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Staff Report 308-08
City of Palo Alto City Manager’s Report TO: FROM: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: City Manager’s Office 1 5 DATE:JULY 21, 2008 CMR: 308:08 SUBJECT:REVIEW OF RESULTS OF COST-BENEFIT ANALYSIS OF CLIMATE PROTECTION PLAN AND DIRECTION TO STAFF ON RECOMMENDED FOLLOW-UP ACTIONS RECOMMENDATION Staff recommends that Council review the results of the cost-benefit analysis conducted on Climate Protection Plan actions, as summarized below and in the attachments to this report. In addition, staff recommends that Council authorize staff to prepare a cash flow needs assessment as well as a proposed budget for implementing (a) the negative cost-per-ton items; (b) the low (less than $50) cost per tdn items, and (c) the items showing a community cost per ton of well below zero. This analysis should be completed and brought back to Council before the end of the year. BACKGROUND AND INTRODUCTION At its December 3, 2007 meeting, Council approved staff’s request for funds to complete an analysis of costs and benefits of the recommendations in the Climate Protection Plan..This report presents the results of that analysis. Out of the original 120 possible actions included in the Climate Protection Plan (CPP), 25 were analyzed by staff and presented as part of the CPP in December 2007 (CMR:435:07). Staff divided the remaining cost-benefit work as follows: 1.Requested the Rocky Mountain Institute, already under contract with Utilities, to recommend an overall methodology for conducting the cost-benefit analysis. o Contracted with URS Corporation, an experienced environmental consulting finn with expertise in greenhouse gas mitigation, to conduct analysis on green building, Zero Waste, and transportation-related actions. Worked with Stanford Environmental Consultants (SEC), a team of Stanford student consultants, to analyze opportunities within Environmentally Preferable Purchasing. 4.Continued collaboration with the Utilities Department to work on the programs it presented as part of the CPP. CMR:308:08 Page 1 of 12 The results of each of these portions of the work are summarized below and included in the attachments. DISCUSSION Summary The Cost-Benefit analysis shows that: 1. Two recommendations - replacing Street lights with LED units and purchasing remanufactured toner cartridges - would save the City about $478,000 per year (average annual savings over 20 years, net present value) and reduce 1,350 metric tons of CO2 per year. An additional 24 measures could be funded by that savings, creating another 14,730 metric tons of CO2 reductions per year, for a combined total of 16,080 metric tons, or 2.2% of 2005 community emissions. Of the 36 measures analyzed, 14 have a net cost to the City of less than $50 per metric ton. These 14 measures would cost a combined total of $1.3 million in net City costs with a resulting 64,210 metric tons of CO2 reductions. These measures include, in addition to the two measures listed in #1 above: ¯Allowing telecommuting for City employees 2 days per month ¯Replacing two high-mileage City fleet vehicles with hybrids ¯Purchase of carbon offsets for City employee business travel ¯Parking space cash-out for City employees ¯Adding community bike racks ¯Utilities investment in GHG-reducing projects ¯Implementing existing commercial green building ordinance ¯SMART station retooling ¯Increasing City participation in Palo Alto Green to 30% of City-only load °Expanding Utilities’ use of renewable energy Implementing mandatory recycling 4.The 22 measures that cost above $50 per metric ton cost the City a combined $11.5 million and reduce CO2 by 133,138 metric tons per year. Certain measures have a net cost to the City greater than zero but produce significant net savings for the community. For example: ¯For the residential green building ordinance, net costs to the City are $78 per metric ton, but the community derives $569 of benefit (reduced costs) per metric ton ¯Offering VTA EcoPasses to all City employees would cost the City $2,088 per metric ton, but employees and the community would save $2,690 per metric ton. ¯Adding community bike racks would cost the City $36 per metric ton but produce $1,024 per metric ton of savings for the community. CMR:308:08 Page 2 of 12 A master list of all analyzed actions ranked by City net cost per metric ton is included in Attachment A. Staff recommends that the City Council focus first on implementing the measures that save the City money over the short or long term. Second, staff recommends focusing on implementing measures that can be funded by the cost-saving actions, particularly measures that cost under $50 per metric ton. Third, the City should examine measures that produce large benefits or savings to the community with relatively low cost to the City, as well as measures that may cost over $50 per ton, but have a strong policy benefit. The follow-up to the cost-benefit analysis would be for Sustainability Team staff to work with Administrative Services to prepare a cash flow needs assessment and proposed budget for implementing the measures described above. In addition, staff will need to work with the departments that would implement these measures, to ensure that all relevant expertise is incorporated into the financial and logistical planning of the measures. Staff suggests that this analysis be a first step in evaluating these measures, rather than a final recommendation. There are inevitably details regarding specific programs which are left out of the analysis. For example, Planning and Transportation staff responsible for employee commute programs have significant knowledge about which incentives, and in what combinations, might work most effectively. Their detailed understanding could not be fully incorporated into this analysis, nor could details-about how such programs would be implemented or enforced. Rather, this report presents an initial, theoretical cost/CO2 reduction assessment for measures, were they to be implemented as stand-alone items. Details of the Analysis I. URS Analysis of Green Building, Zero Waste, and Transportation Measures The first part of URS’s work was to review the list of actions from the Green Building, Zero Waste, and Transportation chapters of the CPP and develop a shorter list of actions that could be analyzed. Attachment C shows the results of this review, listing all the CPP recommendations for Green Building, Zero Waste, and Transportation, and indicating which were analyzed by URS, which were not, and reasons for each. a) Green Building: URS analyzed the following two Green Building measures, which are already in process: Implement existing City ordinance for LEED certification for commercial buildings (new construction or existing building) within the City of Palo Alto Implement existing City ordinance for Green Point Rated requirements for all new low- density residential buildings and/or upgrades within the City of Palo Alto The analysis showed that the first measure will cost the City a net $16 per metric ton, but save the community $631 per metric ton. Similarly, the second measure will cost the City a net $78 per metric ton, but save $569 per metric ton in community expenditures. CMR:308:08 Page 3 of 12 The table below summarizes these results. Please note that column A presents the ranking of the action by net City cost per metric ton - from least cost to greatest cost. Column B describes the action being evaluated. Column C presents the number of metric tons of CO2e anticipated to be reduced annually as a result of the measure. Column D represents the average annual net cost to the City of implementing the measure (net present value). Column E represents the average cost to the community, and therefore includes all costs expended and benefits accrued. (In the URS report, the stakeholders listed at the bottom of each table indicate which costs and benefits are incorporated in the community analysis.) For example, for green building measures, City costs include staffing for training, implementation and enforcement of the ordinance; the City derives no direct benefit from these measures. The community’s costs include the increased cost of building to green standards (estimated at 2% on average), as well as the benefits, such as energy savings, water savings, and improved indoor air quality. Therefore, for the two measures below, City costs are greater than zero, but community benefits are considerably higher. In most instances in this report, the Net Community Cost is not included, as this part of the analysis was done only by URS for the Green Building and Transportation measures it examined. A Ranking B Action Description Implement City Ordinance for green building requirements for commercial new and upgraded buildings Implement City Ordinance for green building requirements for all new low-density residential buildings Table 1: Green Building Actions c Annualized CO2e metric tons reduction 2,263 $ 851 $ D Annualized Net City Cost (Benefit) S/metric ton 16 78 E Annualized Net Community Cost (Benefit) S/metric ton ($631). ($569) b) Zero Waste: URS examined the following Zero Waste measures: SMART Station Retooling Mandatory Recycling Ordinance Public Area Recycling Landfill Ban Food Waste Rescue The results of their analysis are shown in Table 2 below. Once again, items are ranked from least to highest net cost to the City per ton of CO2 reduced. CMR:308:08 Page 4 of 12 Table 2: Zero Waste Actions A B Ranking 1 2 3 4 5 Action Description SMART Station Retooling Mandatory Recycling Ordinance Food Waste Rescue Landfill Ban Public Area Recycling c Annualized CO2e metric tons reduction 9,126 $ 8,169 $ 233 $ 1,155 $ 95 D Annualized Net City Cost (Benefit) S/metric ton 5 24 73 179 2,301 E Annualized Net Community Cost (Benefit) S/metric ton not analyzed* not analyzed* - not analyzed* not analyzed* not analyzed* *Cost of these measures is expressed as a cost to the City, but will later be presented to refuse ratepayers for approval c) Transport-Related Measures: As detailed in the CPP, transportation is a key source of greenhouse gas emissions. Considering actions to lower the emissions from City employees’ commuting is critical, given employees’ geographical dispersion. Appendix F provides three visual presentations of the distribution of City employees in the Bay Area and statewide, by residential zip code. In designing an employee commute program, an array of incentives is generally offered as a package. Implementing a stand-alone incentive, such as parking space cash-out, would be unlikely, since employees accepting the cash-out would need to demonstrate that they were using alternative means of transportation. As is clear in the URS report, adding additional commute incentives to those currently offered by the City would require additional staff resources. Also, staff would need to work closely with the Human Resources department in implementing any change to the employee commute program. URS examined the following employee commute measures: Go Pass (CalTrain pass) for City employees Parking Space Cashout for City employees Bicycle Racks/Showers & Lockers for City employees EcoPass (VTA pass) for City employees Carpooling website portal for City employees ZIPCAR for City employee private use Of those measures, URS found that only one -parking space cash-out- showed a net cost to the City of under $50 per metric ton (specifically $16/metric ton). Staft" s cost/benefit analysis in the CPP had found an additional two transportation-related measures for under $50/metric ton: the replacement of two low-mileage vehicles with hybrids ($14/metric ton) and the purchase of carbon offsets for employee travel ($36/metric ton). URS examined one general community transport-related measure (in addition to its look at several measures within the context of the Stanford expansion projects): the addition of CMR:308:08 Page 5 of 12 community bicycle racks. It found that this measure would cost the City $36 per metric ton, but save the community $1,024 per metric ton. Table 3 combines the results of the URS analysis with the cost-benefit analysis done by staff in the CPP. All actions are ranked by net City cost per metric ton. Items analyzed by URS also include a net Community cost per metric ton. A Ranking 1 2 3 4 5 6 7 8 9 10 Table 3: Transportation and Sustainable Land Use Actions 14 15 16 17 **Actions B Action Description City allow telecommuting to reduce emissions** Purchase 2 Hybrids to replace high-mileage conventional vehicles** Parking Space Cash-out for City employees Additional Community Bicycle Racks Purchase Carbon Offsets for Employee Business Travel** Fleet optimization software** Fleet Accountability Programs** Limit Idling in City fleet** Purchase very low emission vehicles to serve as shuttle services between City facilities** Carpooling website portal for City employees Expand use of biodiesel** C E Annualized Net Community Cost (Benefit) S/metric ton not analyzed D Annualized Net City Cost (Benefit) S/metric ton $ $14 $16 $36 $33 $52 $t26 $ 294 $510 618 652 694 1,062 1,000 Annualized CO2e metric tons reduction 53 3 95 132 39 285 95 136 2 101 $ it$ 1813 $ 284 $ 17 $ 21 $ 15 $ 1,1 $ not analyzed ($1,348) ($1,024) not analyzed not analyzed not analyzed not analyzed not analyzed ($937) 11 not analyzed 12 Purchase additional Cross town shuttles**not analyzed Increase Employee Commute Incentives to max. 13 allowable by federal law**not analyzed Bicycle Racks, Showers, Lockers & Pool Bicycles ($10) for City employees Go Pass for City employees ($1,708) EcoPass for City employees ($2,690) ZIPCAR for City employee private use $1,935 1,801 2,088 2,325 costs and benefits.analyzed in CPP. Note that CPP analysis did not include community d) Stanford Shopping Center and Stanford Medical Center Expansions: Since a number of community transportation-related measures are difficult to quantify outside the context of a specific project or projects, URS chose the Stanford expansion projects as a test case for analyzing the following measures: Develop Comprehensive Plan Programs to Support Increased Density near Transit Evaluate Pedestrian and Transit Oriented Development Zoning Intensity, Including Along E1 Camino Real Implement Pedestrian and Transit Oriented Zoning in Downtown CMR:308:08 Page 6 of 12 Reduce Parking Needs for New Development Require Transportation Demand Management (TDM) Programs Zone for Mixed Use and Higher Density Around Transit Stations This preliminary look showed that without any GHG emissions reduction measures, the expansions as planned are estimated to add a combined total of approximately 73,000 metric tons of CO2e to the community’s emissions, or 10% of the 2005 community-wide emissions. However, these results are very preliminary, and the Environmental Impact Report currently being conducted by PBS&J will provide a more complete assessment of the base case as well as the impact of various mitigation measures. The initial URS analysis showed that measures such as transit/pedestrian oriented development, transport demand management, bicycle and pedestrian initiatives, and transit initiatives could have a significant downward effect on this anticipated increase. Staff is engaged in conversations with Stanford regarding environmental impacts of their planned expansions, and will continue to collaborate with Stanford, the Simon Group, and other stakeholders to include in their planning as many of these mitigation measures as possible. Clearly, without implementing mitigation measures these projects could significantly hinder progress towards the reduction goals committed to by the Council in December 2007. II. Stanford Environmental Consulting (SEC) and Staff Analysis of Environmentally Preferred Purchasing (EPP) Measures In the last several months, it has become more evident that EPP will be implemented through successive contracts, purchase requests, and City credit card purchases. Staff education and annual reporting will be critical components of the program. Current contracts up for renewal that will contain EPP language include those for office supplies, copiers and printers. In addition, Utilities is seeking to incorporate into its rebate programs low mercury lighting alternatives as well as Extended Producer Responsibility, whereby manufacturers assume a large portion of the responsibility for safe and appropriate disposal of their products. As part of the 2008-09 EPP work plan, staff is developing a purchase evaluation methodology incorporating environmental costs and benefits into the financial formulas. For example, a GHG "adder’’1 of $20 per metric ton is being proposed, and costs and benefits for other environmental impacts, such as pollution and hazardous waste disposal, are also being considered. In addition, life cycle analysis, already a policy of the City, has yet to be fully integrated into City purchasing practices. Training workshops are being scheduled for this fiscal year to educate staff responsible 1 "Climate Change: Action by States To Address Greenhouse Gas Emissions," CRS Report to Congress, January 18, 2007, page CRS-17: Greenhouse Gas "Adders": ...In general, adders require utilities to weigh the future costs of greenhouse gas emissions when considering different energy investment options (e.g., fossil fuels, renewable energy supplies). For example, California’s Public Utilities Commission requires investor-owned-utilities to include an [adder] on carbon dioxide emissions when conducting long-term planning or procurement activities.,. [to] "serve to internalize the significant and under-recognized cost of [greenhouse gas] emissions, [and] help protect customers from the financial risk of future climate regulation...." CMR:308:08 Page 7 of 12 for CIP projects in how to use life cycle analysis to identify the best economic and environmental values for the City as they make purchases for their projects. Staff worked with SEC, a team of Stanford students, to identify the most cost-effective opportunities for reducing GHG emissions via City purchases. After reviewing City purchases, SEC concentrated on LED street lights, office supply, and credit card purchases. SEC’s analysis of LED street lights included current material and energy costs, hazardous waste disposal costs, labor for installation and maintenance (both in the product and upstream sources from energy used to run lights), and mercury generation. They concluded that purchasing LED street lights to replace the less-efficient 100W and 250W high pressure sodium (HPS) lamps currently used throughout the City would save the City $9.3 million over 20 years, reduce GHG emission.s by 1,348 metric tons per year, and eliminate the mercury currently used in HPS lighting. The down side to this significant cost-saving opportunity is its high up-front investment requirement. As of this writing, one LED fixture costs approximately $500 compared to an $11 HPS bulb. However, LED fixtures last five times longer than HPS bulbs with 40%-80% greater efficiency. The product switch has a payback period of approximately six years. While staff in the Utilities and Public Works departments believe that the LED technology is not quite ready for widespread deployment, they are piloting the use of LED lights at three parking lots, and are encouraged by the results. Given the rapid evolution of this technology and price declines, staff will reassess this option in early 2009. In the interim, City departments will begin exploring financing options for LEDs. Table 4 presents the combined results of staff’s CPP analysis and SEC’s analysis of EPP measures, ranked by net City cost per metric ton. Table 4: Environmentally Preferred Purchasing Actions A B Ranking 1 Action Description Purchase only remanufacturered toner cartridges when available. C Annualized CO2e metric tons reduction D Annualized Net City Cost (Benefit) S/metric ton E Annualized Net Community Cost (Benefit) S/metric ton 2 $(6,690)not analyzed Replace all 75W, 100W and 250W high pressure sodium street lights currently in 2 service with LED models.1,348 $(410)not analyzed Mandate Purchasing of only 100% recycled 3 content paper when available.33 $t85 not analyzed Implement full duplexing as default in all printers, and copiers in City facilities when 4 possible 29 $696 not analyzed CMR:308:08 Page 8 of 12 III. Utilities Measures The CPP included (on pages 32-33) tables summarizing the estimated community-wide 2005 CO2 emissions from electricity and natural gas use and projected 2020 emissions including the impact of each major utility program area: efficiency, solar, mandatory renewable supply, voluntary renewable supply, and low-carbon fossil-fuel supply. Since then, the price premium for renewable energy (non solar based supply) supply increased from a range of $30 to $40 per metric ton to $30 to $60 per metric ton. Staff continues to evaluate GHG reduction scenarios, as well as the cost and retail rate impact of implementing additional programs. The emissions generated by electricity use in 2007 are estimated at 285 lbs/MWh (170 lbs per month per average home). This is expected to decrease by 65% to 100 lbs/MWh by 2020 as the utility increases the renewable supply portfolio and other programs. For customers of the Palo Alto Green program, the household’s electric consumption related emissions are zero. Natural gas consumption-based emissions may decrease through an upcoming Utilities biogas program and through energy efficiency measures. In 2007, the Council increased the 2003 Council mandate that Utilities attain 20% renewable power sources (RPS) to a higher 33% target to be achieved by 2015. Approximately 15% of the 2008 supply is expected to come from renewable sources by December 2008. To achieve the 33% target, the Utility expects to pay a cost premium of between $30 and $60 per metric ton of CO2 reductions. However, the retail impact of that premium is estimated to be less than the 0.5 cents/kWh cap imposed by the Council. Staff is in the process of implementing a Solar Hot Water Heating program, as well as exploring Biogas based natural gas supplies to reduce the carbon intensity of natural gas supplies. The amount of greenhouse gas reduction as a result of these programs will depend upon the level of customer participation. In addition, Council has approved Utilities’ pursuit of discussions to co-develop an ultra clean natural gas-fired cogeneration plan within the City. These combined heat and power applications would increase City-generated CO2 emissions (as approximately 15% of our electric supply could be produced locally), but reduce overall California-wide emissions, through increased efficiency of supply and reduced transmission losses. These units also have the potential of increasing supply reliability to the City and reducing overall supply procurement costs. Table 5 summarizes the CO2 and cost impact of the Utilities programs. CMR:308:08 Page 9 of 12 Table 5: Utilities Actions A Ranking 1 2a 2b 3 4 B Action Description Invest in GHG-Reducing Projects or Offsets to Balance Remaining Emissions iAchieve participation in Palo Alto Green to imeet 5% of load Achieve participation in Palo Alto Green to meet 10% of load City increase its participation level in Palo Alto Green to 30% (in 2008-09 budget) Expand Use of Renewable Energy Installed or Purchased Directly By Customers Further reduce Carbon Intensity of Energy 5 Supply Provided by CPAU 6 IDevelop voluntary CO2 reductions for Gas 7 Promote Solar Initiatives Reduce electricity and natural gas use through conservation andenergy efficiency. 7 Extrapolated from 10 year efficiency plan. C Annualized CO2e metric tons reduction 1,000 17,700 35,400 3,300 3,280 91,000 16,400 250 22,100 D Annualized Net City Cost (Benefit) S/metric ton $25 $30- $40 $30-$40 $40 $41 $55 $57 $100 $207 E Annualized Net Community Cost l (Benefit) S/metric ton not analyzed* not analyzed* not analyzed* not analyzed not analyzed* not analyzed* not analyzed* not analyzed* not analyzed* *Immediate (City) costs passed on to ratepayers, with approval. Additional costs and benefits to the community have not been analyzed. IV. Carbon Pricing and Investment Decision-Making The cost benefit analysis discussed in this report is expressed in. dollars per metric ton of CO2 equivalent reductions. The "market cost" of carbon emissions is a moving target, varying over time and depending upon the party evaluating the action. Therefore a dollars-per-metric-ton methodology allows the stakeholders in the City to consider the report’s recommendations in comparison to their threshold cost of carbon-related emissions, thereby informing their decisions on projects for reaching short, medium and long term climate protection goals. Currently, in the US, the environmental costs associated with creating a product or service are not embedded in its price. In Europe, some of those costs are embedded through a "cap and trade" system that requires industries to purchase sufficient emission credits to cover their carbon emissions. Under California’s Global Warming Solutions Act (AB32), the Market Mechanisms Subcommittee to the California Air Resources Board is developing a cap and trade system for California. A similar national trading scheme was proposed in the US Senate this year, under the Lieberman-Warner Climate Security Act (S.2191). Many observers expect that a trading scheme similar to that in the European Union will be developed in the US within the next few years. Many economists predict that the price of carbon, as realized through emissions trading credit pricing, will increase from the current price of approximately $5 per metric ton. The City is CMR:308:08 Page 10 of 12 currently participating in a project with the Electric Power Research Institute which utilizes a price range of $30-$60 per metric ton of carbon emitted in 2010 and beyond. This price range is based on US EPA estimates of the costs associated with capturing one metric ton of CO2 from a coal fired power plant and storing it underground, a process known as sequestration. These trends, as noted in 2007 by the respected Stern Review of the Economics of Climate Change from the UK, strongly suggest that early reductions of carbon will be far cheaper than later reductions. This implies that municipalities ought to consider the following principles in developing a CO2 reduction portfolio: 1.In California, industry sectors targeted in AB32, such as electricity and energy providers, will be impacted first by regulation and might be willing to pay a higher price for carbon reductions. Correspondingly, different departments in the City will have different expectations or thresholds for their CO~-reduction costs. 2. Utility and industrial impacts of AB32 will likely provide the impetus for a small increase ($0-$5 per metric ton) in current carbon prices because of the constrained nature of a California-only market. However, should these measures be adopted on a regional basis, for example through the Western States Climate Initiative, or on a national level, then carbon prices are likely to rise to a more significant level ($30-$60 per metric ton). 3. Actions to meet the City’s short term reduction goals should be comparatively inexpensive because the City has chosen initially to pursue low cost reductions. 4.Longer term actions will require greater resources, but initiating those actions as soon as possible will have lesser cost implications than waiting to initiate them. Conclusions The cost benefit analysis discussed above and in the attachments to this report shows a range of possible City-initiated climate protection efforts, and in some cases; provides a strong fiscal incentive for pursuing these actions. Other actions offer a relatively low-cost way to reduce the City’s carbon footprint. However, many will require an up-front investment to realize longer- term benefits. Therefore staff recommends that Council authorize staff to prepare a cash flow needs assessment as well as a proposed budget for implementing (a) the negative cost-per-ton items; (b) the low (less than $50) cost per ton items, and (c) the items showing a community cost per ton of well below zero. This analysis should be completed and brought back to Council before the end of the year. RESOURCE IMPACT This report has no direct resource impacts. When staff returns to Council for direction on the financing plans, a resource impact section will be included with that report. POLICY IMPLICATIONS All of the above programs are in line with the City’s Sustainability Policy, Council’s adoption of the Climate Protection Plan, and other existing City policies. ENVIRONMENTAL REVIEW The actions described in this report are exempt from the California Environmental Quality Act (CEQA), pursuant to California Code of Regulations, Title 14 §15061(b)(3), because it can be CMR:308:08 Page 11 of 12 seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and pursuant to §15308, since these are actions taken by regulatory agencies for protection of the PREPARED BY: NANC KARL VAN ORSDOL WENDY HEDIGER JULIE WEISS Sustainability Team Members CITY MANAGER APPROVAL: STEVE Deputy ATTACHMENTS Complete List of Possible Actions Ranked by City Cost/Metric Ton of CO2eAttachment A: Reduction Attachment B: Attachment C: Attachment D: Rocky Mountain Institute Memorandum CPP Recommendations v. URS Study URS Report: "City of Palo Alto Climate Protection Plan: Cost/Benefit Analysis of Selected Measures" Attachment E: Stanford Environmental Consulting: Analysis of LED Street Lighting Attachment F: Environmental Purchasing Policy Plan Attachment G: Mapping of Employee Commutes -Bay Area and Statewide Employee Residence Maps, Employee Distribution by Zip Code CMR:308:08 Page 12 of 12 Ranking 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Attachment A Complete List of Possible Actions Ranked by City Cost/Metric Ton of CO2e Reduction Action Description Remanufacturered toner cartridges Replacing al! street lights with LED models. City allow telecommuting SMART Station Retooling Purchase 2 Hybrids to replace high-mileage conventional vehicles Implement commercial green building ordinance Parking Space Cashout for City employees Mandatory Recycling Ordinance Invest in GHG-Reducing Projects Purchase Carbon Offsets for Employee Business Travel Additional Community Bicycle Racks City increase its participation level in Palo Alto Green to 30% (in 2008-09 budget) Expand Use of Renewable Energy Fleet optimization (with software) Food Waste Rescue Implement City Ordinance for green building requirements for residential construction Promote Solar Initiatives Fleet Accountability Programs Landfill Ban Mandate Purchasing of only 100% recycled content paper Reduce electricity and natural gas use cons. & energy efficiency. Reduce idling by installing auxiliary electrical systems Purchase very low emission vehicles to serve as shuttle services Carpooling website portal for City employees Expand use of biodiesel Purchase additional Cross town shuttles $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Cost to the City (13,380) (888,160) 47,736 40 33,555 1,506 196,743 25,000 1,300 4,757 122,000 135,000 14,820 17,000 66,031 25,000 12,000 206 745 6,000 4,574,700 40,000 1,175 6,283 12,392 125,000 Annualized CO2e metric tons reduction Annualized Net City Cost (Benefi0 S/metric ton 2 $(6,690) 1,348 $(215) 53 $ 9,126 $5 3 $14 2,263 $16 95 $16 8,169 $24 1,000 $25 39 $33 132 $36 3,300 $40 3,280 $41 285 $52 233 $73 851 $78 250 $100 95 $126 1,155 $179 33 $185 22,100 $207 136 $295 2 $510 10 $618 19 $652 18C $ 694 Annualized Net Community Cost (Benefit) $/metrie ton not analyzed not analyzed not analyzed not analyzed not analyzed ($631) ($1,343) not analyzed not analyzed not analyzed ($1,024) not analyzed not analyzed not analyzed not analyzed ($569) not analyzed not analyzed not analyzed not analyzed not analyzed not analyzed not analyzed ($937) not analyzed not analyzed Attachment A Complete List of Possible Actions Ranked by City Cost/Metric Ton of CO2e Reduction Ranking Action Description 27 Implement full duplexing as default in all printers Bicycle Racks, Showers, Lockers & Pool Bicycles for 28 City employees 29 Increase Employee Commute Incentives 30 Go Pass for City employees 31 EcoPass for City employees 32 Public Area Recycling 33 ZIPCAR for City employee private use Utilities Measures: $ $ $ $ $ $ Cost to the City 20,000 16,882 301,532 38,417 30,902 21 647 32,377 Annualized CO2e metric tons reduction 29 17 284 21 15 9 14 Annualized Net City Cost (Benefit) S/metric ton $ 696 1,000 1,062 1,801 2,088 2,301 2,325 34a 34b 35 36 Achieve participation in Palo Alto Green to meet 5% of load Achieve participation in Palo Alto Green to meet 10% ot load Reduce Carbon Intensity of Energy Supply Provided by CPAU Develop voluntary C02 reductions for Gas $ $ $ 619,500 1,239,000! 5,005,000: 934,800~ 17,700 35,400 91,000 16,4001 $ $ $30-40 $30-40 55 57 Annualized Net Community Cost (Benefit) S/metric ton not analyzed ($10) not analyzed ($1,708) ($2,690) not analyzed $1,935 not analyzed not analyzed not analyzed unknown Attachment B: Rocky Mountain Institute Memorandum CITY OF PALO ALTO CLIMATE PROTECTION PLAN OUTLINE OF A RECOMMENDED COST/BENEFIT METHODOLOGY To evaluate, compare, and prioritize potential measures to reduce greenhouse gas (GHG) reductions, we recommend a transparent cost-benefit framework, which builds directly on the analytic work already conducted by CPAU’s sustainability team. This framework is best used in the following progression: 1.First, identify the menu of candidate GHG emission reduction actions (and continue to add to the menu on a continuous basis). 2.Next, estimate the potential physical impact of the identified actions in terms of tons CO2-equivalent GHG reductions. 3.Then, screen out the items that are obviously minor or very difficult to quantify in terms of GHG savings vs. other benefits. 4. For the remaining (hopefully much smaller) subset, proceed with a cost effectiveness evaluation (cost/benefit). 5.Based on the cost/benefit evaluation, rank the actions and prioritize them for implementation. Recommended methods .for completing the analytic steps 2 and 4 follow below. GHG Reduction Benefit The fundamental benefit of GHG reduction actions, by definition, is the quantity of emission reductions that we expect to achieve. GHG reductions are measured in terms of tons of CO2 equivalent. CPAU can decide whether to standardize on short tons (2000 lb.) or metric tons (1000 kg, about 2200 lb.). The conversion between the two units is simple, but consistency is obviously very important. Most ofPalo Alto’s GHG emission inventory and potential reductions involve CO2 emissions, generally resulting from fossil fuel energy use. The remainder involves other GHGs such as methane, SF6 and certain fluorocarbons. For CO2 emissions from energy use, the analytic approach is somewhat different for electricity use vs. direct fossil fuel use. For CO2 emissions from direct fossil fuel energy use, or savings, the emission impact simply depends on the type of fuel and the quantity used. Emissions [tons/year] = Fuel use [MMBtu/year] * Fuel carbon intensity [tons/MMBtu] The fuel use term is transparent, and fuel intensity depends on the type of fuel. One important detail is to ensure consistency between the fuel use and carbon intensity values in terms of using higher heating value (HHV) for the energy (MMBtu) component of both (one could also use lower heating value, but ~ is more standard in the U.S.). Fuel carbon intensity can be taken from a variety of sources. One of the most comprehensive and widely used is the World Resources Institute (WRI) GHG protocol, see July 14 CMR Page 1 of 5 Attachment C Memorandum dated March 6, 2008 http://www.ghgprotocol.org/for more information and sector-specific tools. Values for some of the more common fuels are given below. Fuel Natural Gas LPG fuel Gasoline Diesel fuel Coal Carbon intensity (metric tons CO2 / MMBtu at HHV) 0.053 0.063 0.071 0.073 0.096 For CO2 emissions from electricity use, or savings, the emission impact is determines in a similar way as for direct fuel use. However, the carbon intensity of electricity is not as simple as that of fuels used directly. Emissions [tons/year] = Electricity use [MWh/year] * Carbon intensity [tons/MWh] Again, the usage term is .transparent, but the carbon intensity of electricity depends on its source. If there is a single generator, the carbon intensity depends on the type of fuel used, the rate of loss in transmission and distribution (e.g., 5% = 0.05), and the efficiency, typically expressed as a heat rate, of generation Carbon intensity [tons/MWh] = {Heat rate [MMBtu/MWh] * Fuel carbon intensity [tons/MMBtu]} / { 1 -Loss rate} In most cases, however, electricity supply will come from a variety of sources, either through a wholesale utility supplier or through a regional power supply pool. In such a case, the appropriate carbon intensity of electricity should be obtained from the supplier. For GHGs other than CO2, emissions and/or savings can typically be estimated directly, but they must be converted to CO2 equivalents. The conversion factors measure the potential impact on global climate change ofa GHG, relative to CO2, based on the gas’ atmospheric lifetime and strength in terms of radiative forcing, or heat trapping ability. Emissions [tons CO2 equivalent/year] = Emissions [tons/year] * Global warming potential (GWP) ratio The GWP ratios have been estimate by the Intergovernmental Panel on Climate Change (IPCC), based on a 100 year time horizon, for the common non-CO2 GHGs. Global Warming Potential (GWP) July 14 CMR Page 2 of 5 Attachment C Memorandum dated March 6, 2008 Gas (tons CO2 equivalent / tons GHG) Values published in IPCC 4~ assessment report2 (2007) Values from 1PCC 2nd assessment report and currently used in GHG inventory protocols1 and markets 21 310 23,900 11,700 1300 Methane CH4 23 Nitrous Oxide N20 298 SF6 22,800 HFC 23 14,800 HFC 134a 1430 Cost/Benefit Analysis of GHG Reduction Measures The basic methodology for cost!benefit (C/B) analysis should compare the GHG reduction benefit of an action can to the cost of that action. The ratio of the cost and benefit provides a simple measure, in dollar per ton-CO2 equivalent (CO2e) reduced, of the cost-effectiveness of each action. The potential reduction options can then be compared on a common basis, ranked in terms of magnitude (tons) and cost-effectiveness (S/ton) and prioritized for the next steps of implementation. For one-time measures, this metric is simply the following: C/B = Net present value (NPV) of GHG reduction cost IS] / Emission reduction [tons] The NPV of a cost value C that occurs t years in the future depends on the discount rate r, NPV(C) = C / (l+r)t A more likely case involves measures that produce a stream of annual reductions, in which case the metric is the following: C/B = Annualized net cost of GHG reduction IS/year] / Annual reductions [tons/year] From basic financial economics, the annualized value is simply the product of the NPV and the capital recovery factor (CRF), which depends on the economic life of the measure and the discount rate. Annualized net cost [S/year] = Net present value cost [$] * Capital recovery factor (CRF) This calculation and the CRF value can be produced using any financial calculator or the Payment function in Excel. The formula for the CRF is as follows: x IPCC Second Assessment Report, 1995. www.ipcc.ch 2 IPCC Fourth Assessment Report, 2007. www.ipcc.ch July 14 CMR Attachment C Page 3 of 5 Memorandum dated March 6, 2008 CRF = Annuity value / Present value = r / { 1 - ( 1 + r )-t } To perform the cost!benefit analysis, CPAU will need to select the appropriate discount rate. We recommend a value of 4.8% based on the estimated rate of return on reserves. The complicated part of the cost/benefit analysis is determining the net cost, whether it is evaluated as a NPV or annuity, depending on the time profile of the expected emission reductions. The net cost value will typically take the following form: Net cost = Cost of GHG reduction actions - non-GHG benefits The cost of GHG reduction actions is simply the initial capital or annual fuel, operating and maintenance costs of a given measure. Most reduction measures will involve some sort of initial capital cost, such as the cost of installing an energy-efficiency upgrade or the infrastructure for a public transit upgrade. Annual cost might include customer incentive payments or the cost premium for purchasing renewable power or biofuels. The value ofnon-GHG benefits is more complicated. For most CO2 reduction measures, the main benefit will be the annual cost savings of fuel or electricity that is saved (via efficiency) or replaced (by renewable power or biofuels). Many other type of non-GHG benefits are nevertheless possible. Some of the likely categories include the following: Utility: Saved water costs, landfill costs, non-GHG emission costs Transportation: Reduced traffic, improved safety, air quality benefits Waste: Saved landfill costs, non-GHG emission costs Green building: Indoor air quality, improved occupant comfort, work productivity or student performance resulting from lighting and ventilation upgrades Purchasing: Savings in equipment and supply costs in purchasing and operation Education: Reduced waste generally and in each of categories noted above Most of these potential benefits, while real and worth considering, are difficult or impossible to monetize and quantify. Therefore, we expect that the main category of non-GHG benefits will be annual energy cost savings. Nevertheless, it is important to consider the other, less quantifiable benefits, to include them in the analysis to the extent possible, and to weigh these benefits when prioritizing potential actions to implement. Once the initial and future costs and non-GHG benefits have been evaluated, they can be combined into a single cost-effectiveness metric (S/ton) through the following steps: 1.Convert each future cost and benefit term to a present value 2.Sum the costs and subtract the benefits (a negative result is possible!) 3.Convert the net cost to an annualized value 4.Divide the annualized net cost by the annual GHG reductions For each potential GHG reduction actions, the result of this procedure, the ratio of the net cost and GHG benefit in dollar per ton-CO2 equivalent reduced, indicates the cost-effectiveness of the action. In addition, the total cost and benefit, including the estimated value of the GHG reductions, can also be determined as: July 14 CMR Page 4 of 5 Attachment C Memorandum dated March 6, 2008 Total C/B = Annualized cost of GHG actions / { Annualized value of non-GHG benefits + (Annual GHG reduction [ton-CO2e/year] * GHG emission value [$/ton-CO2e] )} The last term, the $/tonCO2 value of GHGs, is the topic of earlier work that RMI performed for the CPUC and recently updated for CPAU. Our current recommended GHG emission value is about $16/ton-CO2 equivalent. A Note on the Applicability of the Cost/Benefit Analysis The value of non-GHG benefits is potentially important and also possibly uncertain or difficult to determine for many GHG reduction actions. Therefore, to avoid unproductive analytic effort, we suggest refining the analysis logic to further prioritize potential GHG actions with significant non-GHG benefits. The recommended logic is as follows: 1.Identify the menu of candidate GHG emission reduction actions. 2.Estimate the potential physical impact of the identified actions in terms of tons CO2- equivalent GHG reductions. 3.Based on this physical impact analysis, screen out the actions for which the potential impacts are obviously minor or very difficult to quantify in terms of GHG savings vs other benefits. 4.For the remaining subset, proceed with a cost/benefit evaluation (C/B). 5.Where the non-GHG benefits are minor or easy to evaluate, complete the cost/benefit evaluation and include the measures in the cost-effectiveness ranking. 6.Where non-GHG benefits are significant and uncertain, check whether the C/B looks reasonable based on the costs and GHG benefits alone. If this C/B looks reasonable, complete the evaluation and include the measures in the ranking. 7.If this C/B looks unattractive and the non-GHG benefits are not very significant, screen out the action in question. 8. If this C/B looks unattractive and the non-GHG benefits are potentially dramatic,, screen out the action as a GHG mitigation measure, but consider itin the appropriate department as an important action for its other benefits! 9.Based on the cost/benefit evaluation, complete the ranking of the candidate GHG emission reduction actions and prioritize them for implementation. July 14 CMR Page 5 of 5 Attachment C Memorandum dated March 6, 2008 0 0 ~ 0 0 0 0 0 0 0 0 0 © ©© 0 0 0 0 0 o o oZZZ 0 ~9 ~ ~9 0 ©0 0 0 0 0 0 © 0 0 0 0 0 FIHAL REPORT Attachment D CITY OF PALO ALTO CLIMATE PROTECTION PLAN: FINAL REPORT COST/BENEFIT ANALYSIS OF SELECTED. MEASURES Prepared for City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 July 8, 2008 Victoria Evans, Project Manager Zach Baumer Jenai Davies Amy Jewel Contributing Authors: City of Palo Alto: Wendy Hediger Nancy Nagel Karl Van Orsdol Jutie Weiss Project: 01157518.00100 TABLE OF CONTENTS Executive Summary ...............................................................................................................................ES-1 Section 1 Introduction .....................................................................................................................t-1 1.1 1.2 Overview ..................................................................................................1-1 Approach ..................................................................................................1-1 Section 2 Section 3 Green Building Actions ..................................................................................................2-1 2.1 2.2 2.3 Overview ..................................................................................................2-1 Findings ....................................................................................................2-1 Methodology and Discussion of Each Measure .......................................2-3 2.3.1 Measure 1 ai Implement City ordinance for LEED-certified green buildings .............................................................................2-4 2.3.2 Measure lb: Implement City Ordinance for Green_Point Rated requirements for all new low-density residential buildings .................................................................... ’ ................... 2-4 Zero Waste ......................................................................................................................3-1 3.1¸ 3.1 3.2 Overview ..................................................................................................3-1 Findings ....................................................................................................3-1 Methodology and Discussion of Each Measure .......................................3-3 3.2.1 Measure 2a: SMART Station Retooling .......................................3-3 3.2.2 Measure 2b: Mandatory Recycling Ordinance ............................3-4 3.2.3 Measure 2c: Public Area Recycling .............................................3-4 3.2.4 Measure 2d: City Landfill Ban ..........................................., ........3-6 3.2.5 Measure 2e: Food Waste Rescue ....... ..........................................3-7 Section 4 Section 5 City Employee Transport Related Measures ................................................................4-1 4.1 4.2 4.3 Overview ..................................................................................................4-1 Findings ....................................................................................................4-1 Methodology and Discussion of Each Measure .......................................4-3 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 Measure 3a: Go Pass for City Employees .....................................4-6 Measure 3b: Parking Space Cashout for City employees ............4-7 Measure 3c: Bicycle Racks/Showers & Lockers for City employees ....................................................................................4-9 Measure 3d: EcoPass for City employees ..................................4-12 Measure 3e: Carpooling website portal for City employees ......4-13 Measure 3f: ZIPCAR for City employee private use .................4-14 Community Transport Related Measures .....................................................................5-1 5.1 5.2 5.3 Overview ..................................................................................................5 - 1 Findings ....................................................................................................5-1 Methodology and Discussion of Each Measure .......................................5-2 TABLE OF CONTENTS Section 6 Section 7 Co-Benefits of Measures ................................................................................................6-1 6.1 Co-benefits of measures ...........................................................................6-1 6.2 Conclusions ..............................................................................................6-2 References ......................................................................................................................7-1 Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6 Table 7 Table 8 Table 9 Table 10 Table 11: Figures Figure 1: Figure 2: Figure 3: Figure 4 Figure 5 Rank by Costs of Consolidated Actions: Green Building, Solid Waste and Transport Cost Benefit Analysis for Green Building Measures Building Permit Data for the City of Palo Alto (2007) Costs, Benefits, and GHG Reductions per Square Foot City of Palo Alto Cost/Benefit Analysis for Zero Waste Measures City of P~lo Alto Cost/Benefit Analysis for City Employee Related Transport Measures Assumptions for employee commute trips Employees at each City facility City of Palo Alto Cost/Benefit Analysis for Community Transport Related Measures Co-Benefits of Measures Rank by Costs of Consolidated Actions: Green Building, Solid Waste and Transport Net Cost per Tonne of GHG Emissions Reductions, Green Building Net Cost per Tonne of GHG Emissions Reduced for Zero Waste Measures Combination Trash/Recycling Receptacle for Public Area Recycling Net Cost per Torme of GHG Emissions Reduced for City Employee Transport Measures Net Cost per Tonne of GHG Emissions Reduced for Community Transport Measures Executive Summary The City ofPalo Alto’s (City) Climate Protection Plan (CPP) was prepared by the City’s Sustainability Team and approved by the City Council in December of2007~ The CPP includes a comprehensive greenhouse gas emissions (GHG) inventory based upon general protocols and guidance available from the California Climate Action Registry (CCAR), Local Governments for Sustainability (ICLEI) and the US Environmental Protection Agency (US EPA). GHG emissions reporting by the City is voluntary at this time, although Electricity Utilities and certain other sources will be required to report to the California Air Resources Board (CARB) from 2009 onwards as part of the Mandatory GHG Reporting Regulation being developed as a result of AB32 requirements. A specific protocol for preparing a GHG inventory by local governments is unavailable, but a voluntary Local Government Operations protocol is currently being developed by CARB in partnership with ICLEI, CCAR and The Climate Registry (TCR). The City’s GHG inventory includes GHG emissions from both City operations and the Community. The City’s strategy for reducing GHG emissions is based upon implementation of approximately 120 actions which serve as GHG reduction measures. The City’s Sustainability Team performed an initial analysis of a subset of potential actions to evaluate the costs of implementing each action and the tormes of CO2e avoided as a result. In this study, URS conducted a cost/benefit analysis for an additional 14 of these potential actions. The actions analyzed in this report involve 14 measures in three sectors: Green Building, Zero Waste and Transportation. The results of this analysis will inform City officials by identifying the most cost-effective actions with the largest GHG reductions. The cogt/benefits discussed here are in terms of annualized dollars per tonne of CO2e over a twenty year timeframe, i.e., to the year 2028. Summary tables of the cost/benefit analysis results are shown below in Table 1, for the three categories of measures evaluated in this study, separated into measures which are largely undertaken by the City or Community. These summary tables show the total greenhouse gas reductions (expressed as tonnes CO2e/per annum) for each measure, together with the net costs to the City and net total costs to the City/community and other stakeholders (expressed in $/tonne CO2e). Measures to be undertaken by the City or community have been ranked according to the net costs to the City. Each of these GHG reduction actions are also associated with certain non-financial co-benefits as outlined in Section Six of this report together with the following conclusions: Measures which would achieve significant GHG reductions for a low to moderate cost to the City include Measure la: LEED for commercial buildings, Measure 2a: SMART Station Retooling and Measure 2b: Mandatory Recycling Ordinance. Measures which would achieve moderate to large GHG reductions for a low to moderate cost to the City include Measurelb: GreenPoint Rated, Measures 2d: City Landfill Ban, Measure 2e: Food Waste Rescue and Measure 3b: Parldng Space Cashout. I City of Palo Alto, Climate Protection Plan, 3 December 2007. pp 47. Webpage: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BloblD=9986 ~ES-1 SECTIONON introduction 1,1 OVERVIEW The City ofPalo Alto’s (City) Climate Protection Plan (CPP) was prepared by the City’s Sustainability Team and approved by the City Council in December of 2007. The CPP includes a comprehensive greenhouse gas emissions (GHG) inventory based upon general protocols and guidance available from the California Climate Action Registry (CCAR), Local Governments for Sustainability (ICLEI) and the US Environmental Protection Agency (USEPA). GHG emissions reporting by the City is voluntary at this time, although Electricity Utilities and certain other sources will be required to report to the California Air Resources Board (CARB) from 2009 onwards as part of the Mandatory GHG Reporting Regulation being developed as a result of AB32 requirements. A specific protocol for preparing a GHG inventory by local governments is unavailable, but a voluntary Local Government Operations protocol is currently being developed by CARB in partnership with ICLEI, CCAR and The Climate Registry (TCR). The City’s GHG inventory includes GHG emissions from both City operations and the Community. The City’s strategy for reducing GHG emissions is based upon implementation of approximately 120 actions which serve as GHG reduction measures. The City’s Sustainability Team performed an initial analysis of a subset of potential actions to evaluate the costs of implementing each action and the tonnes of CO2e avoided as a result. In this study, URS conducted a cost/benefit analysis for an additional 14 of these potential actions. The selection of appropriate, high impact GHG-reducing measures and the cost/benefit analysis of those measures will support the City’s effectiveness in maximizing the reduction of GHG emissions. These actions in the CPP affect GHG reductions in both City operations as well as the Community. The actions analyzed here involve GHG reductions from 14 measures taken in three sectors: Green Building, Zero Waste, and Transportation. The costs/benefits discussed here are in terms of annualized dollars per tonne of CO2e over a twenty year timeframe, i.e., to the year 2028. 1.2 APPROACH The work conducted during this study included an initial literature research for benchmarks, emissions factors and costs for each category of GHG reduction actions. Also a brief review was undertaken of Climate Action Plans from other local governments and ICLEI information sources to confirm standard benchmarks, estimation methods for the impact of each measure and GHG emissions factors for the proposed actions. A uniform set of benchmarks and estimation methods are not available nor have any been adopted by government agencies as of yet. Nonetheless, a significant amount of early experience and work on best practices has been accomplished. This work relied upon the Climate Action Plan Handbook by ICLEI and other source materials available from cities who have already developed Climate Action Plans. In addition, benchmarks, estimation methods and emissions factors from similar prior work by URS team members were also reviewed. URS developed screening criteria for prioritizing actions to analyze further, working collaboratively with the City Sustainability Team. This effort focused upon screening those individual actions or measures that were specific and that could be firmly assessed for GHG reduction effectiveness and associated costs. SECTiONONE Introduction To evaluate selected specific individual measures, this analysis utilized the cost/benefit calculation methodology outlined in "City of Palo Alto Climate Action Plan: Outline of a Recommended Cost/Benefit Methodology." The key assumptions in this methodology were previously developed for the City by the Rocky Mountain Institute2 and are: For calculating future costs and benefits, the discount rate is 4.8%. All costs, benefits, and greenhouse gas (GHG) emissions shown as annualized amounts In addition, URS made an additional assumption: All measures in this analysis are calculated according to a 20-year time life span, i.e., from 2008 to 2028. 2 Rocky Mountain Institute (Swisher, Joel). Outline of a Recommended Cost/Benefit Methodology, 2008. 1-2 SECTIOHTW@ Green Building Actions 2.1 OVERVIEW URS examined the following two green building measures: Measure la: Implement city ordinance for LEED-certified green buildings (new construction, additions, or existing buildings) built within the City of Palo Alto, and increase the green building features of projects that do not fall under the city ordinance (i.e., projects under $100,000 of value). Measure lb: Implement city ordinance for GreenPoint Rated requirements for all new low- density residential buildings / upgrades built within the City of Palo Alto, and increase the green building features of projects that do not fall under the city ordinance (i.e., projects under $75,000 of value). 2.2 FINDINGS For the City, implementing both the green building measures leads to a total reduction of3,114 tonnes of greenhouse gas emissions per year. These reductions come at a relatively low cost. These two measures also create significant financial savings for the community. Table 2 shows the summary of costs and benefits that will be realized by the City of Palo Alto, as well as the costs and benefits that will be realized for the greater community, for each of the two green building measures. All costs and benefits are provided in annualized amounts of the net present value. Figure 1 shows a graphical representation of the cost/tonne of GHG emissions reductions for the two measures. One of the key sources used in this analysis is a report on the costs and benefits of green buildings by Greg Kats3 (2003), the most recent and most comprehensive source to document the life cycle costs and benefits of green buildings. Kats’ methodology.included data gathering on the costs for 33 green buildings as compared to conventional buildings of similar design. Benefits were estimated using existing data sources identified during a literature review. 3 Kats, Greg. The Costs and Benefits of Green Buildings." A Report to California’s Sustainable Building Task Force. (2003) 2-1 SECTiONTWO Green Building Actions Table 2: Cost Benefit Analysis for Green Building Measures GHG emissions reductions (tonnes CO2e/year) Cost S/year Benefit (S/year) Net Cost or (Benefit) ($/year) $/tonne CO2e reduced Cost (S/year) Benefit (S/year) Net Cost or (Benefit) (S/year) $/tonne C02e reduced Stakeholders Included Measure la: Implement city ordinance for LEED-certified green buildings (commercial, mixed use, and multi-family) 2,263 $35,555 $o $35,555 $16 $414,812 $1,843,290 ($i,428,477) Developers, Building Owners, Building Occupants, and City Measure lb: Implement city ordinance for GreenPoint Rated requirements (low- density, residential buildings) 851 $66,031 $o $66,031 $78 $208,574 $693,201 ($4S4,627) (5~569) Developers, Building Owners, Building Occupants, and City $200 $100 $0 ($]oo) ($200) ($300) ($400) ($500) ($600) ($700) la: LEED for Commercial Buildings $16 ($63~) i b: GPR for Low Density Buildings $78 [] City Costs/Benefits [] Overall Costs/Benefits Figure 1: Net Cost per Tonne of GHG Emissions Reductions, Green Building 2-2 SECTIONTW@ Green euildina Actions These findings indicate that the green building measure that is the most cost effective based on dollars per tonne of CO2e reduced is Measure la: LEED for commercial buildings, followed by Measure lb: GreenPoint Rated for low density buildings. 2,3 METHODOLOGY AND DISCUSSION OF EACH MEASURE To perform this analysis, URS gathered data on new construction and additions from building permits issued by the City of Palo Alto between January 1, 2007 -December 31, 2007. This building permit data is summarized in Table 3 below. Table 3: Building Permit Data for the City of Palo Alto (2007) Construction Number of Total Square Cost/Square Type of Project Permits Footage Foot* Commercial - new buildings and additions**16 297,655 $159.62 Mixed Use - new building***5 950,782 $149.21 Multi-Family Residential - ne.w buildings and additions 29 330,351 $189.31 Single Family Homes - new buildings and additions****339 593,731 $159.47 $164.40Totals: 389 2,172,519 (average) *Construction cost/square foot includes materials and labor. Also, includes assumption that the cost/square foot for additions is the same as the cost/square foot for new construction. **City staff noted that the total square footage for commercial buildings and additions appeared unusually low in 2007. Thus, we gathered data for commercial buildings for 2006, and used an average of the 2006 and 2007 data in the final analysis. *** No permits issued in 2007 for additions in the Mixed Use category. ****Includes assumption that all residential additions were in the single family home ~ategory. We also included the following assumptions for both measures: All additions create opportunities for green building features, and the total square footage of additions is included in the total square footage constructed annually for each building type. These measures did not include remodels, as often these projects do not allow for green building features to be installed. New building and addition rates for 2007 (as shown in Table 3) were assumed for all future years included in this analysis. Costs for program implementation were provided by City Staff. Costs were provided for both measures. URS assumed that 35% of the costs were allocated to Measure la, and 65% of 2-3 SECTiONTWO Green Building Actions costs are allocated to Measure lb. This assumption is based on the higher number of single family homes and additions constructed each year. See Table 3 for data on permits issued in 2007 for each building type. 2.3.t Measure la: Implement City ordinance for LEED-certified green buildings Measure l a: hnplement city ordinance for LEED-certified green buildings (new construction, additions, or existing buildings) built within the City of Palo Alto, and increase the green building features of projeets that do not fall under the city ordinance (i. e., projects under $100, 000 of value). Assumptions specific to Measure la are as follows: The City’s costs for implementing the program are $63,875 in the first year for outreach, enforcement, and education of City Staff, and $33,250 in each year following. All commercial, mixed use, and multi-family housing buildings are included in Measure la. 2.3.2 Measure lb: Implement City Ordinance for GreenPoint Rated requirements for all new low-density residential buildings Measure l b: Implement city ordinance for GreenPoint Rated requirements for all new low- density residential buildings/upgrades built within the City of Palo Alto, and increase the green building features of projects that do not fall under the city ordinance (i. e., projectsunder $75,000 of value). Assumptions specific to Measure lb are as follows: o All new single family residences fall into the category of"low density residential buildings." The City’s costs for implementing the program are $118,625 in the first year for outreach, enforcement, and education of City Staff, and $61,750 in each year following. Additional assumptions are as follows: For the analysis of the costs and benefits for the City of Palo Alto, the costs only included the costs to the City for administration of the programs. All costs for adding green building features will be borne by the developers of the buildings. In addition, the co-benefits from reduced energy usage, reduced water usage, and other green building features were not included as benefits that the City will receive. As per the findings in the report The Costs and Financial Benefits of Green Buildings (2003) by Greg Kats, greenhouse gas reductions were estimated using the assumption that energy usage for green buildings will be 36% lower (on average) than energy usage for conventional buildings. This assumption was based, on electricity usage only, any decrease in natural gas and corresponding greenhouse gas reductions was not included. .The community-wide costs and benefits include the premium costs for constructing green buildings, as well as a number of avoided costs over a 20-year life of the building. 2-4 SECTiONTW@ Green Building Actions For the green premium cost of green building, URS again used information from Kats (2003). In this report, Kats finds that the typical green building costs 2% more during the construction phase. This includes not only energy efficiency measures (which reduce the energy and ultimately the GHG emissions of the building) but also other measures, including water conservation and reducing the amount of waste generated from the building. Using the construction cost/square foot shown in Table 3, URS found the estimated cost of adding green building features to each type of project in cost!square foot, assuming that this cost would be 2% higher than the average cost/square foot. In Kats’ report, benefits are found through reduced energy usage (36% reduction), reduced water usage, the value from performing regular commissioning, which improves building equipment performance and efficiency, and reduced waste removal costs. Our analysis included the estimated value of these benefits at $14.80/square foot in net present value, as per Kats’ report (assuming a 20 year building life and 5% discount rate.) The annualized value of these benefits is $1.17/square foot. Other benefits were also included in Kats’ report, such as the value of increased worker productivity due to increased daylighting and improved ventilation systems. However, since the methodology for estimating these latter benefits is more complicated, they were not included in our analysis. Also, benefits relating to reductions of other regulated emissions of non-GHG gases, i.e., criteria emissions were not included. URS included the savings from all of the benefits cumulatively, since the costs for incorporating green building features were not broken down by the type of measure (i.e. energy efficiency, water conservation, etc.). Table 4 summarizes the almualized costs, benefits, and GHG reductions per square foot of building space in green building: Table 4: Costs, Benefits~ and GHG Reductions per Square Foot Type of Project Commercial (new buildings and additions) Mixed Use Multi-Family (new buildings and additions) Single Family Annualized Cost of Green Building ($/ft2/year) $0.24 $0.22 $0.29 $0.24 Annualized Benefits of Green Building ($/ft2/year) $1.17 $1.17 $1.17 $1.17 Difference (¢~;~. ..... Benefit) ($0,93) ($0.88) (,$0,93) 2-5 SECTIONTH E zero waste 3.1 OVERVIEW URS examined the following Zero Waste measures: =Measure 2a: SMART Station Retooling =Measure 2b: Mandatory Recycling Ordinance ¯Measure 2c: Public Area Recycling ¯Measure 2d: City Landfill Ban ¯Measure 2e: Food Waste Rescue The ultimate goal of Measures 2a-2d are to increase the amount of waste recycled, which reduces greenhouse gas emissions by reducing the amount of energy used throughout the supply chain of creating products, and by avoiding the decomposition of material in landfills. The goal of measure 2e is to reuse the materials; this measure falls into the category of waste reduction. Measure 2e also reduces greenhouse gas emissions of methane by avoiding decomposition of the material in landfills. This report attributes all costs and benefits to both the City of Palo Alto and the Community because the Zero Waste program is financed through refuse rates that are paid by members of the community. Additionally, most of the measures will require community participation. However, the specific costs and benefits for community members are not included in this analysis due to lack of data and difficulty in estimating these costs and benefits. 3.1 FINDINGS Measure 2a: SMART Station Retooling and Measure 2b: Mandatory Recycling Ordinance create significant GHG emission reductions (17,295 tonnes/year for both measures) at a relatively low cost. Measures 2d: City Landfill Ban and Measure 2e: Food Waste Rescue lead to some GHG emission reductions (1,389 tonnes/year for both measures), at a reasonable cost. Measure 2c: Public Area Recycling leads to very low GHG emissions reductions (9 tonnes/year) at a high cost. Table 5 shows the summary of costs and benefits that will be realized by the City of Palo Alto for each of the five Zero Waste measures, and Figure 2 shows a graphical version of the cost per tonne of GHG emissions reduced. All costs and benefits are provided in annualized amounts of the net present value for all measures, with the exception of Measure 2d: Landfill Ban. This Measure only included a 2 year time period for analysis, as it would only be in effect for 2 years. 3-1 SECTiON HRE] zero wsste Table 5: City of Palo Alto Cost/Benefit Analysis for Zero Waste Measures Measure 2a: SMART Station Retooling Measure 2b: Mandatory Recycling Ordinance Measure 2c:Pub~c Area Recycling Measure 2d: City Landfill Ban* Measure 2e: Food Waste Rescue GHG emissions reductions (tonnes CO2e/year)9,126 8,169 9 1,155 233 Annual Additional Diversion (tons/year)3,229 8,919 5 1,549 1,164 ~ ~Cost (S/year)$153,095 $196,743 $21,647 $206,250 $17,000 ~ ~Benefit (S/year)$105,358 $0 $0 $0 $0 ~Net Cost or (Be~efit) (S/year) $47,736 $196,743 $21,647 $206,250 $17,000 $/tonne CO2e reduced $5 $24 $2,301 $179 $73 * The City Landfill Ban is only a 2 year program. The City Landfill is expected to close in 2011. $2,500 $2,301 $2,000 $1,500 $1,000 $500 $179 $5 $24 $73 2a: SMART S~fion 2b: RecyclNg 2e: Food Waste 2d: Landfill Ban 2c: Pubfic Area RetoolNg OrdNance Rescue Recycling City Net Costs Figure 2: Net Cost per Tonne of GHG Emissions Reduced for Zero Waste Measures 3-2 SECTIONTH] _ E Zero Waste Based on these findings, the zero waste options that are the most cost effective based on dollars per tonne of CO2e reduced are: Measures 2a: SMART Station Retooling, followed by Measure 2b: Mandatory Recycling Ordinance, followed by Measure 2e:Food Waste Rescue. 3.2 METHODOLOGY AND DISCUSSION OF EACH MEASURE 3.2.1 Measure 2a: SMART Station Retooling The City of Palo Alto has already started the retooling of the Sunnyvale Materials Recovery and Transfer (SMART) Station. The purpose of this analysis is to calculate the net cost and benefits of the retooling in terms of GHG reductions. Our methodology and assumptions for this measure are listed below: In 2006, the SMART station received 47,990 tons of waste from Palo Alto, and the diversion rate was 18.27% (equal to 8,769 short tons). Increasing the diversion rate to 25% is equal to diverting 3,229 additional short tons per year. This tonnage comes from the tonnage of recyclable items that are not diverted and are currently sent. to the Kirby Canyon Landfill. The total tonnage of recyclable materials that are currently going to the landfill is estimated to be 10,905 tons. This estimate was calculated using data reported in the Palo Alto Waste Composition Study (2006) (p. 26). URS found the percentage ofrecyclable materials going from the SMART Station to the landfill that is currently able to be diverted at the SMART Station. This percentage (27.8%) was multiplied by the 2006 tonnage of materials going to the landfill (39,221 tons) from the 2006 SMART Commodity Report to find the tonnage of 10,905 tons. Diverting an additional 3,229 short tons from the total tonnage of recyclable items going to the landfill is equal to diverting 29.61% of the tonnage of those recyclable items (3,229 tons / 10,905 tons). The City receives 25% of the revenues from the materials they deliver to the SMART Station. 6. Our analysis assumes that increased diversion of all recyclable materials will be 29.61%. To calculate greenhouse gas emissions reductions for each material, URS utilized the EPA’s Solid Waste Management and Greenhouse Gases Report4. Specifically, we used Exhibit B-4 (p. 130) to determine the net GHG emissions reductions from recycling each material vs. a baseline case in which the materials are landfilled, with the exception of organic materials. For organics, URS used Exhibit.B-5 to determine the net GHG emissions reductions from composting each material vs. a baseline case of landfilling the materials. 4 EPA, Solid Waste Management and Greenhouse Gases: A Life Cycle Analysis of Emissions and Sinks, September 2006. 3-3 SECTiONTHREE zero waste These emission reduction calculations take a life cycle approach under the assumption that the recycling or composting of each material displaces virgin material from being extracted, processed, and transported, thus reducing emissions from each of these activities. In the case of organics, GHG emissions are also reduced through the process of soil carbon sequestration. 3,2,2 Measure 2b: Mandatory Recycling Ordinance The City of Palo Alto is considering the implementation of a mandatory recycling program for both organics (including food waste and yard trimmings) and recyclable materials (paper, plastic, glass, and me~als). The benefits of this measure are increased revenue from the recyclable items. The cost of the program is estimated to include one full-time equivalent employee, estimated at $150,000 per year, and $50,000 in outreach materials per year. A cost was also estimated for collection of recyclable materials and organics, and for composting the organic material. Our methodology and assumptions for this measure are listed below: 1. Expected tonnages of organics and recyclables to be diverted are from hauling proposal estimates at worst case scenario as of June 2008. The worst case scenario provides the most conservative estimate possible for the tonnages to be diverted in this program. 2. Recycling percentages were derived using the 2005 SMART Station Commodity Report. The 2006 SMART Commodity Report was not used due to lack of data on the tonnage of newspapers diverted for recycling. 3. The percentage of each recyclable material was multiplied by the total tonnage of recyclables diverted to find the estimated tonnage of each recyclable material to be diverted. 4.URS used the same methodology for calculating greenhouse gas emission reductions as described for Measure 2a above. Costs for this measure were taken from hauler proposals at worst case scenario as of June 2008. Costs include the collection of materials and disposal fees for organic materials. URS assumed additional costs for City staffing and outreach materials. These cost are estimated at $200,000 in year one, and $150,000 each additional year. 3.2.3 Measure 2c: Public Area Recycling This measure includes adding new bins that are combination receptacles for both trash and recycling to business districts in downtown Palo Alto and on California Avenue. A diagram of a sample combination trash/recycling receptacle is shown in Figure 3. Bins of the type shown are currently in use in many Cities (e.g. New York City, Oakland, San Francisco, San Jose). The goal of installing these receptacles is to add an option for recycling in these public areas; primarily, CA CRV beverage containers would be diverted for recycling. The initial costs (year one only) include the cost of the receptacles and installation costs. Ongoing costs are from additional outreach materials (year two only), plus annual evaluation of the program by the waste hauler (every additional year). Because some of these recyclable materials are currently diverted at the SMART Station, creating revenue for the City of Palo Alto, the reduction in the amount of material sent to the SMART 3-4 SECTiONTHR E zero waste Station will create another cost to the City of Palo Alto. Removal of the recyclable material does not add an additional cost to the City. The City will not receive financial benefits from this measure, since it is assumed that all items will be retrieved and recycled by street recyclers. Figure 3: Combination Trash/Recycling Receptacle for Public Area Recycling Cans and go here and are retrievable All other waste goes here ~ A key source of information for this report is the New York City Public Space Recycling Pilot Program, Bureau of Waste Prevention, Reuse, and Recycling, 2007. This report contains comprehensive data on waste weights and waste characterization from street receptacles, while Palo Alto only had limited data on waste volumes from a few receptacles, and no data on waste characterization from street receptacles. Also, tonnage data on street receptacles are not available from other cities in the region. For example, the San Francisco Waste Characterization Study does not include a characterization of city litter receptacles, and only includes an annual tonnage total for all city litter receptacles.5 Our methodology and assumptions for this measure are as follows: 1. A total of 150 receptacles would be placed in the downtown area and California Avenue. Each receptacle would generate 20 pounds of waste per week (both recyclable and non- recyclable), based on the average amount found in the data gathered for the New York Public Space Recycling Pilot Program6. Although New York City’s total waste tonnages will be very different from Palo Alto’s tonnage, this study included public recycling receptacles in many different locations, some of which received high traffic, and some of which received quite low traffic. As a result, the average amount of waste per receptacle (20 pounds per week) was judged to be appropriate for this analysis. 3.The percentage of each recyclable material in the total waste stream is based on a waste characterization study performed on street litter baskets in New York City; the results of 5 City and County of San Francisco, Department of the Environment. Waste Characterization Study, August 2005. See p. I-6 for list of materials not characterized, including "City litter cans." Webpage: 6 New York City Department of Sanitation, New York City Public Space Recycling Program, September 2007. 3-5 SECTIOHTHREE Zero Waste that study are cited in the New York Public Space Recycling Pilot Program7. As noted above, the City of Palo Alto only has limited volume data for street receptacles. Another key assumption is that 100% of the expected tonnage ofrecyclables would be correctly placed in the recycling receptacles by the people disposing of their waste, and then 100% of the expected tonnage would be taken by street recyclers. This is clearly the best case scenario for recycling. URS used the same methodology for calculating expected GHG emissions reductions and market value of each material as described in Measure 2a above. Also as in Measure 2a, URS assumed that the City of Palo Alto is currently receiving 25% of the revenue for their percentage ofrecyclable items delivered to the SMART Station. 3,2.4 Measure 2d: City Landfill Ban The City Landfill Ban is intended to reduce the amount ofrecyclable materials that are currently disposed of in the landfill from self-haul loads. This measure would only be expected to be in effect for the next 2 years, assuming the measure is enacted in 2009 and the Landfill closes in 2011. Additional materials to be diverted from the landfill include paper, glass, plastic, and mixed construction and demolition waste. The City of Palo Alto would not receive financial benefits from this measure. Costs include lost revenue from disposal of the recyclable items in the landfill; revenue includes sale of material to recyclers. To better reflect the short time frame for this measure, all analysis for this measure included a 2 year time period instead of a 20 year time period. For this measure, the tonnages of material to be diverted and the total cost of the measure were estimated by City Staff. More specifically, assumptions are as follows: 1.The total tonnage ofrecyclable paper, plastic, glass, and metal are estimated at 279 tons per year, including 86 tons of paper, 55.6 tons of plastic, 0.7 ton of glass, and 170.9 tons of metal. 2.The volume of construction and demolition waste is estimated to be 825 loads, each of which is about 10 cubic yards, for a total of 8,250 cubic yards per year. These data are based on estimates from the Palo Alto Landfill Supervisor. Assuming that 6.5 cubic yards is equal to 1 ton of material, this equates to 1,270 tons of construction and demolition waste per year. 3. Diverting the recyclable paper, plastic, glass, and metal would lead to loss of revenue from landfill disposal fees, but it is assumed that this loss of revenue would be offset by revenue gained from selling these materials to recyclers. Thus, no net loss or gain is expected from diverting these materials, also assuming that the self-haul load customers utilize the Palo Alto Recycling Program to dispose of their recyclable materials. 4.The diversion of construction and demolition debris is expected to create a net loss in revenue, since these items do not bring additional revenue when sold. The cost of 7 New York City Department of Sanitation, New York City Public Space Recycling Program, September 2007. 3-6 SECTiONTH] _,E zero waste diverting these materials from the landfill is $25/cubic yard. Since a total of 8,250 cubic yards will be diverted annually, this equates to a cost of $206,250. URS used the same methodology as described in Measure 2a to estimate the GItG reductions expected from this measure. For construction and demolition waste, GHG emission reduction factors are not provided in the EPA report Solid Waste Management and Greenhouse Gases: A Life Cycle Analysis of Emissions and Sinks (September 2006). URS assumes the same emission reduction factor for all construction and demolition waste: 0.010 tonne COze / ton material recycled, which is the emission reduction factor provided for concrete in the EPA report. 3,2.5 Measure 2e: Food Waste Rescue The goal of this measure is to capture edible food in the waste stream and redirect that food to organizations providing food.to the hungry. The City of Palo Alto would not receive financial benefits from this action. Costs include staff time and outreach materials to help connect the businesses generating the food waste to the organizations collecting the food waste. Although the community would benefit financially via reduced disposal costs (for the businesses that donate their food waste), and the community would benefit socially from feeding less fortunate persons, community benefits are not included in this analysis. In the United States, a large portion of food is wasted; up to a pound of food per person per day is estimated to go to waste. Of the food that is wasted, about 30% is estimated to be edible.8 Examples include produce with cosmetic defects, and pre-made or pre-packaged food that is not immediately sold in restaurants or supermarkets. According to the Palo Alto Waste Composition Study (p.17), 7,758 short tons of food waste are generated by commercial and multi-family housing each year. URS assumed the following in conducting the analysis of this measure: 1.Of the total tonnage of food waste generated by commercial and multi-family sources (7,758.2 tons), 50% is generated by commercial sources (3,879 tons). 2.Of the 3,879 tons assumed to be generated by commercial sources, 30% is recoverable and edible (1,164 tons). 3.Staff level of effort was assumed at 10% FTE, and the total annual cost for the FTE employee is $150,000. Thus, the cost to Palo Alto for staffing is $15,000/year. 4. Outreach materials are expected to cost an additional $2,000/year. 5.URS used the same methodology as described in Measure 2a to estimate the GHG reductions expected from this measure. 8 For a case study regarding food waste donation, see: California Integrated Waste Management Board, San Francisco Commercial Food and Organics Recycling Case Study, Available online ~t~.-’~.~--w-~‘~-c.’~-w.r~-~--c2a.-g~-3~I~--~J~i--b-rt~1--‘~.~/~I.1~-~a~J~s~\V~j~!~-~i~s~.~t-~. oFor a 2006 news article regarding the estimated percentage of food waste that is edible in Seattle at 30’~, see: 3-7 SECTiONF OUR City Employee Transport Related Measures 4.1 OVERVIEW For the purposes of this analysis, URS examined the following transport related measures: =Measure 3a: Go Pass for City employees ¯Measure 3b: Parking Space Cashout for City employees =Measure 3c: Bicycle Racks/Showers & Lockers for City employees °Measure 3d: EcoPass for City employees ¯Measure 3e: Carpooling website portal for City employees ¯Measure 3f: ZIPCAR for City employee private use The ultimate goal of these measures is to reduce the total vehicle miles traveled (VMT) by City employees and increase the usage of alternative, less-greenhouse-gas-intensive transport modes. 4.2 FINDINGS Table 6 shows the summary of costs and benefits that would be realized by the City of Palo Alto for each of the six City employee transport related measures. All costs and benefits are provided in armualized amounts of the net present value. In total, these measures would lead to moderate GHG reductions (172 tonnes CO2e/year in total), at a reasonable cost for all measures except Measure 3b: Parking Space Cashout, which has a relatively low net cost. Based on these findings, the options which would be most cost effective for City expenditure would be Measure 3b: Parking Space Cashout Pass followed by Measure 3e: Carpooling Website Portal. Considering the total cost effectiveness the following measures yielded a net total benefit: Measure 3a: Go Pass, Measures 3b: Parking Space Cashout, Measure 3c: Bicycle Racks/ Showers & Lockers, Measure 3d: Ecopass, Measure 3e: Carpooling website portal. 4-1 SECTiONF OUR City Employee Transport Related Measures Table 6 City of Palo Alto Cost/Benefit Analysis for City Employee Related Transport Measures GHG emissions reductions (tonnes CO2e/year) Cost ~(S/year) ~Benefit ~Z ~ (S/year) Net Cost or (Benefi0 (S/year) $/tonne CO2e reduced Cost (S/year) Benefit (S/year) Net Cost or (Benefit) (S/year) $/tonne CO2e reduced Stakeholders Included Measure 3a: Go Pass 21 Measure 3b: Parking Space Cashout 95 Measure 3c: Bicycle Racks, Showers & Lockers 17 Measure 3d: EcoPass 15 Measure 3e: Carpooling website portal 10 Measure 3f: ZIPCAR for employee private use 14 $38,417 $13,266 $20,608 $30,902 $6,283 $32,377 $0 $11,760 $3,726 $2,467 $0 $0 $38,417 $1,506 $16,882 $30,902 $6,283 $32,377 $1,801 $16 $1,000 $2,088 $618 $2,325 $73,131 $200,922 ($i27~79~ $38,417 $74,847 ($35,431) $22,495 $22,663 ($ l o) Employees, City $30,902 $70,712 ($39,~1 O) ($2,690) Full-time Employees, City Full-time Employees, City $7,453 $16,977 Employees, City Full-time Employees, City $50,561 $23,615 $26,946 $1,935 Employees, City 4-2 SECTiONF City Employee Transport Related Measures 3a: Go Pass 3d: EcoP~ss $2,500 $2,000 $1,500 ~ $1,000 $500 S0 ($5oo) ~ ($1,000) ~ ($L5oo) ($2,000) (Sl,708) (s2,soo) ¢3,ooo) Figure 4 3b: Parking 3e: Bicycle 3e: Carpooling 3f: ZIPCAR for Space Cashout Racks, Showers website portal employee & Lockers private use $16 $2,088 $618 ($937) ($1,348) ($2,690) [] City Net Costs [] Total Net Costs ] Net Cost per Tonne of GHG Emissions Reduced for City Employee Transport Measures 4.3 METHODOLOGY AND DISCUSSION OF EACH MEASURE For City employee commute trips, the average mode share, roundtrip length, direct costs to commuter per passenger mile, and CO2 emissions per passenger mile were assumed as follows: Table 7 Assumptions for employee commute trips Average Direct Costs ($) to commuter per passenger mile13’14’1s Average Average CO2 Mode Roundtrip emissions (lbs/ Trip Mode Share12 Length (miles)9,u passenger mile) 9,10 Drive-alone 68.87%28.29 0.94 $0.55 2-6 Person Carpool 14.55%32.38 0.47 $0.28 Vanpool 0.44%34.26 0.19 $0.08 Bus 0.71%24.32 0.67 $0.19 Rail 5.76%41.56 0.45 $0.15 Bicycle 5.89%7.81 0.00 $0.10 Walk Only 0.95%6.64 0.00 $0.05 Taxi 0%11.36 0.87 $0.05 Motorcycle 1.31%27.52 0.39 $1.80 SECTiONF City Employee Transport Related Measures CO2 emission rates and average roundtrip distances were taken from the City of Palo Alto ABAG Commute Data Spreadsheet.9 This spreadsheet derived CO2 emissions factors from estimates of Btu per passenger mile and carbon coefficients extracted from the US Department of Energy Transportation Energy Data Book." Edition 25 (2006)l° CH4 and N20 emission factors were not derived, however, as these factors are relatively small compared to CO2. The CO2 emission factorwas therefore taken to approximately represent the CO2e emission factor (or carbon dioxide equivalent emissions). This approach is also consistent with that used in the City of Palo Alto’s Climate Protection Plan. CO2 emission rates for Vanpools from the City of Palo Alto ABAG Commute Data Spreadsheet were altered, however, to reflect an average 7 person vehicle occupancy for City of Palo Alto employee Vanpools. Average employee trip lengths in the City of Palo Alto ABAG Commute Data Spreadsheet were taken from estimated from Metropolitan Transportation Commission’s Census Transportation Planning Package data (CTPP 2000).11 Average employee modal share was taken from the 511 Regional Rideshare Program’s City of Palo Alto Employee 2007 Transportation Survey.12 Employees from this survey who were not at work due to a scheduled day off, leave or vacation were not included in modal share calculations. Scheduled days off were subsequently accounted for in considering the number of trips made per year in calculations for Measures 3a to 3f. Direct vehicle costs to vehicle drivers were estimated from AAA’s 2008 Driving Costs Survey.13 Direct commuting costs per passenger mile for transit and non-motorized transit modes were estimated from three Victoria Transport Institute reports.14’1516 The total number of employees at each facility was supplied in spreadsheet form by City staff, as summarized in the following table.17 9 Van Orsdol, Karl (City of Palo Alto), City of Palo Alto ABAG Commute Data Spreadsheet 2008. 10 US Department of Energy, Transportation Energy Data Book: Edition 25, 2006. Webpage: www~n~wandfutures.c~rrdd~wn~~ad/transp~rtati~n-energy-b~~k-TEDB-Editi~n25-~RNL-6974.pdf I1 Metropolitan Transportation Commission, Census Transportation Planning Package data -CTPP2000, 2000. Webpage: ~w.mtc.c.,3~.~,.q._m.’_a~ and da’tx/datamar~.’~censuc~ctp.p~.O_.O_Oiin_~.e_~.ht_rn_ I~ 511 Regional Rideshare Program, Ci~ of Palo Alto Employee 2007 Transportation Survey Results, 28 January 2008. Supplied via email by Kathy Durham (City of Palo Alto), 5 June 2008. 13 American Automobile Association (AAA), 2008 Driving Costs Survey, 2008. Webpage: ht’:p:/iwww.aa,~newsroom.net!Assets!Files,’~200844 921220.DrivingCosts2008.pdf 14 Victoria Transport Institute, Evaluating Public Transit Benefits and Costs Best Practices Guidebook, 2008. Webpage: 15 Victoria Transport InstitUte. Quantifying the Benefits of Nonmotorized Transportation For Acbieving Mobility Management Objectives, 2004. Webpage: http ://www.vtpi.org/nmt-tdm.pd f 16 Victoria Transport Institute. Transportation Cost and Benefit Analysis: Techniques, Estimates andlmplications, December 2006. Webpage: http ://www.vtpi.org/tca/tca0501 .pdf 17 Nagel, Nancy (City of Palo Alto), Email forwarding employee numbers at each City facility, with additional clarification from Melinda Cook, 3 June 2008. 4-4 SECTiONF @UR City Employee Transport Related Measures Address Civic Center Municipal Service Center Lucie Stem Water Quality Control Plant Main Library Elwell Court Station 6 Cubberley Art Center Junior Museum Station 1 Children’s Theater Table 8 Development Center Mitchell Park Community center Mitchell Park Library Station 2 Animal Services Center Children’s Library Landfill Downtown Library College Terrace Library Golf Course Sthtion 3 Station 4 Station 5 Station 7 Utility Control Center 300 Hamilton Foothills Park Baylands Interpretive Center TOTAL Employees at each City facilityt8 Full-time Employees 396 239 15 67 20 39 12 14 10 4 0 8 24 0 7 0 12 5 12 7 4 9 0 0 0 0 7 7 1 0 919 Shift Employees 0 0 0 0 0 0 27 0 0 0 16 0 0 0 0 18 0 0 0 0 0 0 9 9 9 9 0 0 0 0 97 Hourly Employees 53 15 158 5 24 3 1 23 23 24 12 18 2 25 14 0 4 9 1 4 6 1 0 0 0 0 2 1 7 3 438 Number of Employees (all classifications) 449 254 173 72 44 42 40 37 33 28 28 26 26 25 21 18 16 14 13 11 10 10 9 9 9 9 9 8 8 3 1454 18 .Nagel, Nancy (C~ty of Palo Alto), Email forwarding employee numbers at each City facility, with additional clarification fi’om Melinda Cook, 3 June 2008. 4-5 SECTIONF @UR City Employee Transport Related Measures It was assumed that all regular full-time employees worked a 9/80 schedule, working for nine days every two weeks. It was assumed that all shift employees worked ten 24 hour shifts each month. It was assumed that each hourly employee worked on average for one day per week, 19 t all em lo eebased on advice from staff at the City of Palo Alto . It was assumed tha p y s worked for 50 weeks per year in total. 4.3.1 Measure 3a: Go Pass for City Employees Measure 3a involves the City purchasing Go Passes (an annual transit pass offered by Caltrain) for employees at a discounted rate of $106 per annum per full-time employee. This represents a considerable cost saving to employees compared to the cost of a comparable monthly Caltrain pass which would cost around $1,326 per employee per annum,z° Discussions with Caltrain have confirmed that the City of Palo Alto would be able to offer Go Passes to qualified full-time staff at only facilities within walldng distance of Caltrain. This would include the following facilities with a total of 438 full-time employees: Civic Center 300 Hamilton Development Center College Terrace Library Station 1 Station 2 Downtown Library Employee Commuter Incentives have been estimated to have the potential to reduce vehicle miles traveled by 5-25% according to the Center for Clean Air Policy’s Transportation Emissions Guidebook.21 Considering that a number of commuter incentives are already established at the City of Palo Alto and that Caltrain is not a viable option for many employees, it was therefore assumed that an additional 5% of drive-alone vehicle trips would be diverted to rail ifGoPass were offered at these facilities. Therefore, from existing drive-alone vehicle trips, the shift in passenger miles traveled to rail would be 96,008 PMT per annum.22 19 Nagel, Nancy (City of Palo Alto), Email advising average hourly staffFTE and hoursper week, 18 June 2008. 20 Average Monthly Caltrain Cost before this measure estimated to be $1326.36 based on an assumption of 25.8% of employees purchasing o o$59.75 monthly 1 Zone tickets, 48.3 ~ purchasing $106 monthly 2 Zone tickets, 16.1 ~ purchasing $152.5 monthly 3 Zone tickets and 9.7% purchasing $198.75 monthly 4 Zone tickets 21 Center for Clean Air Policy, Transportation Emissions Guidebook Part One: Land Use, Transit & Travel Demand Management. Webpage: www.ccap.org/guidebook o22 Shift in PMT to rail 5% x 438 employees x 68.87~ x 25 formights!year x 9 trips/fortnight x 28.29 miles/roundtrip= 96,008 PMT per annum 4-6 SECTIONF @UR City Employee Transport Related Measures The City currently provides Commuter Check benefits for full-time workers of $35 per month for travel within 1 Caltrain Zone or $40 per month for travel within 2 or more Caltrain Zones. The existing Commuter Check benefit provided by the City was therefore estimated to be $465 per annum per average Caltrain commuter23. Data from the City showed that on average 26 employees per month were currently utilizing commuter check transit benefits24. Of these employees, 25 were utilizing commuter checks for Caltrain. Therefore, it was calculated that the City is currently spending 25 times $465 per annum on Caltrain/BART benefits for a total of $11,611 per annum. From the CO2 emission factors in Table 7, the total CO2e emission reduction from shifted trips was therefore calculated to be equal to 21 tonnes CO2e per annum. The estimated cost to the City to pay for a Staff transport coordinator to administer this program would be 60 hours per year at $60/hour for a total of $3,600 per annum. The cost to the City to enroll 438 full-time employees at $106 per annum in the Go Pass program would be $46,428 per annum. Subtracting the existing amount that the City currently spends on Caltrain benefits, this would represent an additional $34,817 per annum in City costs to pay for the Go Pass program. GoPasses would be provided at zero cost to all eligible full-time and shift employees, with no resultant increase in assessable income tax for employees. For staff who would shift- from drive-alone vehicle trips to Caltrain as a result of Go Pass, the benefit due to reduced trip costs would be $52,996 per annum, calculated by subtracting free Go Pass costs from drive-alone costs calculated from per passenger mile costs as listed in Table 725. For staff who currently travel by Caltrain, the benefit of free GoPasses would be $21,851 per armum.26 4.3.2 Measure 3b: Parking Space Cashout for City employees Measure 3b would involve offering a parking cashout of $210 per employee to full-time or shift employees who elect not to drive. As employees receive free parking at city facilities, this provides an incentive for staff to shift to alternative transport modes. The City could then lease vacated parking spaces to the public at a cost of $420 per annum at the Civic Center and $246 per annum at College Terrace Library.27 There were estimated to be a total of 919 full-time employees and 97 shift employees at all facilities where parking cashout is to be offered as per Table 8. 23 25.8% (Zone 1 ticket) x 12 months/year x $35/month+ 74.2% (Zone 2 or more tickets) x 12 months/year x $40/month = $465 per annum. 24 ¯Nancy Nagel (City of Palo Alto), Email forwarding comments from Kathy Durham (City of Palo Alto), 30 June 2008. 25 96,008 shiftable drive-alone PMT x $0.55 per drive-a!one passenger mile - $0 (cost of Go Passes to employees)= $52,996 per annum. 26 (438 employees x 5.76% existing rail mode share x $1,326 Caltrain pass costs/passenger) - $11,611 (existing City Caltrain commuter benefit) $0 (cost of Go Passes to Employees)= $21,851 per annum. 27 Nagel, Nancy (City of Palo Alto), Email of general assumptions for transport related measures, 13 May 2008. 4-7 SECTIONFOUR City Employee Transport Related Measures Based on Table 3 of the Victoria Transport Policy Institute’s TDMEncyclopedia Trip Reduction Tables (2007)28 for a rideshare oriented activity center, undertaldng a parking cashout with an $0.84 per day daily incentive would provide an approximate 10.2% reduction in vehicle miles traveled. The total passenger miles traveled per annum for drive-alone vehicle trips that could be shifted, would be 411,758 passenger miles per annum.29 After implementation of parking space cashout, it is assumed that staff would shift to alternative transport modes such as carpooling/bus/rail!walking and cycling according to their proportional mode share of the existing employee commute survey corrected for average trip lengths per mode. This would mean that of all passenger miles traveled shifted from drive-alone trips, 59.3% would shift to 2 person carpool, 1.9% would shift to 3 or more person carpool, 2.2% would shift to bus, 30.1% would shift to rail, 5.8% would shift to cycling and 0.8% would shift to walking. From the CO2 emission factors in Table 7, COze emission reductions from implementation of this measure would therefore be equal to 95 tonnes COzeper annum. The annual cost to the City to administer the program would require 120 hours of a staff transport coordinator’s time at $60/hr for a total of $7,200 per annum The annual income to the City from rental of parking spaces at the Civic Center to the public would be 28 spaces at $4.20 per annum for a total of$11,760 per annum. The annual cost to the City to pay for parking cashout would be 72 spaces at $210 per annum for a total of $15,120 per annum. This parking cashout would also represent a benefit to staff of $15,120 per annum. In addition to the parldng cashout, the City was assumed to also continue paying existing commuter incentives to staff who shift to alternative transport modes. These employee commute incentives include $30 per month for 2-6 person carpool participants, $60 per month 7 or more person vanpools participants, $35 per month for employees VTA passengers, one-zone Caltrain passengers, $40 per month for two-or-more zone Caltrain passengers, and $20 per month for employees who walk or cycle to work. This would represent an additional cost to the City and benefit to staff of $37,545 per annum. For receiving this commute incentive on non-qualified transport fringe benefits (employer incentives for carpooling in vehicles with less than 6 passengers, walking and cycling), the increased tax cost for City employees would be $13,266 per annum. This calculation is based on an assumption of marginal Federal and California personal income tax rates of 25% and 8% respectively. For employees shifting from drive-alone vehicle trips to alternative transport modes, the financial benefit to City employees through reductions in per passenger mile costs as shown in Table 7 would be $136,496 per annum.3° 28 Victoria Transport Policy Institute, TDMEncyclopedia Trip Reduction Tables, 2007. Webpage: http://www.vtpi.org/tdm/tdm41.htm 29 919 employees x 68.87% drive-alone mode share x 10.2% shift to alternative modes x 28.29 miles x 25 weeks x 9 trips/fortnight + 97 employees x 68.87% drive-alone mode share x 10.2% shift to alternative modes x 28.29 miles x 12 months x 10 trips/month = 411,758 passenger miles per annum. 4-8 SECTIONF OUR City Employee Transport Related Measures 4,3.3 Measure 3c: Bicycle Racks/Showers & Lockers for City employees Measure 3c involves providing covered bicycle racks and showers and lockers for City employees at all properties with over 20 employees which do not presently have either of these facilities. Covered bicycle racks would also be provided at City properties with less than 20 employees but with existing shower facilities. These measures would provide an incentive for staff to travel to work by bicycle at properties where such facilities do not exist at present. Bicycle pool vehicles for City employee private use and business related work trips would also be provided at facilities with over 20 employees. The bicycle pool vehicle would also provide an alternative to drive-alone vehicle trips using city owned fleet vehicles and to private drive-alone vehicle trips during work hours. Showers which could be used by general employees were assumed to already be in place at all fire stations, the Municipal Service Center, Rinconada Pool, the Water Quality Control Plant, Animal Services Center, Main Library, Cubberley and the Landfill31. A further 4 new showers and lockers were assumed to be required at facilities with over 20 staff, including: Civic Center (showers/lockers also to be used by Downtown Library, 300 Hamilton, and the Development Center). ¯Lucie Stem (showers/lockers also to be used by Children’s Theater and Junior Museum) =Elwell Court Mitchell Park Community Center and Library Installation of showers and lockers was assumed to cost $15,000 per shower/locker for a total of $60,000 in upfront costs. Public bicycle racks were assumed to already be installed at all public buildings such as libraries/community centers as per verbal advice from staff at the City.32 In order to achieve an increased shift towards bicycle transport, it was assumed that both covered bicycle racks and showers/lockers would need to be provided by the City. Twenty-four additional covered bicycle racks were assumed to be required at City facilities with over twenty employees and also at City facilities with existing shower facilities as per the following list: ,Civic Center, Downtown Library, 300 Hamilton, Deve!opment Center (4 additional bicycle racks) ¯Lucie Stem, Children’s Theater and Junior Museum (3 additional bicycle racks) Main Library and Arts Center (2 additional bicycle racks) ° Mitchell Park Community Center and Library (2 additional bicycle racks) 30 Direct staff transport financial benefits= 411,758 PMT x [$0.552/rnile - 59.3% x $0.28/mile +1.9% x $0.08+ 2.2% x $0.19/mile + 30.1% x $0.15/mile + 5.8% x $0.15/mile + 0.8% x $0.05/mile]= $136,496 per annum. 31 Nagel, Nancy (City of Palo Alto), Email forwarding estimate of facilities with bicycle showers/lockers from Karen Smith (City of Palo Alto), 5 June 2008. 32 Nagel, Nancy (City of Palo Alto), Email forwarding estimate of facilities with bicycle racks from Gaffe Likens (City of Palo Alto), 4 June 2008. 4-9 SECTIONF OUR City Employee Transport Related Measures ¯Municipal Service Center - Bldg A (1 additional bicycle rack) ¯Water Quality Control Plant (1 additional bicycle rack) ¯Elwell Court (1 additional bicycle rack) ¯Cubberly Community Center (1 additional bicycle rack) ¯Station 6 - Serra (1 additional bicycle rack) ¯Animal Services Center (1 additional bicycle rack) ¯Landfill (1 additional bicycle rack) ¯Station 2 (1 additional bicycle rack) ¯Station 1 - Alma (1 additional bicycle rack) ¯Station 3 (1 additional bicycle rack) ¯Station 4 (1 additional bicycle rack) ~, Station 5 (1 additional bicycle rack) Station 7 (1 additional bicycle rack) The purchase and installation costs for 24 additional bicycle racks were assumed to be $820 per rack33 for a total of $19,680 in upfront costs to the City. Locations where bicycle end-of-trip facilities would be improved (resulting in a shift to increased bicycle transport) would be available to 893 full-time, 97 shift and 410 hourly employees. Bicycle Initiatives are estimated to have the potential to reduce vehicle miles traveled by 1-5% according to the Center for Clean Air Policy’s Transportation Emissions Guidebook.34 For facilities where new bicycle racks or showers were to be installed, it was assumed that this would generate a mode shift of 2.5% from drive-alone passenger trips. However, any vehicle trips shifted to bicycle would be assumed to have an average trip length of 7.81 miles from Table 7. This gave a total of 31,341 employee commute PMT per annum shifted from drive-alone to bicycle mode. It was assumed that of the drivers shifting to bicycle, approximately 25% would have previously made personal trips with their motor vehicle whilst at work and that these trips would have had an average trip length of 1.5 miles. For employee personal trips, this gave an additional 1,505 PMT per annum shifted from drive-alone to bicycle mode. It was also assumed that One Bicycle Pool bicycle would be provided by the City to each of nine city properties with more than 25 employees, namely: Civic Center (also to be used by Downtown Library, 300 Hamilton, Development Center) 33 Nagel, Nancy (City of Palo Alto), Email forwarding cost estimate from Sean Kennedy (City of Palo Alto), 28 May 2008. 34 Center for Clean Air Policy’s Transportation Emissions Guidebook Part One: Land Use, Transit & Travel Demand Management. Webpage: www.ccap.org/guidebook 4-10 SECTIONFOUR City Employee Transport Related Measures Municipal Service Center - Bldg A Lucie Stem (also to be used by Children’s Theater and Junior Museum) Water Quality Control Plant Elwell Court Main Library (also to be used by Arts Center) Station 6 - Serra Mitchell Park Community Center and Library Cubberly Community Center It was assumed that this bicycle pool vehicle would be used for 2 trips per day of 1.5 mile roundtrip distance, which would replace existing drive-alone city fleet vehicle travel. This would equate to a shift of 6,750 PMT per annum from drive-alone city fleet vehicle mode to bicycle. Pool bicycles were assumed to cost the City $500 to purchase and replace each 5 years at a total cost of $4,500 for relevant years. Pool bicycles were assumed to require maintenance costs of $300 per year per bicycle, with a total cost to the City of $2,700 per annum. The total direct financialbenefit to the City through reduced costs per vehicle fleet miles for drive-alone vehicle trips was calculated to be $3,726 per annum.35 The total net reduction in PMT from drive-alone vehicle trips to bicycle for each of these measures would be 39,620 PMT per annum. The total GHG emissions reduction for all of these bicycle measures would equal 17 tormes CO2e per annum. The City currently provides a staff benefit of $20 per month to full-time or shift employees who cycle to work. Data from staff at the City of Palo Alto indicates that 9 employees currently are paid this benefit per month, representing an existing cost to the City of $2,160 per annum.36 This cost has not been included in this analysis as it will remain the same once this measure has been implemented. Other costs to the City include 120 hours of a City transport coordinator at $60/hour or $7,200 per annum. For employees shifted as a result of this measure from drive-alone vehicle trips to cycling, it is assumed the City would continue to pay the existing bicycle commute incentive of $20 per month. This would equate to an additional $4,091 per annum in commuter benefits to eligible full-time and shift staff.37 For receiving this bicycle commute incentive (classified as a non- qualified transportation fringe benefit), employees would pay additional marginal Federal and 35 Direct financial benefit to the City through reduced costs for vehicle fleet=- 9 bicycles x 2 trips per day x 1.5 miles x 250 days/year x ($0.552/mile - $0,05/mile) for a total of $3,726 per annum, 36 Durham, Kathy. Email forwarding Employee Commute data including 511.org survey and participation in various Commute Incentive programs. 5 June 2008. 37 Additional City commute benefit costs (893 full-time employees + 97 shift employees) x 68.87% (drive- alone mode share) x 2,5% (mode shift to bicycle from drive-alone trips) x $20/month (staff commute benefit) for a total of $4,091 per annum. 4-11 SECTiONF @UR City Employee Transport Related Measures California personal income tax at rates of 25% and 8% respectively, for a total of $1,350 per annum. The direct fmancial transport benefit to staff shifting from drive-alone vehicle commute trips to cycling commute trips was estimated from the relative costs of various transport modes from Table 7 to be $14,846 per annum. 4.3.4 Measure 3d: EcoPass for City employees Measure 3d involves the City purchasing EcoPasses (an annual transit pass offered by VTA) for full-time employees at a discounted rate of $30 per annum per full-time employee outside ¼ mile distance of light rail but within the VTA bus network (this would represent all City of Palo Alto facilities and 919 full-time employees). This represents a considerable cost saving to employees at $674 per employee per annum or $2.69 per workday compared to comparable annual VTA passes available for private purchase. The City currently provides a commuter benefit of $35 per month for employees using VTA buses. One employee is currently collecting this commuter benefits at a cost to the City of $420 per annum.38 Surveys undertaken by other companies using EcoPass have demonstrated a 3-5% increase in VTA mode share.39 Considering that a number of commuter incentives are already established at the City of Palo Alto and that VTA is not a viable option for many employees, it was therefore assumed that 3% of drive-alone vehicle trips would be diverted to bus ifEcoPass was offered at these facilities. Therefore, the total PMT which would be shifted to rail would be 120,865 PMT per annum.4°. The shift in passenger miles traveled was converted to CO2e emissions using the values from Table 7. This resulted in an annual CO2e reduction of 15 tonnes CO2e per annum. City costs for Staff transport coordinator to administer this program were assumed to be 60 hours per year and $60/hour or $3,600 per annum. EcoPasses would be provided at zero costs to all eligible full-time employees with no resultant increase in assessable income tax for employees. City costs to enroll 919 full-time employees at $30 per annum would equal $27,570 per annum. The City would also be required to pay an upfront cost of $3 per employee for EcoPass stickers to be placed on employee identification cards, for a total upfront cost of $2,022. For staff who would shift from drive-alone vehicle trips to VTA buses as a result of EcoPass, the benefit due to reduced trip costs would be $66,717 per annum, calculated by subtracting free EcoPass costs from drive-alone costs calculated from per passenger mile costs as listed in Table 38 Nagel, Nancy (City of Palo Alto), Emailforwarding comments from Kathy Durham (City of Palo Alto), 30 June 2008. 39 Guevarra, Dino (VTA, Supervisor EcoPass program). VerbalAdvice regarding mode shifts resulting from EcoPass at 1BM. 1 July 2008. 40 Passenger miles traveled whiela would he shit~ed to rail would he 3% x 919 employees x 68.87% x 25fortnights/year x 9 trips/fortnight x 28.29 miles/trip or a total of 120,864 PMT per annum 4-12 SECTIONF OUR City Employee Transport Related Measures 741. For staffwho currently travel by VTA, the benefit of free EcoPasses would be $3,995 per armum.42 4.3.5 Measure 3e: Carpooling website portal for City employees Measure 3e involves the City establishing a separate hosted connection to the 511 ride matching website (known as skinning) so that City employees can locate other potential carpooling partners who also work for the City of Palo Alto. This measure would allow for a reduction in VMT for employees who currently commute by drive-alone vehicle mode. It was assumed that all 1,454 City employees would be able to utilize this carpooling website. It was also assumed that around 1% of all drive-alone vehicle commuters would shift to carpooling (based on BAAQMD Coun4~ Grant Manager guidelines43). This would result in a potential shift of 46,823 PMT per annum. 4 It is assumed that these passenger miles traveled would be redistributed to 2 or 3 person carpooling modes based on their proportion of existing mode share from the City’s employee commute survey corrected for average trip distance. That is: Drive-alone Passenger Trips shifted to 2 person carpooling passenger trips = 46,823 PMT x 96.9% = 45,383 PMT per annum. Drive-alone Passenger Trips shifted to 3 or more person carpooling passenger trips = 46,823 PMT x 3.1% = 1,441 PMT per annum. The CO2e emissions from shiftable drive-alone trips before undertaking this measure would be = 46,823 PMT per annum x 0.94 lbs CO2/mile divided by 2,205 lbs/tonne = 20 tonnes of CO2e per annum. The CO2e emissions from drive-alone trips shifted to carpooling’ would be 10 tonnes of CO2e per annum.45 Therefore, the total net reduction in CO2e emissions from implementing the carpooling website would be 10 tonnes of CO2e per annum. It was assumed there would also be an ongoing City staff transportation coordinator cost of $60ihour for 40 hours per year which would total $2,400 per year. 41 120,865 shiftable drive-alone PMT x $0.55 per drive-alone passenger mile - $0 (cost of EcoPasses to employees)= $66,717 per annum. 42 (919 employees x 0.71% existing bus mode share x $674 average VTA pass costs/passenger) - $420 (existing City VTA commuter benefit) - $0 (cost of EcoPasses to Employees)= $3,995 per annum. 43 Bay Area Quality Management District, Transportation Fund for Clean Air County Program Manager Fund Expenditure Program Guidelines, January 2008. Webpage: http://www.baaqmd.gov/plrdgrants and incentives/tfca!programmgrguide2008.pdf 44 PMT Shifted from drive-alone trips to carpooling 68.87% (drive-alone mode share) x 1% (potential mode shift) x 28.29 miles (average roundtrip distance) x (919 full-time employees x 25 fortnights/year x 9 trips/formight + 97 shift employees x 12 months/year x 10 trips/month + 438 hourly employees x 50 weeks/year x 1 trip/week =46,823 PMT per annum. 45 The CO2e emissions from drive-alone trips shifted to earpooting would be 45,383 PMT per annum (shifted to 2 person carpool) x 0.47 lbs CO2/mile divided by 2205 lbs/tonnes+ 1,441 PMT per annum (shifted to Vanpool) x 0,19 lbs CO2/mile divided by 2,205 lbs/tonnes= 9.8 tonnes of CO2e per annum. 4-13 SECTiONF @UR City Employee Transport Related Measures Discussions with www.511.org staff indicate that establishing the carpooling webpage would require a onetime upfront payment of $1,500 to establish the site, but no ongoing payments thereafter.46 The net financial benefit to employees through direct transport cost savings was estimated from the relative costs of various transport modes in Table 7 to be $13,207 per annum.47 It was assumed that the City would provide existing commute benefits to employees who shift to carpooling. Current commute benefits are $30 per month for employees commuting via 2-6 person carpools and o $60 per month for employees commuting via Vanpools with 7 or more persons. This represented a cost to the City and a benefit to employees of $3,770 per annum. For receiving this commute incentive on non-qualified transport fringe benefits (employer incentives for carpooling in vehicles with less than 6 passengers, walking and cycling), employees would pay additional marginal Federal and California personal income tax at rates of 25% and 8% respectively, for a total of $1,170 in additional income tax costs per annum. 4,3.6 Measure 3f: ZIPCAR for City employee private use Measure 3f is aimed at providing commercial carpooling vehicles known as ZIPCARs at certain City facilities to employees for private use throughout the workday, thereby reducing the need to drive to work solely to undertake personal trips near work. It is assumed that the City would pay for parking costs for ZIPCARs and registration costs for employees and guarantee a fixed income to ZIPCAR for each vehicle, and that employees would pay the City for their private vehicle usage on an hourly basis. For City employee commute trips, it is assumed that approximately 2% of employees who currently drive to work alone would switch to public transit or bicycle or pedestrian modes if a ZIPCAR was available for private use during business hours. It was also assumed that at least four people per day would need to require a ZIPCAR for personal Use at a particular facility for this to be considered viable for the City. Therefore, in general only facilities with 200 employees would be able to support a dedicated on-site ZIPCAR. Therefore, it was assumed that the following City properties be provided with ZIPCARs: The Civic Center (with ZIPCAR to be shared with Downtown Library, 300 Hamilton and the Development Center) Municipal Service Center There are a total of 673 full-time employees and 75 hourly employees at the facilities being considered. It was assumed that one ZIPCAR would be provided at each of these City properties. 46 Smith, Michael (www.511.org program representative), Email regarding skinning the Skinning the 51L org Ride-share Ridematch Service, 3 June 2008. 47 Direct staff financial transport cost!benefit 46,823 PMT x $0.552 (for drive-alone vehicle trips) - 45,383 PMT x $0.28 - 1,441 PMT x $0.0g = $13,207 per annum. ~4-14 SECTiONFOUR,city Employee Transport Related Measures The number of vehicle miles which would be switched from drive-alone vehicle commuting to another trip mode would then be 60,469 PMT/annum.48. Shifted drive-alone passenger trips were then allocated to alternative transport modes according to their proportion of the existing City employee survey mode share corrected for average trip distance (calculated to be 59.3% for 2 person carpool, 1.9% for 3 or more person carpool, 2.2% for bus mode, 30.1% for rail mode, 5.8% for bicycle mode and 0.8% for pedestrian mode). From the CO2e emission factors in Table 7 the net reduction in CO2e per annum for this measure was therefore calculated to be 14 tonnes of CO2e per annum. From the direct transport financial costs per passenger mile in Table 7 the direct transport financial benefits to staff from implementation of this measure is estimated to be $20,045 per annum. It was assumed there would also be an ongoing City staff transportation coordinator cost of $60/hour for 60 hours per year which would total $3,600 per year. It was assumed that one parking space would be set aside at each of these City properties in order to park ZIPCARs at a cost to City of $420 per annum from lost public parking revenue at the Civic Center. The cost to the City to pay ZIPCAR for staff enrolment costs is assumed to be $2,500 per annum.49 The cost to staffto rent a ZIPCAR was estimated to be $8.1ihour for a total of 2,137 trips per annum of one hour duration, for a total of $17,313 per annum. The City would also be required to pay dedicated revenue of $1,650 per month for each ZIPCAR supplied or a total of $39,600 per annum5°. Subtracting out tlae revenue from employee usage this would require the City to pay $22,287 per annum in guaranteed revenue payments to ZIPCAR. It was assumed that the City would provide existing commute benefits to employees who shift to alternative transport modes as a result of this measure. These employee commute incentives include $30 per month for 2-6 person carpool participants, $60 per month 7 or more person vanpools participants, $35 per month for employees VTA passengers, $35 per month for one- zone Caltrain passengers, $40 per month for two-or-more zone Caltrain passengers, and $20 per month for employees who walk or cycle to work. This would represent an additional cost to the City and benefit to staff of $3,570 per annum. For receiving this commute incentive on non-qualified transport fringe benefits (carpooling, walking and cycling incentives), employees would pay additional marginal Federal and 48 Drive-alone PMT shifl.edto alternative modes 2% mode shift x 68.87% drive-alone mode share x 28.29 miles average drive-alone trip length x [673 full-time employees x 25/formights/year x 9 trips/furmight + 75 hourly employees x 50 weeks/year x 1 trip/week]= 60,469 PMT/annum 49 Maciaz-Tellezm, Fabiola (URS), Email forwarding ZIPCAR corporate cost estimates based on correspondence with JemTifer Payne-Sleight from ZIPCAR, 7 March 2008. 50 Payne, Jennifer (ZIPCAR Business Development Manager), Phone Conversation and Email regarding ZIPCAR for Business Program dated 16 June 2008. ~4-15 SECTIONF OUR City Employee Transport Related Measures California personal income tax at rates of 25% and 8% respectively. This would result in employees being required to pay $ 871 in additional income tax costs per annum. Note that apart from the ZIPCARs proposed for these two specific facilities, there are considerable opportunities for fleet optimization at most City properties, which in general would be more cost-effective than payments to a third party car sharing company such as ZIPCAR. 4-16 SECTiONFIVE Community Transport Related Measures 5.1 OVERVIEW For the purposes of this analysis, URS examined the following general community transport related measure: Measure 3g: Additional Community Bicycle Racks The aim of this ultimate goal of these measures is to reduce the total vehicle miles traveled (VMT) and increase the usage of zero greenhouse-gas-emitting bicycles throughout the community. 5.2 FINDINGS Table 9 shows the summary of costs and benefits that would be realized by the City of Palo Alto for the community bicycle rack measure. All costs and benefits are provided in annualized amounts of the net present value. This measure would result in a moderate GHG reduction of 176 tonnes of CO2e per year, at a low cost to the City and net total benefit. Table 9 GHG emissions reductions (tonnes CO2e/year) City of Palo Alto Cost/Benefit Analysis for Community Transport Related Measures Measure 3g: Additional Community Bicycle Racks 132 < Cost (S/year) Benefit (S/year) Net Cost or (Bcne±’Jt) (S/year) $/tonne CO2e reduced Cost (S/year) Benefit (S/year) Net Cost or (Benefit) (S/year) $/tonne CO2e reduced Stakeholders Included $4,757 $0 $4,757 $36 $4,757 $140,455 ($135,697) ($1,024) Community, City 5-1 SECTIONFIVE Community Transport Related Measures 3g: Additional Community Bicycle Racks $0 (~oo~ (s80o) $36 ($],2oo) Figure 5 ($],o24) IN City Net Costs [] Total Net Costs ] Net Cost per Tonne of GHG Emissions Reduced for Community Transport Measures 5.3 METHODOLOGY AND DISCUSSION OF EACH MEASURE Measure 3g: Additional Community Bicycle Racks Measure 3g involves the City purchasing and installing additional bicycle racks for general community use at various locations throughout the City, A detailed bicycle rack needs study was not available for the purposes of this study. The average commute bicycle roundtrip distance was estimated to be 7.81 miles from Table 7 and was assumed to be half of this distance, or 3.9 miles, for non-commute trips. It was assumed that throughout the City a total of 30 times 13-space bicycle racks are required and 10 times 26-space bicycle racks, equating to 650 spaces. The assumed cost for bicycle rack purchase and installation was $820 for a 13-space rack and $3,140 for a 26-space racksl. It is also assumed that a City employee would be required to spend 120 hours at $60/hour organizing and supervising the installation of these racks. This gives a total purchase and installation cost of $63,200. It is assumed that once per day, 25% of these spaces would be occupied by 50% commuters and 50% non-commuter cyclists (apart from weekends when non-commuter cyclists would use all 51 Nagel, Nancy (City of Pato Alto), Email forwarding cost estimate from Scan Kennedy (City of Palo Alto), 28 May 2008. 5-2 SECTIONFIVE Community Transport Related Measures racks). The total drive-alone passenger miles reduction generated by the bicycle racks would therefore be 310,740 PMT/annum.52. The CO2e reduction would then be 310,740 PMT x 0.94 lbs COz/mile divided by 2205 lbs/tonne = 132 tonnes CO,e/annum. The cyclist benefit was calculated from the passenger mile costs for drive-alone and cycle trips in Table 7 to give total direct transport costs benefit to new cyclists of $140,454 per annum. 52 PMT reduction from drive-alone vehicle trips= 650 spaces x’25% occupancy x 50% non-commute trips per space per day x 3.9 miles (non- commute bicycle trip length) x 50 weeks/year x 5 days/week + 650 spaces x 25% occupancy x 50% commute trips per space per day x 7.81 miles (non-commute bicycle trip length) x 50 weeks/year x 5 days/week + 650 spaces x 25% occupancy x 100% non-commute trips per space per day x 3.9 miles (non-commute bicycle trip length) x 115 days/year (weekend days) = 310,740 PMT per annum shifted to bicycle mode. 5-3 SECTION $Fin dinUs 6.1 CO-BENEFITS OF MEASURES Many of the climate measures in the CPP are expected to produce significant co-benefits in addition to reducing greenhouse gas emissions and fossil fuel use. Several measures have a positive impact on human health, are likely to reward energy efficiency, and!or can be expected to encourage economic growth and development. Co-benefits occur from improving air quality affecting human health, by reducing combustion of fossil fuels for electricity or transportation, thereby reducing other air pollutants. These air pollutants include smog-producing nitrogen oxides, sulfur dioxide, and the fine particulates implicated in asthma and other respiratory diseases. Also, energy efficiency measures will enable cost savings for stakeholders and businesses, while contributing to energy security. Co-benefits of economic development include new technologies, new markets for existing products, and increasing value of resources.53 Information about co-benefits is presented here qualitatively, since only some of the co-benefits can be quantified reliably. One example relating to public health improvements: public health organizations point to "significant savings" in avoided health care costs and lost work time due to decreased incidences of air pollution-related chronic health problems. Table 10 Co-Benefits of Measures Measure Co-benefits GREEN BUILDINGS LEED Ordinance for new low-density residential Green Buildings (Commercial, Mixed Use, Multi-family developments) ZERO WASTE Mandatory Recycling Ordinance SMART Station Retooling Food Waste Rescue City Landfill Ban Public Area Recycling Reduce other air emissions. Water conservation. Waste reduction. Increased worker productivity. Economic development. Consumer, business, institutional, and/or municipal savings. Reduce other air emissions. Lifecycle reduction of energy, water, waste, and other resources. Economic development (new technologies, increased markets for recycled materials). Consumer, business, institutional, and/or 53 State of Maine. A Climate Action Plan for Maine 2004. A Report to the Joint Standing Committee on Natural Resources of the Maine Legislature Pursuant to PL 2003, Chapter 237, 2004. 6-1 SECTIONSTX Findings Table 10 Co-Benefits of Measures Measure Co-benefits municipal savings. Avoided landfill site odors. TRANSPORTATION City Employee EcoPass City Employee Parking Space Cashout City Employee Carpooling website portal ZIPCAR for City Employee private use ZIPCAR for City Vehicle Fleet Optimization Additional Community Bicycle Racks City Employee Bicycle Racks, Showers & Lockers Reduce other air emissions. Improved employee and community health, Consumer, business, institutional, and/or municipal savings. Energy security. 6.2 CONCLUSIONS The results of cost/benefit analysis for all measures are summarized below in Table 11. The green building measure that is the most cost effective for the City’ s expenditure based on dollars per tonne of CO2e reduced is Measure la: LEED for commercial buildings, which generates significant GHG reductions for a low cost, followed by Measure lb: GreenPoint Rated for low density buildings, which generates large GHG reductions for a moderate cost. For zero waste measures, Measure 2a: SMART Station Retooling and Measure 2b: Mandatory Recycling Ordinance create significant GHG emission reductions at a relatively low cost. Measures 2d: City Landfill Ban and Measure 2e: Food Waste Rescue lead to large GHG emission reductions, at a reasonable cost. Measure 2c: Public Area Recycling leads to very low GHG emissions reductions at a high cost. For City-employee related transport measures, the options which would be most cost effective for City expenditure would be Measure 3b: Parking Space Cashout Pass which would generate moderate GHG reductions at a low cost. Measure 3e: Carpooling Website Portal would generate low GHG reductions at a moderate cost to the City. Considering the total cost effectiveness the following measures yielded a net total benefit: Measure 3a: Go Pass, Measures 3b: Parldng Space Cashout, Measure 3c: Bicycle Racks/Showers & Lockers, Measure 3d: Ecopass, Measure 3e: Carpooling website portal. For community related transport measures, Measure 3 g: Additional community bicycle racks, would generate low GHG reductions at a moderate cost to the City. 6-2 SECTIONSEVEN References American Automobile Association (AAA), 2008 Driving Costs Survey, 2008. Webpage: hN~://www.aa~newsroom.net/Assets/Files!200844921220.DfivingCosts2008.pdf Bay Area Quality Management District, Transportation Fund for Clean Air County Program Manager Fund Expenditure Program Guidelines, January 2008. Center for Clean Air Policy, Transportation Emissions Guidebook Part One: Land Use, Transit & Travel Demand Management. Webpage:www.ccap.orgiguidebook City of Boulder (Colorado). Climate Action Plan. September 2006. 70 pp. City of Palo Alto, Climate Protection Plan, 3 December 2007. pp 47. Webpage: http://www.citvofpaloalto.org!civica/filebankiblobdload.asp?Blob.ID=9986 City of Palo Alto, City of Palo Alto Comprehensive Plan, Chapter 3, pp T-24. (17 July 2007). Webpage: http ://www.cityofpaloalto.org/depts/pln/planning_forms.asp#Comprehensive%20Plan City of Seattle. Office of Sustainability and Environment. 2005 Inventory of Seattle Greenhouse Gas i~missions: Community & Corporate. Final Draft. October 2007. Durham, Kathy. Email forwarding Employee Commute data including 511.org survey and participation in various Commute Incentive programs. 5 June 2008. 511 Regional Rideshare Program, City of Palo Alto Employee 2007 Transportation Survey Results, 28 January 2008. Supplied via email by Kathy Durham (City of Palo Alto), 5 June 2008. EPA. Solid Waste Management and Greenhouse Gases: A Life-Cycle Assessment of Emissions and Sinks, September 2006. Guevarra, Dino (VTA, Supervisor EcoPass program). resulting from EcoPass at IBM. 1 July 2008. HDR/BVA. Zero Waste Operational Plan, June 2007. Verbal Advice regarding mode shifts ICLEI and the City of Seattle. U.S. Mayor’s Climate Protection Agreement, Climate Action Handbook. ND. Kats, Greg. The Costs and Financial Benefits of Green Buildings: A Report to California "s Sustainable Building Task Force, October 2003. Maciaz-Tellez, Fabiola (URS), Email forwarding ZIPCAR corporate cost estimates based on correspondence with Jennifer Payne-Sleight from ZIPCAR, 7 March 2008. Metropolitan Transportation Commission, Census Transportation Planning Package data - CTPP2000, 2000. Webpage: http:i!ww~;.mtc.ca.gov/maps and dat~idatamart/censusictpp2000/index.htm 7-1 SECTIONSEVEN References Nagel,Nancy (City of Palo Alto), Email forwarding cost estimate from Sean Kennedy (City of Palo Alto), 28 May 2008. Nagel,Nancy (City of Palo Alto), Email forwarding comments from Kathy Durham (City of Palo Alto), 30 June 2008. Nagel,Nancy (City of Palo Alto), Email forwarding estimate of facilities with bicycle showers/lockers from Karen Smith (City of Palo Alto), 5 June 2008. Nagel, Nancy (City of Palo Alto), Email advising average hourly staff FTE and hours per week, 18 June 2008. Nagel, Nancy (City of Palo Alto), Email forwarding employee numbers at each City facility, with additional clarification from Melinda Cook, 3 June 2008. Nagel, Nancy (City of Palo Alto), Email forwarding estimate of facilities with bicycle racks from Gayle Likens (City of Palo Alto), 4 June 2008. Nagel, Nancy (City of Palo Alto), Email of general assumptions for transport related measures, 13 May 2008. Payne,Jennifer (ZIPCAR Business Development Manager), Phone Conversation andEmail regarding ZIPCAR for Business Program dated 16 June 2008, 16 June 2008. Rocky Mountain Institute (Swisher, Joel). Outline of a Recommended Cost/Benefit Methodology, 2008. Rocky Smith, Mountain Institute. Review of Climate Change Financial Risk and Greenhouse Gas Adders in Utility Planning, May 2007. Michael (51 l.org program representative), Email regarding skinning the Skinning the 511.org Rideshare Ridematch Service, 3 June 2008. State of Maine. A Climate Action Plan for Maine 2004. A Report to the Joint Standing Committee on Natural Resources of the Maine Legislature Pursuant to PL 2003 Chapter 237, 2004. The Climate Registry, General Reporting Protocol, 2008. Webpage: http:i/www.theclimatere~istl _’y.org/downloadsiGRP.pdf US Department of Energy, Transportation Energy Data Book." Edition 25, 2006. Webpage:www.nowandfutures.com/download/transportation_energy_bool~TEDB_Editi on25_ORNL_6974.pdf Van Orsdol, Karl (City of Palo Alto), City of Palo Alto ABAG Commute Data Spreadsheet 2008. Van Orsdol, Karl (City of Palo Alto), Email supplying 2007 Fuel Consumption Excel Spreadsheet (3 June 2008). Vernez-Moudon, Anne, (Univ. of Washington). Strategies and Tools to Implement Transportation-Efficient Development. A Reference Manual. Phase 2 of Integrating 7-2 SECTiONSEVEN References Land Use and Transportation Investment Decision-Making. Prepared t~or Washington State Transportation Commission. September 2003. Victoria Transport Institute, Evaluating Public Transit Benefits and Costs Best Practices Guidebook, 2008. Webpage:~ottp:iiwww.vtpi.org/tr~nben.pdf Victoria Transport Institute, Quantifying the Benkfits of Nonmotorized Transportation For Achieving Mobility Management Objectives, 2004. Webpage:http://w’ww.vtpi.org/nmt- tdm.pdf Victoria Transport Policy Institute, TDMEncyclopedia Trip Reduction Tables, 2007. Webpage:http://wwxa,.vtpi.org/tdm/tdm41.htm Victoria Transport Institute. Transportation Cost and Benefit Analysis." Techniques, Estimates andlmplications, December 2006. Webpage: http://www.vtpi.org/tca/tca0501.pdf 7-3 EPP - Street Lighting Attachment E sec Stratford F~wh’onmental Cons~.d~-~ Stanford Universi~, Voh.mtary Student Organization ssecg.stanford.edu EXECUTIVE SUMMARY SEC recommends that the City of Palo Alto considers replacing current High Pressure Sodium (HPS) street lighting systems with more energy efficient Light Emitting Diode (LED) systems. Because of the many varied models of LED replacement lighting systems, SEC is providing a lighting calculator to aid in the city’s decision. Our estimates show that replacing the current purchases of 250W HPS lamps with equivalent LED fixtures will save 502,262 lbs of CO2 emissions, reduce mercury and sodium use by 4,062 and 975 mg respectively, and save $1,390,737 over the 25 year lifetime of the LED fixtures. These estimates can be further refined by obtaining detailed costs, power consumption, and lifetime specifications from manufacturers and distributors of the specific LED fixtures the city is planning to use and of the HPS bulbs they will replace. INTRODUCTION Lighting public areas uses a considerable amount of energy; more efficient lighting systems can reduce the city’s energy consumption which will reduce costs and GHG emissions. Conventional HPS bulbs contain hazardous materials like mercury and elemental sodium that need to be disposed of properly. Mercury’s environmental hazards are well documented. Elemental sodium also poses a health hazard if it comes in contact with the skin and will ignite under the presence of moisture. Newer LED lighting technology reduces the use of hazardous materials in addition to electricity. The long lifetime of LED’s allows them compete with HPS systems even though the initial cost of LED systems is considerably higher. PRODUCT INFORMATION What are the current lamps the city uses for street lighting? The city currently utilizes high pressure sodium lamps for street lighting. The high pressure sodium lamp not only contains metallic sodium, but mercury as well. It produces a dark pink glow when first struck, and a pinkish orange light when warmed. The money the city spends on lighting is dominated by those products used for outdoor lighting. Table 1 shows the city’s purchases of liPS bulbs in 2007. EPP - Street Lighting Table 1: Purchases of liPS Bulbs by the City of Palo Alto in 2007 Type Quantity Cost 70W 780 $8,674 100W 372 $3,742 150W 296 $2,978 250W 364 $4,080 Total 1,812 $19,474 What are White LED lamps for street lighting? White Light-Emitting Diode lamps utilize LED technology in the manufacturing to traditional street lamps, both globes and cobraheads. LED technology provides reduced energy consumption, longer lifetime, directionality and controllability. TECHNOLOGY COMPARISON What are some of the benefits of using LED White Lamps? ¯Depending on the manufacturer and model, LEDs, compared to HPS, save 40- 80% on energy and last up to 5 times longer.1 Table 2 below shows an example comparison from BetaLED. Results may differ for different suppliers. Table 2: Example Energy Savings using BetaLED Systems2 HPS System Equivalent EnergyHPS Bulb (W)Power(W)LED (W)Savings 70 105 28 73% 100 130 28 78% 150 188 55 71% 250 300 104 65% LED’s will provide more opportunities to save energy with their ability to light immediately and brighten and dim based on time of day, ambient light, or any other control parameters desired. Motion sensors can turn LEDs on and off instantly or reduce to a lower level, allowing lighting to be used only when needed. Typical outdoor lighting has a relight time of a few minutes before they can turn on and therefore cannot be used with motion sensors. White LEDs offer improved color rendition over light generated by HPS lamps. Improved color rendition can be more aesthetically pleasing and may offer aid to security efforts. 1 BetaLED. "HID vs LED Quick Comparison Guide". Online Resource. <http://www.betaled.com/docsiLED.Beta.Comparison.Chart.pdf> Accessed March 2008. : BetaLED. March 2008 EPP - Street Lighting What are some of the disadvantages of using LED White Lamps? Although White LED’s are more energy efficient than HPS, their high initial cost is often a deterrent to implementation. LED equivalent street lighting units cost above $1,000 each in comparison to HPS bulbs that are prices in the $10-20 range, see Table 3 for more details. Installing LED systems takes a large initial investment and payback periods can be long. White LEDs normally fail through gradual lowering of light output and loss of efficiency knows as lumen depreciation. All forms of lighting experience this to some extent including both HPS and LED. In LEDs, the primary cause of lumen depreciation is heat generated at the LED junction. If the LED system design has inadequate heat sinking or other means of removing the heat, the device temperature will rise, resulting in lower light output. Clouding of the epoxy encapsulate used to cover some LED chips is also a source of lumen depreciation. Newer high-power LED devices use silicone as an encapsulate, which prevents this problem. LEDs continue to operate even after their light output has decreased to very low levels. This becomes the important factor in determining the effective useful life of the LED. Manufacturers should include some failure criteria when quoting an LED’s expected lifetime. Relume Technologies, working with Cree Research have increased reliability of their LEDs through aggressive thermal management avoiding excessive lumen depreciation. Have other cities successful replaced their street lamps with White LEDs? Over the past five years, Austin, Texas has taken several bold initiatives to integrate LED lighting, citing the predicted cost benefit of a large decrease in energy usage, low maintenance cost, and greater comparative brightness of the LEDs to conventional incandescent bulbs and high pressure sodium lamps. Specifically in the area of street lighting, the city of Austin is looking to replace the 250-watt HPS street lights with LED lights, estimating an annual savings of $500,000 for 5,000 street lights, a small fraction of the total number. Austin has retrofitted 47-watt LED fixtures from Beta LED in the One Texas Center Parking Garage, has started replacing HPS lamps in Barton Springs and at the Lady Bird Lake and Bike Trail, and has put LEDs in marquee signs at the Palmer Events Center and Convention Center. Austin’s goals are to increase the visibility of LED lighting in a variety of settings, to gather data and feedback on performance, maintenance, and cost-effectiveness. Raleigh, North Carolina started with a test program with Cree Inc. that put LED lighting on one level of the Municipal Building parking deck. This test went smoothly, and LED’s are currently being installed in a new underground Parking Garage, with an LED Shimmer Wall and outdoor LED fixtures around the New Convention Center. The Municipal Building will have LED-enabled conference rooms. All of Raleigh’s LED’s are Cree LED’s, and are supplied by various lighting fixture manufacturers. According to C. Ellis Wheeler, the purchasing EPP - Street Lighting manager for the City of Raleigh, the biggest problem Raleigh has encountered so far has been trying to find competitive bids. The City is excited about future LED purchases, and looks forward to the long term financial payoff. Ann Arbor, MI is installing LED streetlights in order to reduce lighting costs and greenhouse gas emissions. The City began in 2006 by testing out various brands of LED lights for their City Hall parking lot. Over the past two years, Ann Arbor has continued to see an increase in LED quality, and continue to find more opportunities to implement LEDs. After successfully replacing downtown globe lights, the City received a $630,000 grant from the Ann Arbor Downtown Development Authority to fund retrofits for 1,400 additional lights. This installation will save the City over $100,000 per year and will reduce annual greenhouse gas emissions by 267 tons of CO~. In addition, testing will continue on LED replacements for neighborhood streetlights, with the eventual goal of replacing all of the public lighting with LEDs. Full implementation of LEDs would cut Ann Arbor’s public lighting energy use in half and reduce annual greenhouse gas emissions by 2,200 tons of CO~. In addition to cost savings, the public input from Ann Arbor was very positive; only two out of 83 responses were negative. The positive responses sited the lack of light spilling out onto yards and house faces ("light trespass"). One negative response commented that the light was too harsh. AVAILABILITY How available are the White LEDs for purchase? White LEDs technology is developed by several companies. Purchasing directly from these manufactures is not possible; however, their products are available through distributors. Below is a short list of manufacturers and distributors of LED street lights. LED Technology (Research and Manufacturing): Cree (http://www.cree.com/index.asp) Beta-LED (http://www.betaled.com/) Relume (http ://www.relume.com/) NeoPac Lighting Ltd. (http://www.alibaba.com/company/11098697.html) Phillips(http://www.lighting.philips.com) LED Distributors: LEDTronics (http ://www.ledtronics.com/) LED Waves (http://www.ledwaves.com/home.php?cat=340) WE-EF Lighting Group (http://www.we-ef.com/) Holly Solar (http://www.h011ysolar.com/html/streetlight.html) Shenzhen Spark Optoelectronics S&T Co. Ltd (http://www.spark-oe.com/) Shenzhen Bang-Bell Electronics Co., Ltd. (http://www.bbeled.com/) IQLED (http://www.iqled.com/) Kaki Group Co. Ltd. (www.kakigroup.net) 4 EPP - Street Lighting ANALYSIS OF REPLACEMENT PRODUCT Because LED fixtures vary in their power consumption, cost, and lifetime based on their manufacturers and intended use, we are providing a lighting calculator developed by Stanford Environmental Consulting (SEC). An example analysis depicting the user interface can be seen in the Appendix. SEC analyzed the replacement of 250W and 100W HPS lamps with equivalent LED fixtures, the summary of these results can be seen in Table 3. Information provided BetaLED3 was used to determine appropriate replacement LED fixtures for the two HPS bulbs. Replacing a 250W bulb reduces environmental impacts more than replacement of 100W bulbs. It also offers higher cost savings for a similar payback period. Cost estimates used as inputs to our calculator were provided to the city by Morrow-Meadows Contractors and forwarded to SEC.4 Table 3: Replacing One HPS Bulb with an Equivalent LED Fixture Original HPS Bulb 250W HPS HPS Bulb Cost $11 Equivalent LED Power Consumption 104W LED Bulb Cost $1,681 Annual GHG Savings (lbs CO2eq)1,380 Reduction in Mercury Use (mg)11 First Year Energy Cost Savings $78 Lifetime Cost Savings (w/o GHG Adder)$3,821 Lifetime Cost Savings (w/GHG Adder)$4,418 Payback Time in years (no discounting or GHG adder included) 100W HPS $10 28W $1,o45 718 5 $41 $2,887 $3,198 10.2 9.3 Replacing all HPS bulbs purchased in 2007 could offer considerable cost and GHG savings as Table 4 shows below. Table 4: Savings from Replacing 2007 Purchases of HPS bulbs with LEDs Number of Annual GHG Lifetime CostHPS Bulb (W)Bulbs Savings (Ibs)Savings 100 372 267,096 $1,189,494 250 364 502,262 $1,608,205 BetaLED. Mm’ch 2008. Information forwarded by Bridget Ryan: Bridget.Ryan@CityofPaloAlto.org. March 2008 EPP - Street Lighting DISCUSSION Using cost information the city provided and SEC’s own research, we conclude LED lighting systems will take a relatively long time to break even financially but could offer large cost savings over the total life of the fixture. The technology offers a way to reduce the city’s carbon footprint and toxic waste. Since LED lighting is an emerging technology, no market price exists for the products; this makes financial analysis more challenging. We recommend that Palo Alto inquire about costs and technical details from multiple suppliers and use this calculator to compare the options. When contacting LED distributors, inquire as to which model would replace your current t-IPS bulb for the given application and ask for the power consumption and lifetime in addition to cost of the LED fixture. Costs may come down several hundred dollars with bulk purchasing. An example of the model interface can be seen in the Appendix. Grey boxes are fields users can modify and should be updated to reflect the true parameters quoted by manufacturers as well as true installation and replacement costs the city would face. The operation hours per year may change if parking structure lights are being analyzed as they are in operation. 6 EPP - Street Lighting APPENDIX Note: Documentation of sources is located on the excel file that contains the model # of hours in operation per year Price of Electricity ($/kWh) GHG Intensity of Electricity (Ibs CO2e/kWh) Price of GHG Emissions (S/ton) NA NA HPS Bulb (W) 25O 150 100 70 System Power (W) 3O0 188 130 105 Replacement Current Bulb Bulb Number of Units System Power Consumpti.on in Watts Material Costs / unit Bulb Cost Bulb Life (hours) Ballast Cost Ballast Years Fixture Cost Fixture Years Igniter Cost Igniter Years Replacement Cost / unit - Labor and Equipment Installation Cost / unit - Labor and Equipment Mercury (mg) Sodium (rag) GHG Emissions per year (Ibs) 4,062.2 974.9 768,768 0.0 0.0 266,506 Bulb lifetime (years) Total Yearly Energy Use (kWh) First Year Energy Cost ($) First Year GHG Cost Average Annual Material Cost Average Annual Replacement and Installation Cost Total Cost without GHG Adder Total Cost with GHG Adder Break Even Point (year) w/o NPV and GHG adder 6.0 436,800 $43,68O.0O $6,974.22 $15,275.87 $22,750.00 $2,769,740 $3,102,599 25.0 151,424 $15,142.40 $2,417.73 $24,475.36 $5,460.00 $1,379,003 $1,494,394 -10.2 *Negative numbers indicate replacements will reduce these quantities Difference* -4,062.2 -974.9 -502,262 -285,376 (S2a~SSS) (S4,556) $9,199 (S17,290) ($!,390,737) ($1,608,205) Attachment F: ENVIRONMENTAL PURCHASING POLICY PLAN April 28, 2008 Year 1 Accomplishments Completed ¯Wrote EPP policy and procedures ¯Set up initial intranet infrastructure to connect Purchasing Manual with environmental policies and related purchasing preferences Future printer purchases will require duplexing for most models (and by December 2009 printers with existing duplexing ability will have double-sided function set as the default). Worked with Stanford Student Environmental Consulting Team on assessing cost benefits of designated products Applied for Responsible Purchasing Network "pro bono assistance to help green lighting and fleets (to be announced in May) In Progress ¯Providing EPP input into new copier RFP to require duplexing and product take-back ¯Developing cogt benefit methodology to incorporate adders, and operational efflciencies into the evaluation of product costs Determining EPP efforts will continue in Year 2 (e.g., identify project leads and expectations) ¯Progress report to Council Developing specifications and a evaluation process for the Office Supply Contract that will include paper and toner cartridges By July 1, 2008 Review schedule of contracts for renewal and staff contacts that will help with greening criteria (recommend for each year to stay ahead of the game to that staff can plan to allocate time) ¯Expand EPP Committee to include reps that will offer support and input into new contracts Year 2 2008-09 ¯Implement new office supply contract ¯Incorporate existing Life Cycle Analysis policy into projects working with Utilities, project managers, Purchasing and ESSC and EPP Team Insert boiler plate language to be inserted into relevant contracts for: o Extended Producer Responsibility o Energy efficiency (Energy start and EPEAT certified) o EPP reporting requirements Continue aligning Purchasing Manual with Environmental Policies that pertain to purchasing Attachment F: EPP Plan Page 1 of 2 Target two products or services to green using cost benefit methodology produced in Year 1 (fluorescent lights, fleets). This could include possible pro bono work from the Responsible Purchasing Network pending acceptance of CPA 2008 application Identify appropriate training and education needs for Purchasing and EPP staff Develop outreach priorities and strategies to engage all City staff in EPP (factor in additional time for staff ideas and interest) Determine scope and draft Annual EPP Report (to included estimate of GHG reductions, waste, water reductions, operational efficiencies made, less toxicity, cost, amount of EPP products purchased). Determine Year 3 Plan Year 3(Pending additional needs identified in Year 2)2009-10 ¯Review schedule of contracts for renewal ¯Identify three products or services to green ¯Determine necessity to review and update existing EPP criteria ¯Implement additional projects identified in Year 2 ¯Continue implementation of ongoing projects, such as employee engagement Attachment F: EPP Plan Page 2 of 2 Attachment G CITY OF PALO ALTO EMPLOYEE DISTRIBUTION BY ZIP CODE 56 Emp. > g0 nil. 246 Emp. 20-50 mi. 486 Emp. 10-20 mi. 254 Emp. 5-10 llli. 404 Elnp. 0-5 nil. NUMBER OF EMPLOYEES WITHIN ZIP CODE 5-11 ~ 12-23 ~ 24 - 44 ~ 45 - 106 Data Sources: Ci~" of :Palo Alto, U.S. Censt~s Bureau, l~and McNally Map Produced by: I. Bump, 2008 Total Employee Count by Zip Code Area Legend Employees: up to up to up to up to up to up to up to up to up to up to ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ upto ~ up to ~ upto Chip Eitz~l, 2008-96-14 17:09:25S:’~DatalPaloAIt olPersonal\Chtp Eitzel.mdb)This document is a graphi~ representation only of bell availal:l e soumes, The Cityof Palo AIIo assumes no lesponsillility for anyelro~ ~1989 to City of Palo Alto