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HomeMy WebLinkAboutStaff Report 477-0915 TO: FROM: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: UTILITIES DATE: DECEMBER 14, 2009 CMR: 477:09 REPORT TYPE: CONSENT SUBJECT: Adoption of a Resolution Authorizing the City Manager to Execute a Letter of Support for the WAVE ONE Application for a $2,500,000 Grant Funded by the California Energy Commission State Energy Program, and to Negotiate and Execute a Two-Year $2,835,000 Direct and In-Kind Funded PubliclPrivate Partnership Agreement with WAVE ONE, Contingent Upon the Full Award of the State Grant Applied for by WAVE ONE RECOMMENDATION Staff recommends that City Council adopt a Resolution: (a) Authorizing the City Manager to execute a Letter of Support of WAVE One's application for $2.5 million in energy efficiency funding from the State Energy Program "Municipal and Commercial Building Targeted Measure Retrofit Program (MCR),,; (b) Authorizing the City Manager, contingent upon the full award of the state grant applied for by WAVE ONE, to negotiate and execute a Letter of Intent and a PubliclPrivate Partnership Agreement with WAVE ONE, providing $2,835,000 in direct and in kind City funding, in exchange for W AVE ONE implementing the $2.5 million grant MCR Program in downtown Palo Alto, and WAVE ONE obtaining commitments for an additional $1.5 million in energy efficient investments over two years by the downtown property. owners currently leasing to small and medium-sized commercial businesses. CMR: 477:09 Page 10f6 The City would provide the following as "Leveraged Funds" identified in WAVE One's MCR grant application to the California Energy Commission: 1) Up to $725,000 as direct City funding for the administration and implementation of lighting efficiency improvements, with paybacks of less than five years in City- owned garages, parking lots, and Civic Center stairwells. Potential sources of funding have yet to be finalized, but may include a loan from the Utilities Calaveras Reserve, with interest paid by the General Fund, or funding from the City Infrastructure Reserve. 2) Up to 900 hours of staff time (approximately $110,000 in salary and benefits) over the next two years as "in kind" funding by the City Manager's Office, City Attorney's Office, the Public Works, Planning and Community Environment, and Utilities Departments, in support of the WAVE ONE MCR Program targeting downtown businesses; and 3) A new $2 million Electric Efficiency Financing Program, funded by the Calaveras Reserve. EXECUTIVE SUMMARY Under the Federal American Recovery and Reinvestment Act (ARRA) of 2009, the California Energy Commission (CEC) received funds to implement and administer specific programs under the State Energy Program (SEP) umbrella. The CEC has issued a Request for Proposals for grant applications to implement "Municipal and Commercial Building Targeted Measure Retrofit Programs." The City of Palo Alto is collaborating with several organizations seeking SEP efficiency grants for programs targeting both residential and commercial Utilities customers, including W AVE ONE. There is no state reporting requirement or grant-related financial risk to the City if the WAVE ONE MCR grant application is, or is not, funded by the CEC. BACKGROUND The ARRA was enacted by Congress to preserve and create jobs, promote economic recovery, assist those most impacted by the recession, provide investments needed to increase economic efficiency by spurring technological advances, and to make investments that will have long term economic benefits. The US Department of Energy allocated $226 million in ARRA funding for the California SEP. In October 2009, the CEC published RFP #400-09-402, the "Municipal and CMR: 477 :09 Page 2 of 6 Commercial Building Targeted Measure Retrofit Programf1 (MCR). The MCR focuses on achieving significant energy savings from targeted retrofit measures where opportunities exist in large numbers across the state's municipal and commercial building sectors. The awarded projects are intended to be completed with a 24-month period. DISCUSSION America's small business sector has traditionally been under-represented in securing conservation and efficiency usage reductions and cost savings for a number of reasons. This program seeks to increase reductions in this sector by attacking the problem that the small or medium-sized business tenant's return-on-investment for efficiency improvements has not been economically viable. The problems stem from the length of typical leases, usually less that the life of the installed measure, and the utility cost indifference of the property owner and/or manager serving tenants under a triple net lease. WAVE ONE Palo Alto is a not-for-profit organization legally associated with Acterra. On November 3, 2008 the City Council adopted a Resolution formally recognizing the environmental goals of WAVE ONE. WAVE ONE is seeking this SEP funding opportunity to create and implement a plan which could obtain significant energy efficiency improvements among the small and medium-sized businesses in the downtown core of Palo Alto. WAVE ONE proposes to address multiple end use systems including heating, ventilation and air conditioning (HVAC), lighting, and control modification. In addition, there will be significant efforts to improve tenant awareness and incorporate consumption monitoring, Green Business certification, and Zero Waste in a coordinated and holistic approach to maximize the benefits to the target market of small and medium-sized businesses in the downtown core of Palo Alto. WAVE ONE proposes to: • Assist up to 100 small and medium-sized businesses to achieve approximately 50 percent savings in selected Hghting systems; • Utilize local labor programs to train individuals in long-term green job technologies; CMR: 477:09 Page 3 of6 • Drive market transformation by penetrating up to 66 percent of eligible small and medium- sized businesses in downtown Palo Alto; • Identify and implement additional opportunities for energy efficiency improvements, waste reduction, and sustainable practices; and • Work collaboratively with the Utilities Department and with program participant permission, to use consumption data to measure and verifY actual energy reductions achieved by participants as measured against a base period beginning January 1,2005. With adequate funding and partnerships with local government, educational institutions, and labor organizations, WAVE ONE believes its unique programmatic approach to small business efficiency will not only provide value to the City of Palo Alto and its small and medium-sized business sector, but that the WAVE ONE business model can successfully be reproduced regionally and nationally across the small business sector. The MCR RFP will partially evaluate Applications based on demonstrated public participation and community involvement through "Leveraged Funds. II Leveraged Funds greatly increase the cost-effectiveness of a program because the achieved energy savings are measured against Grant funds and not against total funds used. Applicants must identifY sufficient Leveraged Funds so that the energy savings for each Grant dollar received are comparable to or greater than other Applicants. The City's cost-effective direct and in kind contribution of $2,835,000 over the two year MCR implementation period represents a substantial contribution toward the Leveraged Fund submission totaL WAVE ONE has also obtained additional Leveraged Funds including $1 million of in kind services from Premier Properties for all WAVE ONE administrative, insurance, equipment, telecommunications and facility costs. Downtown property owners have also pledged an additional $1.5 million in direct funding to support additional efficiency improvements beyond the CMR program. The Applicant or "Prime Bidder" on the MCR program application can be a private entity rather than a local government agency, but the CEC requires Prime Bidders to develop a private/public partnership. Staff supports the WAVE ONE approach to improvements in small business water and energy efficiency, recycling, and other environmentally sensitive end uses. The Utilities, Planning and Community Environment, and Public Works Departments will assist the WAVE CMR: 477:09 Page 4 of6 ONE program by targeting budgeted programs and services to the small and medium-sized business sector. RESOURCE IMPACT The City will not have any fiscal or fiduciary responsibility for any grant funds awarded to WAVE ONE. If the grant is not successful, the City is not responsible for funding this program or to provide efficiency investments in support of the WAVE ONE grant application. If the full $2.5 million grant application is successful and awarded to WAVE ONE, the City Manager will negotiate and execute a Letter of Intent and a PubliclPrivate Partnership Agreement detailing the roles and responsibilities of both parties, pursuant to the requirements of City Policy and Procedure 1-25/MGR, "PubliclPrivate Partnerships." It is anticipated that the City's financial involvement will be up to $2,835,000 in direct and in kind funding. The breakdown is as follows: 1) Up to $725,000 for lighting efficiency improvements, with paybacks ofless than five years. Potential sources of funding have yet to be finalized, but may include a loan from the Utilities Calaveras Reserve, with interest paid by the General Fund, or funding from the City Infrastructure Reserve. 2) Up to 900 hours of staff time (approximately $110,000 in combined salary and benefits) over the next two years as "in kind" funding. Staff time will include the following departments (with 864 estimated hours of in kind contribution): City Manager's Office Sustainability 144 hours Planning and Community Environment Permitting and Planning 240 hours Public Works Facilities 48 hours Utilities Public Benefits 432 hours There will also be miscellaneous support required from the City Attorney's Office and.the Administrative Services Department; and, 3) The new $2 million Electric Efficiency Financing Program, funded from the Calaveras Reserve. POLICY IMPLICATIONS CMR: 477:09 Page 5 of6 Establishing a successful public-private partnership with WAVE ONE, contingent upon grant funding, will reinforce the City of Palo Alto's policies and goals to encourage energy efficiency installations and to assist customers in their attempts to use electricity more effectively. Goals being supported include the City Council Priority Number Three, "Environmental Protection," the Ten Year Energy Efficiency Program, and the Climate Protection Plan. ENVIRONMENTAL REVIEW The City's support of WAVE One's grant application process does not constitute a project pursuant to Section 21065 of the California Public Resources Code, thus no environmental review under CEQ A is required. ATTACHMENTS A. Resolution Authorizing the City Manager to Execute a Letter of Support for the WAVE ONE Application for a $2,500,000 Grant Funded by the California Energy Commission State Energy Program; B. Summary of the WAVE ONE Application for $2,500,000 Grant From the Municipal and Commercial Building Targeted Measure Retrofit (MCR) Program Funded by the California Energy Commission State Energy Program (SEP); C. Section C.6 of the Grant Application -Collaboration with National and State Programs; and D. Letter of Support of WAVE One's application for $2.5 million in energy efficiency funding from the State Energy Program "Municipal and Commercial Building Targeted Measure Retrofit Program (MCR)" to the California Ener.A"t1"-f-..8"\ PREPARED BY: PREPARED BY: TOM AUZENNE Assistant Director, Utilities Customer Support Services CITY MANAGER APPROVAL: CMR: 477:09 Page 6 of6 NOT YET APPROVED .ATTACHMEN1"A· Resolution No. ---. Resolution of the Council of the City of Palo Alto Authorizing the City Manager to Execute a Letter of Support for the WAVE ONE Application for a $2,500,000 Grant Funded by the California Energy Commission State Energy Program, and to Negotiate and Execute a Two- Year $2,895,000 Direct and In-Kind Funded Public/Private Partnership Agreement with WA VE ONE, Contingent Upon the Full Award of the State Grant Applied for by W AVE ONE WHEREAS, the City of Palo Alto ("City") adopted a Climate Protection Plan establishing environmental goals; a Ten Year Energy Efficiency Program implementing customer energy efficiency programs, rebates and services; and "Environmental Protection" as one of it's Priorities; WHEREAS, WAVE ONE, A CONSERVATION RESEARCH CENTER FOR SMALL BUSINESSES (W AVE ONE), is an organization located in Palo Alto that is fiscally allied with Acterra, a non-profit California corporation in Palo Alto; WHEREAS, On November 3, 2008, the City Council directed the City Manager to establish guidelines so that members of the City's Sustainable Design Team will continue to support the WAVE ONE goals to assist any small or medium sized Palo Alto businesses to become certified as "Green Businesses" and to achieve the California 2020 Energy Goals, the City'S energy Goals and the California 2020 Water Goal; WHEREAS, W AVE ONE has applied for a $2.5 million grant under the "Municipal and Commercial Building Targeted Measure Retrofit (MCR) Program" of the California Energy . Commission to assist .100 or more Palo Alto small and medium-sized downtown Palo Alto businesses increase their efficient use of energy; WHEREAS, the City will not have any fiscal or fiduciary responsibility for any grant funds awarded to W AVE ONE through application to the MCR Program; and WHEREAS, W AVE ONE proposes to join with the City in a PubliclPrivate Partnership to implement the energy savings measures required by the MCR Program grant; NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: 1 091210 syn 6051029 NOT YET APPROVED SECTION 1. The Council recognizes that WA VE ONE will apply to the California Energy Commission for a $2.5 million grant under the "Municipal and Commercial Building Targeted Measure Retrofit Program". SECTION 2. The Council recognizes WAVE ONE as an Palo Alto organization that, in conjunction with existing City programs and services, will assist 100 or more Palo Alto businesses to become more energy efficient. SECTION 3. The Council authorizes the City Manager to execute a Letter of Support for WAVE One's application for $2.5 million in energy efficiency funding from the State Energy Program "Municipal and Commercial Building Targeted Measure Retrofit Program (MCR),,; SECTION 4. The Council authorizes the City Manager, contingent upon the full award of the state grant applied for by W AVE ONE, to negotiate and execute a Letter of Intent and a Public/Private Partnership Agreement with WAVE ONE, pursuant to the requirements of City Policy and Procedure 1-25/MGR, "PubliclPrivate Partnerships", and providing $895,000 in direct and in kind City funding, in exchange for WAVE ONE implementing the $2.5 million MCR Program in downtown Palo Alto, and WAVE ONE obtaining an additional $1.5 million in energy efficient investments over two years by the downtown property owners leasing to small and medium-sized commercial businesses. The City would provide the following as "Leveraged Funds" identified in WAVE ONE's MCR grant application to the California Energy Commission: 1) $725,000 as direct City funding for the administration and implementation of lighting efficiency improvements, with paybacks of less than five years in City- owned garages, parking lots, and Civic Center stairwells. Funding will be finalized at a later date, but may include a loan from the Utilities Calaveras Reserve, with interest paid by the General Fund, or funding from the City Infrastructure Reserve. 2) Up to 900 hours of staff time (approximately $110,000 in salary and benefits) over the next two years as "in kind" funding by the City Manager's Office, City Attorney's Office, the Public Works, Planning and Community Environment, and Utilities Departments, in support of the W AVE ONE MCR Program targeting downtown businesses; and 3) A new $2 million Electric Efficiency Financing Program, funded by the Calaveras Reserve. SECTION 5. The Council finds that the City's support of WAVE ONE's application does not constitute a project pursuant to Section 21065 of the California Public Resources Code, thus no environmental impact assessment is necessary. 2 091210 syn 6051029 NOT YET APPROVED INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Deputy City Attorney 091210 syn 6051029 3 Mayor APPROVED: City Manager ATTACHMENT B I SUMMARY OF THE WAVE ONE APPLICATION FOR A $2,500,000 GRANT FROM THE MUNICIPAL AND COMMERCIAL BUILDING TARGETED MEASURE RETROFIT (MCR) PROGRAM FUNDED BY THE CALIFORNIA ENERGY COMMISSION STATE ENERGY PROGRAM Author: James Baer WAVE ONE The Wave One Conservation Research Center for Small Businesses (Wave One Center) is a an existing collaboration between the City of Palo Alto (City) environmental, waste reduction, and efficiency programs and Wave One, a California nonprofit organization serving small and medium-sized businesses in the downtown Palo Alto area. The Wave One Center operational area encompasses the 43 contiguous blocks of Downtown Palo Alto consisting of 380 buildings, 3.5M square feet, 1050 businesses, 10,500 employees, $275M sales in 2008, and 150,000 weekly visitors. Downtown is one ofthe most successful and vibrant central business districts in California. The goal of the Wave One Center is to manage the effective delivery of energy efficiency services to small businesses with an overall energy and water reduction target of 40% by the end of 20 12. The Wave One Center will penetrate 66% of the Downtown, with no fewer than 500 businesses occupying not less than 2 million square feet. The Downtown Building owners of in excess of2 million square feet have signed letters indicating their willingness to consider energy efficiency investments subject to reasonable payback periods. The Wave One Center can be the catalyst for a market transformation for the delivery of energy efficiency services to small businesses. The Media and Communications strategies of the Wave One Center and the professionals it has assembled will establish brand identification for energy efficiency accomplishments, and will deploy web portals, social media, and web pages customized for every small business participant. There is no other small business program comparable to the Wave One Center in the United States. THE MUNICIPAL AND COMMERCIAL BUILDING TARGETED MEASURE RETROFIT (MCR) PROGRAM The Targeted Retrofit measures identified by the California Energy Commission that will be deployed by the Wave One Center include Bi-Level Garage Lights, BI-Level Stairwell Lights, Daylight Dimming Indoor Lights, Wall Pack and Parking Lot High Efficiency Lights, LED Task Lighting, Load-Shedding Lighting Controls, Wireless Programmable Thermostats, Service Technologies for HV AC, Variable Speed Controls for HV AC and for Kitchen Exhaust. The Wave One Center will measure the results of each efficiency measure. Energy and peak demand reductions will be reported based on a defined series of product specifications and quantities. FUNDING AND EXPENSES The Wave One Center has applied for a $2.5 million grant under the Municipal and Commercial Building Targeted Retrofit Program (MCR Program) as described in Application for RFP #400- 09-402. The RFP evaluates an Application based on its ability to demonstrate public participation and community involvement through Leveraged Funds. Leveraged Funds greatly increase the cost- effectiveness of a program because the energy savings are measured against Grant funds and not against total funds used. A successful SEP Applicant must include sufficient Leveraged Funds so that the energy savings for each Grant dollar received are comparable to or greater than other Applicants. The Wave One Center has current commitments for $1 million of "In-Kind" services, including all administrative, insurance, equipment, telecommunications and facility costs which will be provided by Premier Properties, a for-profit Palo Alto company. Additional Leverage Funds can consist of funding by downtown businesses, property owners, City staff time, pro bono professional services, advisory board participants, and mature volunteers with advanced skills. Small and medium-sized businesses in the Wave One Center's target area have indicated that if $2 million of grant funds are available for hardware retrofits, they would be willing to contribute an additional $1.5 million to fund additional efficiency improvements. If the CEC grant is awarded, the Wave One Center has projected the Administrative cost for servicing 500+ businesses over a two-year period between $750,000 and $1,000,000. The Wave One Center will apply to foundations and donors for funds to offset Administrative costs and achieve the $2 million in grant funding for hardware installation required to achieve the trigger point for the additional investment of$1.5 million pledged by Downtown businesses. Existing City Utilities programs such as Right Lights+, Commercial Advantage rebates, custom rebates, MeterLinks, and the pilot $2 million interest-free Electric Efficiency Financing Program, also constitute Leveraged Funds ifused in conjunction with the Wave One Center MCR Program. To the extent that the City contributes more funding for efficiency improvements at its facilities more MCR grant funding will be available to make upgrades at small commercial bUildings. This City payment if approved by the City Council, in addition to the $1.5MilIion pledged by the business community, will result in achieving the recommended MCR fund leveraging. WAVE ONE CENTER FUNDS CEC GRANT PROCEEDS Administration $ 750,000 lighting upgrades $ 1,250,000 HVAC controls $ 500,000l $ 2,500,000 Admin Breakdown including In-kind support CEC Grant In Kind Total FIELD SERVICES 1.1 Wave One $ 562,000 $ 24,000 $ 586,000 1.2 Premier Properties Management $ -$ 622,843 $ 622,843 1.3 City of Palo Alto $ -$ 110,000 $ 110,000 LABOR & TRAINING $ 28,000 $ 45,200 $ 73,200 LEGAL & ACCOUNTING 80,000 $ 60,000 $ 140,000 ADMINISTRATION $ -$ 334,000 $ 334,000 MEDIA AND COMMUNICATIONS $ 80,000 $ 238,000 $ 318,000 TOTAL ADMIN $ 750,000 $ 1,434,043 $ 2,184043 Estimated Program Funding for Construction CEC GRANT-Payment for lighting upgrades and HVAC Controls $ 1,750,000 CITY LOAN PAYMENTS -Electric Efficiency Financing Program for Businesses $ 2,000,000 CITY REBATES -on upgrades $ 250,000 DOWNTOWN OWNERS $ 1,500,000 DONORS $ 500,000 TOTAL $ 6,000,000 GREEN JOBS AND GREEN JOB TRAINING The Wave One Center creates quality green jobs by involving labor and employment organizations. The Wave One Center provides Green Job Training by involving the union apprentice programs, De Anza Community College and the Haas Center at Stanford. PARTNERS The City will be named as a "Partner" in the RFP Application. This does not create any fiscal or fiduciary responsibility for the City. There are many Partners for the Wave One Center that provide "In Kind" services, though some are paid consultants. Public Agencies include the City, Kirsch Center for Environmental Studies at De Anza Community College and NOVA, the Local Workforce Investment Agency. Nonprofit organizations include Santa Clara and San Benito County Trade Council, Working Partnerships USA, International Brotherhood of Electrical Workers, Pipe Fitters Local Union, Haas Center for Public Policy at Stanford apprentice and journeyman training centers for the International Brotherhood of Electrical Workers and the Pipe Fitters Union, Acterra, Sustainable Silicon Valley, Chamber of Commerce, Green Building Alliance and other environmental organizations for which we are awaiting final commitments. Professional organizations include Seiler and Company, DLA Piper, Fedarra, Maynard Public Relations, 1185 Design, Chamber of Commerce, Embarcadero Media Co., IDEO, Harrington Lighting Ventures, Field Diagnostics, Rosendin Electric and ACCO Heating and Cooling. ATTACHMENT C Section C.6 of the Grant Application C.6. COLLABORATION WITH NATIONAL AND STATE PROGRAMS. C.6.A: Introduction C.6.B: CEC 2008 Strategic Plan GoaIsC.6.C: National Programs C.6.D: LDC Electric Public Benefits Program C.6.E: City Sustainability Programs C.6.F: Other Local Government Programs C.6.G: Community Programs C.6.A: INTRODUCTION. In 2008, Wave One established the Wave One Conservation Center for Small Business (WOCCSB) as a direct response to the California Energy Commission (CEC) Strategic Plan for the Commercial Sector, with particular focus on the Small Business sector. The Wave One partnership modified several program components of the original Wave One Small Business Research Center, to specifically address, the goals of the CPUC Strategic Plan. The proposed Wave One Program also addresses Department of Energy (DOE) goals and supports City of Palo Alto Utilities (CPAU) projects funded by an American Recovery and Reinvestment CARRA) Block Grant, enhances and complements CPAU's state-mandated Electric and Natural Gas Public Benefits (PB) programs, and created the impetus for the new CPAU pilot off-bill electric efficiency revolving financing program for small business. The Wave One Program also supports and co-markets other sustainability programs offered by the City including water and energy efficiency audits and rebates, renewable energy purchasing, photovoltaic installation, new technologies such as geothermal heating and cooling systems, advanced metering infrastructure, composting and recycling. By assembling and presenting all of the locally-administered environmental programs serving Palo Alto businesses, the Wave One Program greatly reduces administrative and general costs, including outreach and marketing, service installation, program measurement and verification, and program and regulatory accomplishment reporting. C.6.B. CEC 2008 STRATEGIC PLAN GOALS. C.6.B.(2) Heating, Ventilating and Air Conditioning Achievements. The Wave One MCR Program proposes to deploy both traditional and state-of-the-art HV AC technologies and is working with the City to develop and implement local jurisdiction-approved standards that will simplify and streamline HV AC permitting when Tenant Improvement work is performed in a building. See Section C Introduction, Section E, Section H and Appendix 3. C.6.B.(3) Codes and Standards. The Wave One MCR Program has as its goal to achieve 50% energy savings with respect to lighting as measured ANSIIASHRAEIIESNA standard 90.1-2001 and to document methodology necessary to achieve this lighting goal and replicate the impacts across the country. See Section C Introduction, Section C.2., Section C.lO, Section E, Section H and Appendix 3. Page 1 of 6 C.6.B.(4) Workforce Education and Training. The Wave One MCR has developed innovative green job partnerships programs with De Anza Community College Kirsch Center for Environmental Sciences, NOVA, a Local Workforce Investment Agency, Working Partnerships USA, the Santa Clara and San Benito Trade Council and training organizations within the Santa Clara County construction trade unions. See Section C.1, Section C.7, Section C.11, Section D and Appendix 3. C.6.C. NATIONAL PROGRAMS. As stated in the "Background" Page 1 of the Request for Proposals, the State Energy Program is to align with the following national Goals: "increasing jobs, reducing US oil dependency through increases in energy efficiency and deployment of renewable energy technologies, promoting economic vitality through an increase in "green jobs" and reducing green house gas emissions The DOE encourages states to focus their program on market transformation initiatives." The Wave One MCR Program accomplishes each of the national goals: (a) Increasing "green jobs" and training. See Section D for details of Workforce Development and Job Creation. (b) Increases in energy efficiency See Section C.1, Section C.lO and Section E. for details of energy, peak demand and GHG emissions reduction. (c) Deployment of renewable energy technologies, though not an element of the Wave One MCR Program, the larger Wave One Conservation Research Center for Small Businesses facilitates renewable energy purchases of the City's nationally-recognized Palo AltoGreen program. (d) Market transformation will be achieved by recruiting 66% of Downtown Palo Alto small businesses to participate in the Wave One MCR Program. Downtown Palo Alto is the retail, financial, legal and social media center of Silicon Valley. Downtown Palo Alto academics and business and technology leaders are powerful "influencers" throughout the Silicon VaHey region and beyond. See Section C.2, Section C.3 and Section C.9 for details of recruitment, communication and Market Transformation. C.6.D. LOCAL DISTRIBUTION COMPANY (LDC) ELECTRIC PUBLIC BENEFITS PROGRAMS The City of Palo Alto's Utilities Department (CPAU) is the local distribution company (LDC). As such it annually collects and applies 2.85 percent of sales to their AB 1890-mandated Electric Public Benefits program. With a proposed budget for FY 2010-11 of $3.5 million, approximately 80 percent paid for by the 2,200 commerciaVindustrial customers, CPAU is poised to strongly support Wave One's program with their ongoing programs using audits, rebates and zero-interest loans for the small commercial business community. These programs include: C.6.D.(1) Right Lights+. Since March 2008, Wave One has been involved in recruiting over 75 small businesses to participate in the Right Lights+ program. CPAU Right Lights+ program could include certain Targeted Retrofits. C.6.D.(2) Commercial Advantage Prescriptive Rebate. Page 2 af6 CPAU provides specific rebate amounts for prescribed energy efficiency installations and retrofits. The Commercial Advantage rebate include some of the Targeted Retrofits proposed for the Wave One program. C.6.D.(3) Commercial Custom Rebate. The Commercial Custom Rebate program was designed to provide rebates for retrofit procedures and devices (excluding equipment replacement) exceeding Title 24 standards. These custom rebates could be applicable to Targeted Retrofits. C.6.D.(4) HVAC Re-commissioning. CPAU offers re-commissioning studies for commercial buildings larger than 30,000 square feet by a statewide-recognized company, Ennovity. There are twenty commercial buildings in the Wave One MCR Program that will be eligible for this re-commissioning. These re- commissioning efforts performed by Ennovity for several of the buildings could support the Targeted Retrofits. C.6.D.(5) CPA renewable energy rebate program California Senate Bill 1 (signed August 24,2006) required all publicly-owned utilities to offer specified minimum incentives for PV systems, on or before January 1,2008, for a ten year period. The budget to meet CPAU's share of the total California PV installation goal is projected to be $13 million, averaging $1.3 million per year for ten years. The PV Partners Incentive program is designed to continuously provide incentives based on the rate of PV system installation up to the ten year maximum of $13 million. If the demand for customer incentives is accelerated in the early program years, the program will reach the SB 1 goals in less than ten years. This program will be marketed and supported by Wave One in the small business community. C.6.D6 $2 Million Interest Free Loan Program: 2009 CPAU will implement California's first unsecured publically-owned utility (POU) Zero Interest Loan Program for commercial energy efficiency with an initial funding of $2 Million for a pilot- program revolving loan fund, the "Electric Efficiency Financing Program." The loan terms and repayment will be tied to energy cost savings similar to an On Bill Financing program. Wave One has assisted with the design and implementation of the CPAU Loan Program. The CPAU loan program will bridge the divergent financial interests between a Landlord and a Tenant so that, together, they can invest in energy efficiency and share energy cost savings. C.6.D7 LED Parking Lot & Street Lights ARRA Block Grant Funds: 2009 The City allocated $437,000 of ARRA Block Grant funding for an energy efficient LED streetlight program using Echelon's LonWorks dimmable technology. The City will evaluate the installation of additional prescriptive Targeted Retrofits on the City's twelve public surface parking lots as part of the Wave One MCR Program. C.6.DS Electronic Monitoring of Energy Use at Primary Meter The City may be installing meters as part of their "MeterLinks" program on primary electric panels throughout Downtown Palo Alto. The daily uploaded data from this "automated metering infrastructure" program will precisely track and energy consumption at IS-minute intervals on a next-day basis. The Wave One MCR Program will install monitors on all subpanels so that energy efficiency measures can be more precisely monitored. C.6.D9 AB 1103 Utility Company Measurement of Energy Use Page 3 of 6 CPAU has upgraded its customer billing and record-keeping data that enable CPA to provide state-of-the-art consumption and billing data. With customer permissions, CPAU will make billing and energy use information available for the Wave One MCR Program. C.6.D10 Palo AltoGreen Renewable Energy Program In 2003 the City established a renewable energy program known as Palo AltoGreen pursuant to which a ratepayer can elect to pay a kWh surcharge to enable the City to purchase renewable energy for that customer's energy requirements. 5,992 members, (over 21% of the City's residential customers) have enrolled in Palo AltoGreen. Since March 2008, Wave One has recruited over 50 small businesses to participate in Palo AltoGreen. The Palo AltoGreen program was honored by the Department of Energy as the Green Power Program Supplier of the Year for 2008. C.6.Dll Santa Clara Valley Water District (SCVWD) SCVWD provides extensive rebates for water conservation installations including High Efficiency Toilets and Urinals, aerators for faucets and showers, landscape and irrigation controls and other landscape management features. Wave One has reviewed the water conservation opportunities for nearly 100 small businesses. e.6.E. CITY SUSTAINABILITY PROGRAMS. C.6.E.(1)Green Ribbon Task Force In January 2006, the City Council commissioned a "Green Ribbon Task Force on Climate Protection" to "recommend tangible steps and local actions by all stakeholder groups, including the City, to reduce global warming and encourage sustainable practices." The Green Ribbon Task Force completed its formal recommendations in December 2006. C.6.E.(2) Climate Protection Plan In December 2007, Palo Alto became one of the first cites in California to adopt a comprehensive Climate Protection Plan in support of State AB 32. The Palo Alto Plan calls for reducing GHG emissions to a level that is 15% lower than base year 2005, and to achieve 33.3% Renewable Energy by 2015. Both of these goals exceed AB 32 goals. e.6.E.(3) Green Building Ordinance, Zoning Chapter 18.44 In 2008, Palo Alto adopted mandatory green building requirements for both residential and commercial properties. Under the Green Building Ordinance, a commercial property, whether new or renovated, must satisfY LEED Silver standard; a residential property, whether new or renovated, must satisfY Build It Green standards. No project is able to pull a building permit or receive a certificate of occupancy if it fails to comply with the standards of the Green Building Ordinance. C.6.E.(4) Comprehensive Plan Amendment The Palo Alto Comprehensive Plan for 1998-2010 is, perhaps, California's most progressive general land use plan. The Comprehensive Plan update, now underway, for the period 20 I 0-2020 advances not only Palo Alto's Climate Protection Plan but also national and state conservation and energy efficiency goals such as those embodied in: (i) AB 32; (ii) CPUC Strategic Plan; (iii) CEC Integrated Energy Policy; (iv) California Water Plan 2009 Update; (v) Strategic Directives of the California Integrated Waste Management Board; and (vi) Federal programs of the Department of Energy and the Environmental Protection Agency. Page 4 of6 C.6.F. OTHER LOCAL GOVERNMENT PROGRAMS. C.6.Fl) ABAG/Santa Clara County Certified Green Business Program. Since July 2008, Wave One has collaborated with the Santa Clara County Certified Green Business Program as established by ABAG, and has managed nearly 100 small businesses through the certification process. The ABAG program certifies businesses that demonstrate conservation outcomes related to lighting, plumbing, waste stream management, and compliance with environmental laws. C.6.F2City Zero Waste Program The City Zero Waste program has established a goal of achieving Zero Waste (commonly defined as 90% or> diversion from landfill to recycling or compost) by 2020. Wave One is working with the City and GreenWaste to divert 90% or > waste streams of Downtown Palo Alto small businesses. The City, GreenWaste and Wave One distribute printed and electronic educational materials to the targeted businesses. C.6.F3) GreenWaste Compost & Recycle Program Wave One collaborates with GreenWaste, the City's refuse contractor. GreenWaste has initiated composting and recycling programs that should reduce waste stream delivery to landfill by more than 75% by 2012. Since March 2008, Wave One has managed every Downtown Palo Alto small business that has enrolled in the GreenWaste compost and recycling program. A business that participates in the GreenWaste program, receives refuse cost savings of between 30% and 50%. These savings are available for investment in conservation and energy efficiency measures of the Wave One MCR Program. C.6.G. COMMUNITY PROGRAMS. C.6.G(1) Community Environmental Action Partnership In March 2008, the City of Palo Alto in conjunction with community groups created the Community Environmental Action Partnership (CEAP). CEAP brings together different segments ofthe community (businesses, neighborhoods, schools, medical services; non-profit organizations, churches) to implement the Palo Alto Climate Protection Plan. Wave One has been leader of the business sector ofCEAP since its inception. C.6.G.(2) Chamber of Commerce Palo Alto Business Goes Green Palo Alto Business Goes Green (PABGG) was initiated in January 2006 to assist Palo Alto businesses implement conservation and energy efficiency measures primarily through the ABAG Certified Green Business program. In June 2009, The Chamber of Commerce designated Wave One as its Environmental Partner and as its sole source for managing the certified green business process. C.6.G.(3) Wave One Conservation Research Center for Small Businesses In May 2008 Wave OnelPalo Alto was formed as a nonprofit organization to manage the effective delivery of conservation and energy efficiency programs to Palo Alto small businesses. Wave One has assisted nearly 100 small businesses through a rigorous series of conservation and energy efficiency undertakings. C.6.G.(4) Wave One Energy Star Portfolio Manager Service Page 5 af6 California AB 1103 requires commercial building owners to perform an Energy Star analysis of its energy efficiency and to make this information available before selling, financing or leasing a property. Wave One will perform Energy Star evaluations for a building owner for $150 -far less than could be performed by an individual property owner. Page 6 af6 December 15,2009 Mr. Andrew Ferrin, Contracts Officer California Energy Commission 1516-9th Street, MS-18 Sacramento, CA 95814 ATTACHMENT D DRAFT On behalf of the City of Palo Alto I am writing to express our strong support for the WAVE ONE funding application under the "Municipal and Commercial Building Targeted Measure Retrofit Program" (RFP #400-09-402). America's small business sector has traditionally been under-represented in securing conservation and efficiency usage reductions and cost savings for a number of reasons. WAVE ONE seeks to increase reductions in this sector by attacking the problem caused due to the fact that the small or medium-sized business tenant's return-on-investment for efficiency improvements has not been economically viable. The problems stem from the length of typical leases, usually less that the life of the installed measure, and the utility cost indifference of the property owner and/or manager serving tenants under a triple net lease. With adequate funding, and partnerships with local government, educational institutions, and labor organizations, WAVE ONE believes its unique programmatic approach to small business efficiency will not only provide value to the City of Palo Alto and its small and medium-sized business sector, but that the WAVE ONE efficiency and sustainability business model can successfully be reproduced regionally and nationally across the small business sector. We also believe in their approach to this historically underserved market sector and are prepared to support their efforts with both the direct and in kind funding identified in the application. Thank you for you consideration ofthe WAVE ONE application. Sincerely, James Keene City manager City of Palo Alto