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Profile a First Look: the General Fund MUNICIPAL ENERGY PROFILE A FIRST LOOK: THE GENERAL FUND Municipal Energy Profile: The General Fund 1 Photo: City Hall clock tower prior to LED retrofit 2014 PHILADELPHIA ENERGY COSTS (in millions) 0 10 20 30 40 50 60 70 80 street lighting GENERAL FUND* WATER AVIATION *excludes vehicle fuel 2 Municipal Energy Profile: The General Fund DEAR CITY LEADERS, We are pleased to publish our first report focused on energy management for the City of Philadelphia. The Philadelphia Energy Authority (PEA) is an independent authority jointly created by City Council and Mayor Nutter in 2010 to provide targeted expertise and focus to the City’s efforts to reduce energy consumption and expense. One of PEA’s charter responsibilities is educating the broader public, our decision-makers and leaders. Our hope is that this report provides context for future decisions, highlights effective practices, and contributes to a more public conversation about our city’s energy future by examining its history. This report is a consolidated record of significant utility management milestones pursued to ensure budget stability in the ever changing energy market, and contains recommendations for future improvements, additions or changes. The report is a result of compiling over 200 documents provided by the City, informal interviews, case study research, and on-going working group sessions. We are grateful for the support and fact-checking of the Energy Office, Mayor’s Office of Sustainability, and the Mayor’s Office of Transportation & Utilities. Though the factual content has been reviewed by the current administration, the recommendations herein are made solely by the PEA. These recommendations are by no means exhaustive, and in many cases, City stakeholders and officials have already begun to address these issues. We recognize their progress and initiative, and believe there is value in continuing to drive and support a more public conversation. Energy is one of Philadelphia’s largest non-labor, non-discretionary expenditures. In 2014, the City of Philadelphia spent approximately $78,000,000 on energy1 and approximately 53% of that cost was attributable to the General Fund. For this reason, this report focuses on buildings within the General Fund portfolio (excluding vehicle fuel). The City of Philadelphia has made great strides in energy management, many occurring in the last 7 years under Mayor Nutter’s Administration. The PEA is looking forward to continuing to work with this and future administrations to seize available opportunities to reduce energy consumption, cost, and environmental footprint, all of which ultimately impact the taxpayers and quality of life in our great City. Sincerely, Christopher A. Lewis Jill D. Kowalski Chairman Executive Director THE GENERAL FUND ENERGY EXPENDITURES INCLUDE: • Police Department • Department of Public Health The General Fund does not include • Philadelphia Prison System • Office of Supportive Housing the Aviation Fund (Philadelphia • First Judicial District • Free Library System International Airport) or the Water • Fire Department • Philadelphia Parks and Recreation Fund (Philadelphia Water Department). • Office of Fleet Management • Philadelphia Museum of Art These entities have their own energy • Department of Public Property • Streets Department plans and strategies. The Philadelphia • Department of Human Services • City Commissioner School District operates separately. Municipal Energy Profile: The General Fund 3 TABLE OF CONTENTS INTRODUCTION .....................................................5 Financing....................................................................26 Why is Energy Efficiency Important? .........................5 • Innovation in Energy Efficiency Financing ..........27 Where Do We Rank? ...............................................6 • Current Rebate Accounting ..............................27 ENERGY MANAGEMENT THROUGH LOOKING FORWARD ............................................28 THE ADMINISTRATIONS .......................................7 Governance ..........................................................28 An Energy Management Timeline .............................8 Legislation & Policy ...............................................29 State Legislation Policies ........................................10 • Pennsylvania’s Building Energy Code .................29 Potential Planning Process Policies & Measures ........30 CURRENT ENERGY MANAGEMENT ..................12 • Holistic & Integrated Design Approach ..............30 Current Cost ......................................................... 12 • ROI ................................................................ 31 Governance Structure ............................................ 13 • LCA ............................................................... 31 Current City Policies & Legislation .......................... 14 • Building Operator Training ...............................32 Reducing Energy Demand ...................................... 15 • Leveraging Rebates as a Funding Stream ............32 • Preventative Maintenance ................................ 15 • PECO’s Smart Business Solutions • Utility Billing ................................................... 16 Direct Install Program ......................................32 • Energy Management Database ......................... 16 Reducing Demand .................................................33 • PECO’s Smart Ideas Rebate Program ................ 17 • Departmental Energy Efficiency • Current Technology - Incentive Program ............................................33 Building Management Systems ......................... 17 • Departmental Accountability Policy...................33 • Demand Response Programs Emerging Data Management Technologies ..............33 & PLC Management ......................................... 18 • Smart Meter Technology ..................................33 • Incentivizing Behavior Change .......................... 19 • Submetering....................................................34 Energy Supply ...................................................... 20 • Open Data Strategy .........................................34 • Electricity ....................................................... 20 • Electronic Data Interface .................................34 • Natural Gas .................................................... 21 Barriers to Energy Efficiency ..................................35 • Vehicle Fuel ..................................................... 21 • S t e a m ............................................................. 21 PEA CALLS TO ACTION .......................................36 • Fuel Oil ........................................................... 21 REFERENCES ..........................................................38 • Renewable & Alternative Energy .......................22 ACKNOWLEGEMENTS .........................................43 Projects ................................................................23 • Quadplex GESA ..............................................24 COMMON ACRONYMS AEPS ................................Alternative Energy Portfolio Standard LSP .................................................... Licensed Service Provider BAS ...............................................Building Automation System MEO ....................................................Municipal Energy Office CSP .............................................. Curtailment Service Provider MOS ...........................................Mayor’s Office of Sutainability DOE ....................................................... Department of Energy MOTU .....................Mayor’s Office of Transportation & Utilities DPP ............................................Department of Public Property PEA .............................................Philadelphia Energy Authority ESCO ................................................. Energy Service Company PPA ................................................Power-Purchase Agreement GESA ....................................... Guaranteed Energy Savings Act PLC ...................................................... Peak Load Contribution IgCC .............................. International Green Construction Code PUC...................................................Public Utility Commission LCC ................................................................Lifecycle Costing PWD ..........................................Philadelphia Water Department LCCA .................................................... Lifecycle Cost Analysis QECB ...............................Qualified Energy Conservation Bonds LEED .................Leadership in Energy and Environmental Design RO .............................................................. Remote Operations LSE ............................................................. Load Serving Entity SREC ......................................... Solar Renewable Energy Credit 4 Municipal Energy Profile: The General Fund INTRODUCTION Energy management must evolve from an optional exercise to a core function of City operations. Philadelphia has not been able to consistently manage energy costs due to a decentralized approach of energy management, and fragmented energy office functions with limited resources and authority. In addition, the current centralized utility payment policy disconnects users from their consumption, and the project budgeting process discourages energy efficiency. Progress has been made, but governance and leadership focused on a single, comprehensive
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