Proposition 39: Its Go Time! 2016 Green Summit

Anna Ferrera, SEC Executive Director

School Energy Coalition: Who We Are

• Formed in 2011 – Schools Districts, Community Colleges and Associate Members statewide

• Our Mission: Funding and technical assistance for school energy and water projects that create utility bill savings for K-14 schools.

• Advocacy before State and Federal agencies on Legislation and Rates from the LEA perspective

• Provide up-to-date information to SEC Members regarding Proposition 39 implementation and other energy and water concerns.

School Energy Legislation • SB 1207 (Hueso) ECAA Extension – Extends the Energy

Conservation Assistance Act (ECAA) framework that includes the low-interest loan program well-used by school districts for energy efficiency projects throughout the state. Signed by the Governor.

• AB 1928 (Campos) Resets deadlines for CEC to establish water efficiency performance standards and labeling for landscape irrigation equipment by Jan. 1, 2018. Signed by the Governor.

• AB 1637 (Low) Increases the funding available for the Self-Generating Incentive Program (SGIP)/battery storage incentive program. Signed by the Governor

• AB 2868 (Gatto) Accelerates Battery Storage Statewide . Signed.

• SB 1041 (Hueso) School Electricity - To provide for a “just and reasonable” school electricity rate that reflects the costs of providing that service. Dead: Held in Appropriations

• AB 2120 (Weber) Intervenor Comp – Would have allowed school district “consortiums” and COEs to apply for reimbursement for resources expended on CPUC energy proceedings. Held in Sub

Cap and Trade & State Electricity Transmission Regionalization

Cap and Trade: Governor and Legislature Agreed to a plan for spending $900 million Cap and Trade auction revenue reserving $452 million for future allocation. Regionalization: The State held discussions about the idea of creating a regional transmission system joining the California System Operator (CAISO) with PacificCorp utilities, a company that currently serves six Western states. • Many concerned parties expressed deep concerns

about what this change might do to rates and independent management of CA transmission grid.

• The discussion was tabled, but Governor expressed strong interest in taking this up again next year.

Proposition 39: State and District Goals

• Success for the State through energy savings and job creation

• Success for districts through cost savings • Ongoing savings for the lifetime of the project

in light of anticipated electricity rate increases • Schools may invest savings back into facilities

and maintenance given the lack of state bond funding

• Changing the way we look at our school facilities going forward

Proposition 39: Eligibility

•Eligible Projects: Energy efficiency measures and clean energy installations – Recommend Efficiency First

•Eligible Applicants: LEAs: County Offices of Education, School Districts, Charter Schools, State Special Schools and Community Colleges

•All Facilities Within the LEA: School site facilities include: classrooms, office facilities, auditoriums, multi-purpose rooms, gymnasiums, cafeterias, kitchens, pools, and special purposes areas

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2016-17 Governor’s Budget January Proposal Supports Funding for Prop 39 – Focused on K14

2013-14 2014-15 2015-16 2016-17 Approved

K-12 ADA Grants $381 M $279 M $313.4 M $398.8M

Community Colleges

$47 M $37.5 M $39.6 M $49.3M

Allocations are expected to be announced by the CDE by October 30, 2016

Proposition 39 Highlights 2016

• New Final Deadline for accepting Energy Expenditure Plans (EEP) is August 1, 2017.

• SIR Change: From 1.05 to 1.01

• Maintenance Percentage Change: Cost savings from 2 to 3 percent of project cost

• Zero Net Energy (ZNE): Changed from LEA wide to schoolsite. Those that qualify may use alternative methodology for determining the energy cost savings when one schoolsite is ZNE.

LEAs Not Participating: Discussion

A total of 1,120 (of 2,136) LEAs not participating, as of August 30, 2016.

Down the Final Stretch: School Districts Prepare for Reporting under Program

• Keep reporting in mind throughout when expending Prop 39 funds. No sole source contracting.

• Review and make use of the CEC’s online and final reporting

tools and review what is expected in the Guidelines and in the Handbook. Become familiar with these tools.

• Continue to discuss with your staff or consultant about how

to track and record savings for final reporting, and future projects – master planning.

• SEC alerts: Be first to know when state actions are being contemplated or taken on energy and water and Prop 39.

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Project$ are advancing!

Questions?

Contact Information

Anna Ferrera

(916) 441-3300 aferrera@m-w-h.com

www.schoolenergysolutions.org

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Executive Director of the School Energy Coalition. A former appointee and Senior Advisor at the U.S. Department of Energy and former staff to the California State Senate on energy issues.

ZNE Challenges and Strategies

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Prop.39 Execution

Solar Energy

Battery Storage

“TerraVerde emphasizes education and

transparency. We feel confident that they provide

us an unbiased assessment of the risks

and benefits.”

Don Ulrich, Clovis USD

“It’s going to save us general fund money.”

Robert Groeber, Visalia USD

“TerraVerde worked as a true partner, providing information in a

fully transparent manner, and have worked collaboratively with us

to address issues and problems that inevitably arise during the

development process.”

Steve Bolman, Petaluma City Schools

“More than an independent advisor,

TerraVerde empowered us in every phase of the process

through excellent communication,

deep expertise, and critical insights.”

Russell Freitas, Firebaugh-Las Deltas USD

Eric Cederquist, Fowler USD

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Time to consider

buying out your

solar PPA?

You need an

independent partner

you

can trust.

Ready to do

something about

rising demand

charges?

Let’s create energy

savings, together.

Facility Master Planning

Operations & Maintenance

Savings Reporting

K-12 and Higher Ed. Design Services

Facilities Master Planning

Historic Renovation

Eric Cederquist, Fowler USD

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Experts in Sustainable Design:

Zero Net Energy

Solar and Prop 39

CHPS + LEED

ZNE Challenges

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Official ZNE Definition

The California Energy Commission defines ZNE as: A Zero-Net-Energy Code Building is one where the net amount of energy produced by on-site renewable energy resources is equal to the value of the energy consumed annually by the building, at the level of a single “project” seeking development entitlements and building code permits, measured using the CEC’s Time Dependent Valuation metric. A zero-net energy code building meets an energy use intensity value designated in the Building Energy Efficiency Standards by building type and climate zone that reflect best practices for highly efficient buildings.

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Unofficial Definition

A=Energy Use B=Energy Production

A=B

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California ZNE Policy

AB 32 required reductions in Greenhouse gas levels across California which has resulted in various policies and regulations

California has a policy goal of achieving ZNE building standards by 2020 for low-rise residential buildings and by 2030 for commercial buildings. In addition, Governor Brown’s Executive Order B-18-12 establishes goals for ZNE construction in new and existing state buildings between now and 2025.

CALGreen and the CA Energy Code continue to be revised towards ZNE to meet these goals

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Why ZNE

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Educational Opportunities

Saves Money

Environmental Stewardship

Regulations will require it

ZNE Context

ZEPI (Zero Energy Performance Index) compares energy efficiency standards

Used by CHPS

CA Energy Code nearing max efficiency

Working towards ZNE

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ASHRAE 90.1-1999

Net Zero Energy

Title 24 2001

Title 24 2008

Title 24 2005

0

NREL Maximum Technical Potential (with no renewables). Includes plug load savings.

ASHRAE 90.1-2010

CBECS Median School

Title 24 2013 ASHRAE 90.1-2013

ASHRAE 90.1-2007

100

Title 24 2016?

0

ZNE Challenges

Additional Investment for Renewable Energy

Complexity and cost to get to absolute zero

Requires on-going monitoring and verification

Avoidance or offset of natural gas

Requires energy production beyond 100% of bill

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ASHRAE 90.1-1999

Net Zero Energy

Title 24 2001

Title 24 2008

Title 24 2005

0

NREL Maximum Technical Potential (with no renewables). Includes plug load savings.

ASHRAE 90.1-2010

CBECS Median School

Title 24 2013 ASHRAE 90.1-2013

ASHRAE 90.1-2007

100

Title 24 2016?

0

100% Energy Bill Offset

CA Net Metering

California Net Metering rules: any electricity generation beyond 100% of previous year’s utility bills is reimbursed at a much lower rate

Lower school energy use in summer and evenings

Very little financial return for exceeding 80-90% ZNE

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CA Net Metering

State policy is moving towards ZNE

Many reasons to embrace ZNE

Schools have limited funding and a fiduciary responsibility

CA Net Metering rules need to change to allow schools to embrace ZNE

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ZNE Strategies

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Cost Cutting: Solar

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Usage Versus Optimal Solar Production

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SCE Demand Charges

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PG&E Demand Charges

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Battery Storage Performance

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Peak Demand Reduction (kW) Building Type Oct Nov Dec Jan Feb Mar Apr May Jun Total Elementary School 37 28 31 24 39 24 67 111 0 361 Middle School 89 38 25 58 83 47 91 89 80 600 High School 109 80 50 66 73 107 44 89 46 663 Elementary School 50 18 13 21 11 34 66 99 0 313 Elementary School 40 30 22 22 44 25 8 46 21 259 Elementary School 27 33 13 21 54 76 18 20 0 263 Middle School 78 14 21 20 29 22 68 39 63 354 Elementary School 45 22 22 35 38 33 54 21 43 314 Total 477 265 195 267 371 368 416 515 253 3126

How does this translate into dollars?

Battery Storage Savings

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Pro-rated 9 month demand charge savings projections: $31,688Savings to Projections Ratio: 115%

Building Type Oct Nov Dec Jan Feb Mar Apr May Jun TotalElementary School $424 $325 $349 $274 $445 $274 $468 $320 $184 $3,062Middle School $1,023 $441 $287 $670 $959 $543 $760 $1,270 $0 $5,953High School $1,249 $913 $565 $753 $833 $1,221 $94 $530 $243 $6,401Elementary School $575 $210 $150 $240 $126 $388 $787 $448 $733 $3,657Elementary School $462 $342 $246 $251 $502 $282 $497 $1,014 $519 $4,115Elementary School $309 $381 $146 $240 $616 $867 $1,050 $1,033 $920 $5,561Middle School $905 $163 $237 $231 $335 $254 $757 $1,128 $0 $4,010Elementary School $518 $254 $254 $399 $434 $377 $616 $243 $488 $3,581Total $5,464 $3,029 $2,234 $3,057 $4,249 $4,205 $5,028 $5,986 $3,087 $36,340

Demand Charge Savings ($)

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Inflation Hedge

Best Practices: ZNE Asset Management

Monitor and Maintain Systems for Peak Performance Monitor solar & battery systems on an hourly basis, compare to

predicted output Schedule regular inspections and Preventive Maintenance

Schedule solar panel washing based on soiling loss calculations Respond to any monitoring alarms Initiate warranty claims and dispatch technicians as required

Compare actual meter values to projected output and identify cause of any discrepancies. Report findings Provide quarterly production/performance reports with usage breakdowns Provide annual realized savings report and future maintenance budget forecast

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What to Do Next

Improve facility design standards and practices to move towards ZNE using CHPS or similar Improve energy efficiency of existing buildings and operations Evaluate renewable energy options Advocate Legislature and CPUC for changes to Net Meter regulations for schools to pursue ZNE Support School Energy Coalition!

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Contact Information

Rick Brown, PhD,

President

TerraVerde Renewable Partners, LLC

1100 Larkspur Landing, Suite 155

Larkspur, CA 94939 (707) 953-2885

Rick.Brown@tvrpllc.com www.TVRPLLC.com

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Aaron Jobson

AIA, LEED AP, ALEP Principal

Quattrocchi Kwok

Architects 636 5th Street

Santa Rosa, CA 95404 (707) 576-0829

aaronj@qka.com www.qka.com

Prop 39 – Adding Value to Requirements

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Matt Spence Program Director

916.849.7571 mspence@ies-hvac.com

Overview

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What will be shared today? Reporting requirements Available resources Ideas for analyzing energy use Tools Examples of what can be done Notes and tips Contact

Prop 39 – Adding Value to Requirements

P39 Reporting Requirements

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ANNUAL PROGRESS REPORT Annually for all current or open projects in July of each

year. Information regarding project and progress. FINAL REPORT Submitted 12-15 months after project completion. Requires more detailed information including new utility

consumption data, solar generation, etc. to show savings

Project description, pictures, and financial information

For more information and all details please see: www.energy.ca.gov/efficiency/proposition39/

P39 Reporting Requirements

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WILL THE CEC ASK ME QUESTIONS? Most likely. Typical Questions Include: What caused changes in utility usage? What is the utility data by month? Were there any utility (or other) rebates? Is the project fully completed?

WILL I GET AUDITED? Most likely. Audits Include: Internal District Audits State Controller’s Office

Resources are available

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Project Example

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Project Summary: Saved over 33% over baseline, 31% was estimated Avoided cost savings of $55,000 per year due to rate increases

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

100,000

% S

avin

gs o

ver b

asel

ine

12/1

3

Ene

rgy

Con

sum

ptio

n (k

Wh)

FY 12/13 CY 2015 Savings (%)

Tools and Resources

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HOW DO WE ENSURE THE PROJECT SAVES ENERGY? Use tools or resources to monitor energy use Consider energy expertise to help manage Use project as learning opportunity for students

GET UTILITY DATA: Create a user name and login for all of your

accounts for easy access

USE TRACKING SOFTWARE: Energy Star Portfolio Manager

https://portfoliomanager.energystar.gov

Notes and Tips

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TAKE HOME MESSAGE: Do not allow the reporting requirements prevent you

and/or your District from utilizing P39 funds. DO YOUR HOMEWORK: The only consistency is change: Prop 39 guidelines Weather Changes in enrollment Additional use (added spaces, 3rd parties, hours, etc) Make sure to document

Consider adding reporting requirements to your scope of work

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-30%

-20%

-10%

0%

10%

20%

30%

(100,000)

(80,000)

(60,000)

(40,000)

(20,000)

-

20,000

40,000

60,000

80,000

100,000

Energy Elem Exp Elem

Loss High

Avg Middle

Green High

New Elem

Perc

enta

ge c

hang

e si

nce

2010

(%

)

Ener

gy c

hang

e si

nce

2010

(kW

h)

Performers: Green High and New Project Elementary Maintainer: Average Joe Middle Consumers: Energy Hungry Elementary, Expanding Elementary,

Loss of Controls High

Energy Analysis Example

15-minute Performance

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15kW summer increase?

32 kW base load

Energy Analysis Example

Decent 15-minute Performance

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Summer increase

22 kW base load

Better Control

Energy Analysis Example

$0.55 $0.25

$0.18 $0.25

$0.18

Average PG&E Rate: $0.23 Solar PPA Rate: ~ $0.18

Importance of Saving energy with Solar

Notes and Tips

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Energy Internship Program •Energy Savers was created by IES in coordination with Cutler-Orosi Joint

Unified School District. •6-month paid internship work-based learning opportunity managed by IES •The mission of this program was to enhance student’s thinking and

understanding of energy systems and complete a real-world energy audit, analysis, report, and presentation of their school.

Energy Lessons • Classes provided by our staff to 8th graders at Delano High School • IES created and provide classes discussing and demonstrating Energy

Efficiency, renewables (solar), careers in energy, and the decision process for projects.

Energy Competitions • In 2016, we created a Wind and Solar Energy educational program. This

was designed to allow students to learn about energy sources and dialogue with experts in the energy field.

• Shared energy savings program competition between District sites.

Prop 39 – Adding Value to Requirements

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Matt Spence Program Director

916.849.7571 mspence@ies-hvac.com

Timing Projects To Meet The New Deadline Kyle Frandsen – Balfour Beatty Construction

Important Considerations • Multi-Year EEP

• CCC, Bright Schools, Competitive Bid Process, In-House Resources

• District Approval Process

• # of Trades

• DSA

• Include All-In Estimates

• Utility Incentives

• Accounting Requirements

• Maximize Energy Savings and Allocated Funding

Important Changes That Help You! • An LEA can now

submit up to three (3) EEPs in a fiscal year

• 1.01 SIR • Increased the annual

maintenance cost savings from 2% percent to 3%

Tips & Tricks • Keep it simple! Use the Energy Savings Calculator

• Leverage Non-Repayable Funds

• No Limits on Amendments • Cannot add a school to an amendment • Consider Amendments to Previous EEPs

• 5th year funding is unknown • Tier 1-3 is more accurate • Tier 4 is the wildcard

• SEC Support & CEC Support

• No Matter What…Submit an EEP!

The End Result

K-12 Program Timeline