California Community Colleges Energy Project Guidance

Transcription

1 Proposition 39: Clean Energy Jobs Act of 2012 California Community Colleges Energy Project Guidance Prepared for the Administration by the California Community Colleges Chancellor s Office MAY 29, 2013

2

3 CCC Energy Project Guidance i ACKNOWLEDGEMENTS The California Community Colleges Chancellor s Office wishes to acknowledge the California Department of Education, the California Energy Commission, the California Public Utilities Commission, the California Community Colleges/Investor Owned Utilities Energy Efficiency Partnership, and the four Partnership participating utilities (Pacific Gas & Electric, Southern California Edison, Southern California Gas, and San Diego Gas & Electric) for their assistance in preparing this document. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

4 CCC Energy Project Guidance ii TABLE OF CONTENTS SECTION 1. BACKGROUND... 1 SECTION 2. FUNDING... 4 SECTION 3. PROJECT IDENTIFICATION... 5 SECTION 4. PROJECT COST-EFFECTIVENESS CRITERIA SECTION 5. JOB TRAINING AND WORKFORCE DEVELOPMENT SECTION 6. TRACKING AND REPORTING SECTION 7. PROGRAM EVALUATION, MEASUREMENT, AND VERIFICATION APPENDICES APPENDIX A PROJECT ALLOCATIONS BY DISTRICT APPENDIX B SUSTAINABILITY TEMPLATE ENERGY PROJECT EXCERPT APPENDIX C CAMPUS PROJECT IDENTIFICATION AND PRIORITIZATION WORKSHEET APPENDIX D FUNCTIONAL SPECIFICATIONS FOR SYSTEM-WIDE ENTERPRISE ENERGY INFORMATION SYSTEMS APPENDIX E FUNCTIONAL GUIDELINES FOR BUILDING MANAGEMENT SYSTEMS APPENDIX F MBCX GUIDELINES APPENDIX G RCX GUIDELINES APPENDIX H PROJECT PROPOSAL FORM APPENDIX I SUSTAINABILITY TEMPLATE ECONOMIC EXCERPT APPENDIX J CCC GUIDANCE PROCESS FLOWCHART APPENDIX K RESOURCES LIST APPENDIX L ANNUAL EXPENDITURE REPORT PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

5 SECTION 1: BACKGROUND 1 SECTION 1. BACKGROUND The California Clean Energy Jobs Act (Proposition 39) was approved on November 6, 2012, by the voters of California. The initiative makes changes to corporate income taxes and provides for the transfer of funds annually from the General Fund to the Clean Energy Job Creation Fund for five fiscal years, beginning with The budget proposes to allocate $464 million of Proposition 39 revenue to school districts, charter schools, county offices of education (collectively local educational agencies [LEA]), and community colleges (of that amount, $51 million will go to community colleges in ) to support energy efficiency projects and workforce development training. In the four years to follow, LEAs and community colleges will receive an estimated $550 million annually. Monies in the fund are available, upon appropriation by the Legislature, for purposes of funding eligible projects that create jobs in California while improving energy efficiency and expanding clean energy generation. The California Community Colleges Chancellor s Office will be responsible for distributing funding to individual Community College Districts. These funds may be used by Districts for energy efficiency and alternative energy projects, along with related improvements and repairs that contribute to reduced operating costs and improved health and safety conditions in the community college system. These funds may also be used by the community colleges for job training and workforce development in the energy efficiency and renewable energy industry sectors. The Chancellor s Office has developed this guidance to assist Community College Districts to implement projects to meet Proposition 39 requirements. Projects must be consistent with the state s energy loading order, which guides the state s energy policies and decisions according to the following priority order: 1) decreasing electricity demand by increasing energy efficiency and reducing energy usage in periods of high demand or cost; 2) meeting new energy supply needs with renewable resources; and 3) meeting new energy generation needs with clean fossil-fuel generation. California Community Colleges (CCCs) educate 2.4 million students annually at 112 campuses within 72 Districts. As a system, they use approximately 706 million kwh of electricity annually, 26 million therms of natural gas, with a total annual energy cost of $162 million and $6.9 billion annually in total operating costs. The CCCs will utilize the Proposition 39 funding to achieve ambitious goals for energy efficiency and demand reduction with more efficient, clean energy systems. Savings on energy costs would then be put back into the community colleges system in the form of increased student access and class sections, which have been slashed by over $800 million in state funding reductions over the last 4 years. This additional funding will allow campuses to increase their efforts as incubators for clean energy and energy efficiency, as well as benefit the campuses students. Community colleges are the leaders in workforce training for the type of projects envisioned by Proposition 39. The funding and resulting projects will generate thousands of highly paid public and private sector direct, indirect, and induced jobs. In this way, the California Community Colleges will fulfill the goals of Proposition 39 PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

6 2 CCC Energy Project Guidance to create green energy jobs, advance the clean energy economy, and reduce energy use and greenhouse gas emissions. This CCC Energy Project Guidance has been created specifically to address the opportunities, challenges, and past successes in energy project implementation at California Community Colleges. The program will supplement, compliment, and leverage existing energy efficiency programs such as the California Public Utilities Commission administered California Community Colleges/Investor Owned Utilities Energy Efficiency Partnership (CCC/IOU Partnership). This public-private partnership has been working on behalf of the Community College system since 2006 and has delivered 81 million kwh and 2.6 million therms in annual energy usage reduction, and over $12 million in cost savings to the system. Utility incentive programs will also help increase the impact of the use of Proposition 39 funds at the CCCs by providing matching project funds to campuses, as well as providing financial assistance through other utility funding mechanisms like On-Bill Financing. This CCC Energy Project Guidance will ensure a transparent, fully publicly accountable and auditable procurement process that will maximize the program s overall value and return on investment. As required by the initiative language, all approved projects will be cost effective, and total benefits shall be greater than project costs over time. All projects shall require contracts that identify the project specifications, costs, and projected energy savings. Finally, all completed projects will be subject to a Measurement & Verification process leveraged through the existing California Public Utilities Commission (CPUC) requirements for all energy efficiency projects to ensure program integrity and accountability. According to the Budget Trailer Bill language, the funding provided in this program is subject to annual audits as required by California Education Code (EC) Section Districts will need to maintain documentation on project specifications and costs, which may also include costs associated with technical assistance and projected energy savings, in order to complete the expenditure report due annually on October 1 to the Chancellor s Office. This CCC Energy Project Guidance takes a slightly different approach to project identification and prioritization than the California Department of Education K-12 Guidance. This is due to the fact that the CCCs have been aggressively pursuing and implementing energy efficiency and renewable energy projects for many years with significant success. Because of this, the Community Colleges are in a position to employ more sophisticated processes and tools to build on existing progress. Key elements of the CCC Guidance program include: Leveraging existing successful energy efficiency, renewable energy, and workforce development programs to the fullest extent possible to streamline processes and capitalize on existing, proven program delivery infrastructure. Implementation of the over $86 million of existing energy efficiency project backlog identified to support CCC Proposition 39 activities. Employing the California Community Colleges Sustainability Template Sustainability Template to identify, screen, prioritize, and implement projects. This would result in deeper and more comprehensive projects as most colleges have already picked the low-hanging fruit. In addition, a Campus Project Identification and Prioritization Worksheet has been developed to assist Districts and will be employed for this purpose. Evaluate project cost effectiveness against the Proposition language using the analysis tools and methodologies provided in the Sustainability Template. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

7 SECTION 1: BACKGROUND 3 While adhering to the State Loading Order, support Community Colleges to move forward rapidly with renewable energy projects by allowing past energy efficiency efforts to demonstrate compliance. Incorporate existing guidelines and standards for Monitoring-Based Commissioning and Retrocommissioning to assist with project identification and development Employ the Functional Specifications for a System-wide Enterprise Energy Information System and campus-level Building Management Systems developed in response to Proposition. Use the results of a system wide survey conducted by the Chancellor s Office to determine the condition of existing systems and campus plans for upgrade or replacements of systems. Utilize the existing CPUC Evaluation, Measurement, and Verification process that are already being employed for projects implemented under utility programs to streamline and simplify this effort for colleges. The following pages describe the Project Guidance to be used by individual Districts and campuses for the identification, qualification, implementation, and reporting of projects utilizing Proposition 39 funds, and the tools, specifications, and process aids to facilitate the execution of projects that improve energy efficiency, expand clean energy generation, and create jobs in California. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

8 4 CCC Energy Project Guidance SECTION 2. FUNDING Commencing with the fiscal year and concluding with the fiscal year, 11% of the funds deposited annually in the Clean Energy Job Creation Fund shall be provided to community college districts by the Chancellor of the California Community Colleges on the basis of Full-Time Equivalent Students for energy efficiency, renewable self-generation projects and clean energy related workforce training. According to the Governor s proposal, the allocation for each Community College District annually and over the five year total is shown in Appendix A for energy efficiency and renewable self-generation projects. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

9 SECTION 3: PROJECT IDENTIFICATION 5 SECTION 3. PROJECT IDENTIFICATION The Community College Project Guidance employs a broad and comprehensive process to assist Districts with identifying potential projects. This is due to the fact that the CCCs have been aggressively pursuing and implementing energy efficiency and renewable energy projects for many years with significant success. This places the Community Colleges in a position to employ more sophisticated processes and tools to build on existing progress. Appendix J provides a Process Flowchart that describes the step-by-step process for project identification and implementation at Community Colleges. The Chart shows the existing process steps from the CCC/IOU Partnership illustrated with light gray boxes. The Proposition 39 steps are overlaid and illustrated with light green boxes. This Flowchart demonstrates the synergies of the Community College Proposition 39 implementation program with the existing CCC/IOU Partnership infrastructure, and will be used with all utilities throughout the state. 3.1 ENERGY EFFICIENCY PROJECT ELIGIBILITY Proposition 39 establishes the following criteria for project eligibility: Projects must be cost-effective Projects must focus on energy efficiency and demand reductions first All projects shall require contracts that identify the project specification, costs, and project energy savings Recipients agree to submit to financial audits, to make necessary facilities and information available to program evaluators, and to provide information as required by the annual expenditure report Alternative energy generation projects and other innovative energy projects may only be considered if the Community College District can demonstrate that cost-effective energy efficiency projects are already installed or are committed through their utility incentive program Energy Efficiency Projects First California s loading order of energy resources was established in 2003 in the state s first Energy Action Plan. This established a prioritization of energy strategies to address the state s growing energy needs. Energy efficiency and demand response projects are the first approach, followed by renewable energy generation, distributed generation, combined heat and power applications, and clean and efficient fossil-fired generation. This loading order has been well recognized and adopted in the implementation of the ongoing programs the Community College Districts have utilized to complete energy projects. This includes the California Solar Initiative program which requires implementation of cost effective energy efficiency measures before installation of solar photovoltaic systems. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

10 6 CCC Energy Project Guidance Following this loading order, prioritization should be given to energy efficiency and demand response projects first. Only after a facility has implemented cost-effective energy efficiency options should funding for alternative energy generation projects (e.g., solar) be considered. Districts that have previously completed energy efficiency projects through existing programs will immediately be qualified to pursue renewable energy projects. Outlined below is the hierarchy of project eligibility: I. Implement energy efficiency and/or peak demand reduction projects first. (Peak demand reduction or load management targets limiting or shifting electric demand away from highcost, peak demand periods e.g., installing daylighting or energy management systems). II. III. Then consider renewable on-site energy generation (i.e., solar, photovoltaic [PV] water heating, wind). Finally, consider non-renewable projects (i.e., efficient gas fuel cell or co-generation). 3.2 PROJECT IDENTIFICATION AND PRIORITIZATION METHODOLOGY The California Community Colleges will employ several strategies to identify and prioritize projects to be implemented using Proposition 39 funds. These are listed below Prioritize Existing Project Backlog and Partnership Program Infrastructure As previously noted, the California Community College Districts have identified a significant backlog of projects that are ready for implementation. These projects meet the proposed eligibility requirements established by Proposition 39 and meet the established loading order. These shovel-ready projects exemplify how the CCCs will maximize use of their Proposition 39 funds from the very start of this five year program. Taken together the backlog and more recent submittals of identified projects are substantial, with energy savings of almost 43 million kwh and 980,000 therms with a construction cost of $86 million in identified measures. These submittals are identified in two lists: the first being a list that was developed recently by the Chancellor s Office in early 2013 from a Call for Projects to all Community College Districts, and the second represents the pre-existing project backlog established in There are 64 Districts out of a total of 72 statewide represented on these two lists that have projects ready for implementation. By utilizing this established framework, the Proposition 39 implementation can achieve significant benefits with all utilities statewide, including: Leveraging of existing technical resources, program infrastructure, and utility incentives, all previously funded by public dollars Streamlining the ease and speed of project implementation, resulting in substantially faster realization of cost and energy savings PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

11 SECTION 3: PROJECT IDENTIFICATION 7 Assuring the technical quality and consistency of projects, as well as the persistence of ongoing energy and cost savings Optimizing existing program reporting and project verification processes to ensure transparency and accountability Minimizing program administrative costs by avoiding the creation of redundant project identification, delivery, and verification processes Identify Projects using the California Community College Sustainability Template The California Community College Sustainability Template was developed in 2012 by the Chancellors Office as a roadmap and toolkit to help Districts with energy and sustainability planning. Districts can employ the Template as a checklist of project examples and possibilities for implementation. The Implementation Programs and Plans chapter (Section 7) of the Template Guidebook outlines the different programs and projects that can be implemented to achieve the District s sustainability goals. This list is intended to be a starting point for planning, and individual Districts are encouraged to select those elements that meet established goals and priorities. The list is not all-inclusive, and Districts are also encouraged to think innovatively to identify projects that may not have been addressed here but suit the District s unique circumstances and needs. This would result in deeper and more comprehensive projects as most colleges have already picked the low-hanging fruit. However, Districts should filter, prioritize, and select programs and projects for implementation that best meet their goals while taking into account the budget and resource constraints of the campus. While the Sustainability Template is comprehensive and includes project examples for energy, solid waste, transportation, and water, an excerpt has been created to address energy efficiency, efficient operations of facilities, sustainable building practices, and renewable generation that can be utilized by Districts as project examples for Proposition 39. The Template Energy Excerpt is included in Appendix B of this Guidance Document Campus Project Identification and Prioritization Worksheet A Campus Project Identification and Prioritization Worksheet have been developed to assist Districts in identifying and prioritizing potential energy efficiency projects. This worksheet is included in Appendix C and contains features to analyze campus energy usage, lists potential project examples, provides a weighted ranking formula to help prioritize projects, and calculates rough energy savings from implementing selected projects. This Worksheet should be used by Districts and campuses in conjunction with the Sustainability Template Energy Information and Building Management Functional Specifications In an effort to improve energy efficiency in facilities operations at the campus level and to provide better system-wide energy usage information and benchmarking, Functional Specifications for a System-wide Enterprise Energy Information System (EEIS) and campus-level Building Management Systems (BMS) have been developed. These documents are intended to be a resource to the community college system for the implementation of these types of projects utilizing Proposition 39 funding, and are included as Appendix D and E, respectively. In addition, the Chancellor s Office is conducting a survey of all 72 CCC Districts to determine the condition of existing EEIS/BMS systems and campus plans for upgrade or replacements of systems. This information will be very helpful to all Districts in helping to plan projects and will be disseminated in early June PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

12 8 CCC Energy Project Guidance Commissioning Guidelines Guidelines for Districts to implement Monitoring Based Commissioning (MBCx) and Retro-commissioning (RCx) at college campuses have been established to assist campuses with project identification, approval, implementation, and EM&V for building and energy system commissioning projects. These projects qualify for CPUC incentives and meet all eligibility requirements for Proposition 39 funding. MBCx and RCx represent a significant untapped source of new projects in the Community College footprint, and the injection of project funding from Proposition 39 should help jump-start many projects. The MBCx and RCx Guidelines can be found in Appendix F and G, respectively Project Proposals and Approvals After the District identifies a project to be implemented using Proposition 39 funds, they will submit it to the Chancellor s Office using the Call for Projects Project Proposal Form included in Appendix H. This Project Proposal Form will identify the project and indicate estimated project cost, energy savings, and completion date. The Chancellor s Office will perform a brief review of each Form submitted and will release funding through the state apportionment process immediately after the state budget is enacted to the District if the Form contains the necessary information. This review from the Chancellors Office will ensure compliance with Proposition 39 criteria & these Guidelines and will facilitate successful year-end reporting to the Citizens Oversight Board. The Chancellor s Office review will not result in project delays if the Project Proposal form is completed fully. Each of the projects in the current backlog has already been submitted using this form. Based on the Chancellor s Office review of all the projects in the current backlog in 2012 and the recent submittals in 2013, a high percentage of projects have already been deemed eligible to receive Proposition 39 funds. Efforts will now be focused on providing technical assistance to the remaining districts to help them complete and submit their project proposals. 3.3 TECHNICAL ASSISTANCE FOR PROJECT IDENTIFICATION AND IMPLEMENTATION Proposition 39 requires validation of cost-effective projects which requires project identifications and analysis to determine feasibility, cost effectiveness, and project prioritization. This may require technical assistance activities as outlined below, working closely with District staff and in-house resources, to be funded through Proposition 39 distributions. Technical assistance for project identification can include activities that move energy efficiency projects from identification and planning through implementation, using all types of available resources. Technical assistance activities include: Benchmarking provide information about campus energy usage and compare the energy performance of similar buildings and/or campuses Definition / Scoping conduct site/equipment energy survey, investment grade audits, no-touch audits, and/or baseline modeling; collect whole building data PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

13 SECTION 3: PROJECT IDENTIFICATION 9 Review reviewing energy conservation measures, project/improvement design (engineering specifications), and/or incentive applications Design and Implementation assist with procurement and construction management as well as other implementation requirements such as project financing Verification and Reporting provide post-project verification and reporting per program guidelines These activities are well under way in many Community College Districts through the infrastructure provided by the CCC/IOU Partnership, as demonstrated by the significant project backlog identified. Additional outreach by the Chancellor s Office in cooperation with each Utility will make this technical assistance comprehensive, and can be efficiently accomplished through the Proposition 39 program. To expand and deepen available technical resources to Districts, the Chancellor s Office will establish a centralized resource for technical assistance that can be utilized on an as-needed basis by colleges and districts that require these services but are unable to use their own contacting processes to engage engineering services. Significant advantages will exist through utilizing the engineering and project management resources provided through the Chancellor s Office. Participating districts will contribute a portion of their Proposition 39 revenues for this purpose. This cost effective approach will permit districts to focus on Proposition 39 implementation and the process will be conversant with the requirements and documentation needed to fulfill program requirements. Districts choosing to engage resources individually will need to ensure that their consultants understand and meet these requirements, which may be a burden they are not willing to undertake. 3.4 ENERGY AUDIT AND PROJECT IDENTIFICATION GUIDELINES Energy Audits in varying depth are proposed for implementation in K-12 Districts which is a reasonable and necessary step to identify and prioritize the best use of Proposition 39 funding. This is typically not the case for most Community College Districts, however, many of which have benefitted from audits and project identification services through other past and ongoing energy programs. The recommended approach outlined below leverages this previous work and the more centralized nature of the Community College system, compared to K-12. For each District, this customized approach is recommended: a) Benchmarking Energy and sustainability benchmarking has been adopted by the CCC Board of Governors as a key goal for the Community College system. Many Districts employ the Association of Physical Plant Administrators Facilities Performance Indicators system to benchmark facilities condition and operations against their peers in the higher education field across the United States. While not focused specifically on energy, this is a means of using benchmarking to identify potential projects. b) Review existing project backlog As discussed, there is a significant backlog of previously identified projects, many of which have already received the technical services and analysis necessary to be quickly and efficiently implemented with the help of Proposition 39 funding. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

14 10 CCC Energy Project Guidance c) Evaluate needs for implementation of System-Wide Enterprise Energy Information System (EEIS) The full deployment of the EEIS described above will serve as a critical tool to benchmark facilities energy use across buildings on campus as well as provide campus-to-campus comparisons at the Chancellor s Office level. Each campus will be screened to determine the needed upgrades to accomplish the goals of this initiative based on a consistent data platform. d) Perform additional auditing where needed, determined on a case-by-case basis; These would typically be targeted, ASHRAE Level 2 audits which include project scoping and screening with detailed energy calculations and financial analysis of proposed energy efficiency measures. 3.5 ENERGY EFFICIENCY PROJECT COMPLIANCE REQUIREMENTS THE DIVISION OF THE STATE ARCHITECT The Division of the State Architect (DSA) must review and approve public school construction for compliance with the California Code of Regulations, Title 24, (24 CCR), the California Building Standards Code (CBC) when alterations or additions are made to existing buildings to ensure that buildings are safe. The CBC specifies the following three triggers that require a structural building upgrade. These are as follows: The alteration project cost exceeds 50 percent of building replacement value (excluding structural work). The building seismic mass is increased by more than 10 percent. The building seismic load capacity is reduced by more than 5 percent. DSA review and approval is not required for alteration or reconstruction projects: With an estimated construction cost of $39,324.38, or less, for 2013; or With an estimated construction cost of between $39, and $157,297.53, for 2013 when certain conditions are met. See the DSA Interpretation of Regulations A-10 at the following Web page for more information: In addition to these cost threshold exceptions, under the current 24 CCR, Part 1 and 24 CCR, Part 2, and CBC provisions certain energy conservation and efficiency projects may be exempted from DSA structural safety and fire and life safety review and approval. The following table lists potential project types and the related requirements for DSA structural safety and fire and life safety review and approval. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

15 SECTION 3: PROJECT IDENTIFICATION 11 No. Project Type DSA Structural Safety Review & Approval Required? Notes/References 1 Heating, ventilation and air conditioning No ii * *HVAC unit replacement limited to units of equal or lesser weight, in the same location, and no structural framing is altered. 2 Reroofing with cool roof No* *Roof covering replacement and insulation limited to weight of existing roof covering and insulation. 3 Weatherization/caulking No 4a Window replacement, glazing only No 4b 5a 5b Window replacement, frames, and glazing Window shading devices window screens (applied to glazing) Window shading devices solar shading devices requiring structural attachment Yes* No Yes* 6 Energy Management Systems (EMS) No *DSA approval not required if entire window replacement project cost is $39, or less per DSA IR A-10. *DSA approval not required if entire window shade structure project cost is $39, or less per DSA IR A Lighting upgrades re-lamping, ballast No replacements, fixture replacement 8 Water heating upgrades No 9 Skylights Yes* * DSA approval not required if entire skylight project cost is $39, or less, and no structural framing is altered. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

16 12 CCC Energy Project Guidance 3.6 ACCESSIBILITY REQUIREMENTS FOR ENERGY CONSERVATION AND EFFICIENCY PROJECTS The Division of the State Architect must review and approve public school construction for compliance with accessibility standards given in the California Code of Regulations, Title 24, Part 2, of the CBC when alterations or additions are made to existing buildings. If the existing path of travel elements do not comply with current code provisions, upgrades are required to the area of the work and designated elements serving the area being altered. Upgrades to the current path of travel are required as follows: If the cost of the project is below $139,934, then the cost of compliance is limited to 20 percent of the adjusted construction cost. If the cost is $139,934 or higher, there is no limit to the cost of compliance unless the enforcing agency determines the cost of compliance is an unreasonable hardship. If unreasonable hardship is determined, there must be compliance by equivalent facilitation or to the greatest extent possible. However, the cost of compliance shall not be less than 20 percent of the adjusted construction cost. Under the current proposed CBC accessibility provisions for certain energy conservation and efficiency projects may trigger accessibility upgrades outside the area of the project work. The following table lists potential project types and the related requirements for accessibility upgrades. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

17 SECTION 3: PROJECT IDENTIFICATION 13 No. Project Type Path of Travel Access Upgrades Required? Applicable 2013 Code Sections 1 Heating, ventilation and air 11B Exceptions: 7 No conditioning 2 Reroofing with cool roof No 11B Exceptions: 7 3 Weatherization/caulking Definitions Alterations and No 11B Exceptions: 7 4a Window replacement, glazing Definitions Alterations and No only 11B Exceptions: 7 4b Window replacement, frames, Definitions Alterations and Yes and glazing 11B a Window shading devices Definitions Alterations and No window screens 11B b Window shading devices solar Definitions Alterations and shading devices requiring Yes 11B structural attachment 6 Energy Management Systems Definitions Alterations and No (EMS) 11B Exceptions: 7 7 Lighting upgrades re-lamping, Definitions Alterations and ballast replacements, fixture No 11B Exceptions: 7 replacement 8 Water heating upgrades Definitions Alterations and No 11B Exceptions: 7 9 Skylights Definitions Alterations and Yes 11B PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

18 14 CCC Energy Project Guidance SECTION 4. PROJECT COST-EFFECTIVENESS CRITERIA Proposition 39 requires that all energy projects be cost-effective, meaning that total benefits shall be greater than project costs over time. When determining project cost-effectiveness, benefits beyond energy savings can be included. For example, non-energy benefits, such as health and safety, can be considered when calculating the total project benefits. Below are a few terms and approaches to consider. 4.1 HOW TO DEFINE THE PROJECT? It is recommended that projects be defined consistent with ongoing utility-sponsored energy programs. This allows flexibility in defining the project scope and can include the following Single measure A single energy efficiency measure includes a singular activity (e.g., replace fluorescent lamps with LED lighting) that meets the cost-effectiveness criteria Bundled measures An eligible project may be a package of energy efficiency technologies. For example, a project may include lighting fixture and lamp replacement, additional lighting and space conditioning controls, and the addition of solar light tubes in some classrooms Add-on or upgrade to a building renovation or new construction project In some cases, a college may have a major renovation already planned, such as the upgrade of heating and cooling systems or replacement of lighting systems. An energy efficiency project could provide incremental change or meet higher efficiency specifications that upgrade the renovation over and above the minimum building code or design requirements. 4.2 HOW TO DETERMINE WHAT IS COST-EFFECTIVE? The following provides guidance to Districts to determine if a proposed project is cost effective as defined by Proposition 39. Paragraphs through 4.2.5, below, provide a baseline for understanding and calculating project cost effectiveness and are similar to the Guidance provided to the K-12 system by the California Department of Education. Paragraphs and provide additional information and tools regarding costeffectiveness to assist Districts in calculating project costs that are specific to the Community Colleges. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

19 SECTION 4: PROJECT COST EFFECTIVENESS CRITERIA Perspective Project costs and benefits should be identified from the perspective of the Community College District. This means thinking in terms of expenditures and savings, but not using the broader economic perspective of an energy utility (the value of avoided energy supply) or society (e.g., the secondary benefits of savings re-spent in the California economy) Costs For a totally discretionary project, the cost is the total installed expense of the measure or project, such as hardware or equipment, materials, installation, engineering, or design. In the case of an already planned renovation, the cost for the energy improvement project would be the incremental or upgrade costs (but not the basic costs) Benefits Proposition 39 requires the following benefits for qualified projects Energy Savings Savings are typically based on the estimated reduction in the electricity and gas utility bills. In the case of an already planned renovation, the savings for the energy improvement project would be the estimated higher savings value over and above the projected energy use for the minimum design of the basic project Non-Energy Benefits (NEBs) Proposition 39 allows for NEBs to be considered in determining cost-effectiveness, although it is not easy to quantify NEBs nor translate them into economic values. From a Community College District perspective, NEBs typically would include: Labor savings: reduced operations and maintenance costs from better-performing or long-lived energy systems (e.g., less time replacing burned out lighting, less time on HVAC maintenance) Water savings: reduced water usage or wastewater utility bill savings Health effects: indoor and campus air quality, which may improve student/teacher health and result in reduced absenteeism Comfort effects: from better lighting, temperature, ventilation, noise reduction, etc., which may affect student/teacher well-being, reduced absenteeism, and/or improved student performance Safety effects: decreased fire and combustion hazards; structural improvements to building; improved security due to improved lighting which could reduce property losses Educational effects: student involvement with projects provided marketable learning experience Because quantifying NEBs is challenging, there are several options for including NEBs in a Proposition 39 cost-effectiveness framework: - Quantify the easily estimated savings, such as reduced operations and maintenance costs (labor, supplies) and include these as monetary benefits. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

20 16 CCC Energy Project Guidance - Use either a standard adder, such as assuming an additional 10 percent NEBs value for the other harder-to quantify (this is a rule of thumb used in some energy evaluation practices), or take a qualitative approach and simply list the specific non-energy benefits expected from the energy improvement project Persistence of Savings The persistence of any energy savings should be considered in the evaluation of project benefits. For example, Monitoring-based Commissioning (MBCx) projects provides the ability through permanent metering installed as part of the project to monitor and adjust building energy use over time to ensure savings continue into the future. The same can be said for the Enterprise Energy Information System (EEIS) initiative being led by the Chancellor s Office. The system-wide metering and benchmarking will allow ongoing campus-to-campus energy usage comparison and will ensure that improvements will be maintained over time Time frame for analysis In determining the total value of benefits, both energy and non-energy, it is important to estimate the period of time over which the benefits are expected to continue. For example, the lighting improvements should last years. This is referred to as the expected useful life of the measures or project. For bundled or more comprehensive projects with measures of varying lives, a District can calculate a weighted life for the whole project. For example: Cost Effectiveness Metrics Item % of Project Cost Expected life HVAC filters 5 2 years High efficiency fans 20 7 years Lighting fixture years Daylighting years Weighted life = years (.05*2 plus.20*7 plus.25*15 plus.50*30) Project cost-effectiveness typically will call upon one of three financial metrics depending upon the size and complexity of the project. These are: Simple Payback Metric: The simple payback (in years) does not exceed the useful life of the proposed equipment. Divides project total cost by expected annual savings, to indicate in how many years the investment will pay back the initial outlay. (e.g., spend $50,000 and save $10,000 per year for a 5-year payback) Simple payback (yrs) = Project Cost($) / Anticipated Annual Energy Cost Savings ($/yr) o Example: Lighting fixture replacement will last 15 years, simple payback is five years, so a fiveyear payback easily produces economic return within the 15-year expected life. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

21 SECTION 4: PROJECT COST EFFECTIVENESS CRITERIA 17 The downside to this approach is that it does not compare the expected life-cycle of alternative measures or projects that have different life expectancies. For example, if one project lasts only seven years, and another of equal cost and annual savings will last 15 years but has the same simple payback of five years, the second project may be a better choice because it will produce savings for an extra eight years Biggest Bang for the Buck This approach can be used when an energy audit or analysis suggests there are many improvements possible for a facility. Metric: Each measure could have a cost of energy saved metric, such as $.03 per kwh saved, $.05 per kwh saved, or $.015 per kwh saved. Example: These could be rank-ordered, with the college selecting the lowest cost savings items in succession until reaching a budget limit Net Present Value (NPV) Adds the life-time expected cost savings from each measure or the bundled project, subtracts any up-front capital costs or increased operating costs, and applies a discount rate to acknowledge that savings will occur in future dollars. This approach is helpful when comparing alternative projects with different cost and saving profiles that could be undertaken with a given investment budget. NPV enables the decision-maker to select the project(s) that will produce the greatest total financial benefit Other considerations While not all measures have similar costs and savings, their combination in a bundled project may produce an overall set of benefits for the total cost that ensures the overall project is cost-effective. A whole-building approach may help to maximize the savings and still be cost-effective Project Economics CCC Sustainability Template The California Community Colleges Sustainability Template provides tools and resources to assist Districts in analyzing project costs and benefits. The Template parallels the basic Proposition 39 cost benefit criteria described above and expands the methodologies to better meet the needs of Community Colleges. In an environment of budget cuts and limited funding, Districts need to carefully evaluate the economics of sustainability in the decision making process. This will mean balancing the different costs and benefits of each project, including those that are difficult to quantify. Often, energy projects that have an initial capital cost will result in annual operating cost savings that translate to reduced General Fund expenditures. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

22 18 CCC Energy Project Guidance It is strongly recommended that colleges consult the Template and employ the strategies and tools to evaluate cost-effective projects. Ares covered in the Template include: What is the District or campus investment criterion for sustainability projects? How much is the project capital or up-front cost, how much total capital is available, and when is it available? How much savings will the project generate compared to its cost? Are there economies of scale with certain project types? Can sustainability project capital expenditures translate to campus General Fund and annual operating budget savings? What are the project s lifecycle costs and benefits? Consider the cost of doing nothing. The Cost of Going Green Cost Estimating Tools An excerpt of the Sustainability Template that examines these issues can be found in Appendix I. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

23 SECTION 5: JOB TRAINING AND WORKFORCE DEVELOPMENT 19 SECTION 5. JOB TRAINING AND WORKFORCE DEVELOPMENT The Chancellor s Office proposes to authorize the use of Proposition 39 funds to support energy efficiency and clean energy related workforce training in the California Community Colleges. The rational and approach for the program is described below. 5.1 RATIONALE Existing workforce shortages in critical occupations slow the state s ability to effectively invest Proposition 39 funds to achieve meaningful improvements in energy efficiency. This plan would build a workforce in each region that links training with Proposition 39 investment and supports a viable workforce beyond the sunset of Proposition 39 funds. Key components and advantages of this plan include: Build On Successful Statewide Initiatives Community colleges are the state s largest workforce training provider. The Chancellor s Office has targeted investment at sectors important to regional economies under the Doing What MATTERS for Jobs and Economy framework ( Energy Efficiency and Utility is one of these sectors Leverage Existing Assets and Practices That Work These include: Recruiting and Placement Job Portal: The Chancellor s Office just announced a Job Portal partnership with the California Employment Development Department (EDD), leveraging a multi-million dollar investment by EDD in a system to help people find work. This recruiting and placement Job Portal is available to all community colleges via CACareerCafe.com and can be used at no extra cost to help employers post job and internship openings and for students and community members to find jobs. Sector Navigator: The Chancellor s Office has put in place a Sector Navigator to act as the first point of contact for the Energy & Utility sector statewide. Our Sector Navigators work with employers, labor unions, and colleges to help them establish relationships and take advantage of the scale of the 112 community colleges and their respective expertise. Curriculum Models: Where curriculum is similar across multiple regions, Sector Navigators facilitate the adoption of common curriculum models rather than have each college build its own model, a practice that frustrates employers and lowers success in job placement. Apprenticeship: Community colleges administer state Apprenticeship funds. Working through this network will leverage the pre-existing coordination with the labor community. RFA process and data collection: The Chancellor s Office has pre-existing processes for issuing RFAs and collecting performance data. Existing programs of study: Employers will need a range of skills from architects and engineers to entry-level energy raters. By coordinating the training capacity of a region, braiding Proposition 39 with PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

24 20 CCC Energy Efficiency Project Guidance existing Chancellor s Office programming, a region will be better positioned to provide the skilled workforce needed by employers Role of the Chancellor s Office Establish standards and guidelines for Proposition 39 workforce projects, including the use of curriculum models mapped to industry-recognized credentials. Encourage preference to proposals where the California Conservation Corps is a signed partner or where training graduates receive first source consideration from union Project Labor Agreements. Oversee data collection and reporting into existing Chancellor s Office accountability systems. Facilitate use of the CACareerCafe.com Jobs Portal and other pre-established assets rather than making duplicative investment. PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

25 SECTION 6: TRACKING AND REPORTING 21 SECTION 6. TRACKING AND REPORTING As required by the Clean Energy Jobs Act of 2012, Proposition 39, all approved projects must be cost-effective and have total benefits greater than project costs over time. All projects require contracts that identify the project specifications, costs including technical assistance, and projected energy savings. Districts will need to maintain documentation in order to complete the expenditure report due annually on October 1 to the Chancellor s Office. All projects will be subject to financial audit. According to the Budget Act trailer bill, the Chancellor s Office compiles and transmits this information to the Citizens Oversight Board (Board) by November 1 of each year for their review and evaluation. The Board annually reviews all expenditures from the Job Creation Fund and also commissions and reviews a selection of projects completed, to assess the effectiveness of the expenditures in meeting the objectives of the California Clean Energy Jobs Act. The Chancellors Office has created a template for Districts to use for the expenditure report due on October 1. (See Appendix L). (Note: This form is under development). PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012

26 22 CCC Energy Efficiency Project Guidance SECTION 7. PROGRAM EVALUATION, MEASUREMENT, AND VERIFICATION Evaluation, Measurement, and Verification (EM&V) is a standard protocol when assessing the impact of an energy efficiency project. Evaluation helps determine whether the energy savings that were projected for an energy efficiency retrofit project were realized, and if installed energy conservation measures are performing post-project. EM&V will enable Community College Districts to assess the impact and effectiveness of retrofit activities related to Proposition 39 funds. Districts should choose an EM&V approach that is practical for the nature and scope of a project and consider the personnel skills or software tools to support this. The preferred approach for Districts employment of EM&V activities is for Districts to take advantage of Investor Owned Utility, local municipal utility, Energy Commission, or other sponsored programs that offer EM&V services as part of the incentive and rebate processes. These programs are already developed, documented and in place to safeguard the interests of public funds which provide incentives. The validation processes are robust and account adequately for the complexity and variables of a variety of energy retrofits. It is anticipated that most work associated with the Community Colleges under Proposition 39 will simultaneously move through the Utilities incentive program processes, and will be subject to the technical scrutiny of these regulated programs. These established processes require pre- and post-project field verification and thorough technical third-party review of all associated savings claims and cost documentation. This review must meet CPUC established guidelines for savings claims which are typically based on Federal Energy Management Program International Performance Measurement and Verification Protocol Options A, B, or D according to project size and scope. Smaller projects are more efficiently verified using savings claims according to the Database for Energy Efficiency Resources which is a well-established, industry-standard source and its use is required by regulation in CCC/IOU Partnership funded programs. This review process ensures that all calculations and assumptions are transparent and repeatable, and that overall estimates are conservative. The process also ensures that free ridership is minimized and that steps are taken to ensure persistence of savings. For projects that are not eligible for, or are otherwise not participating in incentives programs, Districts should use an independent technical resource to verify the savings utilizing International Performance Measurement and Verification Protocol appropriate for the retrofit type, complexity and size. Districts are encouraged to align their process closely to the CCC/IOU Partnership verification processes, which can be found in the Statewide Customized Offering Procedures Manual for Business, available at or PROPOSITION 39: CLEAN ENERGY JOBS ACT OF 2012