified the draft Proposition 39 funding applications that are to be submitted for consideration

• The proposed package of measures includes $5.23M of eligible energy savings measures, with a SIR of 1.11

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Special Criteria – SatisfiedProp 39 Clean Energy Act funding

Project Financial Net Benefit: $13,796,954

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Year

Solar Electricity Produced (kWh)(1)

Solar Avoided Electric Rate

($/kWh)(2)Net Solar Project

Savings

Energy Conservation

Rebates

Energy Conservation

Savings O&M and

M&V Costs Maintenance

SavingsDistrict Prop 39

Funds Net Program Savings

Cumulative Program Savings

W Z A = W x Z B C D E F G =A+B+C+E+F-D H1 319,196 $0.262 $83,677 $100,463 $234,174 $10,403 $2,059,626 $2,467,537 $2,467,5372 317,600 $0.274 $87,005 $244,712 $10,785 $1,029,813 $1,350,745 $3,818,2823 316,012 $0.286 $90,466 $255,724 $11,181 $1,029,813 $1,364,822 $5,183,1044 314,432 $0.299 $94,064 $267,231 $11,592 $1,029,813 $1,379,516 $6,562,6205 312,860 $0.313 $97,805 $279,257 $12,018 $84,331 $449,375 $7,011,9956 311,296 $0.327 $101,696 $291,823 $12,461 $381,058 $7,393,0547 309,739 $0.341 $105,741 $304,955 $12,919 $397,777 $7,790,8308 308,190 $0.357 $109,946 $318,678 $13,395 $415,230 $8,206,0609 306,649 $0.373 $114,320 $333,019 $13,889 $433,449 $8,639,50910 305,116 $0.390 $118,867 $348,005 $14,401 $252,994 $705,464 $9,344,97311 303,591 $0.407 $123,595 $363,665 $14,933 $472,327 $9,817,30012 302,073 $0.425 $128,511 $380,030 $15,484 $493,056 $10,310,35713 300,562 $0.445 $133,622 $397,131 $16,056 $514,697 $10,825,05414 299,059 $0.465 $138,937 $415,002 $16,650 $537,290 $11,362,34315 297,564 $0.485 $144,463 $433,677 $17,265 $84,331 $645,206 $12,007,55016 296,076 $0.507 $150,209 $453,193 $5,328 $598,074 $12,605,62317 294,596 $0.530 $156,184 $473,587 $5,488 $624,282 $13,229,90518 293,123 $0.554 $162,396 $494,898 $5,653 $651,641 $13,881,54619 291,657 $0.579 $168,855 $517,168 $5,822 $680,201 $14,561,74720 290,199 $0.605 $175,571 $540,441 $5,997 $710,015 $15,271,76321 288,748 $0.632 $182,555 $564,761 $6,177 $741,139 $16,012,90122 287,304 $0.661 $189,816 $590,175 $6,362 $773,629 $16,786,53023 285,868 $0.690 $197,366 $616,733 $6,553 $807,546 $17,594,07524 284,438 $0.721 $205,216 $644,486 $6,750 $842,952 $18,437,02725 283,016 $0.754 $213,378 $379,211 $6,952 $585,637 $19,022,665

Total $3,474,259 $100,463 $10,141,737 $264,515 $421,656 $5,149,065 $19,022,665Outlay $5,225,711

Net Benefit $13,796,954

Savings Guarantee

15 Year Guarantee Period Annual measurement and reporting on solar production One-time measurement of savings associated with lighting retrofits Backed by dollar value in contract and payment from OpTerra Value rises with expected energy cost increases

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Energy Education

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Enhance Professional Development• Inquiry-based and literacy-infused sessions reinforce skills critical to Common

Core and NGSS (Next Generation Science Standards) implementation• Supporting curriculum and hands-on components empower teachers to

incorporate energy concepts into classroom learning

Strengthen Career Pathways• Internship through S4CA (Santa Clara County Construction Careers

Association) offers real-world construction experience to East Side students• Visits from OpTerra STEM (Science, Technology, Engineering, Math) experts

help students explore potential career paths and support workforce development

Cultivate Community Connections • Analysis of East Side energy use helps students understand their

environmental impact – and why it matters• Student-led energy awareness activities help make energy efficiency

upgrades more “visible” and connect facility modernization to campus life

Value-Added Benefits

• On top of the net savings, the District will realize these additional benefits:

• Improved indoor lighting quality in classrooms

• Increased outdoor lighting levels and clarity

• Decreased maintenance burden with longer lasting lighting

• Economic stimulus through creation of local, green construction jobs

• Educational enrichment through internships and custom educational programming that supports common core implementation, enhances career pathways, and boosts professional development

• Continuation of East Side’s leadership position in energy conservation

• Environmental benefits of avoiding more than 2,305 tons of greenhouse gas emissions

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Program Benefits

Goal Solar & Lighting Project2008-2010

District-Wide Energy Services Project

2015-2016

General Fund Savings

$3 million in year 1, and $43 million in lifetime savings

Net value more than $13.7 million during project lifetime, leveraging

state funds

Economic Stimulus

Employed over85 local contractors

Create green, prevailing wage jobs

Educational Enrichment

Provided professional development workshops and solar

kits to students at 13 schools

Enhance educational program with internships and custom educational programming

Celebrating District

Leadership

Hosted groundbreaking ceremony in March 2010 and ribbon cutting

in May 2011Continue community leadership

with media strategy

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Additional Benefits

Goal Solar & Lighting Project2008-2010

District-Wide Energy Services Project

2015-2016

Learning Environment

Improved lighting quality, parking lot shade

Improved indoor air quality, comfort and light quality

Operational Savings

Solar operations & maintenance included

Decreased maintenance burden for replacement and comfort calls

Environmental Benefit

Equivalent to planting 726 acres of pine forest

Avoid nearly 2,305 metric tons of greenhouse gas emissions per

year, or 5.5 million car miles

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OpTerra secured the best price for the District through competitive RFPs for labor & materials

The project is expected to directly create local jobs and millions of dollars in economic growth

Construction workers from local union halls will complete installations

The construction work falls under the District’s Project Labor Agreement

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Regional Labor

The following companies were invited to bid and we plan to expand the pool to include additional local contractors during final engineering Solar PV

Atlas Pellizzari Electric (Redwood City) BEI Construction (Alameda) MBL Energy (San Jose) Sprig Electric (San Jose) – did not bid

Lighting ABM Electrical (Pleasanton) Enlight (Pleasanton)

Project Funding

• Proposition 39 Clean Energy Jobs Creation

• $4,958,554 (Board approved March 20, 2014, Board Item 9.06)• This is a projected allocation amount; actual allocations for Fiscal Year 2015‐16 through 2017‐18 are not known at this 

time

• Utility Rebates

• $100,463 

• School Facilities Fund 35

• $166,694

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Project Funding Cash Flow Strategy

• Proposition 39 California Clean Energy Job Creation Fund

• Funding allocations over 5 fiscal years (2013‐14  2017‐18)

• Applications for eligible projects are submitted to the California Energy 

Commission – the agency responsible for Proposition 39 oversight.  Upon 

completion of the approved projects, including any required Measurement & 

Verification (M&V) processes, funds are disbursed.  OpTerra will provide 

Proposition 39 program administration on East Side’s behalf.

• Utility Rebates

• OpTerra will administer applications, M&V, and claims processes with PG&E.

• Cash Flow Strategy

• School Facilities Fund 35 will be used to temporarily fund the project until East 

Side receives Proposition 39 and utility rebate proceeds

• Fund 35 will cover any small reimbursement gap, if any.  24

Program Development Assessment Fee

• The terms of the Program Development Agreement between the District and 

OpTerra provide that OpTerra shall receive a $60,000 Assessment Fee for their 

work of the Program Development Phase.

• The terms further provide that if the District enters into an Energy Services 

Contract with OpTerra, this Assessment Fee shall be incorporated into the 

total contract amount payable under the Energy Services Contract.

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Recommendation

It is recommended that, pursuant with Government Code section 4217.10 – 4217.18 and on the basis of the foregoing and the materials and analysis presented, the Board of Trustees adopt Resolution #2015‐2016‐01: (i) finding and determining that the anticipated cost to the District for thermal or electrical energy or conservation services provided by the energy conservation facility under the proposed contract with OpTerra will be less than the anticipated marginal cost to the District of thermal, electrical, or other energy that would have been consumed by the District in the absence of those purchases, (ii) authorizing the Associate Superintendent of Business Services to execute an Energy Services Contract with OpTerra Energy Services in an amount not to exceed $5,225,711, to provide energy saving measures, administer Proposition 39 Clean Energy Jobs Act and utility rebate funding processes, administer an associated educational enrichment program, and provide support and assistance with an energy conservation media campaign; and (iii) approving use of approximately $5,225,711 of School Facilities Fund 35 to bridge the funding gap until the District receives Proposition 39 Clean Energy Job Creation fund and utility rebate proceeds, and to fund any small reimbursement gap, if any, with replenishment of Fund 35 with Proposition 39 and utility rebate funds as they are received.

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