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Navigating the Prop 39 MazePart 2
February 6, 2014
Presented by:
Rick Brown, PresidentTerraVerde Renewable Partners, LLC
Tyler B. Dockins, Attorney at LawLozano Smith
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Table of ContentsProposition 39: Current StatusEnergy Project
Scoping IssuesProp 39 Sole Source ProhibitionQ & A*
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Proposition 39 UpdateFundingAllocation of funding the 2013-14
State Budget allocated $381 M in Prop 39 funds to K-12 School
Districts. Funds are being distributed to Districts on a
per-student basis plus a weighting for Free and Reduced Price Meals
ADA, with small school minimum guarantees. Annual allocations
through FY 2018-19 are yet to be determined; Prop 39 funds count
towards the States Prop 98 requirement.
Rollover Schools will be able to roll over their allocation year
to year in order to pay for larger projects.The smallest LEAs will
be able to bundle funding in years one and two.
Planning Allocations-Districts were eligible to apply for
planning dollars as of November 1; second round in January 31st;
third round later in the spring.
Energy Project Loans--Allocates $28 million to State Energy
Conservation Account at CEC for low interest and no-interest loans
for eligible projects and technical assistance.
Workforce Development--Provides $3 million for competitive
grants to community based organizations for job training and
workforce development.
Energy Audit--Allocates $5 million to Conservation Corps for
workforce training and development.
Entitlements:
http://www.cde.ca.gov/fg/fo/r14/prop39cceja13result.asp
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Proposition 39 UpdateProcessApplication Guidelines--Required
California Energy Commission (CEC), in consultation with the
California Dept. of Education (CDE) and the California Public
Utilities Commission (CPUC), to develop guidelines for project
expenditures and applications, including energy benefit estimates,
energy savings cost assumptions, benchmarks, energy surveys and
audits, and cost-effectiveness determination. Draft Guidelines were
released Sept 28thFinal Guidelines were released Nov. 19th CEC
approved final guidelines Dec. 19thApplication Materials released
Jan. 31st
Accountability Schools will be subject to front-end project
verification and back-end reporting.
Required Prop 39 DeliverablesExpenditure Plan and
ApplicationExpenditure Plan General Form A: a financial summary of
how the District intends to spend its Proposition 39 award
fundsExpenditure Plan Project Summary Form B(s): the eligible
energy project(s) proposed at each of the Districts schools or
sitesUtility Data Release Authorization form(s)Back-up
documentation: additional information providing justification for
the Expenditure Plan
Project Expenditures Report
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Prop 39 Funding and Project Development Process*Project Scoping:
TerraVerde Energy Report CardConduct on all sites and systems:
energy benchmarking, usage, and cost analysesDetermine the highest
potential energy and cost savings opportunitiesProject Asset
ManagementMonitor and analyze performance dataConduct necessary
O&M and warranty managementComplete Prop 39 Project
Expenditures Report
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Prop 39 Eligible Project Examples*Lighting Energy Efficiency
Measures:Replace incandescent light with compact fluorescent
(CFL)Replace incandescent/down light/flood with lightemitting diode
(LED) lightReplace incandescent Exit Sign to LED Exit signReplace
CFL Exit Sign to LED Exit signConvert T12 fluorescent lamps to T8
with electronic ballastConvert T12 or T8 fluorescent lights to
linear LED lampsReplace 32 Watt T8 lamps with 28 Watt T8
LampsReplace exterior mercury vapor lights with induction or LED
lightsReplace exterior high pressure sodium lights with induction
or LED lightsInstall occupancy control for intermittently occupied
rooms
HVAC/Mechanical Efficiency Measures:Replace incandescent light
with compact fluorescent (CFL)Replace old packaged/split HVAC unit
with highefficiency HVACReplace old heat pump with highefficiency
heat pumpReplace boiler or furnace with high efficiency condensing
typeSeal existing leaky ductInstall premium efficiency
motorsInstall variable speed drive for pumps and fansInstall new
programmable/set back thermostatReplace storage water heater with
instantaneous water heaterPlugLoad Efficiency Measures:Install
smart strip/PC management to control computers/printersInstall
vending machine occupancy control.Simple PV SelfGeneration
Project:Schoolowned Solar PV systemSolar PPA
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Application and Expenditure PlanThere were no big surprises; the
application requirements did not vary in an meaningful way from
what was described in the Guidelines adopted by the CEC in
December.However, the application requirements are sufficiently
detailed that completion will take a good bit of focused
effort.Good news: there are more online calculators provided than
were anticipated, narrowing the scope of what is needed from an
energy audit to get your application approved. More good news: one
important new clarification included in the materials is that Bond
proceeds or any local capital funds (e.g. developer fees) that dont
require some form of payback can be considered grant funding for
the purposes of reducing the denominator in the Savings to
Investment Ratio. This could help bring up the SIR of energy
conservation measures that might otherwise not meet the required
1.05 threshold.*
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BenchmarkingMeasuring and comparing the energy use intensity of
buildings per square footkBTU = Thousand British Thermal
UnitsCombination of kWH: thousand watt hours of electricity
andTherms: units of energy for natural gas, propane, fuel oil.
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Benchmarking Example*
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Strategic Audit Scoping*
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Online Calculators*LightingEnergyEfficiencyMeasures:ECM1
ReplaceincandescentlightwithcompactfluorescentECM2
Replaceincandescentlightwithlightemittingdiode(LED)lightECM3&4
Convertincandescent/CFLexitsigntoLEDexitsignECM5&6
ConvertT12fluorescenttoT8withelectronicballastorLEDlampsECM7
Replace32wattT8lampswith28wattT8lampsECM8&9
Replaceexteriormercuryvapor/HPSwithLED/inductionlightsECM10
InstalloccupancycontrolforintermittentlyoccupiedroomsHVAC/MechanicalEfficiencyMeasures:ECM11
Replaceoldpackaged/splitHVACunit(upto65
kBTU)withhighefficiencyHVACECM12
Replaceoldheatpump(upto65kBTU)withhighefficiencyheatpumpECM13A
ReplaceboilerwithhighefficiencycondensingboilerECM13B Replace
furnace with highefficiency condensing furnaceECM14
SealexistingleakyductECM15
InstallvariablespeeddriveforpumpsandfansECM16
ReplacemanualthermostatwithprogrammablethermostatECM17
ReplaceoldmotorwithpremiumefficiencymotorECM18
Replacestoragewaterheaterwithgasfiredtanklesswaterheater
PlugLoadEfficiencyMeasures:ECM19
Installsmartstrip/PCmanagementtocontrolcomputers/printersECM20
InstallvendingmachineoccupancycontrolSimplePhotovoltaic(PV)SelfGenerationProjectECM21
InstallPVSystem
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Prop 39 S.I.R. Formula*
SIR (Savings to Investment Ratio) is defined as follows:Non
Energy Benefits are to be calculated as 5% of project cost.
Rebates and other grants will vary by utility company and
technology.
This calculation will need to be done for each individual Energy
Conservation or Clean Energy Measure and again for the combined
Project or Portfolio.
An SIR of 1.05 is the threshold a project or portfolio must meet
to receive approve in your Expenditure Plan
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S.I.R. Portfolio Estimate Example*
Energy Conservation MeasureEnergy SavingsMaint.
SavingsNumeratorProject CostLess Grants & RebatesLess Non
Energy BenefitsDenominatorS.I.RUpgrade existing Energy Management
System$238,484 $31,098 $269,582 $103,661 ($20,251)($3,110)$80,301
3.36Upgrade T8 light fixtures/lamps from 32W to 28W$362,733 $21,087
$383,820 $210,870 ($12,570)($6,326)$191,974 2.00Install Occupancy
Sensors$78,797 $11,643 $90,440 $72,770 ($4,087)($2,183)$66,499
1.36Replace HVAC units $970,146 $792,540 $1,762,686 $2,641,800 $0
($79,254)$2,562,546 0.69Totals / Weighted Average SIR$1,650,160
$856,369 $2,506,528 $3,029,101 ($36,908)($90,873)$2,901,320
0.86
Economic/Effective Useful LifeYearsEnergy Management
System15Interior Fixture15Interior Lamps4Occupancy Sensors8HVAC
Units (packaged/split)15
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The Energy Project ChallengeHow does a School DistrictAchieve
actual cost savings results that match expectations?Conduct a
transparent procurement process that gets the benefits of
competitive bidding without a lot of administrative hassle?Achieve
net positive cash flow savings without upfront expense; minimize
balance sheet impact?
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Q & AIf you have any questions, please ask using the
Questions pane as shown below.
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Contact InformationRick Brown, PresidentTerraVerde Renewable
Partners, LLC1100 Larkspur Landing Circle, Suite155Larkspur, CA
94939T: [email protected] B.
Dockins, Attorney at Law Lozano Smith 4 Lower Ragsdale Drive, Ste.
200 Monterey,CA93940 T:831.646.1501| F: 831.646.1801
[email protected] www.lozanosmith.com
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