municipal facilities

New Concept for Local Governments to Partner with Utilities and Participate in the Cap-and-Trade Market

The Cap-and-Trade market has added a new dynamic to California’s greenhouse gas regulations. Utilities are faced with finding cost-effective ways to comply with their emissions reductions requirements. Energy efficiency at the local government level presents a large opportunity for saving energy that is currently not incentivized by the Cap-and-Trade system.

The coalescence of these three related factors presents an interesting nexus for solutions. The emissions reductions resulting from saved energy can be valued against the cost of compliance to utilities, which is projected to increase over time.

In response to this nexus of opportunity, the Alliance has released Exploring Utility and Local Government Partnerships to Fund Energy Efficiency Projects for Compliance with AB 32, a whitepaper that outlines a new concept that would enable local governments to participate in the Cap-and-Trade market. Under the presented framework, local governments could partner with their load-serving utilities to move cost-effective energy efficiency projects forward. The concept presented follows this basic framework:

  • Local governments receive upfront capital from their load-serving utility.
  • These local governments undertake projects with measureable energy savings.
  • These energy savings result in reduced greenhouse gas emissions for the utility, helping them meet their compliance obligation under AB 32.

This possible fit between the utilities’ needs for compliance and local government opportunities for energy efficiency needs to be explored for cost-effectiveness. Local governments require additional funding mechanisms for expansive energy efficiency projects. Utilities are some of the largest entities covered under Cap-and-Trade regulations, leading to large compliance obligations. Energy efficiency is also known to be the most cost-effective way to balance supply and demand for electricity. The key to this new concept is that the funding comes from the utility’s compliance budget. Therefore, it is in addition to existing energy efficiency incentive programming. There are challenges to the framework. Thus, the Alliance addresses each of them individually in the whitepaper. The paper also includes recommendations for implementing this new framework for harnessing potential greenhouse gas emissions reductions.

Key study conclusions include:

  • There is an anticipated shortfall of compliance instruments (allowances and offset credits) occurring as early as 2016.
  • Alternate cost-effective means of compliance will be needed, and this mechanism could greatly benefit both utilities and local governments.
  • Working locally to permanently reduce emissions is a win-win opportunity for local governments and utilities.
  • There is widespread support among key stakeholders and industry subject matter experts to test this concept.

The study also summarizes key stakeholder feedback gathered as a part of concept exploration. Download the full report for more details.

Working together to further sustainability goals

The path to sustainability is difficult. Collaboration and joint efforts can help ease our journey. To this end, leaders from water and energy utilities as well as representatives from local governments of Southern California recently participated in a roundtable to discuss the opportunities to support each other in their efforts to promote energy and water efficiency. The 2013 Utility Sustainability Roundtable, the fourth such event, addressed three main topics: The Water-Energy Nexus, Aligning City Planning and Utility Incentive Cycles, and Cap-and-Trade.

Starting with the Water-Energy Nexus, attendees identified finding ways to present both water and energy efficiency opportunities to customers simultaneously as key to increasing participation in these programs. Such joint marketing must be specific to the customer and therefore requires water and energy suppliers to work together to raise awareness about savings opportunities and available incentives in their overlapping service territories. Joint water-energy audits have also proven to be a successful way to coordinate for increased customer participation.

The discussion then moved to Aligning City Planning and Utility Incentive Cycles. Coordinated communications between utilities and local governments may allow more trust to build and incentive funding to better enable scheduled system renovations in municipal buildings.

The last discussion topic related to an emerging topic: Cap-and-Trade. A forward-looking concept was presented that provides a framework by which utilities might be able to put additional funds toward the energy efficiency projects of local governments in return for the resulting emissions reductions.

The study also highlights a couple initiatives that would help move the ideas discussed forward. Download  the full report for more details.

New Retrocommissioning Program Toolkit for Local Governments

As part of its efforts to help local governments comply with federal and state retrocommissioning codes and policies, the California Sustainability Alliance (Alliance) has developed a Retrocommissioning Program Toolkit specifically for municipal facility use.

Retrocommissioning (RCx) is a method of systematically examining the operation and maintenance of an existing building’s systems in order to identify ways to improve overall building performance. It offers a relatively quick and low-cost way to help building owners ensure that energy efficiency features and equipment specified in the building design are installed and operating as intended - and as required to meet occupants’ needs. 

The Alliance created its RCx Program Toolkit to help local government staff develop and implement a municipal facility retrocommissioning program.  The RCx Toolkit complements existing portfolio management tools and utility management systems, helping the user take the “next step” once a decision has been made to incorporate retrocommissioning into municipal facility standard operating procedures.  Although focused on the performance testing and documentation components, the Toolkit also provides resources, such as model commissioning specifications, to facilitate the entire commissioning process.

In addition to a detailed step-by-step description of the RCx program development processes of planning and preparation, creating data infrastructure, and collecting baseline data, the Toolkit includes necessary tools and resources to implement the program such as:

  • Sample RCx Action Plan;
  • References to common RCx resources and procedures;
  • Model Request for Proposals (RFP) language;
  • The RCx Dashboard, a spreadsheet tool that allows the user to enter basic building information to identify potential RCx candidates and track RCx program accomplishments.

The RCx Toolkit is designed to be flexible enough to be a complementary resource for an energy manager in a large local government or to be the sole RCx Program management tool for facility and public works staff in smaller jurisdictions.  It may be used to facilitate RCx for an entire portfolio of buildings, or for a defined sub-group, such as all fire stations or libraries.  Alternatively, a subset of the Toolkit’s procedures can serve to guide local government staff through retrocommissioning those measures for which that team is responsible, or to provide to its maintenance contractor. 

Depending on a government’s specific situation, the RCx Dashboard can aid in prioritizing buildings and identifying RCx candidates.  Data or analyses from other tools such as the EPA’s Portfolio Manager or a utility management system also function to prioritize the buildings, in which case, the Toolkit can work as a complementary resource library and tracking tool.  For example, for planning a heating, ventilation, and air conditioning (HVAC) system replacement, the Toolkit includes sample retrocommissioning RFP language to ensure the HVAC contractor performs functional tests and provides the required documentation to the project team.  For projects completed by internal staff, such as lighting replacements, the Toolkit’s RCx functional tests can be used to document proper installation and operation of the newly installed lighting system.