NJCleanEnergy.com

ENERGY SMART Saving Money

Investing in Infrastructure Building Resilience

September 15, 2017

by Elizabeth Ackerman, DCO Energy Gary Finger, Ombudsman NJ Board of Public Utilities

NJCleanEnergy.com

First Step: AWARENESS

• What is the Societal Benefits Charge (SBC)?

• What does NJ’s Clean Energy Program (NJCEP) do?

• What is ESIP?

• What is the value of a ‘negawatt’ (EE)?

• What about generation (RE, DR, microgrids)?

• What resources are available?

NJCleanEnergy.com

Second Step: ENERGY AUDIT

• How much energy is being consumed – kWh, BTU, kW

• How energy is being purchased

• Provides a baseline and benchmark of energy usage

• Inventory/age of existing equipment – level of efficiency

• Identifies cost-effective Energy Conservation Measures

(ECMs)

• Opportunities for on-site generation?

NJCleanEnergy.com

Third Step: ENERGY EFFICIENCY

REDUCE WHAT YOU CONSUME BEFORE YOU GENERATE

• ‘Negawatt’is the most cost-effective kWh

• Ample incentives available

• Reduces size and cost of generation

• Collateral benefits: increased comfort, reduced

emissions, increased productivity, job creation

NJCleanEnergy.com

Step 4: DISTRIBUTED GENERATION

NOW SIZE GENERATION FOR REDUCED LOAD

• Solar PV (+ Battery Storage)

• Combined Heat and Power (CHP)/Fuel Cells

• Micro-grids

• Collateral benefits: resilience, energy independence +

security, revenue streams

NJCleanEnergy.com

Step 5: INCENTIVES

• NJ’s Clean Energy Program (NJCEP)

• Energy Savings Improvement Program (ESIP)

• Solar Renewable Energy Credit (SREC)

• Power Purchase Agreement (PPA)

• Demand Response, Frequency Regulation Market

NJCleanEnergy.com

INCENTIVE PROGRAMS

NJCleanEnergy.com

NJ CLEAN ENERGY PROGRAM

• Administered by the New Jersey Board of Public Utilities

• Funded from “Societal Benefits Charge” on utility bill

• Program Goals:

Save energy and lower operating cost

Protect environment and lower emissions

Transform the market: technology, environment, financial

NJCleanEnergy.com

EE PROGRAM PORTFOLIO

Commercial, Industrial, Government, Non-Profit,

Institutional and Multifamily

Audits

• Local Government Energy Audit • Benchmarking study

Equipment Rebates

• SmartStart • Direct Install – Local Gov’t; Small Business • Large Energy Users • Sandy Relief Plan

Whole Buildings

• Pay for Performance Existing Buildings • Pay for Performance New Construction

Energy Generation:

• Combined Heat and Power (CHP) and Fuel Cells

ELIGIBLE SECTORS

PROGRAMS

NJCleanEnergy.com

LOCAL GOVERNMENT ENERGY AUDIT (LGEA)

NJCleanEnergy.com

The program subsidizes 100% of the audit cost,

subject to an annual incentive cap of $100,000

per entity, per fiscal year.

Local governments under Local Public

Contracts Law

Local governments under Local Public School

Contracts Law

County colleges under County College

Contracts Law

NJ State Colleges or State Universities

501(c)(3) Non-profit Agencies

AVAILABLE TO

INCENTIVE

LGEA OVERVIEW

NJCleanEnergy.com

LGEA: HOW IT WORKS

• TRC Solutions (Program Manager) provides ASHRAE level

II audit, using an on-line application process

• Analysis of building(s) energy use: how much, by which

equipment, how purchased, on-site generation

• Produces a list of recommended, cost-effective energy

conservation measures (ECMs)

• Incentive cap increased for entities involved in ESIP

project

NJCleanEnergy.com

WHAT IS BENCHMARKING?

Is 60 MPG high or low for this automobile?

Fuel Efficiency: MPG

Is 90 kBtu/SF/YR high or low for this building?

Energy Performance Source: 1 to 100

NJCleanEnergy.com

WHY BENCHMARK?

• Understand energy usage and costs

• First step for ENERGY STAR

certification

• Identify under-performing facilities

• Assess effectiveness of operations

• Assist in goals, targets and timelines

• Set investment priorities

• Verify and document pre and post

project energy use

NJCleanEnergy.com

NJ SMARTSTART BUILDINGS

NJCleanEnergy.com

SMARTSTART OVERVIEW

• Two types of incentives for installing high efficiency

equipment:

Prescriptive Incentives

Custom Incentives

• Available to all Commercial, Industrial, Agricultural,

Government, Non-Profit and Institutional customers

• Includes New Construction, Rehab and Retrofit projects

• Project pre-approval required

• Incentives up to $500,000 per electric account and

$500,000 per natural gas account.

NJCleanEnergy.com

SMARTSTART: INCENTIVES

Prescriptive Incentives

• Project Categories:

New Construction

Renovation

Remodeling

Equipment Replacement

• Specific incentives and individual applications for

Lighting, HVAC, VFDs, Refrigeration, Controls and more.

NJCleanEnergy.com

SMARTSTART: INCENTIVES

Custom Incentives

• Designed for new or innovative technologies proven to

be cost-effective and not listed as prescriptive

• Incentives paid for approved projects at the lesser of

three values:

50% of project cost

Buy down to one year payback, OR

$0.16/kWh, $1.60/ therm saved in first year

• Projects must have a minimum first year energy savings

of 75,000 kWh or 1,500 therms to be eligible.

NJCleanEnergy.com

DIRECT INSTALL

NJCleanEnergy.com

DIRECT INSTALL OVERVIEW

• A turn-key, retrofit program to replace outdated and

inefficient equipment

• Lighting, HVAC, Water, Refrigeration

• Open to Local Governments, small- and mid-sized Commercial

and Industrial facilities with a peak electric demand ≤ 200 kW

• Provides incentives of 70% of the installed cost

• Incentives are paid directly to the contractor

Customer only pays remaining 30% of installed cost

$125,000 project cap

$250,000 per entity cap per year

NJCleanEnergy.com

DIRECT INSTALL: BENEFITS

• Turnkey process: State-approved contractors conduct

audit, complete all paperwork, install equipment

• Minimal capital outlay: Cost to entity limited by generous

incentives and paid when work is completed and

approved by NJCEP

• Fast turnaround time: Average length of time for project

completion = 3 - 6 months

• Ongoing savings: Projects provide energy savings year

after year

NJCleanEnergy.com

MIDDLESEX COUNTY EXTENSION SERVICES

• County Park Building

• Lighting & HVAC retrofit

• Total Project Cost: $79,505

• Incentive: $55,654

• Annual Savings: $11,604

• Payback Period: 2.1 Years

NJCleanEnergy.com

ROXBURY TOWNSHIP PUBLIC SCHOOLS

• Public Elementary School

• Lighting & HVAC retrofit

• Total Project Cost: $119,740

• Incentive: $83,818

• Annual Savings: $16,229

• Payback Period: 2.2 Years

NJCleanEnergy.com

HAMILTON TOWNSHIP FIRE DISTRICT #2

• Municipal Fire Station

• Lighting & HVAC retrofit

• Total Project Cost: $125,664

• Incentive: $87,965

• Annual Savings: $12,961

• Payback Period: 2.9 Years

NJCleanEnergy.com

PAY FOR PERFORMANCE

P4P

NJCleanEnergy.com

P4P OVERVIEW

• Comprehensive, whole-building approach to saving

energy in existing or new facilities

• Goal: reduce consumption by 15% or more

• Incentives up to $2 million per project, assuming both

gas and electric improvements are made; $4 million

annual entity cap

• Incentives paid in three installments at milestones

• Requires Customer to work with State-approved

participating ‘Partner’

NJCleanEnergy.com

P4P OVERVIEW

• Existing Buildings: Large Commercial, Industrial

Institutional and certain multifamily with an annual

peak demand in excess of 100kW

• New Construction: Projects with over 50,000 square

feet of planned conditioned space

• Eligibility requirements flexible for hospitals, 501(c)(3)

non-profits, local government buildings, affordable

multi-family housing and public universities and

colleges

NJCleanEnergy.com

P4P: HOW IT WORKS

• Projects must create an Energy Reduction Plan

Prior 12 month energy use baseline for existing buildings

Current energy code baseline for new construction projects

Incentive Milestone #1 of up to $50,000

• Implementation of Project

Must finish construction or renovation to qualify

New Construction projects must submit an As-Built

Energy Reduction Plan to address any changes during

construction

Incentive Milestone #2 paid to customer

NJCleanEnergy.com

P4P: FINAL PAYMENT

To Qualify for Final Payment:

For existing buildings, after 12 month of consecutive

energy billing submit a post-construction report

Complete commissioning and a Commissioning Report of

new construction projects

Final Incentive Milestone #3 paid to customer

NJCleanEnergy.com

P4P BENEFITS

• Helps businesses to stay competitive:

> 40% of new non-residential buildings are built to

green standards

More cities are mandating energy performance

disclosure of commercial buildings annually

• Increases the value of the building:

ENERGY STAR and LEED labeled buildings receive higher

prices and have increased occupancy over standard

buildings

• Reduces operations and maintenance costs

NJCleanEnergy.com

NEWARK PUBLIC SCHOOLS

NJCleanEnergy.com

OLD BRIDGE TOWNSHIP

NJCleanEnergy.com

DG PROGRAMS

Commercial, Industrial, Government, Non-Profit,

Institutional and Multifamily

Energy Generation:

• Combined Heat and Power (CHP) and Fuel Cells

ELIGIBLE SECTORS

PROGRAMS

NJCleanEnergy.com

COMBINED HEAT & POWER AND FUEL

CELLS

NJCleanEnergy.com

CHP/FC OVERVIEW

• On-site power generation with recovery and productive

use of waste heat

• Two paths for incentives:

CHP and Fuel Cell systems fueled by non-renewable

sources

Biopower systems for technologies fueled by biomass,

which is handled through the renewable energy program

NJCleanEnergy.com

CHP/FC OVERVIEW

• Incentives range from $0.35-$4.00/watt

• Cap of $2-$3 million depending on technology and size

• Incentives paid in three phases:

30% at equipment purchase

60% at installation completion

10% at performance verification

NJCleanEnergy.com

CHP/FC BENEFITS

• Lower cost: reduces overall electricity purchases from

utility

• Less risk: company’s energy prices more stable over time

• More reliable: may reduce disruptions from electric grid

• Less waste: utilizes heat that would otherwise be wasted

• More sustainable: on-site generation results in less

greenhouse gas emissions

NJCleanEnergy.com

OCEAN COUNTY COLLEGE

NJCleanEnergy.com

OLD BRIDGE TOWNSHIP

NJCleanEnergy.com

JERSEY SHORE UNIVERSITY MEDICAL CENTER

• Hospital and Critical Care

Facility

• CHP Equipment

• Total Project Cost: $3,888,805

• Incentive: $1,000,000

• Annual Savings: $2,892,703

• Payback Period: 1 Year

NJCleanEnergy.com

RESILIENCE

• Ability to restore power quickly in the event of a grid

power outage

• Requires Distributed Generation (DG) and ability to

‘island’ – i.e. isolate the facility from larger grid

• NJBPU Town Center MicroGrid grant program

Powering Critical Facilities within close proximity

13 Projects

$175,000 each for feasibility studies

NJCleanEnergy.com

SOLAR OVERVIEW

Solar Renewable Energy Credits (SRECs)

Entity owns system

Each MW generated creates 1 SREC

SRECs traded annually

Net Metering

Entity owns system

Sell excess energy back to grid on monthly basis

12 month ‘True-up’: sell back to grid at wholesale price

NJCleanEnergy.com

SOLAR OVERVIEW

Power Purchase Agreement (PPA)

“Rent-your-roof”

Guaranteed cost (4/kWh)of electricity for contract

term

Most common form of solar PV development

NJCleanEnergy.com

SOLAR BENEFITS

• Lower cost: reduces overall electricity purchases from

utility

• Sometimes roof replacement is included in PPA

• Can provide revenue stream

• More sustainable: on-site generation results in less

greenhouse gas emissions

NJCleanEnergy.com

REVENUE STREAMS Demand Response (DR)

Entity paid by PJM for energy not consumed during peak

hours (kW)

Paid whether PJM calls an ‘event’ or not

Ideal for schools – greatest demand hours during summer

cooling season when schools have limited occupancy

Frequency Regulation Market (FRM)

Requires battery storage

Sell energy back to grid at steady, predictable current

Reduces impact on the grid of ‘intermittency’ of RE

NJCleanEnergy.com

ESIP OVERVIEW

• Funding mechanism that allows public entities to pay for

capital improvements (energy infrastructure) with operational

savings realized by upgrading inefficient equipment

• Funds all hard costs (installed ECMs) and soft costs (audit,

engineering design, bonding costs, 3rd-Party review of ESP)

required to implement project

• Typical ESIP term is 15 – 20 years

• Turn-key process that delivers comprehensive energy analysis

and solutions and maximizes all available incentives

• Guaranteed savings when working with an Energy Services

Company (ESCO)

NJCleanEnergy.com

ESIP: TYPICAL ECMs

Retro-commissioning (RCx) Lighting and Controls (in + out) Water Conservation Building Automation System (BAS) HVAC Chillers Boilers Roof Top Units (RTUs) Air Handling Units (AHUs) Motors Pumps Air sealing Insulation New windows New roof Kitchen equipment

All available incentives Revenue Streams Commissioning Staff Training Energy Guarantee Energy Curriculum (schools)*

*ESIP legislation allows 15% of the total cost of project to be directed to non-energy measures as long as energy savings can support them.

NJCleanEnergy.com

ESIP PROCESS

1. Conduct Investment Grade Audit (IGA)

2. Develop Energy Savings Plan (ESP)

3. Third-party review of ESP

4. Obtain BPU approval of ESP

5. Secure Funding

6. Produce Engineering Design/Specifications

7. Competitively bid all ECMs

8.Construct

9. Commission

NJCleanEnergy.com

ESIP: IMPLEMENTATION MODELS

ESCO Model • Uses public bidding or competitive contracting process

to award a contract to a DPMC-certified ESCO to provide turn-key services

• ESCO conducts audit, develops the ESP, produces engineering design/specifications, bids the ECMs and manages the construction

• ESCO must give a guarantee of savings opportunity to government entity

• Contract award is for “most advantageous, price and other factors considered process” or “lowest responsible bidder.”

NJCleanEnergy.com

ESIP: IMPLEMENTATION MODELS

Do-It-Yourself (DIY) Model • Hire an energy consultant to develop your Energy

Savings Plan • Subcontract engineering design/specifications • Bid the ECMs • Manage construction in-house or hire

professionals to provide that service • Rely on built-in verification process to assure

savings – NO ENERGY SAVINGS GUARANTEE

NJCleanEnergy.com

ESIP: IMPLEMENTATION MODELS

Hybrid Model – ESCO + DIY • Hire an Architect or Mechanical Engineer to manage

your ESCO project • AoR/EoR hires an ESCO as subcontractor to its

professional contract • ESCO conducts IGA; develops ESP • AoR/EoR provides 3rd-party review of ESP • ESCO produces engineering design/specifications, bids

the ECMs and manages construction • ESCO can provide energy savings guarantee - contracted

directly with entity

NJCleanEnergy.com

ESIP: NJBPU OVERSIGHT

• RFP to hire ESCO must be approved by the BPU (template RFP available)

• LGEA is basis of RFP to hire ESCO

• Mandatory pre-proposal conference for interested, DPMC-certified ESCO’s

• BPU will receive, at a minimum, a CD or Flash Drive copy of each phase of the proposal and contract process

• BPU must approve ESP *NJCEP incentives are reviewed and approved in writing by the Program Manager, not BPU staff

NJCleanEnergy.com

Projected Guaranteed Actual Percentage Entity Annual Savings Annual Savings Difference

Barnegat School District $317,151.00 $359,411.00 113.32% Mercer VoTech $1,015,724.00 $1,126,793.00 110.93% Millville School District $616,411.00 $803,820.00 130.40% Salem County VoTech $529,649.00 $623,562.00 117.73% Wyckoff School District $368,277.00 $403,642.00 109.60% Kearny Township $100,604.00 $122,534.00 121.79%

Bridgewater/Raritan RSD $592,025.00 $593,612.00 100.26%

Hanover Twp School Dist. $212,168.00 $218,104.00 102.79%

Phillipsburg $442,341.00 $521,762.00 117.95% Franklin Twp $99,134.00 $103,543.00 104.44% Somerset Hills $345,944.00 $352,647.00 101.93% Manalapan $67,021.00 $78,623.00 117.31%

Newark Housing Authority $4,212,128.00 $9,411,792.00 123.45%

$8,918,577.00 $14,719,845.00 113.22%

ESIP: PROGRAM PROGRESS

NJCleanEnergy.com

COUNTY OF OCEAN

NJCleanEnergy.com

ATLANTIC CITY

NJCleanEnergy.com

OLD BRIDGE TOWNSHIP

NJCleanEnergy.com

A D V O C A C Y

NJCleanEnergy.com

STREETLIGHTING IN YOUR COMMUNITY

NJCleanEnergy.com

565 municipalities in New Jersey

Over 8 million ratepayers in the State

Ratepayers (or taxpayers?) pay more than $110 million annually to light our streets

There are just over 745,492

street lights in New Jersey

Street lighting is paid for in nearly

all cases by local government

This is a budget item that is ultimately reflected in your property tax bill.

STREETLIGHT OVERVIEW

NJCleanEnergy.com

USDOE: 20% of all energy consumed in US used is for lighting Between 36 – 44 million street lights in U.S. Primary technology used is High Pressure Sodium

Retrofitting all street lights with new LED technology will reduce the energy used by 24%. Added benefit: Reported reduction in crime by 12%

NATIONAL STREETLIGHTING STATUS

NJCleanEnergy.com

STREETLIGHTS IN NEW JERSEY

• Municipalities can save over $55 million annually utilities provided a tariff for streetlights tariff • This represents between 1 ½% - 2% on a

municipalities annual budget • Atlantic City Electric (ACE) is the only investor-owned

utility to provide the tariff • The Board cannot force the Electric Distribution

Companies (EDCs) to introduce a tariff for LED street lighting

NJCleanEnergy.com

STREETLIGHT COSTS IN NEW JERSEY

Newark - $8.6 million annually

Jersey City - $4.0 million annually

Camden - $1.9 million annually

Cherry Hill - $870,000 annually

Haddonfield - $111,000 annually

NJCleanEnergy.com

Barnegat 144 street lights $19,672 Beach Haven 490 street lights $84,094 Harvey Cedars 176 street lights $35,018 Long Beach 1351 street lights $236,349 Ship Bottom 332 street lights $86,323 Surf City 217 street lights $35,705 Absecon 2022 street lights $127,413 Stafford Twp 3727 street lights $412,965

STREETLIGHT COSTS IN NEW JERSEY

NJCleanEnergy.com

STREETLIGHT SMART

• Any municipally-owned streetlighting can be retro-fitted now.

• Review the capital costs and determine the payback for your county and municipalities.

• NJ’s Clean Energy Program provides incentives to convert to LEDs.

• Consider ESIP to carry the funding. • If you are located in ACE’s territory, upgrade to LEDs

to take advantage of significant and ongoing savings.

NJCleanEnergy.com

The Office of Clean Energy provides LED incentives up to $150 per light, including cobra head street lighting. Working with the street lighting tariffs submitted by Atlantic City Electric (ACE), under their SPL Rate schedule (Street and Private Lighting) a town can take advantage of improved lighting quality and slightly lower monthly costs. Under ACE’s CSL Rate Schedule (CSL) when a town fronts the capital cost of the lighting the annual municipal lighting rates drops by over 65%.

STREETLIGHT SMART

NJCleanEnergy.com

ADVOCATE for building ordinance that requires all new paving and construction projects to upgrade

to LED streetlighting technology.

Parking lot lit with metal halide Same parking lot with LEDs

Reduction in crime impacts public safety budgets

NJCleanEnergy.com

LOS ANGELOS after street light conversion

Significant Green House Gas reductions

Significant reduction in light pollution

NJCleanEnergy.com

RESOURCES Gary Finger, Ombudsman Gary.Finger@bpu.nj.gov Elizabeth Ackerman, Architect elizabetha@dcoenergy.com NJ’s Clean Energy Program www.njcleanenergy.com Energy Savings Improvement Program (ESIP) www.njcleanenergy.com/commercial-industrial/programs/energy-savings-improvement-program Pay for Performance (P4P) Partners www.njcleanenergy.com/files/file/Pay%20for%20Performance/2016%20Partner%20List/P4P%20EB_NC%20Approved%20Partners%20Master%2011-10-16%20Clean.pdf State-qualified ESCOs www.nj.gov/cgi-bin/treas/contract_search.pl Sustainable Jersey www.sustainablejersey.com