Agenda

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Regular-General Government # 33.

Board of Supervisors

General Services

Meeting Date:	06/04/2019
Brief Title: Energy Efficiency Upgrade Project - Trane, Energy Consulting Firm
From:	Kevin Yarris, Director, General Services
Staff Contact:	Tonia Murphy, Fiscal Administrative Officer, General Services, x4830
Supervisorial District Impact:

Subject

Authorize the Director of General Services to sign a Letter of Commitment with Trane, Inc., not to exceed $910,000 and subject to final approval by the County Counsel, to finalize the proposed energy savings project details and costs. (Potential general fund impact $910,000) (Yarris)

Recommended Action

Authorize the Director of General Services to sign a Letter of Commitment (LOC) with Trane, Inc., not to exceed $910,000 and subject to final approval by the County Counsel, to finalize the proposed energy savings project details and costs.

Strategic Plan Goal(s)

Operational Excellence
Sustainable Environment

Reason for Recommended Action/Background

In December 2017, the county issued a Request for Qualifications for Energy Conservation Performance Contracting. After reviewing seven submissions, the county selected Trane, Inc. Subsequently, Trane Inc. reviewed county facilities and utility costs, including the county’s solar program, in great depth with the goal to identify energy and water savings opportunities. There was no cost for this initial assessment.

From their analysis, Trane Inc. is recommending a number or projects that would be self-funding over time. This particular project mix contains (1) typical energy and water conservation measures such as HVAC equipment and plumbing fixture replacement, as well as installing automatic light switches to reduce unnecessary lighting use when buildings are not occupied. It also includes (2) adding battery storage of electricity from our existing solar installations. We will be exploring contracts with Community Choice Aggregators (CCAs) and other Load Serving Entities (LSEs) to purchase this locally produced renewable energy during peak use times. It is expected this will be an attractive resource for those LSEs when time of use rates begin and electricity rates increase substantially during peak use. These new rates, and the sunset of existing agreements with PG&E, are estimated to create an increased annual cost for energy for the county of $606,000, primarily due to loss in value of generated solar and increased energy costs, starting in 2024, if no action is taken.

If approved, this project will continue in phases. A deeper analysis of energy and water rates and use by Trane will be completed, 60% construction documents will be developed and Trane will communicate on the county’s behalf with LSEs about their potential future interest in the battery storage project. Should the project estimates be confirmed as a part of this study, the net positive impact after construction and financing costs of $11.2 million are included would be $16.1 million dollars over 20 years, compared to doing nothing. This estimate assumes a 4% growth in the cost of energy over the next twenty-year period. A detailed pro-forma as prepared by Trane and reviewed by County staff is included in Attachment B. As this will be a performance guarantee contract, any shortfalls would be reimbursed to the county from Trane.

Collaborations (including Board advisory groups and external partner agencies)

County Administrator's Office
Department of Financial Services
General Services Department

Competitive Bid Process

Fiscal Impact

Fiscal Impact (Expenditure)
Potential fiscal impact (see notes in explanation section below)
Total cost of recommended action:		$ 910,000
Amount budgeted for expenditure:		$ 0
Additional expenditure authority needed:		$ 0
One-time commitment	Yes

Source of Funds for this Expenditure

Explanation (Expenditure and/or Revenue)

Further explanation as needed:

After this next phase, if the original proposed project construction costs exceed Trane’s original estimate by more than 20%, or the expected savings is less than 80% of the original estimate by Trane, the county can opt out at no cost. If the study proves the project can deliver the projected net savings to the county, the impact is $910,000: the fee for the study. The county can opt out at any time and would then be obligated to pay Trane’s expenses to date.

Should the County proceed with implementation of the energy savings project, the cost of the detailed study will be incorporated into the overall project cost, which is anticipated to be financed over a 15 year period. If this option is pursued, a detailed financing plan will be developed and reviewed with the Debt Committee, and presented to the full Board for approval. Contingency funding for the detailed study will be incoporated into the proposed 2019-20 Budget as a safeguard in the event that the County elects not to proceed with the energy savings project.

Attachments
Att. A. Stakeholder Recommendation
Att. B. Proforma Base and Storage
Att. C. Peer Review Document
Att. D. Draft Letter of Commitment
Att. E. Trane Progress Plan
Att. F. Presentation

Form Review

Inbox	Reviewed By	Date
Elisa Sabatini	Tonia Murphy	05/26/2019 01:23 PM
Elisa Sabatini	Elisa Sabatini	05/28/2019 03:54 PM
Financial Services	mpatterson	05/29/2019 06:29 AM
County Counsel	Lupita Ramirez	05/29/2019 11:35 AM
Financial Services	Tom Haynes	05/29/2019 05:02 PM
County Counsel	Phil Pogledich	05/30/2019 09:46 AM
Form Started By: Tonia Murphy		Started On: 05/23/2019 09:43 AM
Final Approval Date: 05/30/2019