Better Buildings NW Ohio & Property Assessed Clean Energy Financing (PACE) Overview

Transcription

1 Better Buildings NW Ohio & Property Assessed Clean Energy Financing (PACE) Overview Facilitating Business Cost Savings, Energy Reductions & Alternative Energy Implementations May 2013 Kevin P. Moyer, Executive Director TLCPA Energy Efficiency & Alternative Energy

2 Today s Topics Toledo Port Authority Introduction Why Focus on Energy Efficiency? Port Authority/BetterBuildings NW Ohio: Energy Efficiency Retrofit & Financing Energy Special Improvement Districts (ESID) & Property Assessed Clean Energy Financing (PACE) Energy Project Examples Integrating Renewable & Energy Efficiency

3 TLCPA Intro - Operational Divisions Sea Port / Maritime Foreign Trade Zone Aviation Passenger Rail Real Estate Development BetterBuildings Northwest Ohio & ESID Brownfield Site Industrial Redevelopment Economic Development Innovative Financing

4 Brownfield Redevelopment Alternative Energy Integration Jeep Parkway 80-acre premier site by I-75 & two rail lines. Solar potential on additional 25 acres of land & 750,000 sq.ft. rooftop. Ideal site for geothermal & possibility for wind. High public visibility & job creation opportunity.

5 Economic Development Innovative Finance Programs: 330 projects, 16,750 jobs, $1.15B investments Fixed Interest Rate Revenue Bonds Variable Rate Revenue Bonds Capital Lease Transactions Infrastructure Financing Ohio 166 Regional Loan Program Small Business Administration 504 Loan Program

6 WHY FOCUS ON ENERGY EFFICIENCY? Business Reasons Low Cost Form of Power Permanent Demand Reduction = Renewable

7 Buildings Are Large Energy Consumers ~

8 Business Reasons How do energy cost reductions flow through the business? The Income Statement The Balance Sheet Business Revenues Load management Incentives / Rebates Expenses ENERGY Distribution Capacity Transmission Electricity Gas Maintenance Reliability Costs Net Income Assets Projects Contracts Flexibility Liabilities Future Energy Usage Expansion Capital for Projects Debt Equity Retained Earnings / Energy Savings (Source: AEP)

9 Energy Efficiency = Low Cost Power

10 BETTERBUILDINGS NW OHIO ENERGY EFFICIENCY RETROFITS & FINANCING Program Objectives & Results What Makes a Good Project? How Does it Work?

11 BetterBuildings NW Ohio - Objectives Save Energy Launch innovative energy efficiency financing July Direct marketing with channel partners & industry organizations. Transform business energy use. Save $$$ Create Jobs Target 15% energy savings. President s Challenge stretch goals: 20% energy savings on 7.5 million sq. ft. by $50 million of projects. Over 100 buildings. Build a sustainable energy efficiency financing business.

12 2013 Program Focus: Growth & Long Term Sustainability Program approved to expand outside NW Ohio, upon request, to other areas of the state. Increase program partners & outreach. Accelerate project completions & continue to build the project pipeline. Complete $15M of financing. Expand energy improvement districts throughout Northwest Ohio Assist other Ohio communities. Penetrate underserved small to medium business markets <$500,000 in project size.

13 # Retrofits Results: Strong Project Completion & Transaction Pipeline One of the most active energy improvement districts in the US. $20,500,000 of projects completed, $12,500,000 financed. 60 completed projects. Over $35,000,000 of projects in development. COMMERCIAL RETROFITS COMPLETED & FORECAST CUMULATIVE Q Q Q Q Q Q4 2013

14 What Makes A Good Energy Efficiency Project? Buildings > 5 years old or > 5 years since renovation or re-commissioning. Existing system deficiencies. High energy bills and consumption in building. Equipment in building near the end of useful life. High energy processes in building. High people occupancy; 24/7 operations; 2-3 shifts.

15 Top 10 Reasons for Energy Efficiency Save Significant Money & Energy Energy Savings Pay for Project Fix & Modernize Buildings Improve Comfort & Productivity Increase Building Value Positive Cash Flow to Business Reduce Maintenance Costs Preserve Capital Budgets Smart Planning Reduce Carbon Footprint Business Sustainability

16 How It Works APPLICATION Application: Borrower information, 3 years of business financials, project location & 2 years electrical & natural gas data. ENERGY ASSESSMENT PLAN & APPROVE FINANCE & DOCUMENT IMPLEMENT & CONSTRUCT MEASURE & VERIFY Energy Assessment: Arrange site visit & facility walkthrough. From simple vendor proposal with energy savings calculation to full building energy audit with recommended energy savings measures. Could be included in a design build project. Plan & Approve: Determine scope and cost of project & gain necessary approvals. Determine equipment specifications. Complete economic analysis or feasibility study for more complex energy projects. Finance & Document: Review term sheet and prepared financing documents and sign. Financing can be immediately available. We can assist with structuring for complex projects. Implement & Construct: Obtain competitive quotes for project materials and installation. Implement project construction. Measure & Verify: Measure on going energy consumption to verify energy savings.

17 Business Eligibility Work with all types and sizes of businesses to provide energy efficient solutions for existing structures to make them more efficient and productive while making our environment cleaner. Industrial / Manufacturing Educational K-12 & Colleges/Universities Commercial / Retail Healthcare Government / Municipal Residential

18 Equipment Eligibility Energy efficiency retrofit to existing building Retrofits Lighting Energy Mgt. Systems High efficiency HVAC Ground Source Heat Pumps Compressed Air Building Envelope Steam Systems/Boilers Heat and Industrial Usage Refrigeration Systems Solar Hot Water Energy Projects Waste Energy Recovery Absorption Chillers Process Reviews Distributed & Renewable Power Generation Electrical Distribution Upgrades Power Factor Correction Transformer Replacement District Heating/Cooling Systems - Geothermal Combined Heat/Power Systems

19 Consider New Technologies Some prices have fallen rapidly LED Lighting Solar, Wind, Biomass Geothermal CHP, Cogeneration & Waste Heat Recovery Micro Biodigesters

20 Unique Financing Features Energy Special Improvement District created for the Greater Toledo Area. Allows for improvements to be paid for through special assessment on property. Fixed Interest Rates up to 15 years. 100% financing available from construction through long term operation. Include utility rebates & tax incentives. Transactions $25,000 to $9,000,000. All project costs can be included. Can blend with other financing programs.

21 One Maritime Plaza Energy Assessment Example Semi-annual payments through county Flexible terms Covers all implementation and financing costs Sign agreement to be assessed we do the rest!

22 Program Benefits Quick and simple documentation Accelerate time to achieve savings Let energy savings pays for the improvement Assessment and improvement stays with the building ownership Assessment structure can resolve multi-tenant situations Serve as leadership example for sustainability Cost effective rates.

23 Department of Energy Program Requirements Davis Bacon - Prevailing Wages & Certified Payroll. Buy American made equipment. Target 15% energy savings Project is economically feasible. Industry Standard Processes and Certification for Energy Audits, Engineering and Design, Construction and Installation. Report job hours and energy savings on the project.

24 ENERGY SPECIAL IMPROVEMENT DISTRICTS (ESID) & PROPERTY ASSESSED CLEAN ENERGY (PACE) FINANCING What is it? How do you form one? Advantages

25 PACE Activity in the United States

26 What is an Energy Special Improvement District (ESID)? Form of structure under Ohio Revised Code (ORC)1710 Special Improvement Districts (SID). ORC 727 Assessments; also applies. Governed by a non-profit corporation. Commercial property owners can make energy efficiency & alternative energy improvements & pay for them through a special assessment. Also know nationally as PACE districts or Property Assessed Clean Energy.

27 How Is An ESID Different From A SID? Larger geographical area - township or municipality or a combination. Improved properties do not have to be contiguous. Voluntary participation by the owner.

28 Why form an ESID? - Advantages Attract capital to assist local businesses; save money & energy, repair buildings & make them more comfortable, healthy & productive, increase the value of the property. Facilitate local economic development & financing for energy efficiency & alternative energy improvements Job Creation. Use as a financing & implementation tool for the municipality to achieve the same benefits.

29 How to form an ESID? Petition by property owner to municipality or township. Propose an energy improvement project for the property. Government entity must approve. Form or amend a non-profit corporation for ESID management. Government entity names 1 or 2 members to the board; property-owning members elect board.

30 Toledo Ohio Advanced Energy Improvement Corporation Current ESID consists of Cities of Toledo and Oregon. 7 Board Members: 3 Port; 2 City of Toledo, 2 City of Oregon. Trying to add Cities of Maumee, Perrysburg & Sylvania & Townships.

31 Roles for ESID Formation Roles for ESID Formation Leadership Legislator Assessor Funder Could come from city, township, county or non-profit corporation, or private sector. The municipality or the township passes assessments. The county adds assessment to property and bills the assessment for the energy improvements. BetterBuildings NW Ohio or other city, county, state, non-profit, economic development groups, ESCO s, 3 rd parties, revolving loan funds, bonds or combination. Management Generally the non-profit corporation; could use existing economic development group.

32 Nationally Published White Paper Download at:

33 PROJECT EXAMPLES Commercial & Residential Many Types of Businesses & Buildings High Energy Savings

34 Residential Program Update Columbia Gas Residential Partnership Home Performance Solutions Program Extended to ,281 audits conducted/627 cumulative retrofits; 49% conversion rate Avg. Rebate $ = $1,881 Avg. Project Size = $2,662 Avg. Gas Consumption = 1,007 ccf Avg. Projected Savings = 447 ccf (44% gas savings) Avg. Customer Investment = $741 Warm weather/low natural gas price impact Partnership/program update conducted with Columbia Gas and Conservation Group Services Feb. 2013

35 Residential Program Update Multi-Family Properties Penetrating market for residential impact. SKA Enterprises 1 building/14 unit property currently under construction Vistula Management Company 14 buildings/250 unit portfolio energy assessed; $1.4 million in projects identified; currently under review Neighborhood Properties 370 units; application received and under review

36 One Maritime Plaza President s Challenge Showcase Project Port Authority HQ & office building. Early 80 s building 65,000 sq. ft. $1,000,000 + investment. 50% energy savings potential = Deep Retrofit. Lighting, building controls, cooling tower, mechanical systems, building envelope. Create productive work environment. Considering CHP project; Capstone MicroTurbine; natural gas cogeneration.

37 Toledo Port Authority Large Industrial, Office, Warehouse Facilities $2,300,000 projects funded 1,400,000 sq. ft. 7 projects completed; 1 under construction; 3 in planning Remote building energy management & data tracking system. Facilitate tenant energy savings projects. Buildings located in PACE energy improvement district. Projects/Energy Savings Include: Airport terminal & office 30% Train station & office 13% Downtown office 45% 3 Parking facilities 43% 2 Tenant facilities 20% 1,952,000 kwh saved Next projects: Seaport terminal & warehouse Several tenant facilities Transportation & distribution center

38 City of Toledo Wide-scale Energy Efficiency & Public Private Partnership Retrofit 2,000,000 square feet.; 43 Buildings completed or in construction; 1 MW solar array - $10.5M of projects; Add l 20 buildings in scope. Generate 25%+ energy savings in office buildings; 4,000,000 kwh electricity saved, 100,000 ccf n.gas, 1,300,000 kwh renewable annually. Reduce operating costs; generate $ for general fund and future cost hedge. Improve working conditions lighting & temp. Eliminate need for capital due to emergency repairs and service costs. Proactive plan for future energy monitoring, asset management and maintenance. Turnkey energy assessment, installation and financing. Buildings in PACE energy improvement district.

39 City of Toledo Diverse Building Portfolio 19 Fire Stations, Maintenance and Training Facilities. 3 Police and Safety Buildings 6 Community & Senior Centers Health Department and Municipal Court large prominent downtown buildings Environmental Services Building 2 Water Treatment Facilities large high energy use industrial campus locations. 6 Transportation, Streets, Water & Sewer Maintenance Facilities, and 5 Miscellaneous Buildings.

40 Incorporating Alternative Energy City of Toledo Solar Project: Collins Park Water Treatment Facility $5 million public/private investment. 1mW 1,300,000 kilowatt hours annually. NW Ohio suppliers: IPS, ADG, AP Alternatives, Nextronex, First Solar. Also implementing energy efficiency projects.

41 Large Industrial Energy User Incorporates Solar GM Powertrain Toledo 1.2 MW Rooftop Solar Will be largest rooftop solar on an automotive plant in the US.

42 Sylvania Tam-O-Shanter Sports Complex 87,982 sq. ft. multi-purpose sports facility. Upgrades to lighting and controls, HVAC/Automation and VFD s for ice system control. Electrical savings - 461,230 kwh/yr. 21% energy savings. $46,121 year total costs savings. Project Cost - $313,000 Simple Payback - 6 years

43 Sponsoring Building for Maumee ESID Charlie s Dodge Chrysler Jeep Ram Combined project with Grogan s Towne Chrysler Dodge $462,000. High performance LED interior/exterior lighting. Payback < 4 years. 60% reduction in electricity. $150,000/year energy & maintenance savings. Included $61,000 of utility rebates.

44 Little Learners Discovery Center Berkey, OH $45,000 project for high efficiency propane boilers. Switched from fuel oil. Business was at risk of closing without retrofit. Building is converted church & Sunday school. Energy savings >50%. Needs lighting upgrade. 44

45 Energy Efficiency is Low Cost Power!..Leadership Required Reducing energy is the cheapest cost of new energy generation capacity. Leadership Required: Business & Building Owners,; Local Government Leaders and Individuals. Opportunity to create local jobs. Improve the community. Educate & change behavior towards energy.

46 Conclusion - What Can You Do? Let others know about this program. These projects benefit the business: positive cash flow, more productive buildings, preserve capital, protect the future. This financing can be a facilitator of project completion for your business & others. Be an advocate for energy efficiency & alternative energy.