HomeMy WebLinkAboutMemo - Mail Packet - 9/25/2018 - Memorandum From John Phelan And Kirk Longstein Re: August 28, 2018 Work Session Follow Up - Building Energy ScoringUtilities
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222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522-0580
970.212.2900
V/TDD: 711
utilities@fcgov.com
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MEMORANDUM
DATE: September 19, 2018
TO: Mayor Troxell and Councilmembers
FROM: John Phelan, Energy Services Senior Manager
Kirk Longstein, Energy Services Project Manager
THROUGH: Darin Atteberry, City Manager
Jeff Mihelich, Deputy City Manager
Kevin R. Gertig, Utilities Executive Director
RE: August 28, 2018 Work Session Follow-Up – Building Energy Scoring
The purpose of this memo is to provide City Council additional information on the community
benefits of the program, linkages to existing programs, results from incentive-based approaches
and outreach plans for the Business Energy Score (BES) program based on the August 28, 2018
Council Work Session.
Staff is requesting guidance from the Leadership Planning Team (LPT) on when to schedule
the Building Energy Scoring program on the six-month calendar for formal consideration.
Summary Responses (additional background included on pages 3-6)
BES contributes to Energy Policy goals for energy efficiency and greenhouse gas
(GHG) emission reduction goals of the Climate Action Plan. Short-term reductions come
from direct operational savings and enabling participation in efficiency incentive
programs. Estimates for electricity savings over the first four years are up to 30,000,000
kilowatt-hours, or 2% of community-wide electricity use (table 1, page 4). This would
reduce the carbon emissions inventory by approximately 1% and BES is also amongst the
most cost-effective CAP initiatives (table 2, page 4).
BES contributes to Fort Collins Climate Economy objectives for clean energy
investment, green job creation and expansion of local business opportunities. Having
credible and transparent building performance information which becomes part of
standard real estate transactions, both lease and sales, allows the local market to
recognize the value of high performance buildings and related efficiency investment.
BES aligns with EPIC financing (aka on-bill) and Colorado’s Commercial Property
Assessed Clean Energy (C-PACE) financing tools to leverage private sector capital for
investment. In addition, BES brings a consumer advocacy benefit by improving the
available choices for tenants of all kinds to select lower operating cost options.
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BES aligns with existing programs and planned initiatives delivered by Utilities and
Platte River Power Authority. BES aligns closely with the Efficiency Works – Business
(EW-B) program, providing assessments, incentives, technical assistance and a contractor
network. The EW-B program is in the process of adding a real estate professional
network to provide training and support local commercial real estate and property
managers to incorporate energy performance into their business processes. With BES
implementation, in addition to the reporting and transparency recommendations, Utilities
will be:
o improving automation of benchmarking services through coordination with
partner utilities and Environmental Protection Agency (EPA) Portfolio Manager;
and
o developing education and training materials for stakeholders, including building
owners, property managers, real estate professionals, appraisers and tenants; and
o developing a marketing and communications approach targeted to both “sides” of
a rental or lease transaction in the multifamily and commercial segments; and
o developing additional tools to recognize high performing buildings and provide
targeted efficiency recommendations in support of improving scores.
Based on local and national pilots, BES will provide these outcomes only through a
reporting requirement approach. Councilmembers specifically inquired about the use of
incentives to achieve similar outcomes. Through the City Energy Project (CEP) grant,
staff has access to results and resources from 19 other U.S. cities that have or are in the
process of passing ordinances that require benchmarking, reporting, and/or transparency.
Three jurisdictions initiated voluntary programs and experienced low participation rates
thus moving to required programs to reach their goals. Over the course of 12 months,
starting in May 2017, Fort Collins Utilities incentivized building owners to participate in
a benchmarking pilot by providing a free ENERGY STAR
®
certification for eligible
properties. The $1,000 incentive covered the cost for a Professional Engineer (PE)
certification of the ENERGY STAR score. Of the 3,000 potential participants contacted
via direct emails, utility newsletters and bill inserts, and ENERGY STAR outreach to
local partners, 25 customers participated in the pilot to benchmark their properties and six
customers took advantage of the incentive (<1% of potential participants). Based on this
data and experience from other communities, staff continues to recommend a reporting
requirement approach to achieve the critical mass of building scores which will deliver
the energy and local economic benefits noted above.
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Background
Community Benefits and Support to Climate Economy Objectives
Building Energy Scoring contributes to Fort Collins’ Climate Economy by enabling activities
that encourage clean energy investment and green job creation and expansion. BES aligns with
City and Utility programs aimed at reducing energy use, promoting public collaboration, and
increasing transparency and informed decision making. Achieving a critical mass of credible
and transparent information on building performance allows the market to assign value to energy
efficiency over time. BES engages the market by raising public awareness about energy tracking
and efficiency and helps tenants make better informed decisions about their operating costs. For
a small business owner, energy costs rank third behind salaries and mortgage/rent. Additionally,
money saved by lower utility costs in the pockets of community members revolves within the
local economy. An uptick in BES-driven facility assessments increases demand for a larger
clean energy workforce. With On-Bill Financing and Colorado PACE, financing tools are
available to work in concert with existing energy efficiency programs.
Contributions of BES to Climate Action Plan and Energy Policy Goals
Building Energy Scoring that involves 100 percent of eligible properties is necessary to achieve
2030 climate goals. In addition, BES contributes to Energy Policy goals for energy efficiency
targets. As a stand-alone activity, the act of benchmarking contributes to a national average annual 2.5
percent decrease in energy use due to operational changes as a by-product of awareness and education
during the energy tracking process. Coupled with Efficiency Works – Business, the act of benchmarking,
reporting and transparency drives customers to seek a facility assessment to improve their properties’
performance with a 30 percent conversion rate to an energy efficiency project on the property. As
presented in Table 1, a phased approach to adding more buildings to the program in each of the first four
years of the program will contribute to electricity use reductions. Natural gas savings are also expected.
Table 1. Annual Contributions of BES to CAP and Energy Policy goals. (C=commercial,
M=multifamily)
Year 2019 2020 2021 2022
Building Size C: >20k ft
2 C: >10k ft
2
M:
>20k ft
2
C: >5k ft
2
M: >10k ft
2
C: >5k ft
2
M: >5k ft
2
% Community Electricity
Usage of Covered Buildings
30% 41% 46% 46%
Behavioral Energy Savings
(range from 2-5% savings)
7,000 - 18,000
MWh
10,000 -
25,000 MWh
11,000 - 28,000
MWh
11,000 - 28,000
MWh
EW-B Project Savings from
BES Contributions
1 1,200 MWh 1,500 MWh 1,600 MWh 504 MWh
1Assumes 50% of properties will receive a score less than 50 and will undergo a facility assessment through EW-B.
Assumes 30% of assessments convert to projects, with an average 20,000 kwh savings per project. EW-B annual
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Program
Cost per kWh
Savings
4
Number of Properties
5
Building Code Amendments &
Compliance
$54 3,000
Building Energy Efficiency – Ongoing $35 7,500
Building Energy Scoring (BES) $21 1,540
4
Data presented at May 2018 Council Work Session.
5
Based on 100% eligible properties participating through 2022.
Relationships among BES and existing programs
Building Energy Scoring aligns with existing programs and planned activities within the Utility
and City (table 3). While the Efficiency Works – Business (EW-B) program is expected to
provide the primary set of tools for supporting BES covered buildings, other programs are
aligned as well. For instance, a component of ClimateWise is to bring awareness and leverage
the theory of change to channel participation towards Utility incentive programs.
Table 3. Relationships among BES and existing programs.
Existing program
Building
Sector
Timeline
Relationship to Building Energy
Scoring (BES)
Efficiency Works –
Business (EW-B)
Business Ongoing
Can’t manage what you do not measure:
BES establishes a baseline that drives
property owners toward a free EW-B
facility assessment
ClimateWise Business Ongoing
Benchmarking and reporting counts
towards an Energy Badge in the
comprehensive suite of sustainability
badges offered in ClimateWise
City Energy Project Business 2 year
Grant to support Building Energy Scoring
program and energy efficiency in
commercial buildings
Green Buildings
Program
Business
and
Residential
Ongoing
Community awareness of all green
building programs/incentives including
benchmarking
Integrated Design
Assistance Program
(IDAP)
Business Ongoing
Benchmarking is used to aid in
verification of performance for incentives
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California Public Utility Commission found that 84 percent of those who benchmarked their
buildings said that they either had, or planned to, implement energy efficiency improvements. In
Fort Collins, Efficiency Works – Business provides free assessments, technical assistance and
incentives for energy efficiency projects, with benchmarking serving as a relatively inexpensive
driver to the EW-B program.
Further aligning BES to existing programs is the integration of Utilities and Sustainability staff
into cross-functional projects. Existing staff can support customers with BES and developing
education and training materials for stakeholders. For example, real estate and property
managers are a target audience for delivering energy performance information that they can
share with potential tenants in the community.
Incentivizing Building Energy Scoring
The City of Fort Collins, through its City Energy Project (CEP) grant, has access to staff and
resources from 19 other U.S. cities that have or are in the process of passing ordinances that
require benchmarking, reporting and transparency. Most cities in the CEP cohort have ambitious
climate goals but do not house municipal utilities and therefore have limited resources to stand
up energy efficiency programs. Three jurisdictions initiated voluntary programs experienced low
participation rates and moved to mandatory programs to reach their energy efficiency and
climate goals. Some CEP cities developed non-monetary incentives for energy efficiency efforts
such as awards or challenge programs that provide recognition for buildings that reduce energy
use over time. Staff recommends a mandatory requirement to ensure 100 percent participation of
eligible buildings in order to meet climate and energy goals within the community.
Over the course of 12 months starting in May 2017, Fort Collins Utilities incentivized building
owners to participate in a benchmarking pilot by providing a free ENERGY STAR
®
certification
for eligible properties. The $1,000 incentive covered the cost for a Professional Engineer (PE) to
verify the Building Energy Score of 75 or above which then allowed the customer to receive a
nationally-recognized ENERGY STAR
®
certification plaque/decal to display at their property.
Of the 3,000 potential participants contacted via direct emails, utility newsletters and bill inserts,
and ENERGY STAR
®
outreach to local partners, 25 customers participated in the pilot to
benchmark their properties and six (6) customers took advantage of the ENERGY STAR
®
certification.
Table 4 lists three possible incentive opportunities to encourage voluntary participation along
with an estimated annual cost. Studies of cities with benchmarking programs across the nation
show a reduction in utility costs for participating buildings, a built-in incentive to track energy
performance.
Table 4. Potential incentives, likelihood to attract 100% participation and cost to implement.
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Incentive Description
Likelihood of 100%
Covered Buildings’
Participation in BES
Annual
Cost
Estimate
to Utility
Awards Dinner
Annual celebration to
recognize high performing
buildings with high building
energy scores
Low $20,000
ENERGY STAR
®
Certification Third-
Party Verification
National recognition for
buildings that score 75 and
above; cost for P.E. required
to verify score to obtain
building label
Low $375,000
Pay for Service
Payment for service by
Utilities/third party to
benchmark and prepare report
for customer
Medium $750,000
CC Lisa Rosintoski, Deputy Director Utilities, Customer Connections
Paul Davis, Customer Services Manager, Platte River Power Authority
CAP Executive Team: Includes Deputy City Manager Jeff Mihelich; Utilities Executive
Director Kevin Gertig; Chief Financial Officer Mike Beckstead; Director of Planning,
Development, and Transportation Laurie Kadrich; Chief Sustainability Officer Jackie
Kozak Thiel; and Environmental Services Director Lucinda Smith
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BES aligns closely with the Efficiency Works – Business (EW-B) program. Numerous public
and private utilities nationwide are offering benchmarking services for their customers. The free,
online ENERGY STAR
®
Portfolio Manager
®
tool allows utility customers to review their
buildings’ portfolios and to prioritize future investments. A 2012 study completed by the
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savings accumulate over time based on efficiency measure life.
BES is also amongst the most cost-effective CAP initiatives (table 2).
Table 2. Cost savings and participation among CAP initiative charters
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