Energy Services Contract Award

Transcription

1 Energy Services Contract Award East Side Union High School District Board Meeting of: October 16, 2014; Item 9.02 Linda da Silva, Facilities Director Emily Douglas, OpTerra Energy Services

2 Background November 17, 2011: Board of Trustees approved a site improvement / deferred maintenance plan to be funded by Measure G bond proceeds in the amount of $32.5 million. November 2012: California passed the Clean Energy Jobs Act (Proposition 39) to fund energy efficiency in schools. January 10, 2014: District staff solicited qualifications from firms to design and construct cost effective energy performance improvements at District sites. March 20, 2014: Board of Trustees approved Program Development Agreement with Chevron Energy Solutions, Board Item 9.06, to determine the specific energy conservation measures that will be used to support an Energy Services Contract. 2

3 Background March September 2014: Chevron Energy Solutions (CES) performed the work of the Program Development Agreement: Surveyed all District facilities Reviewed as built construction records Reviewed electricity, gas, water and garbage utility records to ascertain usage and costs Investigated possible energy conservation measures Solicited preliminary pricing bids from a number of trades contractors Numerous meetings with Facilities Planning and Maintenance staff for information and direction September 2, 2014: CES was sold to OpTerra Energy Services and CES assigned its interest in the Program Development Agreement to OpTerra per the contract terms; OpTerra has assumed and is performing all the rights, duties, and obligations of the Program Development Agreement. 3

4 Special Criteria Government Code Section authorizes public agencies to enter into agreements with qualified energy services contract providers. However, before awarding an energy services contract, the Governing Board must first determine and find in a public hearing that the net benefits of the energy conservation measures to be provided through the contract are greater than the expense of the contracted improvements. California Clean Energy Jobs Act Created with the approval of Proposition 39 in the November 2012 statewide General Election Allocates projected revenue to the Clean Energy Job Creation Fund for five fiscal years, beginning in fiscal year 2013/14 Allocations are made to schools and/or districts based on enrollment Identify and include energy work that captures Prop 39 funding allocated to ESUHSD and charter schools housed in East Side facilities 4

5 Result of Program Development Phase Energy Saving and Infrastructure Upgrades: A specific package of energy saving measures and energy infrastructure upgrades has been identified. The cost will be outweighed by the savings provided through the improvements, making it eligible for award as an Energy Services Contract under Government Code On top of the net savings, the District will realize these additional benefits: Improved indoor environmental comfort and function Decreased disruption to learning and working environments due to equipment failures Decreased maintenance burden Economic stimulus through creation of 52 green construction jobs Educational enrichment through internships and custom educational programming that supports common core implementation, enhances career pathways, and boosts professional development Continuation of East Side s leadership position in energy conservation Environmental benefits of avoiding more than 20,000 tons of greenhouse gas emissions 5

6 Program Goals Goal General Fund Savings Economic Stimulus Solar & Lighting Project $3 million in year 1, and $43 million in lifetime savings Employ over 85 local union contractors District-Wide Energy Services Project Net value over $38 million during project lifetime, leveraging state funds Create 52 regional, green union jobs Educational Enrichment Celebrating District Leadership Environmental Benefits Provide professional development workshops and solar kits to students at 13 schools Host groundbreaking ceremony in March 2010 and ribbon cutting in May 2011 Equivalent to planting 726 acres of pine forest Enhance educational program with internships and custom educational programming Continue community leadership with media strategy Avoid nearly 20,000 tons of greenhouse gas emissions 6

7 Energy Education Enhance Professional Development Inquiry-based and literacy-infused sessions reinforce skills critical to Common Core and NGSS (Next Generation Science Standards) implementation Supporting curriculum and hands-on components empower teachers to incorporate energy concepts into classroom learning Strengthen Career Pathways Internship through S4CA (Santa Clara County Construction Careers Association) offers real-world construction experience to East Side students Visits from OpTerra STEM (Science, Technology, Engineering, Math) experts help students explore potential career paths and support workforce development Cultivate Community Connections Analysis of past East Side energy consumption helps students understand their environmental impact and why it matters Student-led energy awareness activities help make energy efficiency upgrades more visible and connect facility modernization to campus life 7

8 Regional Labor OpTerra secured the best price for the District through competitive RFPs for labor & materials The project is expected to directly create 52 regional jobs and millions of dollars in economic growth Construction workers from local union halls will complete installations The construction work falls under the District s Project Labor Agreement The following companies were invited to bid and we plan to expand the pool to include additional local contractors during final engineering Energy Management System Syserco (Fremont) Electrical Upgrades / Solar PV Atlas Pellizzari Electric (Redwood City) BEI Construction (Alameda) Sprig Electric (San Jose) did not bid Lighting ABM Electrical (Pleasanton) Enlight (Pleasanton) Mechanical Airco Mechanical (Benicia) Comfort Dynamics (Alameda) did not bid ICOM Mechanical (San Jose) Western Allied (Menlo Park) Pool Services Knorr Systems (Livermore) Solar Pool Heating Aztec Solar (Rancho Cordova) Poco Solar (Santa Clara) Solar PV Structural Work MBL Energy (San Jose) 8

9 Energy Measures Recommended Energy Saving Measures Interior Lighting Exterior Lighting Solar Photovoltaic (PV) Pool Cover Portable Classroom Controls Infrastructure Upgrades Priority Electrical Infrastructure Priority HVAC Improvements Pool Boiler Replacements Energy Management System (EMS) Exterior Lighting Controls 9

10 Scope Items by Site ESUHSD All Sites Site Solar Photovoltaic Interior Lighting Exterior Lighting Exterior Lighting Controls HVAC Improvements EMS Installation Boiler Replacement Pool Cover Electrical Infrastructure Upgrade Andrew P. Hill High School X X X X X Evergreen Valley High School X X X Independence High School X X X X X X James Lick High School X X X X X Mt. Pleasant High School X X X X Oak Grove High School X X X X X Piedmont Hills High School X X X X X X X Santa Teresa High School X X X X X Silver Creek High School X X X X X William C. Overfelt High School X X X X X Yerba Buena High School X X X X X X Calero High School X Foothill High School X X X X X Independence Adult Center Overfelt Adult Center X Education Center 10

11 Scope Items by Site ESUHSD Charter Schools School Location Solar Photovoltaic Common Spaces Exterior Lighting ACE Charter High School Independence High School X X Downtown College Prep Alum Rock Independence High School X X KIPP San Jose Collegiate Independence High School X X Leadership Public Schools William C. Overfelt High School X Summit Public Schools: Rainier Mt. Pleasant High School X X Note: Prop 39 requires at least one year of ADA data for eligibility. Luis Valdez Leadership Academy (LVLA) began operations in , and will receive allocations in years 3-5. LVLA is excluded for now because the allocation amount is uncertain. 11

12 Additional Scope Evaluated Solar Thermal, 9 sites Comprehensive HVAC Replacement (~700 units audited) Portable Classroom Controls Pool Pump Controls Education Center Solar PV Electrical Infrastructure Interior and Exterior Lighting Priority electrical and HVAC replacements that will be bundled with their respective building modernizations 12

13 Project Funding and Cost Measure G Site Improvements, $8,991,900 Energy-Saving Measures, $9,981,211 Measure I Infrastructure, $4,610,000 Def. Maint., $324,575 Measure G Unallocated Interest Income, $5,131,188 Energy Infrastructure, $15,105,457 Prop 39, $5,712,886 Utility Rebates, Rebates, $316,119 $315,119 Funding Sources $25,086,668 Scope Type and Cost $25,086,668 13

14 Project Financial Benefit GUARANTEE PERIOD (Columns A and 95%) Energy Conservation Rebates Energy Conservation Savings 2 Year Net Solar Project Savings 1 Maintenance Savings District Prop 39 ($) 3 Charter Prop 39 ($) 3 Net Program Savings Cumulative Savings A B C D E F G =A+B+C+D+E+F H 1 $163,426 $316,119 $537,548 $1,874,260 $712,171 $3,603,524 $3,603,524 2 $170,143 $561,738 $772,360 $293,477 $1,797,717 $5,401,241 3 $177,133 $587,016 $772,360 $293,477 $1,829,986 $7,231,227 4 $184,408 $613,432 $720,869 $273,912 $1,792,621 $9,023,848 5 $191,980 $641,036 $170,000 $1,003,016 $10,026,864 6 $216,991 $669,883 $886,874 $10,913,738 7 $225,706 $700,027 $925,733 $11,839,471 8 $234,769 $731,529 $966,298 $12,805,769 9 $244,196 $764,447 $1,008,643 $13,814, $254,000 $798,847 $495,000 $1,547,848 $15,362, $264,197 $834,796 $1,098,993 $16,461, $274,803 $872,361 $1,147,164 $17,608, $285,833 $911,618 $1,197,451 $18,805, $297,305 $952,640 $1,249,945 $20,055, $309,236 $995,509 $170,000 $1,474,745 $21,530, $321,645 $1,040,307 $1,361,952 $22,892, $334,551 $1,087,121 $1,421,672 $24,314, $347,973 $1,136,041 $1,484,015 $25,798, $361,933 $1,187,163 $1,549,097 $27,347, $376,452 $1,240,586 $1,617,038 $28,964, $391,552 $1,296,412 $1,687,964 $30,652, $407,256 $1,354,751 $1,762,007 $32,414, $423,589 $1,415,714 $1,839,303 $34,253, $440,575 $1,479,422 $1,919,997 $36,173, $458,242 $1,545,995 $2,004,237 $38,177,839 Total $835,000 $4,139,848 $1,573,038 Capital Outlay $19,057,663 Net Benefit $19,120,176 1 Solar kwh guaranteed by OpTerra for Years Energy conservation savings guaranteed by OpTerra for Years Prop 39 funding values known for Year 1 & 2 and awarded together. Values conservatively estimated for Years

15 Savings Guarantee 15 Years Annual measurement and reporting on solar production One-time measurement of lighting savings Backed by dollar value in contract and payment from OpTerra Value rises with expected energy cost increases 15

16 Project Funding Measure G Site Improvements / Deferred Maintenance $8,991,900 (of Board approved $28.7M; September 15, 2011, Board Item 13.01) Measure I Infrastructure $4,610,000 (of Board approved $32.1M; June 11, 2013, Board Item 15.02) Deferred Maintenance Fund 14 $324,575 Measure G Unallocated Interest Income $5,131,188 Proposition 39 Clean Energy Jobs Creation $5,712,886 (Board approved March 20, 2014, Board Item 9.06) This is a projected allocation amount; actual allocations for FY2015/16 through 2017/18 are not known at this time Utility Rebates $316,119 16

17 Project Cash Flow Strategy Proposition 39 California Clean Energy Creation Fund Funding allocations over 5 fiscal years (2013/ /18) Applications for eligible projects are submitted to the California Energy Commission the agency responsible for Proposition 39 oversight. Upon completion of the approved projects, including any required Measurement & Verification (M&V) processes, funds are disbursed. OpTerra will provide Prop 39 program administration on East Side s and charter schools behalf. Utility Rebates Applications, M&V, and claims processes with PG&E will be administered by OpTerra. Cash Flow Strategy School Facilities Fund 35 will be used to bridge the funding gap until East Side receives Prop 39 and utility rebate proceeds. 17

18 Project Funding Bond Measure G Unallocated Interest Income $5,131,188 of interest income remains unallocated (as of June 30) District s best interest to allocate the remaining interest income to this project (including interest earned after June 30) With so many competing school modernization needs, why? Maximize previously cited project benefits (improved learning and working environments, reduction in energy and maintenance costs, economic stimulus through creation of green construction jobs, customized educational enrichment and professional development, continued environmental leadership) Maximize modernization benefit with no additional project soft costs Close out Measure G Bond Program administrative burden (program management, annual audits, Citizens Bond Oversight Committee efforts, Measure G financial and accounting oversight) 18

19 Program Development Assessment Fee The terms of the Program Development Agreement between the District and OpTerra provide that OpTerra shall receive a $60,000 Assessment Fee for their work of the Program Development Phase. The terms further provide that if the District enters into an Energy Services Contract with OpTerra, this Assessment Fee shall be incorporated into the total contract amount payable under the Energy Services Contract. 19

20 Recommendation It is recommended that, pursuant with Government Code and on the basis of the foregoing and the materials and analysis presented, the Board of Trustees finds and determines: (i) that the anticipated cost to the District for thermal or electrical energy or conservation services provided by the energy conservation facility under the proposed contract with OpTerra will be less than the anticipated marginal cost to the District of thermal, electrical, or other energy that would have been consumed by the District in the absence of those purchases, (ii) authorize the Associate Superintendent of Business Services to execute an Energy Services Contract with OpTerra Energy Services in an amount not to exceed $25,086,668, to provide energy saving measures and energy infrastructure upgrades, administer Proposition 39 Clean Energy Jobs Act and utility rebate funding processes, administer an associated educational enrichment program, and provide support and assistance with an energy conservation media campaign; (iii) that the Board allocate $5,131,188 of Measure G interest income earned through June 2014, as well as all Measure G interest income accrued after June 2014, to partially fund this Energy Services Contract; and (iv) that the Board approve use of approximately $6 million of School Facilities Fund 35 to bridge the funding gap until the District receives Proposition 39 Clean Energy Jobs Creation fund and utility rebate proceeds. 20