APPA 2015 Annual Meeting and Exhibition August 5, 2015 Ed Choklek, Robert Hilgenbrink, Sam Overton, and Mark Pruitt

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1 Illinois Green Economy Network Comprehensive Energy Analysis: Benchmarking Energy Use and Implementing Energy Efficiency Improvements for Multiple Campuses APPA 2015 Annual Meeting and Exhibition August 5, 2015 Ed Choklek, Robert Hilgenbrink, Sam Overton, and Mark Pruitt Learning Outcomes Develop approaches and tools for energy benchmarking Identify energy related products and services where group purchasing would result in financial benefits Compare energy procurement approaches and strategies for an individual college versus across multiple campuses Integrate energy related issues into operating and capital planning to support campus sustainability goals 2 1

2 Why all the interest in energy? Utility bills are large budget items Sustainability and energy are joined at the hip Data is readily available to end users Benchmarking standards already exist 3 Illinois Green Economy Network Consortium of Illinois community colleges working to grow the green economy of Illinois. Unique statewide approach leverages the power of a sustainability network with the community connections of colleges to expand deployment of clean energy technologies, increase employment opportunities, improve environmental and human health, foster community engagement, and accelerate market competitiveness. Mission is to provide a platform for collaboration among all Illinois community colleges and their partners to drive growth of the green economy. 4 2

3 Background/Overview Project funding provided through a renewable energy grant from the Illinois Department of Commerce and Economic Opportunity Comprehensive analysis of Illinois community colleges energy commodity purchasing, energy consumption/use management, and the potential for renewable energy asset development Selected Patrick Engineering to complete the analysis All Illinois community colleges participated 5 Purpose Determine the potential for campuses to participate in consortium procurement of energy, while placing emphasis on the availability of renewable sources Analyze the economic potential for on site generation utilizing either existing resources or installation of new sources including wind and solar to meet some or all of the campus needs Partnership with facilities management staff to review opportunities for reducing energy use and identifying barriers to their implementation 6 3

4 Project Outputs Comprehensive Report Recorded energy consumption and costs Compared consumption and costs across peer institutions Identified general opportunities for procurement, energy efficiency, and renewable energy asset Recommended system wide structures to assist colleges capture procurement, energy efficiency, and renewable energy opportunities Supplemental Reports Individual reports for all 39 districts Graphical placement of college within its regional and peer groups Identified magnitude of potential savings opportunities 7 Project Outputs - General Data Sources Annual energy reports from colleges Questionnaires completed by the colleges Utility and energy supply bills Data Comparisons Peak vs. average kw Seasonal use intensity BTU / square foot / year $ / square foot / year Average daily consumption / average daily temperature $ / Unit of energy (total) $ / Unit of energy (distribution) $ / Unit of energy (commodity) Units of Energy / student Units of energy / credit hour 8 4

5 Project Outputs Peer Benchmarking Regional Groupings of Illinois Community Colleges Central Region Northern Region Southern Region Danville Heartland Illinois Central Lake Land Lincoln Land Parkland Richland Sandburg Spoon River Wood Black Hawk Chicago Du Page Elgin Harper Highland Illinois Valley Joliet Kankakee Kishwaukee Lake County McHenry Moraine Valley Morton Oakton Prairie State Rock Valley Sauk Valley South Suburban Triton Waubonsee Illinois Eastern Kaskaskia Lewis & Clark Logan Rend Lake Shawnee Southeastern Southwestern Regional groupings to facilitate Comparisons on common weather patterns Comparisons on common utility rate structures 9 Project Outputs Peer Benchmarking ICCB Peer Groups Group I Group II Group III Group IV Group V Group VI Group VII Sandburg Shawnee Southeastern Spoon River John Wood Danville Highland Kaskaskia Kishwaukee Rend Lake Sauk Valley Illinois Eastern Illinois Valley Kankakee Lake Land Lewis & Clark John A. Logan McHenry Black Hawk Heartland Illinois Central Lincoln Land Parkland Richland Rock Valley Southwestern Elgin Morton Prairie State South Suburban Waubonsee Chicago Daley Kennedy-King Malcolm X Olive-Harvey Truman Washington Wilbur Wright City-Wide DuPage Harper Joliet Lake County Moraine Valley Oakton Triton Peer groupings to facilitate Comparisons on common programming 10 5

6 Project Outputs Energy Procurement $60,000,000 $50,000,000 $40,000,000 $/Annum $30,000,000 $20,000,000 $10,000,000 $ Electricity $26,936,277 $30,339,877 $36,811,241 $39,904,810 $35,864,012 Natural Gas $18,034,047 $14,592,113 $15,356,416 $15,372,137 $8,563,382 Annual Total $44,970,325 $44,931,991 $52,167,657 $55,276,947 $44,427,394 Electricity and Natural Gas costs not directly linked Indicates a definite lower cost limit but also upward sensitivity 11 Project Outputs Energy Procurement $30.00 $25.00 $20.00 $/MMBTU $15.00 $10.00 $5.00 $ Colleges ($/MMBTU Electricity) EIA ($/MMBTU Electricity for Illinois) Colleges ($/MMBTU Natural Gas) EIA ($/MMBTU Natural Gas for Illinois) Electricity and Natural Gas costs lagged regional trends Indicates that pricing structures do not allow flexibility 12 6

7 Project Outputs Energy Procurement $ Electricity Cost/MWH per Gross Square Foot (2012) $ MMBTU/Annum $ $80.00 $60.00 $40.00 $20.00 Competitive (Ameren) Competitive (ComEd) Vertical $- - 1,000,000 2,000,000 3,000,000 4,000,000 Gross Square Feet Facility size not directly correlated to average energy price Indicates that variables other than volume drive pricing 13 Project Outputs Energy Procurement $30.00 Historical Energy Unit Cost Index Ranges ($/MMBTU) $25.00 $20.00 $15.00 $10.00 $5.00 $ Performance range widening over time Indicates lack of consistency in hedging/purchasing 14 7

8 Project Outputs Energy Procurement Findings Most colleges purchase energy supply from third parties Supplier selection methods vary Ultimately transact with only a few suppliers Generally transact on 1 2 year contracts Many accept standard supplier contract terms and conditions Recommendations Adopt common supplier specifications and selection practices Increase transparency, supplier competition Reduce counterparty risks Utilize group purchasing, but avoid cross subsidization 15 Project Outputs Energy Efficiency 16 8

9 Project Outputs Energy Efficiency Historical EUI (MMBTU/SqFt) Variance for all Colleges High Low Average Performance range widening over time Indicates some facilities have exceptionally high energy intensity 17 Project Outputs Energy Efficiency Findings Strong correlation between facility size and consumption intensity Energy Use Index Energy Use Index expressed as MBTU/sq ft Weaker relationship between facility size and cost intensity Energy Use Cost Index Energy Unit Cost Intensity expressed as $/sq ft Varying levels of project development Project and funding driven / not programmatic Recommendations Adopt comprehensive energy master planning Extend group purchasing and grant applications Promote system wide approaches Develop internal performance contracting services 18 9

10 Project Outputs Clean Energy Results from a recent survey from Clean Energy Trust: 86.5% of likely voters believe it is very or somewhat important to maintain policies to bring renewable energy to Illinois, with 55% calling it very important. 79.6% of respondents prefer that at least one quarter of the state s electricity come from renewable energy sources like wind and solar with more than 61% wanting the state s renewable energy requirement to double to at least one half of the state s electricity. 19 Project Outputs Clean Energy Price History of Installed Photovoltaic Systems 20 10

11 Project Outputs Clean Energy Illinois Market Price Parity for Solar PV Solar PV Capital Costs ($/kw) $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 Energy costs from solar PV fall to $0.10/kWh when capital costs fall to $2,300/kW. Delivered Solar Energy Costs ($/kwh) 21 Project Outputs Clean Energy 22 11

12 Project Outputs Clean Energy Findings Several colleges have successfully installed clean energy projects System wide load is large enough to support long term power purchase agreements for a centralized clean energy asset Renewable Energy Credit purchases do not support new clean energy development in Illinois Recommendations Consider some short term clean energy purchases from vendors Focus campus development on solar PV, solar thermal, geothermal and Combined Heat and Power (CHP) Consider development of long term power purchase agreement to support centralized clean energy asset 23 Case Study: Rock Valley College Based on FY12 data, Rock Valley College has an EUI of Mbtu/SqFt and its EUCI is $1.19/SqFt This data suggests high energy efficiency and very competitive delivered energy units costs among Illinois community colleges 24 12

13 Case Study: Rock Valley College For FY12, Rock Valley College ranks fourth lowest in unit energy costs compared with its regional counterparts, and third lowest among peer institutions For FY12, Rock Valley College ranks seventh lowest regionally, and fifth lowest among its peers in energy intensity 25 Case Study: Rock Valley College Rock Valley College has a moderate opportunity to improve its energy use intensity In FY12, its EUI was 7% below average of the peer group and 17% below the average of its regional group Rock Valley College should support continued energy efficiency efforts by engaging in a comprehensive energy master plan or an investment grade energy audit Based on FY12 data, a reduction in Rock Valley College s EUI by 10% would save $106, per year in energy costs 26 13

14 Conclusions The college districts are one of the state s larger energy consumers Substantial cost savings and risk reductions can be achieved in energy procurement, energy efficiency, and clean energy categories Impressive levels of internal expertise already exist within the colleges Efficiencies of scale can benefit procurement, planning, and financing 27 Conclusions Improvements fall into several general categories: o Leveraged cost reductions o Increased internal efficiencies o Reduced liabilities Common themes among recommendations: o Increased coordination among colleges = increased improvements o Longer range planning = longer range improvements o Existing internal expertise should be accessed and/or developed by the Illinois community college system 28 14

15 QUESTIONS? View the complete energy analysis here. Robert Hilgenbrink, IGEN, Sam Overton, Rock Valley College, Mark Pruitt, The Power Bureau, 15