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Home My WebLink About2018-03-19 e-packet@11:30Monday, March 19, 2018 11:30 AM City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Hall, City Manager's Conference Room 400 Grand Avenue, South San Francisco, CA Environmental Standing Committee of the City Council Special Meeting Agenda March 19, 2018Environmental Standing Committee of the City Council Special Meeting Agenda NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the Environmental Standing Committee of the City of South San Francisco will hold a Special Meeting on Monday, March 19, 2018, at 11:30 a.m., at City Hall, City Manager's Conference Room, 400 Grand Avenue, South San Francisco, California 94080. Purpose of the meeting: Call To Order. Roll Call. Public Comments. MATTERS FOR CONSIDERATION Motion to approve the Minutes of the meeting of May 30, 2017.1. Report regarding status of the Energy Efficiency Plan project prepared by OpTerra (Engie). (Marian Lee, Assistant City Manager and Justin Lovell, Public Works Administrator) 2. Adjournment. Page 2 City of South San Francisco Printed on 4/16/2018 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-216 Agenda Date:3/19/2018 Version:1 Item #:1. Motion to approve the Minutes of the meeting of May 30, 2017. City of South San Francisco Printed on 3/15/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-187 Agenda Date:3/19/2018 Version:1 Item #: Report regarding status of the Energy Efficiency Plan project prepared by OpTerra (Engie).(Marian Lee, Assistant City Manager and Justin Lovell, Public Works Administrator) RECOMMENDATION It is recommended that the Environmental Subcommittee of the City Council receive an update on the Energy Efficiency plan prepare by OpTerra (Engie) and provide guidance regarding next steps. BACKGROUND/DISCUSSION The City is committed to reducing energy usage and cost and greenhouse gas emissions,through adopted policies,strategies,and programs.The City’s Climate Action Plan (CAP)was adopted in 2014,with the purpose of reducing energy usage and greenhouse gas emissions (GHGs)community-wide.The CAP contains measures and actions that specifically address improving energy efficiency at municipal facilities.Developing and implementing a comprehensive energy efficiency plan for municipal facilities is a way to: -Reduce City energy costs; -Audit current and future energy use; -Expedite energy efficiency projects; and -Implement the Climate Action Plan. Over the past several years,the City has implemented energy-reduction programs at many municipal facilities, reducing energy use and costs.In 2011,the City received a grant from the American Recovery and Reinvestment Act (ARRA),which funded efficiency improvements,including replacing lights at all City facilities with energy efficient upgrades,and installing solar panels at the City Hall Annex.In 2013,San Mateo County Energy Watch provided an audit service to determine additional energy savings opportunities at City facilities.The audit resulted in implementation of several major projects,including an energy management system in the Municipal Services Building (MSB),replacing exhaust fans and installing carbon dioxide sensors in the underground garage at the MSB,installing variable frequency drives on air handling units and heat pumps at several facilities,and replacing boilers at the Magnolia Center and Main Library.The City has saved approximately $41,000 annually as a result of implementing these energy efficiency projects,or approximately eight percent of the electrical cost for City facilities. As an on-going effort,in 2014,City staff worked with PG&E Sustainable Solutions Turnkey (SST)program to audit the City’s electrical bills and facilities to identify additional energy savings opportunities.The audit indicated meaningful opportunities for further savings,likely through the implementation of more complex and larger-scale energy projects. In November,2015,City staff issued a Request for Proposal (RFP)for an energy conservation /generation program.The RFP was sent to nine Energy Service Companies (ESCOs),all registered with the Federal Department of Energy (DOE)and operating in California.The City received one proposal,from OpTerra Energy Services (now branded as Engie).Key reasons for low response included limited competition,company capacity, business goals, and firms’ assessment of selection potential. Staff reviewed Engie’s proposal and concluded that the proposed approach and team qualifications met theCity of South San Francisco Printed on 3/15/2018Page 1 of 3 powered by Legistar™ File #:18-187 Agenda Date:3/19/2018 Version:1 Item #: Staff reviewed Engie’s proposal and concluded that the proposed approach and team qualifications met the City’s criteria outlined in the RFP.In July 2016,staff recommended entering into a professional services contract with Engie for Phase I of the project and was approved by City Council.Phase I results in completion of an Energy Efficiency Plan for City municipal facilities for $50,000.City Council requested staff to return to City Council after Phase I completion and seek City Council approval before entering into Phase II (design, construction and monitoring). Phase I is now complete. The following work is complete: -Audits of energy bills, lighting, water, HVAC systems -Facility site visits -Identification of facilities for metering -Identification of energy savings projects -Project costing -Finance modeling -Solicitation of bank proposals The projects included in the Plan are listed in Attachment 1. The key findings are as follows: -The Plan is a $4.5 million program that has potential to save energy and money; -This program will annually save $166,000 in energy bills and reduce GHG by 650 tons a year; -The projects are installation of solar panels at six sites totaling 428 kilowatts and 1700 LED fixtures at nine sites; -$3.7 million financing would be required by the city in the form of a loan in addition to $800,000 from the City’s Parking District Fund and $50,000 through grants to implement the Plan in total; -The loan interest could range between 2.7 percent and 3.5 percent (as of December 2017); and -The loan would be paid back in 17 years with the estimated energy savings to the city. Staff reviewed the proposed Energy Efficiency Plan and evaluated the draft terms of the design/construction and monitoring contract with Engie for the next phase of the project.Staff believes that the plan has merit and the projects identified should move forward.However,the timing of the next phase (design,construction and monitoring) and contracting strategy should be redefined. The key reasons are as follows: -Committing to this type of turn-key contract through a contractor results in added risk to the City (e.g. limited ability to control program management, limited contractual ability to control contractors); -Proprietary rights to design solutions limit City’s ability to apply Engie developed solutions to other City facilities on its own terms; -The unknown impact of how unforeseen project hindrances (such as soil conditions limiting solar panel installation) could affect the financing and return on investment for the whole program; -Timing of solar panel construction limiting parking availability in the downtown area where parking supply is already strained by construction activities is not ideal; -Potential impact on the City’s credit rating related to the Measure W bonding efforts for the Community Civic Campus project; and -There is general difficulty in obtaining detailed evaluation and analysis given the nature of the current Engie contract. Based on the above assessment, staff recommends the following next steps: -Receive the Energy Efficiency Plan from Engie as obligated in the executed professional services agreement; -Pay Engie $50,000 for the Plan; and City of South San Francisco Printed on 3/15/2018Page 2 of 3 powered by Legistar™ File #:18-187 Agenda Date:3/19/2018 Version:1 Item #: -Issue RFP(s) for the design and implementation of the Plan during the 2018/2019 fiscal year. FISCAL IMPACT There is no impact to the budget.City’s payment obligation of $50,000 for Phase I was previously budgeted and approved by City Council.Funding is available to make payment,subject to direction by the Subcommittee / City Council. CONCLUSION Staff requests the Subcommittee receive the presented information and staff recommendations and provide guidance on the proposed next steps.If RFP(s)is/are issued,it will be important to set objectives,parameters on procurement and contract strategy that address the concerns identified above,including a request for implementing options by program phase and/or by project. Attachment: List of Project included in the Energy Efficiency Plan City of South San Francisco Printed on 3/15/2018Page 3 of 3 powered by Legistar™ Attachment 1 Savings Plan Project Based on Recommendations from OpTerra (Engie)