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 energy management plan for the City is needed. why is energy efficiency important? Energy efficiency is the cheapest, most abundant, If cities want to be more competitive and more and most underutilized resource for local, economic resilient against energy-related crises, they must and community development.2 In every major boost the energy efficiency of their building stock.3 American city, buildings account for the majority of energy use and carbon pollution — even more than the transportation or industrial sectors.
There is an urgent need GLOBAL NATIONAL GLOBAL ENERGY ENERGY GREENHOUSE GAS for energy efficiency in CONSUMPTION4 CONSUMPTION5 EMMISSIONS6 urban areas due to their 80% significant role in energy 75% consumption and green house gas emissions. 67%
Municipal Energy Profile: The General Fund 5 where do we rank? It is difficult to compare different cities’ energy It should be noted that there is a correlation between management strategies on a level playing field. state and city rankings. States with aggressive There are many intertwined factors to consider, energy policies incentivize and support local action. including: energy profile, population, climate, According to the ACEEE State Energy Efficiency infrastructure, governance and policy. scorecard, Pennsylvania is ranked 19th out of US states when evaluating policy activity across multiple In September 2013, the American Council for an sectors, including state and local governments, Energy Efficient Economy (ACEEE) released its first utilities, transportation, buildings, combined heat edition of the City Energy Efficiency Scorecard.7 The and power, and appliance standards.14 report ranked 34 of the most populous U.S. cities exclusively on energy efficiency efforts.8 Cities were The Mayor’s Office of Sustainability (MOS) evaluated in five key areas: buildings, transportation, Municipal Energy Benchmarking Report found energy and water utility efforts, local government that Philadelphia’s municipal buildings fall below operations, and community-wide initiatives.9 the national standards for energy performance as Philadelphia ranked 10th with a score of 54.5 out measured by both Energy Use Intensity (energy per of 100.10 The City scored highly in community wide square foot) and EPA ENERGY STAR® scores.15 This initiatives and transportation policy but lagged in is a reflection of both the age of many city owned building policies.11 This section evaluates building buildings and the City’s limited capacity to address 19 energy code stringency, resources dedicated to deferred building maintenance.16 There is great building code compliance and requirements for potential for improvement. PENNSYLVANIA efficient buildings. All cities have significant room for RANKS #19 IN improvement. Boston ranked first but missed nearly STATE ENERGY a quarter of possible points.12 Only 11 cities scored EFFICIENCY more than half of the possible points.13
the city energy efficiency scorecard
1 76.75 2 70 3 69.75 4 69.75 5 65.25 62 6 STATE ENERGY EFFICIENCY RATINGS 7 56 8 55.25 9 54.75 10 54.5
PHILADELPHIA RANKS #10 IN CITY ENERGY EFFICIENCY
10 Data taken from the American Council for an Energy Efficient Economy; City Energy Efficiency Scorecard; 2013
6 Municipal Energy Profile: The General Fund
OIL
Portland 13.75 STEAM San Francisco 13 Phoenix 12.25 Columbus 11.25 Boston 11 NATURAL GAS ELECTRICITY Denver 11 Chicago 10.75 Seattle 10.75
New York 10.5 Philadelphia 10.5 ENERGY MANAGEMENT THROUGH THE ADMINISTRATIONS
Energy management priorities have been largely directed by the leadership of mayors, with significant variation over time. There has never been an energy master plan that transcended administrations, resulting in energy management policies that have been largely reactive and focused on the short term.
MAYOR WILLIAM GREEN (1980-1984) MAYOR ED RENDELL (1992-2000)
The City of Philadelphia began its foray into energy By 1993, the energy market had become very management in 1981 when Mayor William Green III volatile.21 Newly inaugurated Mayor Rendell was took office amidst relatively high energy prices.17 environmentally minded and requested that a Special He created a Municipal Energy Office (MEO) Committee on Energy Management Issues release a with the responsibility of paying the City’s utility report detailing Philadelphia’s energy management bills and tracking, managing and reducing energy options.22 In response to the report, Mayor Rendell consumption.18 This was the first time energy was expanded the MEO to about five staff members made a priority by the City, but the impact of the and placed the MEO under the Mayor’s Office.23 MEO was limited. One full-time director was in This restructured MEO was put in charge of charge of managing the municipal energy use and auditing and managing the utility accounts utilizing paying utility bills.19 an energy management database, and reducing City energy consumption by 5-10%.24 The MEO prioritized timely utility bill payments, improved MAYOR WILSON GOODE (1984-1992) energy management strategies, implemented Difficult financial times for the City continued into energy efficient technologies, and reduced the cost Mayor Goode’s administration and specific funding of energy for the City through procurement and for energy management was limited. However, negotiations with utility companies.25 important dialogue addressing where responsibility for energy costs ultimately fell set the stage for The Electricity Generation Customer Choice and future progress. Energy related efforts during this Competition Act was passed by Pennsylvania administration included: improved management legislature in 1996.26 The Act aimed to break apart of municipal waste management, ensuring energy the state’s public utility monopolies and allow efficiency solutions in Section 8 housing to protect consumers to choose their electricity generation Philadelphia Housing Authority (PHA) housing providers. Rate caps set electricity prices at STATE ENERGY EFFICIENCY RATINGS residents from inheriting high utility bills, lighting artificially low rates in Philadelphia to prevent retrofits for street lighting and City Hall, and focused severe market fluctuations and discouraged market attention of the Gas Commission to make PGW competition in PECO’s service territory for over more efficient. 20 a decade. This left little incentive for the City to reduce energy consumption or implement energy conservation measures.
Municipal Energy Profile: The General Fund 7 an energy management timeline
10.0
7.5 AVERAGE U.S.ENERGY PRICES (CENTS PER KWHOUR)
5.0 Municipal Energy Office established under Dept. of Public Property
Municipal Energy Office expanded and 2.5 restructured PHILADELPHIA
GREENE GOODE RENDELL STREET NUTTER 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Congress passes EPACT (Energy Electricity Generation Customer Policy Act) requiring states to Choice and Competition Act establish building energy codes passed by the Pennsylvania and to deregulate the electric General Assembly requiring power market, among other electricity deregulation to be Guaranteed Energy energy efficiency provisions implemented Savings Act (GESA) FEDERAL/STATE
MAYOR JOHN STREET (2000-2008) MAYOR MICHAEL NUTTER (2008-PRESENT) During his time in office, Mayor John Street saw energy prices rising dramatically across the country, In 2008, Mayor Nutter was elected and prioritized but Philadelphia’s electricity prices remained stable sustainability. Rising energy prices and expiring because of rate caps set by the Pennsylvania Public rate caps incentivized energy management reform Utility Commission (PUC). In 2004, the Street in Philadelphia. Budget certainty was a priority. He administration released the “Philadelphia High established the Mayor’s Office of Transportation Performance Building Renovation Guide” outlining and Utilities (MOTU) and the Mayor’s Office of integrated whole building approaches for renovation Sustainability (MOS). The MEO energy functions and maintenance projects that included roof, were absorbed and responsibilities were split. window, lighting, automation, HVAC and electrical MOTU was responsible for energy supply and MOS systems upgrades.27 was charged with managing energy demand.
In addition, Mayor Street signed the U.S. Mayors’ Climate Protection Agreement in 2005 and issued Executive Order 1-07. This action set the stage for the City to adopt a Local Climate Change Action Plan, released in 2007.
8 Municipal Energy Profile: The General Fund Creation of Philadelphia Energy Authority Philadelphia begins participating in PJM’s Demand Response Programs City Council passes Bill No. 120428-A, Legislation mandates new construction meet requiring energy benchmarking and disclosure ENERGY STAR® cool roof standards for all commercial buildings 50,000 sq. ft. or larger to report annual energy and water usage Purchase Obligation Bill allows City to 10.0 procure electricity strategically Philadelphia begins participating in a Peak Load Contribution (PLC) Predictor Program to reduce electricity costs Bill No. 080025 mandates large City-owned buildings must be certified LEED Silver Departmental Energy Efficiency Incentive 7.5 Pilot Program launched to target the role Mayor’s Office of of tenant and employee engagement in Sustainability and Mayor’s reducing energy consumption Philadelphia High Office of Transportation and Utility created Nutter announces Philadelphia Performance Building 5.0 will join the “City Energy Project” Renovation Guide released Creation of Energy Office
Local Action Plan Mayor’s Task Force on City- Owned Facilities releases its final for Climate Change report 2.5 released by Sustainability Working Group
GREENE GOODE RENDELL STREET NUTTER 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Electricity retail choice End of Electricity Rate-Caps (Dec. 31, 2010) was implemented for all Assembly passes Act 129, Pennsylvania residents expanding the PUC’s Pennsylvania PUC implements oversight responsibilities measures to remove final barriers to a Pennsylvania mandates and imposing new efficiency complete competitive electricity market an Alternative Energy requirements on electric Portfolio Standard distribution companies First Greenworks Philadelphia Report
In 2009 he launched Greenworks Philadelphia, In November 2013, the Mayor’s Task Force on announcing his goal to make Philadelphia the City-Owned Facilities released its Final Report ‘Greenest City in America.’ The plan’s goals & Recommendations after evaluating four major extend until 2015 and Greenworks reports areas of City facility management: space allocation, have been released annually detailing progress leasing, maintenance and facility management, and to date. utility payments/energy efficiencies. Of the nineteen recommendations, ten were directly related to Mayor Nutter passed Executive Order 6-10, energy efficiency. in 2010, to establish an Electricity Supply Advisory Committee to evaluate and determine In keeping with his priorities, on Earth Day 2014 the best procurement strategy for the City to Mayor Nutter announced that Philadelphia was assure budget certainty.28 This order specifies selected to join the City Energy Project with nine the procedure for electricity procurement and other United States cities to improve the energy established the reporting requirements necessary efficiency of buildings.30 to keep the Mayor and City Council updated on the status of electricity purchases.29
Municipal Energy Profile: The General Fund 9 state legislation policies State legislation and politics greatly impact Philadelphia’s energy landscape.
Guaranteed Energy Savings Act Act 129 In 1996, the Pennsylvania general assembly passed Pennsylvania House Bill 2200, or Act 129 of 2008, Act 29, the Guaranteed Energy Savings Act to was passed by Pennsylvania legislature in October, enable public entities to enter into guaranteed 2009.38 Act 129 “requires that Pennsylvania utilities energy savings agreements (GESA) contracts deliver energy efficiency programs that reduce their with qualified providers, such as energy service electric load by 1% by May 31, 2011 and by 3% by companies (ESCOs), for up to ten year terms.31 May 31, 2013” and “to reduce peak demand by GESA projects identify issues and limitations in a 4.5% by May 31, 2013.”39 This act also gave the facility, implement energy conservation measures Pennsylvania Public Utility Commission (PUC) the and preventative maintenance strategies, and authority to extend the program if it was determined analyze energy reductions and savings during a to be cost effective.40 Act 129 was a major piece measurement and verification phase to guarantee of energy legislation. It amended the Public Utility projected energy savings. Amendments to this Code and obligated the PUC to implement energy Act, including Act 57 of 1998, which extended efficiency and conservation programs such as GESA contracts to 20 year terms,32 and Act alternative energy, smart meter technology, and 77 of 2010, which updated definitions and time-of-use rates and real-time pricing plans.41 contracting procedures to clarify and make GESAs PECO’s Act 129 program, Smart Ideas, offers more efficient and productive,33 have worked to rebates and incentives for energy efficiency incentivize GESA projects. Act 39 of 2010 allowed projects. The PUC evaluated the progress and cost public housing authorities, municipalities, school effectiveness of Act 129 programs and voted in districts and state agencies to contract ESCOs August 2012 to continue Act 129 programs for a without using up-front capital.34 second phase through May 31, 2016.42 Phase three planning is in process. Alternative Energy Portfolio Standard In November 2004, Pennsylvania enacted legislation that mandated an Alternative Energy Portfolio Standard (AEPS).35 This legislation required that 18% of the electricity sold by compliance year 2020-2021 come from approved renewable or alternative sources with at least 0.5% from photovoltaic power.36 By 2013, renewable energy accounted for almost 4% of Pennsylvania’s net electricity generation.37
10 Municipal Energy Profile: The General Fund Building Code Updates In 2012 the RAC did not perform the required Before 2011, Pennsylvania’s building code was analysis, and voted to reject the adoption of all 2012 updated every three years based on model codes building codes. As a result, Pennsylvania is operating recommended by the International Codes Council under the 2009 International Energy Conservation (ICC). The ICC is a non-profit organization that Code (IECC).44 The rejected 2012 building energy facilitates consensus among national stakeholders code would have increased energy performance regarding building code updates.43 Pennsylvania by 15 percent.45 By not adopting the most current Act 1 of 2011 made significant changes to the building code, Pennsylvania is erecting new buildings Pennsylvania’s code adoption process, and code to a lower energy efficiency standard than the updates have been stagnant since. industry is capable of delivering.
Act 1 gave the Department of Labor and Industry‘s Philadelphia is required to follow the state’s building (L&I) Review and Advisory Committee (RAC) code. Municipalities cannot require local building broad authority over how Pennsylvania updates codes to be more stringent than the state’s code. their building code. It requires RAC to individually This may reduce Philadelphia’s flexibility to meet examine the health, safety, welfare, economic, local energy goals and is a disincentive to high financial impacts and technical feasibility of performance construction. However, Philadelphia thousands of proposed code changes on a triennial can petition the state for its own code, incentivize basis, and approve each by a two-thirds vote. building better than code, or adopt voluntary codes such as IgCC.
IMPACT OF BUILDING CODES ON ENERGY COST
The Institute for Market Transformation $150,000 and CBEI compared the energy efficiency $140,500 criteria defined by two versions (2001 and 2010) of the American Society of Heating, Refrigerating and Air-Conditioning Engineers 120,000 savings: (ASHRAE) code $57,600 per year
Based on a 41% energy savings for a four- 90,000 story, 50,000 square foot office building in $82,900 Philadelphia, PA
60,000
30,000
2001 2010
Municipal Energy Profile: The General Fund 11 CURRENT ENERGY MANAGEMENT
The City of Philadelphia manages more than 700 facilities ranging in size and function. They include public safety buildings, libraries, parks and recreation and administrative offices. They range in size from small neighborhood recreation centers to City Hall and the Philadelphia Museum of Art.46 These buildings represent enormous opportunities to save both energy and money.47
current cost48 CITY ENERGY COST BY FUND (in millions)
0 10 20 30 40 50 60 70 80
street lighting MAINTENANCE PROJECTS & OPERATIONS i.e., equipment or roof replacement < 10,000 SQ. FT. > 10,000 SQ. FT.
No energy efficiency LEED Silver Certification 62.7% of the General Fund’s energy No energy efficiency requirement required GENERAL FUND ENERGY COST BY DEPARTMENT usage is from electricity. (percent) measure or policy in place
By department, the top energy users are Public Property, Parks and Cool Roof Energy ROI Analysis Standard Conservation Recreation, Prisons, and the Art Required as of FY16: Certificate Museum—totaling 64.8% of Not retroactive; of Design for can only be enforced General Fund energy use. Commercial on new projects or Construction budget items While the largest single user of energy is the Art Museum, four of the top ten users are prisons.
LARGEST GENERAL FUND ENERGY USERS FY14
1 2 3 4 5 6 7 8 9 10 Art Museum Curram House of Criminal One Parkway City Hall Municipal Philadelphia Philadelphia Riverside Fromhold Corrections Justice Building Services Nursing Juvenile Correctional Correctional Center Building Home Justice Center
12 Municipal Energy Profile: The General Fund CURRENT ENERGY MANAGEMENT governance structure Currently, utilities are managed by MOS, MOTU, PEA is an independent municipal authority that was and the Energy Office. MOS promotes city-wide jointly created by City Council and Mayor Nutter energy policy, energy efficiency projects, and in July 2010 to bring additional expertise and focus community engagement related to Greenworks to the City’s efforts to reduce energy consumption Philadelphia.49 MOTU has worked to enhance and expense.53 The PEA continues to evolve, but the entire city’s energy, utility and mobility is envisioned to serve as an energy think tank and infrastructure in keeping with sustainability convener.54 As a municipal authority, the PEA is principles.50 In July 2014, the City’s energy positioned to provide long-term energy strategies, management functions were merged under a hold long-term energy contracts, act as a public- new Energy Office jointly reporting to MOS and private liaison to leverage resources and aggregate MOTU.51 The goal of creating the Energy Office projects for efficiency, and initiate high level was to position utility management as a separate coordination for future energy management and core function of City operations and provide a single efficiency projects.55 contact for energy related operations.52
PHILADELPHIA ENERGY MANAGEMENT
PEA: ENERGY THINK TANK
• Long term contracts • Public education and engagement • Steward of long term planning • Policy and technical advocacy and vision • Public/private liason • Drive regional, local and • Facilitator/convener MOS cross-sector collaboration • Clearinghouse of energy resources
Y MOS: EXTERNAL ENERGY POLICY & PROGRAMS T I R C • External city-wide policy • Public-private partnership O I T
H Y • Sustainability program • Tracking and reporting
T
G development and management • Municipal project aggregation U
PHILADELPHIA THE O A • Benchmarking
V
T ENERGY ENERGY
E
N R
E AUTHORITY OFFICE
N MOTU: INTERNAL ENERGY OVERSIGHT
D
M
N
E • Utility management oversight
E N
P • Utility relations
E T
D
N I THE ENERGY OFFICE: INTERNAL MUNICIPAL ENERGY OPERATIONS MOTU • Energy procurement • Act 129 Rebate Management • Energy analysis • Administration of the • Technical assistance Energy Efficiency Fund • Project development • Departmental engagement and management • Departmental education • Energy conservation and training management
Municipal Energy Profile: The General Fund 13 current city policies and legislation
DECEMBER 2009 To encourage energy consumption reductions, The LEED requirement is intended to be an the City of Philadelphia enacted Bill No. 080025 effective tool for fostering integrated design and LEED Requirement Large, City-owned in December 2009 (effective January 2010) high-performance construction in major City buildings must be amending Philadelphia code relating to procurement building projects. The Bill clarified a previous LEED Silver contracts.56 The bill required new construction commitment contained in Mayor Street’s Executive 57 MAY 2010 and any major renovations of large City-owned Order 1-07 regarding climate change and buildings to be designed, constructed, and certified environmental stewardship.59 The ordinance applies Cool Roof Law at the silver level of the Leadership in Energy and to capital projects undertaken by all departments All new construction Environmental Design (LEED) rating system of and agencies across the City, including the Airport, meets ENERGY STAR® 58 cool roof standards the U.S. Green Building Council. Enacting LEED Water Department, and the Department of Public legislation guarantees that projects 10,000 Square Property (DPP). There are currently no energy DECEMBER 2010 Feet (SF) or greater will: efficiency requirements for capital projects less Purchase than 10,000 SF, but all construction projects are • Use at least 20% less energy than basic, Obligation Bill encouraged to consider energy efficiency during Allows City to code-compliant structures resulting in reduced design initiation. procure electricity operating costs for the life of the building strategically • Operate as the design intended through a In May 2010, Mayor Nutter signed legislation, JUNE 2012 mandatory commissioning process, resulting in introduced by Councilman James Kenney, requiring Commercial Benchmarking reduced operating and maintenance costs and all new construction in Philadelphia to use highly Requirement maximum occupant comfort reflective roofing materials that meet or exceed Requires annual energy ENERGY STAR® cool roof standards. The cool roof and water benchmarking law was an early step toward the City’s anticipated for large buildings adoption of green building standards.60
CURRENT ENERGY EFFICIENCY POLICY OVERVIEW 0 10 20 30 40 50 60 70 80
street lighting OPERATIONS & MAINTENANCE MUNICIPAL BUILDING PROJECTS i.e., equipment or roof replacement
< 10,000 SQ. FT. > 10,000 SQ. FT. No energy efficiency No energy efficiency LEED Silver Certification standards or policy in place requirement required
There are no Rebate funding is NOT enforceable energy credited back to the efficiency policies or project or operations Code Compliant Cool Roof Standard ROI Analysis procedures for the cost, creating a Required as of FY16: majority of disincentive to fund Not retroactive; can facility-related work. energy efficiency only be enforced through rebates. on new projects or budget items
14 Municipal Energy Profile: The General Fund In order to prepare for the expiration of rate caps Philadelphia City Council took steps in June 2012 at the end of December 2010, City Council passed to reduce building energy consumption by amending the Purchase Obligation Bill61 to allow the City to Chapter 9-3400 of the Philadelphia Code. This contract a licensed service provider (LSP) through a amendment required annual energy benchmarking competitive bidding process to act as the City’s load for all commercial buildings in Philadelphia, serving entity (LSE) to make fixed rate wholesale 50,000 SF or larger, to disclose energy and water electricity purchases for the City. The Purchase consumption data.63 The City had already begun Obligation Bill required that the LSP shop for blocks to measure and compare performance metrics of of electricity and “make purchases only after first municipal buildings. A baseline was established securing responsive and competitive bids from using data from 2011 onwards to set energy qualified electric power providers, and only from the efficiency standards for City buildings. The MOS lowest bidder”62 to ensure low costs, price certainty has benchmarked energy usage for all City-owned and energy security. This was a major step to begin facilities 10,000 SF and larger, as well as dozens of planning for the City’s energy future. smaller facilities.64 reducing energy demand
PREVENTATIVE MAINTENANCE
Economic hardships and constrained budgets have also providing other benefits. Public Property resulted in the deferred maintenance of many received approval to hire 16 employees to begin City-owned buildings, leaving the City with the a preventative maintenance program to complete burden of reviving those that have fallen into scheduled projects and move to a more proactive disrepair. This deferred maintenance has resulted maintenance approach. in a significantly higher cost for the City today than preventative maintenance would have incurred Organizations that have implemented comprehen- over the years. The City does not have a consistent sive preventative maintenance programs have preventative maintenance plan for City buildings, shown dramatic decreases in operation and and preventative maintenance actions have been maintenance costs.65 When factors such as sporadic and limited when funding is available. extended equipment life, reduced energy use, less frequent system downtime, and decreased In 2012 the Facilities Management Division of interruptions to building operations are included, the Department of Public Property explored a total costs can decrease by as much as 50%.66 preventative maintenance strategy on 121 City Implementing a proactive maintenance plan can facilities. It concluded that preventative and help eliminate waste, reduce risk, improve customer predictive maintenance could reduce the City’s service and avoid loss of business continuity due to energy consumption by 5% to 20% annually, while unforeseen building emergencies.67
Municipal Energy Profile: The General Fund 15 UTILITY BILLING
The City currently pays its utility bills manually. later.70 The hard copy invoice is used to pay the bill For most utilities the information is received by the and the electronic invoice is hand-checked for billing Energy Office as an electronic flat file ready for errors and discrepancies.71 Although the bills cover direct import into the energy management database. the same time period, the information is presented The bill is resolved, audited, recorded in a monthly differently in each format and neither provide a report and forwarded for payment. granular breakdown of charges.
The City has been working closely with utility The Mayor’s Task Force on City-Owned Facilities companies to simplify and streamline their billing Report recommended establishing a Utility Payment and payment process to reduce the time it takes to Advisory Board to audit the City’s utility accounts.72 pay utility bills and improve working relationships. According to the Mayor’s Task Force on City-Owned The City has been able to reduce the bill payment Facilities, the City has approximately $590,000 turnaround from 90 days to 30-45 days after allocated to utility payments for non-City tenants receiving its electricity bills, but there is still room for of City facilities.73 Many of these accounts are improvement.68 for buildings that once housed City operations or were previously in use by the City, but their leases As of July 2014, there General Fund has 1,400 were arranged through “formal and semi-formal electricity accounts, with two bills for each: one agreements with inconsistent lease terms regarding for PECO’s distribution charges and one for utilities”74 and are therefore, still billed to the City. generation and transmission charges through an To date the Utility Payment Advisory Board has not energy supplier.69 The City receives a hard-copy convened; however, MOS has been able to begin of the electricity invoice six weeks after the billing this process, already removing several unnecessary cycle ends and an electronic copy about two weeks accounts from the City’s payroll.
ENERGY MANAGEMENT DATABASE
The City selected a new energy management • Enable normalization of utility data to database in 2014, replacing the previous software provide valuable year-to-year, weather solution used between 2010-2014. adjusted comparisons78 • Allow users to group data by utility or by building The EnergyCAP database is the City’s primary tool to organize bills for auditing and to better to monitor energy and water consumption and can understand energy consumption79 perform the following: • Import utility bills automatically without manual • Store information for all City utility accounts75 data entry80 • Enable audits of utility accounts for • Transfer electronic bill data directly into billing errors76 ENERGY STAR® Portfolio Manager for energy 81 • Store information such as a building’s asset type, benchmarking. square footage, age, systems, occupancy, and • Green house gas tracking hours of operation77 • Assist in tracking energy efficiency projects Through EnergyCap, the City will continue to that have completed construction benchmark its facilities with ENERGY STAR® Portfolio Manager both for compliance with the City’s law and for the prioritization of investments.
16 Municipal Energy Profile: The General Fund PECO’S SMART IDEAS REBATE PROGRAM
In compliance with Act 129, PECO offers a series To date the City has received more in rebates of incentives under its Smart Ideas program. All than it has paid in program fees. Since the PECO customers, including the City, pay an energy implementation of Phase 1 in 2010, the City has efficiency charge to cover the administration of the paid approximately $3.5 million in program fees and Smart Ideas rebate program.82 Rebates are awarded received approximately $6.8 million in rebates. This for approved and completed energy efficiency is almost exclusively due to larger energy projects.84 upgrades. This program allows PECO to incentivize In order to maintain this balance the City will need to energy efficiency projects that lower demand, while execute large projects or proactively evaluate smaller also encouraging energy efficiency and helping projects for rebate eligibility. customers save money.83 Phase 2 is currently underway and will end May 31, 2016, with Phase 3 planning in progress.
CURRENT TECHNOLOGY - BUILDING MANAGEMENT SYSTEMS
Building automation systems (BAS) are control To date, BAS and RO implemented at City Hall, systems that electronically monitor multiple building One Parkway Building, Criminal Justice Center, systems.85 Using BAS, mechanical operations and the Municipal Services Building have resulted for lighting, security, and HVAC equipment can in a greater ability to troubleshoot operations, a be automated to maximize energy efficiency and greater sense of energy awareness, and the ability to performance.86 BAS also allow for remote operations increase accountability within operations.88 (RO) so that system checks can be done by multiple users working at offsite locations at any time of the The City continues to retrofit many of its facilities day.87 This can improve energy management because with remotely accessible BAS. In 2013, the DPP it provides quick and easy access to information on installed a RO system in the 1st Police District building operations. Building to further enhance the building’s performance.89 The recently completed renovation has delivered immediate benefits that will be reflected in future municipal reporting.
Municipal Energy Profile: The General Fund 17 “By quickly DEMAND RESPONSE PROGRAMS AND PLC MANAGEMENT responding to As part of the City’s strategy for energy and The Emergency and Economic Demand Response changing energy cost reduction, the Energy Office works with a Programs work the same way, but were put in demands, the City Curtailment Service Provider (CSP) to monetize a place by PJM, the regional grid operator, to avoid can save money, building’s ability to reduce its energy consumption.90 blackouts, brownouts and transmission interruptions help reduce its By quickly responding to changing energy demands during peak times of energy use.94 PJM incentivizes carbon footprint, and reducing peak loads the City is saving money, these programs by offering significant savings and help prevent reducing its carbon footprint, and helping to prevent when the City is able to reduce a facility’s energy power outage from power outages from disrupting City operations.91 consumption when called upon.95 Currently, the disrupting City There are three programs the City participates in City’s 20 largest energy consumers participate in operations.” to deal with extreme weather events, curtail non- PJM’s Demand Response Programs because it is essential energy use during high demand periods, cost effective to enroll in the program.96 Since 2010, improve the region’s power grid for enhanced the City’s general fund participation has resulted in reliability, and reduce the City’s reliance on less nearly $1.8 million dollars.97 efficient energy generation resources: The PLC Predictor Program and the Emergency • Peak Load Contribution (PLC) Predictor Program Demand Response program will see diminishing • PJM’s Emergency Demand Response Program returns over time.98 The financial incentives for • PJM’s Economic Demand Response Program the Emergency Demand Response and the PLC Predictor programs work against one another.99 As For Peak Load Contribution (PLC) Management, the a facility lowers its demand charge year after year, it CSP or Energy Office informs participating facilities becomes increasingly more difficult for that facility to conserve energy on the highest energy use days of to achieve the reduction required for it to continue the year.92 This is done through temperature setting its participation in the Emergency Demand Response adjustments to HVAC systems and the reduced use Program.100 In a few years, the City will not be of non-essential building and office equipment.93 able to take advantage of the Emergency Demand The City’s efforts result in lowered Capacity and Response program in its current form since it will Demand Charges on its electricity bill, which can have brought its facilities’ PLC demand charges yield significant savings. down below the threshold.101
REVENUE: SAVINGS: Demand Response Peak Load Contribution DEMAND Number of 20 Any facility can participate RESPONSE Participating Facilities Demand Response buildings are VS. PEAK LOAD encouraged to participate because their CONTRIBUTION consumption can be metered. As the largest consumers, cost avoidance ia also 102 COMPARISON much greater with their participation.
Number of Events Varies with summer temperatures 5 PLC Predictor Days Summer 2014: 1 event (determined by PJM based on PECO data) Summer 2013: 4 events
Range of Revenue/ Varies: dependent on number of Reduction in Demand Charge Cost Avoidance events and dollars/MW based on year after year + Capacity the capacity
18 Municipal Energy Profile: The General Fund INCENTIVIZING BEHAVIOR CHANGE: THE DEPARTMENTAL ENERGY EFFICIENCY INCENTIVE PILOT PROGRAM
Behavior change is a fundamental component in There was a significant education component in the managing energy consumption. One of the ways the deployment of the pilot, including over forty on-site current administration is seeking behavior change educational workshops and some facility energy is through the Departmental Energy Efficiency audits.107 The workshops educated employees on PEA Incentive Pilot Program (DEEIP). On July 1, 2013 their individual department’s energy use compared SUPPORTS... DEEIP was launched to increase tenant and employee that of to other departments and outlined energy engagement in reducing energy consumption.It saving strategies specific to their facility and type of The continuation and was the first time the City financially incentivized work. Departmental energy savings are calculated expansion of programs departmental behavior change, and explored the at six-month intervals (July-December and January- to encourage behavior feasibility of overcoming budget process disconnect. June) and “rebates” are distributed after the end of change, which can 108 The pilot aims to connect departments to their each fiscal year (July-June). result in significant 103 energy use and cost. Data from the pilot is still energy savings. being analyzed. Given a 5%+ reduction in consumption, tied to a baseline, the savings are distributed as follows:109 104 The pilot program’s goals were to: • 50% to the General Fund • Contribute to Greenworks goal of lowering • 25% to the Department (for immediate use) City government energy consumption by • 25% to the Department’s Energy Bank110 30% by 2015
• Reduce wasteful energy use Given an increase in consumption: • Raise awareness about behaviors to help reduce • 50% will be absorbed by the General Fund waste • 50% by the Department’s Energy Bank • Recognize effective behaviors and measures • Financially reward departments for valuing The departments are encouraged to reinvest their energy conservation savings into energy efficiency upgrades to further • Create a culture of prioritized energy the City’s energy goals. However, currently the conservation in City departments ultimate decision rests with the leadership of each department. The Department of Public Property, Parks and Recreation, the Fire Department, the Police Department and the Health Department all voluntarily participated in the first year of the pilot program.105 A total of 618 City buildings were included in the pilot, with over half of the buildings residing in Parks and Recreation.106
Municipal Energy Profile: The General Fund 19 76.75
70
69.75
69.75
65.25
62
56
55.25
54.75
54.5
OIL energy supply
Portland The Energy Office13.75 is the central procurement STEAM San Francisco 13 PEA entityPhoenix for the City12.25 energy supply, including vehicle SUPPORTS... fuel.Columbus Each of the11.25 fuels has its own strategy. Boston 11 NATURAL GAS ELECTRICITY Regularly evaluating Denver procurement strategies 11 Chicago for all energy sources 10.75 Seattle as the energy market 10.75 New York evolves using comparable 10.5 Philadelphia cities as a guide. 10.5
ELECTRICITY 62.7% Electricity accounts for 62.7%111 of the City’s Since the passage of the Electricity Generation utility bill, making it a priority. There are various Customer Choice and Competition Act, the City costs associated with purchasing electricity that has had a choice of generation suppliers to purchase must be understood. Generation, transmission electricity from to procure the lowest rates. The City and distribution charges make up the bulk of any has no control over transmission and distribution electricity bill, along with other service charges charges which are set by PJM and PECO. and fees.112 Generation costs are determined by the electricity supplier which generates the power. The primary goal of the current procurement plan is These costs vary based on the price of the fuel the to create budget certainty and to avoid single points supplier chooses to use and the actual cost of power of market exposure.116 This procurement strategy generation.113 Transmission charges are determined allows the City to average the cost of electricity by PJM, the regional grid operator, and are supply for maximum stability and to hedge against associated with the movement of electricity through price fluctuations in today’s volatile energy market. high voltage transmission lines.114 Distribution Both fixed rate on and off peak blocks of power are charges are determined by PECO, Philadelphia’s purchased through the PJM subaccount to secure local electricity distributor, and are associated electricity for future use. Forward purchasing of with the movement of electricity through the local expected power load are purchased from 3–30 electricity grid.115 months in advance to fix the energy supply cost for 80%-90% of the City’s estimated use in order to prevent the City from purchasing more power than what will be needed.117 The remaining 10%–20% is purchased on the PJM Day Ahead Market at the current market price.118
20 Municipal Energy Profile: The General Fund NATURAL GAS STEAM 25% 11.6% There are 450 natural gas accounts in the General Steam makes up 11.6% of the City’s total utility Fund consuming over 722 MCF annually.119 This expenditure.124 Approximately ten City buildings represents approximately 25% of the City’s utility utilize steam generation from Veolia for heat and bill. Philadelphia Gas Works (PGW) is the City’s humidification, including the Art Museum, which is main natural gas supplier and distributor; however, the largest user in the General Fund.125 Veolia is the the 20 largest accounts have a Natural Gas Cost only producer of steam in Philadelphia, and the City Management and Procurement Plan and receive their has a negotiated contract in place. commodity supply from a third party supplier and use PGW as their distributor.120 FUEL OIL The City must pay both commodity costs and basis costs for natural gas as well as PGW’s 1% distribution charges. Commodity costs are based Less than 1% of the City’s energy budget126 is on the value of the physical commodity itself, the allocated for fuel oil. It is used to heat a minimal natural gas.121 Basis costs reflect the cost associated number of City buildings. with maintaining natural gas infrastructure and transporting natural gas between the refinery and the user.122 Both the commodity and basis markets have always been volatile. PGW’s distribution costs are not market-based, instead set by tariffs, making them highly stable.123
VEHICLE FUEL
In 2013, the Managing Director put out a directive for the City to begin purchasing vehicle fuel strategically. Fixed rate purchases of fuel for the City’s fleet are made in accordance with the Vehicle Fuel Cost Management Plan or at times when the market allows for Value Buys, when the price of oil drops significantly.127 The goal of the Cost Management Plan is to guarantee future fuel supply and to ensure budget certainty.
Municipal Energy Profile: The General Fund 21 RENEWABLE AND ALTERNATIVE ENERGY
A variety of alternative energy projects are There was a drastic increase of solar projects 2014: potentially feasible in Philadelphia. As part of because it became cost effective. The market Pennsylvania’s Alternative Energy Portfolio became saturated and the value of solar renewable 14.8% Standards (AEPS), electric distribution companies energy credits (SRECs) plummeted. Since the SREC OF ELECTRICITY and electricity suppliers in Pennsylvania must supply market crashed in PA, there has been a slowdown CONSUMED IN 18% of their electricity from alternative energy in solar projects across the state. No legislation to PHILADELPHIA resources by 2020.128 This encourages a diverse repair the market has been successful. SREC market IS FROM energy portfolio for the state, enhancing energy fluctuations at the state level have a local impact ALTERNATIVE security in the face of climate change. The City of on the Philadelphia market’s ability to create viable ENERGY Philadelphia’s Greenworks 2015 target calls for 20% projects. SOURCES of electricity to be supplied by alternative energy sources.129 The 2014 Progress Report reflects One financing vehicle that can remove barriers to that currently 14.8% of electricity consumed in executing solar projects and make solar energy cost Philadelphia is from alternative energy sources.130 In effective is a power-purchase agreement (PPA). 2013, Municipal efforts to support renewable energy PPA’s are long-term contracts where one party shifted from national wind RECs to a local focus finances, installs, operates and owns the solar array by purchasing higher impact REC’s from nearby on a consumer’s property. The consumer benefits projects. This improved efficacy and local impact. from having a negotiated electricity rate, while Solar, wind, and hydroelectric power have potential the installer benefits from the SRECs gained from renewable generation capabilities in this region, as the production of electricity from a renewable do alternative and supplemental energy sources from resource.132 This model can be favorable for both 2015 cogeneration, geothermal ground source heat pumps parties involved. PPA’s make financing arrays a viable Greenworks Goal: and biogas plants. economic option even though the SREC market has not been favorable in recent years. 20% To date there have been no renewable energy projects in The General Fund. However, the Philadelphia joined the U.S. Department of Energy’s Philadelphia Water Department (PWD) has two. Solar America Cities partnership to strive to increase They installed a 250kw solar array at their SE the use of solar energy in the future. The Solar Wastewater Pollution Control Plant and constructed City Partnership set goals for solar generation in a 5.6 megawatt biogas cogeneration plant at their Philadelphia.133 Philadelphia’s goal as a city was Baxter NE Water Treatment Facility. to have 2.3 megawatts (MW) of solar generating capacity by 2011 and 57.8 MW by 2021. As a whole, Solar Photovoltaics Philadelphia met the 2011 goal, but with the collapse The Philadelphia metro area has greater solar of the market, it will take additional incentives to radiance than the rest of the state.131After the meet the goal for 2021. AEPS mandate in 2004, Pennsylvania set up a Sunshine Rebate Program (2008) to encourage the development of solar projects.
22 Municipal Energy Profile: The General Fund Ground Source Heat Pumps Another alternative energy source that can be There is also potential for sewage or wastewater utilized by smaller facilities is ground source heat infrastructure to be used with ground source pumps.134 Ground source heat pumps take advantage heat pumps.136 There is a wastewater geothermal of consistent annual groundwater temperatures installation in operation at PWD’s Southeast Water (50°F-60°F). It can be used to help heat buildings Pollution Control Plant. This technology has helped in the winter and help remove heat from buildings reduce the amount of energy needed to heat and cool in the summer. The volatile energy market has no the building and saves PWD $18,000 annually.137 effect on the cost of this technology and life cycle costs for the system are low with a high return on investment. A system has been installed by the City at the Philadelphia Police Department Regional Tactical Training Facility.135 projects ENERGY EFFICIENCY PROJECTS AND GUARANTEED ENERGY SAVINGS AGREEMENTS
The Quadplex project (highlighted on the next page) The cost-effectiveness of the GESA/ESCO model is the City’s first Guaranteed Energy Savings Act have been debated. Allegheny County compared (GESA) project. GESA projects are large energy their traditional project process with a GESA/ efficiency projects that provide long term energy ESCO project and concluded it would have cost the and cost savings through a performance contract. county more to do the same project internally.141 GESAs have complex financing arrangements Often the standard administrative costs (project and use multiple funding sources, but often use management, procurement, design specifications) savings to pay for the costs of the project. The and lost opportunity costs are overlooked.142 Paying City’s Quadplex GESA project began in 2012 and is an ESCO ensures that the project will be completed expected to realize over $10 million in savings for the in a reasonable time frame and minimizes the risk, City over the duration of the project.138 This project since the ESCO guarantees the savings. took advantage of Qualified Energy Conservation Bonds (QECB), a type of revenue bond with a low interest rate to be used for energy efficiency capital expenditures in public buildings to reduce energy consumption by at least 20 percent.139 The City is considering the GESA model for large facility energy efficiency projects, like museums and prisons, in the future.140
Municipal Energy Profile: The General Fund 23 QUADPLEX GESA PROJECT
PROJECT GOALS The Quadplex Guaranteed Energy Savings Project, The Quadplex GESA Project has been in the works since late 2008. In late 2009 the City selected an initiative of the Mayor’s Office of Sustainability, the energy service company Noresco to complete the Department of Public Property, and the Mayor’s an energy audit, develop energy conservation Office of Transportation & Utilities uses the savings measures, and to manage their implementation. Improvement to four of the City’s biggest energy from increased building energy efficiency to users, known collectively as the “Quadplex,” (City REDUCE pay for retrofits and other upgrades. Project energy use and cost Hall, the Municipal Services Building, One Parkway, goals included: reduce energy use & cost, and the Criminal Justice Center) recently completed construction in January 2015. improve tenant comfort, proactively invest in
facilities, and enable sustainable practices. Many of the upgrades are invisible to building users. These include improvements to boilers, steam pipe
IMPROVE insulation, and HVAC drives and filters. In addition, tenant comfort the City has adopted new building control systems. These systems include web-based software that allows city staff to remotely monitor and manage, in real-time, building HVAC systems. Increased capacity to control HVAC is particularly important because building heating and cooling account for INVEST between 50-60% of Quadplex building energy use. in facilities
ENABLE sustainable practices
JUSTICE JUANITA KIDD STOUT CENTER FOR CRIMINAL JUSTICE
ONE PARKWAY
24 Municipal Energy Profile: The General Fund Some of the Quadplex upgrades are more visible to After one year the Quadplex GESA Project has a building users, such as the installation of low-flow positive cash flow. All bonds will be completely paid water fixtures. In addition, those who enter the in 15 years, but savings will continue. Municipal Services Building from the underground 143 concourse may have noticed newly sealed doors. PROJECT SNAPSHOT Visitors to City Hall may notice new LED lighting Total Cost $12,285,000 in the entrance vestibules and the clocktower. Current Energy Costs in the Four Buildings $5,221,000 In addition to cost savings, there are significant (Annual, 4-year Average) operational benefits associated with upgrading to First Year Energy Cost Savings $1,340,000 more energy efficient building features. For example, First Year Bond Payment ($988,000) LED lights require replacement far less frequently Net Cash Flow (First Year) $352,000 than traditional fluorescent light bulbs. Increases with increases in energy prices. Air Quality Benefits Equivalent of removing 2,156 cars from the road M/W/DS Business Enterprise participation 22%
Lighting Water conservation Energy management Entryway improvements improvements system improvements improvements to enhance energy that reduce water usage that improve temperature that help seal the building efficiency with new low flow devices control and operability
$1.4 MILLION
PROJECTED UTILITY SAVINGS IN THE FIRST YEAR OF THE CITY HALL PERFORMANCE PERIOD
ONE PARKWAY MUNICIPAL SERVICES BUILDING
Illustration provided by Philadelphia Energy Office
Municipal Energy Profile: The General Fund 25 financing
To date, with the exception of the Quadplex project, initiatives include city’s first GESA Project, MOS General Fund projects continue to use a traditional energy efficiency efforts, Greenworks, green financing approach using operating or capital dollars building training and outreach and purchase of PEA to fund energy efficiency projects. Most specific City wind renewable energy credits145 SUPPORTS... energy-efficiency projects have been funded through the MOS’s capital budget, dispersed through the Leveraging the Qualified Energy Conservation Bond (QECB) Energy Efficiency Fund. In FY 2014 the budget unallocated QECB was $500,000.144 Other financing sources have • The City has approximately $9 million in funding and included: unallocated QECBs. They do not expire.146 Guaranteed Energy Projects under consideration include the prisons Savings Agreements and the Philadelphia Museum of Art147 (GESAs) to explore Energy Efficiency and Conservation Block Grant new large scale energy (EECBG) projects, such as the art • One time American Recovery and Reinvestment General Fund Operating Dollars museum and prisons, Act (ARRA) funding from the U.S. Department • A few very small projects have been and to improve the of Energy completed by departments using their own energy efficiency of • City of Philadelphia initiatives supported by the General Fund dollars148 existing buildings. $14.1 million EECBG included installation and verification of traffic LED lights, establishing Grant Funding Energy Works loan funds, installation of RFIDs for incentive based recycling, installation of Big Belly • The City won a $400,000 Pennsylvania Energy solar compacting litter baskets, installation of bike Development Authority grant in 2011, which racks and installation of a 171 kw PV system for was used for lighting retrofits at six recreation 149 Philadelphia Water Department. Other supported centers
NOTE: Project financing is technical and complex. This report presents an overview of innovative opportunities for the City in regards to financing energy efficiency. For more information on energy efficiency finance refer to: Wilson Sonsini Goodrich & Rosati (WSGR) Innovations and Opportunities in Energy Efficiency Finance, 2nd edition (May 2012) & 3rd edition (May 2013).
26 Municipal Energy Profile: The General Fund INNOVATION IN ENERGY EFFICIENCY FINANCE
The goal of energy efficiency finance is to provide All of these models can be structured to be on or off building owners with a cost effective alternative the balance sheet, to allow for extensive retrofits, to using their own funds for the purchase or and are repaid through energy savings.151 They installation of energy efficiency improvements. include:152 Energy efficiency finance structures provide building 1. Energy Savings Performance Contracting (ESPC) owners with access to up-front capital and other 2. Energy or Efficiency Services Agreement (ESA) forms of financing for a specific set of facility energy 3. Managed Energy Services Agreements (MESA) improvements. The debt is typically repaid over time as energy savings are generated. Financing models The financing toolbox is evolving and creates are project specific and are determined based on additional opportunities for municipalities that project size, the desired payback period, and utility benefit from long term ownership. Each of the incentives and rebates available. models listed above achieves this balance in a different way and addresses major barriers including: Recent innovations in energy efficiency finance and first cost hurdle, useful life timing mismatch, the development of new business models to address scalability, existing property or financing restrictions the additional upfront cost (first cost issue) and other and energy baseline measurements. market barriers have accelerated mobilization of capital for energy efficiency projects.150 There are three financing models that are attracting significant interest from public sector stakeholders.
CURRENT REBATE ACCOUNTING
Pursuing rebates is disincentivized by City accounting There is an additional lost opportunity cost. PECO’s practices. Currently, rebates are viewed as revenue ACT 129 Smart Ideas rebate pool is significant and and are deposited to the General Fund versus being funded by all PECO customers, including the City, credited to the project’s bottom line. As a result, through an energy efficiency program charge. The rebates are not being effectively leveraged in current rebates are awarded in order of request, so the City is and future projects. When budgets are scrutinized, eligible to receive more than they contribute. Money energy efficiency measures may be interpreted as an will be left on the table if not proactively pursued. added cost and eliminated from the project scope, even though they may be funded through rebates. It is critical for rebates to offset the efficiency investments they fund. Rebates reduce expense and provide a means to get efficiency projects implemented. It is not revenue.
Municipal Energy Profile: The General Fund 27 LOOKING FORWARD
Significant progress has been made over the years to manage energy effectively yet energy efficiency
continues to be an underutilized resource in the design and maintenance of buildings. It is difficult to 76.75 balance program needs and project budgets when capital dollars are scarce, leaving the temptation to 70 69.75 be penny wise and dime foolish. The City would significantly benefit from further implementing policies 69.75
and processes that encourage energy awareness and conservation. 65.25
62 governance 56 55.25
Philadelphia has already taken the first steps to For example, New York City has one energy 54.75 PEA reduce energy use in municipal buildings, but there personnel in every department of its city government. 54.5 SUPPORTS... needs to be greater accountability to achieve more Those individuals take care of all energy needs in his successful results. An opportunity exists to expand or her department and work with the Office of Long Departmental and restructure the Energy Office to incorporate Term Planning and Sustainability and the Department leadership coordinating energy priorities into daily operations within every of Citywide Administrative Services.153 This structure efficiency projects, department. It is vital to increase dedicated energy increases energy reduction accountability in each behavior changes and management staff for optimal conservation and department and positions energy management as a energy management savings. Energy is a non-discretionary expense and fundamental operating issue, not an optional add-on. solutions with the it is important that Philadelphia, as the fifth largest Energy Office City in America, become a national leader in energy Ideally, Philadelphia would incorporate energy policy, management, and implementation. efficiency into each department by having department leadership coordinate with the Energy OIL Office for energy efficiency projects, behavioral changes, and effective and unique energy management solutions specific to each department. ACEEE CITY SCORECARD: Portland 13.75 STEAM LOCAL GOVERNMENT OPERATIONS San Francisco 13 The tracking, managing and reporting of energy data Philadelphia ranks alongside NYC Phoenix 12.25 is a critical component of the City’s energy strategy with 10.5 out of 15 possible points. Columbus 11.25 to progress towards its energy-efficiency goals. The Boston 11 NATURAL GAS ELECTRICITY Points are based on: ACEEE reported that it is critical for staff members Denver 11 • energy efficiency goals to be exclusively dedicated to energy management Chicago 10.75 • energy strategy implementation to effectively implement tasks required and achieve Seattle 10.75 • procurement and construction policies energy-related goals.154 • integration of energy efficiency into asset New York 10.5 155 management and maintenance strategies Philadelphia 10.5 `
28 Municipal Energy Profile: The General Fund legislation and policy
PENNSYLVANIA’S BUILDING ENERGY CODE
Buildings represent approximately 41% of The City can incentivize building owners to total Pennsylvania energy consumption.156 exceed the current energy code through policy. PEA Without updating the current state energy code, One way to do this would be to mandate that SUPPORTS... “Pennsylvania is erecting new buildings that are buildings meet or exceed the 2012 IgCC. The unnecessarily wasting energy and are built to lower IgCC “creates a regulatory framework for new and Petitioning the state for construction and safety standards that the industry existing buildings, establishing minimum green its own code, 157 can cost-effectively and technically achieve.” requirements for buildings and complementing incentivizing building voluntary rating systems, which may extend better than code, or 159 Leadership in Philadelphia needs to understand the beyond baseline of the IgCC.” The IgCC adopting voluntary full impact of the state’s current decision and choose includes provisions from the International Energy codes such as the IgCC a new path for Philadelphia by adopting voluntary Conservation Code and ICC-700, the National codes such as the International Code Council’s 2012 Green Building Standard, and ASHRAE Standard International Green Construction Code (IgCC), 189.1.160 This code allows for multiple levels of incentivizing building better than code, or petitioning compliance, providing flexibility for states or the state for its own code. municipalities who choose to adopt it.161 Both states and individual cities have made commitments to The City has the ability to petition the state to incorporate the IgCC into their buildings codes require buildings in Philadelphia to exceed the including states such as Florida, North Carolina, state’s current (2009) building code, however, Oregon, Rhode Island, Maryland and cities such there are both advantages and disadvantages to as Phoenix and Scottsdale, Arizona; Richland, doing so. While the code would be more stringent Washington, and Keene, New Hampshire.162 and potentially meet or exceed the 2012 ICEE, the petition process is lengthy, and mandating a stricter code reduces the municipality’s flexibility in meeting local needs.158
Municipal Energy Profile: The General Fund 29 potential planning process policies and measures
There are other strategies the City can implement To further complicate the matter, standard to maximize building performance and reduce accounting and budgeting processes do not wasted energy. Building systems are selected early recognize the interconnectedness of a building’s in the design process and determine operating systems. This encourages isolated design decisions expenses for the life of the building. Installing cheap, that are initially made to reduce the upfront cost inefficient systems obligates the City to a long term of the building, but ultimately render the building energy expense. The real cost of a facility includes inefficient. Although energy-wise decisions may construction, operations, and maintenance expenses slightly increase the initial upfront cost of the project, over the lifetime of the building. Occupant behavior, they have the potential to significantly reduce a maintenance, and volatile energy prices also play building’s total lifetime cost. Future project planning a role in operating costs. It is vital to recognize policies and strategies that could benefit the City that a building is a complicated interwoven series long term are described below. of systems. Isolated design decisions during the design process have long-term operating liability consequences.
HOLISTIC AND INTEGRATED DESIGN APPROACH
“The renovation It is generally recognized that whole-building The Street administration’s “Philadelphia High process needs to design can achieve significant energy savings.163 Performance Building Renovation Guide,” outlines evolve from isolated Integrating conservation-minded thinking into all integrated whole building approaches for roof, repairs to an aspects of project planning management, including window, lighting, automation, HVAC and electrical the initial design and construction of a building, to systems upgrades that are still relevant today. integrated design procurement of energy for that building, to effective approach...” ongoing operation management. 20-50% energy savings can be realized per facility164 with the correct policies and management strategies in place. With a holistic approach, the City can achieve significant reductions in energy consumption to lower its energy cost.
30 Municipal Energy Profile: The General Fund RETURN ON INVESTMENT ANALYSIS
Return on Investment (ROI) Analysis is a benefit legislation was passed. Starting in commonly used financial measure to determine the FY 2016, the mayor is required to submit a cost- PEA comprehensive benefits of a project that are not benefit analysis for any new capital project to City SUPPORTS... captured in a traditional budget sheet. ROI analysis Council. The analysis, approved by the finance requires comprehensive information about facilities director, shall include return on investment, payback Implementing a strategic enabling departments to determine operating, and life cycle cost of the project. The analysis shall asset management lifecycle, replacement and return on investment also include benefits of the proposed project and program to track ROI for costs.165 ROI is a powerful tool that can be used alternates to the proposed project. The rationale for capital projects. to determine the payoff of energy efficiency over proceeding with the project is required for projects Mandating life-cycle many years. It can determine if additional up-front that are not calculable or for which the costs exceed cost analyses and costs for energy efficiency measures are justified the benefits.167 energy efficient design over the useful life of the project. information for City The Mayor’s Task Force on City-Owned Facilities facilities. In Fiscal Year (FY) 2014 the Office of Budget and recommends implementing a strategic asset Program Evaluation piloted an ROI analysis for management program (AMP) to issue work capital projects in several departments.166 orders, generate reports, and track metrics including: energy use, material and labor costs The pilot identified the incremental capital and of maintenance, useful life of components, operating costs associated with each project as well replacement dates and warranties, end-of-useful- as any operational savings, incremental revenue, or life dates and capital investments. outside capital funding generated. As a result, cost
LIFE CYCLE COST ASSESSMENT
Understanding how much a facility is going to cost LCC is advantageous because it incorporates all to operate and maintain throughout the life of the relevant costs for a building, such as the initial facility is a crucial component to determine how capital cost, occupation costs, operating and to approach the first cost investment. Life Cycle maintenance costs, and the cost incurred or Costing (LCC), also known as Life Cycle Cost benefited from its disposal.170 “LCC can evaluate Analysis (LCCA), can be used to determine if a the life cycle cost of the option and help in selecting higher initial cost for an energy efficient design the most suitable option based on a limited budget is justified. “LCC provides a basis for contrasting and calculated payback period, while simultaneously initial investments with future costs over a specified managing environmental impacts.” The City should time period.”168 Future costs are discounted to mandate LCCA and energy efficiency design make current economic comparisons between information for it’s facilities. Decisions regarding alternative designs.169 repairs, replacement, or new construction should be informed by ROI and LCCA.171
Municipal Energy Profile: The General Fund 31 PEA BUILDING OPERATOR TRAINING SUPPORTS... Efficient operations and maintenance (O&M) plans New York City’s Department of Citywide Adminis- Training facility allow buildings to meet the needs of occupants trative Services recently joined in partnership with managers and City while requiring the least amount of energy and the City University of New York (CUNY) to form personnel to execute investment.172 It is important to train facilities a comprehensive Energy Management Institute to efficient operations and personnel to execute O&M plans, encourage energy train NYC city personnel.174 Their goal is to raise maintenance plans. reduction through operations and behavior change, awareness, increase knowledge, and transform and work to raise awareness and accountability for the efficiency of city buildings to reduce energy Expanding proactive employee energy management actions. The City has consumption by 10 to 15% a year.175 This type of rebate management. offered training to facilities managers, but only when consistent training for facilities managers and City grant funding is available.173 personnel would strongly benefit the City’s efforts. Using PECO’s Smart Business Solutions Direct Install program LEVERAGING REBATES AS A FUNDING STREAM as a contract vehicle for Rebate income is currently viewed as revenue and Project rebate eligibility should be included in project small energy upgrades. is deposited to the General Fund.176 Accounting planning. This funding source is time sensitive but practices need to be updated and aligned to can be significant. compliment current energy policies. It is critical for rebates to be credited back to the final project cost.
As budgets are scrutinized, energy efficiency measures may be interpreted as an added cost and eliminated from the project scope, even though they may be funded through rebates.
PECO’S SMART BUSINESS SOLUTIONS DIRECT INSTALL PROGRAM
PECO has launched a Smart Business Solutions The rebate is built into the service fee minimizing Direct Install Program,177 which could provide the upfront investment and eliminating rebate City with a contract vehicle to efficiently complete administration.179 This program is limited to small a high volume of small “low-hanging fruit” energy facilities with a demand under 100 kW and would be upgrades such as lighting retrofits and other energy most applicable to the City’s fire stations, libraries conservation measures. This program would provide and recreation centers.180 the City a single point of contact for management and accountability.178
32 Municipal Energy Profile: The General Fund reducing demand
DEPARTMENTAL ENERGY EFFICIENCY INCENTIVE PROGRAM PEA SUPPORTS... A future policy option to explore would be for departmental leadership or the Mayor to stipulate that departmental rebates must be allocated for energy efficiency upgrades. Linking departmental performance reviews to DEPARTMENTAL ACCOUNTABILITY POLICY energy efficiency
Blanket utility payments by the City on behalf of all Future policy options for the City Holding all projects to departments provide no incentive for cost control to explore include: an energy efficiency in current or future facilities. As a result, energy standard efficiency is a vulnerable and optional program • Explore linking departmental performance element. reviews with departmental energy efficiency
Project leadership is evaluated solely on schedule • Hold all projects (renovation and new and construction budget metrics. Life cycle cost construction, leased or owned) and individuals implications are optional program considerations, to a utility efficiency standard 181 but commit the City to considerable long term expenses. emerging data management technologies As the City explores potential planning policies and management improvements, there are technological considerations. Technology is making it easier to track and store data to increase knowledge, raise awareness, and improve accountability. A few opportunities that exist are explained below:
SMART METER TECHNOLOGY
A smart meter records electricity data, but it is The City is working with PECO to equip facilities distinguished from older electricity meters by the with smart meter technology184 in order to improve capacity to electronically transmit and receive data the analysis of energy use and to respond more between the meter and a utility’s central system.182 effectively to fluctuating energy demands. PECO’s The sensors can convey information at frequent smart meters track electricity consumption on an intervals about power consumption, changes in hourly basis and enables PECO to set pricing in power quality, and power outages. Act 129 was accordance with demand.185 passed in 2008 by Pennsylvania legislature and requires large utility providers to switch to smart meters by 2024.183
Municipal Energy Profile: The General Fund 33 SUBMETERING
Submetering is the process of installing separate Currently, the Art Museum’s one meter system PEA electricity meters on individual facilities or on misses the granular detail about the individual SUPPORTS... separate portions of a facility to evaluate and identify sections of the museum complex. areas of high energy use that could benefit from Implementing real- energy conservation measures.186 The City has been time data analysis evaluating buildings for submetering candidates that using submetering could benefit from energy conservation measures. technology, building The Philadelphia Museum of Art is a prime automation systems, candidate.187 remote operation of buildings, and smart meters OPEN DATA STRATEGY
The City exploring The EnergyCAP database has an additional feature, The Energy Office is also exploring options to the benefits and application program interface (API), that the City develop a front-facing Open Data portal to display consequences of Energy Office plans to develop further in 2015. This energy consumption data to the general public. The implementing platform can accommodate an Open Data portal to City has evaluated case studies from other cities PECO’s Electronic share energy consumption information with all City which have explored Open Data interfaces including Data Interface agencies. The Energy Office is working with the New York City189 and Washington DC.190, 191, 192 billing platform City’s Office of Information Technology (OIT) to schedule the release of an Open Data portal for use within City departments.188
ELECTRONIC DATA INTERFACE
PECO utilizes an electronic bill payment system, The City should explore the benefits and Electronic Data Interface (EDI). EDI has the ability consequences of implementing PECO’s Electronic to provide a detailed and granular breakdown of Data Interface billing platform and its direct benefit all charges directly to the Finance Department on responsive energy management practices. for automated payment and to the City’s energy management database.
This system provides easier access to current bills,193 but would require automatic payment to PECO.
34 Municipal Energy Profile: The General Fund barriers to energy efficiency There are four inter-related barriers that prevent 3. Incorrect rebate accounting energy efficiency from being consistently incorpo- Rebate income is currently viewed as revenue and rated into City projects: is not credited back to the final project cost. Energy efficiency measures are interpreted as an added cost 1. Lack of utility user accountability and eliminated from the project scope, even though Blanket utility payments by the City on behalf of all they may be funded through rebates. departments provide no incentive for cost control in current or future facilities. Departments who drive 4. Lack of holistic design approach project design are currently viewed as clients by DPP, Frequently, the scope of a project is established and energy efficiency is rarely a priority because the without recognizing the interdependence of users are completely disconnected and unaccountable architectural, mechanical, and electrical systems. for their energy consumption. As a result, buildings systems are inefficient. In addition, efficiency opportunities are missed when 2. Energy efficiency is not a required program isolated system repairs or modifications are made to element in project planning existing systems. The renovation process needs to There are over 189 steps in the design process for evolve from isolated repairs to an integrated design the construction or renovation of capital projects.194 approach, implementing comprehensive facility Energy efficiency evaluation is not currently included investments in the proper sequence to improve in this administratively burdened process and, with operational and thermal performance of the total perceived schedule pressures, there is understandably building. little interest in adding additional steps.
LOOKING FORWARD: COMPREHENSIVE INTEGRATION OF ENERGY EFFICIENCY
Raise the Baseline: Departments are Departments are incentivized Policies are fully Incentives for exceeding held accountable for energy efficiency design integrated into current energy code for energy use and construction operations
$ Energy anaylysis and ROI are required in project and maintenance plans
Capital projects are evaluated on Rebates are proactively pursued & MAIN total cost of ownership and have and offset energy efficiency NG TE Project Planning TI RE RE N a stake in operating expenses investments A S A DU A R T C N E S E C P O D E $ O C $ 20-50% $ ENERGY $ SAVINGS
Prioritizing Rebates
Municipal Energy Profile: The General Fund 35 PEA CALLS TO ACTION
Utilities are not a fixed expense; they can be changed and managed. Energy is not an annual project; it is the management and optimization of future expenses and a critical component of fiscal prudence. Our research uncovered significant opportunities for PEA to facilitate action and resolve disconnects between policy and practice that are unintentionally hindering energy cost and consumption reductions.
There are three specific goals resulting from this Profile:
1. INCREASE Daily practices and procedures need to be aligned with current energy policies. Design and properly CAPACITY OF resource an organizational structure that builds capacity for municipal energy leadership and integrates an THE ENERGY accountability mechanism. OFFICE AND ACHIEVE RECOMMENDATIONS: ENERGY • Explore centralizing the functions of utility • Determine the actual value of the Energy MANAGEMENT management and elevate the office to a place Office by calculating savings related to energy EXCELLENCE of authority, reflecting its relevance to all efficiency strategies departments • Provide appropriate staffing capacity and > Conduct a case study of peers (energy resources for utility management including: office capacity, management, utility administration of supply & demand, technical procurement, utility payment, bill validation analysis, opportunity evaluation, and project & explanation, analysis, data management, management project management) • Recognize innovation and empower staff • Evaluate current governance for consistently with proper authority to hold departments motivating long term energy planning and accountable management • Implement an organizational structure with an accountability mechanism
36 Municipal Energy Profile: The General Fund 2. CREATE UTILITY Blanket utility payments by the City on behalf of all departments provide no incentive for cost control ACCOUNTABILITY in current or future facilities. As a result, energy efficiency is a vulnerable and discretionary program FOR USERS element. Project leadership is evaluated solely on schedule and construction budget metrics. Life cycle cost implications are an optional program consideration but obligate the City to significant long term expenses.
RECOMMENDATIONS: • Explore linking departmental performance • Adopt a utility performance standard for all reviews with departmental energy efficiency City facilities (leased or owned). All renovations and new construction should meet sustainability • Hold all projects (renovation and new standards.196 construction, leased or owned) and individuals to an utility efficiency standard195
3. BUILD CULTURE Energy efficiency has the potential to yield 20% savings in electricity consumption, 10% of natural gas OF ENERGY consumption and over 50 percent or more of the expected load growth by 2025.197 It is crucial to coordinate AWARENESS policies that strongly incentivize “better than code” practices and support the implementation of best & DECISION available technology. This will ensure that new construction and major renovations are designed to use MAKING THAT energy effectively and efficiently. PRIORITIZES TOTAL COST RECOMMENDATIONS: OF OWNERSHIP • Review and evaluate current energy efficiency • Develop effective tools that build energy design guidelines leadership capacity and strengthen the project process (statement of work for consultants, • Confirm current requirements are being met owner checklist, draft questions, develop • Revise guidelines to serve as an authoritative metrics to report, develop a project energy tool to enforce policy questionnaire)
• Continue/expand preventative maintenance plans
This publication is the beginning of a much larger critical conversation. Each section has the potential to be an individual report. The Authority plans to release additional reports relevant to the Philadelphia energy market.
Municipal Energy Profile: The General Fund 37 references
1. City of Philadelphia Energy Office. FY 2013 14. American Council for an Energy-Efficient 28. Mayor Nutter, M. City of Philadelphia. Energy Cheat Sheet. Economy. Entire State Database. http:// Executive Order 6-10 City Purchase database.aceee.org/ of Electricity Supply. (Dec. 2010) 2. American Council for an Energy-Efficient Philadelphia, Pennsylvania. Economy. Executive Summary: 2013 State 15. Dews, A. and Freeh, R. City of Philadelphia Energy Efficiency Scorecard. (Nov 2013). Mayor’s Office of Sustainability. 29. City of Philadelphia Mayor’s Office of http://www.aceee.org/files/pdf/summary/ Philadelphia Building Benchmarking Transportation and Utilities. Electricity e13k-summary.pdf Year One Report. (2012). http://www. Procurement Plan. (2013). Philadelphia, phillybuildingbenchmarking.com/ Pennsylvania. 3. The Natural Resource Defense Council and images/uploads/documents/2012-philly- Institute for Market Transformation. The 30. GreenworksPhila. A Blog by the Mayor’s benchmarking-resultsFINAL.pdf City Energy Project. About. http://www. Office of Sustainability. Mayor Nutter cityenergyproject.org/about/ 16. Ibid. Announces Philadelphia To Participate In National Effort To Reduce Climate 4. The World Bank. The World Bank 17. http://www.eia.gov/ Pollution. (Jan. 2014). Annual Report: Year In Review. (2010). 18. City of Philadelphia Municipal Energy http://siteresources.worldbank.org/ 31. The General Assembly of Pennsylvania. Act Office. Municipal Energy Office Strategic EXTANNREP2010/Resources/WorldBank- 29 Guaranteed Energy Savings Act. (1996). Plan. (1994). Philadelphia, Pennsylvania. AnnualReport2010.pdf Harrisburg, Pennsylvania. 19. Ibid. 5. International Energy Agency. World 32. The General Assembly of Pennsylvania. Energy Outlook. (2009). http:// 20. Boonin, D., Director of Utility & Regulatory Guaranteed Energy Savings Contracts, www.worldenergyoutlook.org/media/ Affairs, Mayor Goode Administration. Contracting Procedures, and Contract weowebsite/2009/WEO2009.pdf (2015, March 18). Informal Interview with Provisions. (2010). Harrisburg, Jill Kowalski. Philadelphia, Pennsylvania. Pennsylvania. 6. United Nations Environmental Programme Sustainable Buildings and Climate Initiative. 21. http://www.eia.gov/ 33. Ibid. Buildings and Climate Change: Summary 34. http://www.legis.state.pa.us/ for Decision Makers. (2009). 22. Mondre, J., Former Executive Director of Municipal Energy Office. (2014). Informal cfdocs/legis/li/uconsCheck. 7. Mackres, E., Johnson, K., Downs, A., et. al. Interview with Jill Kowalski. Philadelphia, cfm?yr=2010&sessInd=0&act=39 American Council for an Energy-Efficient Pennsylvania. 35. http://www.dsireusa.org/ Economy. The 2013 City Energy Efficiency incentives/incentive.cfm?Incentive_ Scorecard. (Sept. 2013). Washington, 23. Ibid. Code=PA06R&re=0&ee=0 District of Columbia. 24. Ibid. 36. Ibid. 8. Ibid. 25. Ibid. 37. http://www.eia.gov/state/?sid=pa 9. Ibid. 26. The General Assembly of Pennsylvania. 38. Optimal Energy, Inc. Pennsylvania 2013- 10. Ibid. Electricity Generation Customer Choice and Competition Act, 66 Pa.C.S. § 2801. 2018 Energy Efficiency Goals. Penn Future. 11. Ibid. (Dec. 1996). Harrisburg, Pennsylvania. (Dec. 2011). http://www.pennfuture. org/UserFiles/File/FactSheets/Report_ 12. Ibid. 27. Tuluca, A., Graham, I., Zumwalt-Hathaway, Act129goals_20111220.pdf A., et. al. City of Philadelphia. Philadelphia 13. Ibid. High Performance Building Renovation 39. Ibid. Guidelines. (2004). http://www.phila.gov/ pdfs/PhiladelphiaGreenGuidelines.pdf
38 Municipal Energy Profile: The General Fund references
40. Penn Future. The good, the bad and the 56. City of Philadelphia City Council. Bill 68. City of Philadelphia Department of Public ugly. (Aug 2012). http://my.pennfuture. No. 080025. (Dec. 2009). Philadelphia, Property. Bill Pay Memo (May 2012). org/site/MessageViewer?em_id=50401.0 Pennsylvania. http://www.usgbc.org/Docs/ Philadelphia, Pennsylvania. Archive/General/Docs7229.pdf 41. The General Assembly of Pennsylvania. 69. Agalloco, A., City Energy Manager for House Bill No. 2200. (Oct. 2008). 57. Ibid. the Philadelphia Energy Office. (2014). Harrisburg, Pennsylvania. Informal Interview with Jill Kowalski. 58. Ibid. Philadelphia, Pennsylvania. 42. Penn Future. The good, the bad and the 59. Mayor Street, J.F. Executive Order 1-07. ugly. (Aug 2012). http://my.pennfuture. 70. Ibid. (April 2007). Philadelphia, Pennsylvania. org/site/MessageViewer?em_id=50401.0 http://www.phila.gov/ExecutiveOrders/ 71. Ibid. 43. Clean Energy Wins. A Policy Roadmap Executive%20Orders/1-07.pdf 72. Knox, T. City of Philadelphia Sustainability for Pennsylvania. (March 2004). http:// 60. City of Philadelphia City Council. Bill Working Group. Mayor’s Task Force on cleanenergywins.org/wp-content/ No. 090923. (April 2010). Philadelphia, City-Owned Facilities: Final Report and uploads/2014/03/CleanEnergyWins_ Pennsylvania. http://legislation.phila.gov/ Recommendations. (Nov. 2013). PolicyRoadmap.pdf attachments/10096.pdf 73. Ibid. 44. Ibid. 61. City of Philadelphia City Council. 74. Ibid. 45. Ibid. Ordinance: Bill No. 100368 Purchase Obligation Bill (2010). Philadelphia, 75. EnergyCAP Inc. City of Philadelphia Energy 46. City of Philadelphia Mayor’s Office of Pennsylvania. Management Database. (2014). Transportation and Utilities. 2013 Annual Energy Reports for Municipal Departments. 62. Ibid. 76. Ibid.
47. Dews, A. and Freeh, R. City of Philadelphia 63. Dews, A. and Freeh, R. City of Philadelphia 77. Ibid. Mayor’s Office of Sustainability. Mayor’s Office of Sustainability. Philadelphia Building Benchmarking Philadelphia Building Benchmarking 78. EnergyCAP Inc. Normalization. https:// Year One Report. (2012). http://www. Year One Report. (2012). http://www. www.energycap.com/products/energycap- phillybuildingbenchmarking.com/ phillybuildingbenchmarking.com/ express-features/utility-bill-normalization images/uploads/documents/2012-philly- images/uploads/documents/2012-philly- 79. EnergyCAP Inc. City of Philadelphia Energy benchmarking-resultsFINAL.pdf benchmarking-resultsFINAL.pdf Management Database. (2014).
48. EnergyCAP Inc. City of Philadelphia Energy 64. Ibid. 80. Ibid. Management Database. (2014). 65. City of Philadelphia Department of Public 81. Ibid. 49. http://www.phila.gov/green//index.html Property. Preventative Maintenance Policy Statement Effective March 5, 2013. (2013). 82. DeSeve,G. PECO. (2014). Informal 50. http://www.phila.gov/motu//index.html Philadelphia, Pennsylvania. Interview with Jill Kowalski. Philadelphia, 51. Agalloco, A., City Energy Manager for Pennsylvania. 66. City of Philadelphia Department of Public the Philadelphia Energy Office. (2014). Property. Preventative maintenance 83. Ibid. Informal Interview with Jill Kowalski. Report: FY 2013-2014 Summary and Philadelphia, Pennsylvania. 84. Ibid. Recommendations. (2013). Philadelphia, 52. Ibid. Pennsylvania. 85. The International Society of Automation. Building Automation. https://www.isa.org/ 67. Ibid. 53. Philadelphia Energy Authority. Philadelphia technical-topics/building-automation/ Energy Authority Webpage. (2014). http:// www.philaenergy.org/ 86. Ibid.
54. Ibid. 87. Ibid.
55. Ibid.
Municipal Energy Profile: The General Fund 39 references
88. Agalloco, A., City Energy Manager for 103. City of Philadelphia Energy Office. 124. EnergyCAP Inc. City of Philadelphia Energy the Philadelphia Energy Office. (2014). Departmental Energy Efficiency Incentive Management Database. (2014). Informal Interview with Jill Kowalski. Pilot Overview: For Tenant and Employee 125. Ibid. Philadelphia, Pennsylvania. Engagement. Philadelphia, Pennsylvania. 126. Ibid. 89. Ibid. 104. Ibid. 127. City of Philadelphia Managing 90. Ibid. 105. Ibid. Director’s Office. Fleet Vehicle Fuel 91. PJM. Demand Response. http://www.pjm. 106. Ibid. Cost Management Plan Memo (2013). com/markets-and-operations/demand- Philadelphia, Pennsylvania. 107. Ibid. response.aspx 128. The Pennsylvania General Assembly. State 108. Ibid. 92. Ditze, M., City Energy Analyst for the Bill 1030. (November 2004). Harrisburg, Philadelphia Energy Office. (2014). 109. Ibid. Pennsylvania. Informal Interview with Jill Kowalski. 129. City of Philadelphia Mayor’s Office Philadelphia, Pennsylvania. 110. Ibid. of Sustainability. Greenworks 93. Ibid. 111. EnergyCAP Inc. City of Philadelphia Energy Philadelphia Progress Report. (2014). Management Database. (2014). http://www.phila.gov/green/PDFs/ 94. PJM. Demand Response. http://www.pjm. Greenworksprogressreport.pdf com/markets-and-operations/demand- 112. Pennsylvania Public Utility Commission. response.aspx Electric Bill Breakdown: Understanding 130. Ibid. Your Electric Bill (June 2013). https://www. 95. City of Philadelphia Mayor’s Office of puc.state.pa.us/general/consumer_ed/pdf/ 131. http://www.nrel.gov/gis/images/map_pv_ Transportation and Utilities. Utility Update: Electric_Bill_Breakdown_FS.pdf national_hi-res_200.jpg City Facilities Recognized for Participation 132. NREL: National Renewable Energy in Demand Response. (Dec. 2013). http:// 113. PECO: An Exelon Company. Learn what Laboratory. Power Purchase Agreement phillymotu.wordpress.com/2013/12/12/ Customer Choice means to you. (2014). Checklist for State and Local Governments. utility-update-city-facilities-recognized- https://www.peco.com/CustomerService/ (Oct. 2009). http://www.nrel.gov/docs/ for-participation-in-demand-response/ CustomerChoice/Pages/EnergyChoice. aspx fy10osti/46668.pdf 96. Ditze, M., City Energy Analyst for the 133. City of Philadelphia Mayor’s Office of Philadelphia Energy Office. (2014). 114. Ibid. Sustainability. The Solar America Cities Informal Interview with Jill Kowalski. 115. Ibid. Program. http://www.phila.gov/green/ Philadelphia, Pennsylvania. 116. Mayor Nutter, M. City of Philadelphia. guidebookIntroduction.html 97. Ibid. Executive Order 6-10 City Purchase 134. Manitoba, CA Municipal Government. Why 98. Sullivan, K., City Energy Manager for of Electricity Supply. (Dec. 2010) Geothermal? http://www.gov.mb.ca/ia/ the City of Philadelphia Mayor’s Office Philadelphia, Pennsylvania. energy/geothermal/why_geo.html of Transportation and Utilities.(2014). 117. Ibid. 135. City of Philadelphia Mayor’s Office of Informal Interview with Jill Kowalski. Sustainability. Greenworks Philadelphia Philadelphia, Pennsylvania. 118. Ibid. 2014 Progress Report (2014). 99. Ibid. 119. EnergyCAP Inc. City of Philadelphia Energy http://www.phila.gov/green/PDFs/ Management Database. (2014). Greenworksprogressreport.pdf 100. Ibid. 120. City of Philadelphia Mayor’s Office of 136. Cardno, C.A. New Geothermal Source 101. Ibid. Transportation and Utilities. Natural Gas Ideal for Urban Areas. (2014). The 102. Ditze, M., City Energy Analyst for the Cost Management and Procurement Plan American Society of Civil Engineers. Philadelphia Energy Office. (2014). (2013). Philadelphia, Pennsylvania. http://www.asce.org/CEMagazine/Article. aspx?id=25769808225#.VDXtHPldVHU Informal Interview with Jill Kowalski. 121. Ibid. Philadelphia, Pennsylvania. 137. Philadelphia Water Department. Sewage 122. Ibid. Geothermal Installation Fact Sheet. 123. Ibid. PWD’s Energy Plan Progress. http:// www.phillywatersheds.org/doc/Energy/ SewageGeothermalFactSheet.pdf.
40 Municipal Energy Profile: The General Fund references
138. City of Philadelphia Mayor’s Office 149. Pennsylvania Department of Environmental 163. United States Environmental Protection of Transportation and Utilities. Utility Protection. The Pennsylvania Energy Agency. National Action Plan for Energy Update: City buildings get energy efficient Development Authority Annual Report. Efficiency Vision for 2025: A Framework upgrades. (May 2014). http://phillymotu. (Jan. 2012). http://www.elibrary.dep. for Change. (2008). http://www.epa.gov/ wordpress.com/tag/gesa/ state.pa.us/dsweb/Get/Document- cleanenergy/documents/suca/vision.pdf 86683/7000-MN-DEP4302%20%20 139. United States Department of Energy. State 164. Ibid. PEDA%20Annual%20Report%20July%20 and Local Solution Center. Qualified Energy 1%202010%20-%20June%2030%20 165. Knox, T. City of Philadelphia Sustainability Conservation Bond (QECB). http://www1. 2011.pdf Working Group. Mayor’s Task Force on eere.energy.gov/wip/solutioncenter/qecb. City-Owned Facilities: Final Report and html 150. Wilson Sonsini Goodrich & Rosati. Recommendations. (Nov. 2013). Innovations and Opportunities in Energy 140. Agalloco, A., City Energy Manager for Efficiency Finance. 3rd ed. (May 2013). 166. City of Philadelphia Mayor’s Office the Philadelphia Energy Office. (2014). http://www.wsgr.com/publications/ of Sustainability. Greenworks Informal Interview with Jill Kowalski. PDFSearch/WSGR-EE-Finance-White- Philadelphia Progress Report. (2014). Philadelphia, Pennsylvania. Paper_13.pdf http://www.phila.gov/green/PDFs/ 141. http://www.alleghenycounty.us/ Greenworksprogressreport.pdf 151. Ibid. alleghenygreen/EnergyConservation/ 167. Chapter 21-2200. Cost-Benefit Analysis contracting.aspx 152. Ibid. for Capital Budgeting 47. https://law. 142. Sullivan, K., City Energy Manager for 153. American Council for an Energy Efficient- resource.org/pub/us/code/city/pa/ the City of Philadelphia Mayor’s Office Economy. State and Local Policy Database. Philadelphia/title21.html of Transportation and Utilities.(2014). http://database.aceee.org/ 168. Bayer, C., Gamble, M., Gentry, R., Joshi, Informal Interview with Jill Kowalski. 154. American Council for an Energy-Efficient S. AIA Guide to Building Life Cycle Philadelphia, Pennsylvania. Economy. Entire State Database. http:// Assessment in Practice. (2010). The 143. Philadelphia Energy Office. Energy Salon: database.aceee.org/ American Institute of Architects. http:// Energy Efficiency Paralysis, presentation by www.aia.org/aiaucmp/groups/aia/ 155. Ibid. Agalloco, A. documents/pdf/aiab082942.pdf 156. U.S.Energy Information Administration. 144. City of Philadelphia City Planning 169. Ibid. Energy Consumption by End-Use Sector, Commission. The Recommended FY2015- ranked by State. (2011). State Energy Data 170. Ibid. 2020 Capital Program. (Feb. 2014). System (SEDS). http://phlcouncil.com/wp-content/ 171. Knox, T. City of Philadelphia Sustainability uploads/2014/03/RecommendedFY15_2 157. Clean Energy Wins. A Policy Roadmap Working Group. Mayor’s Task Force on 0CapitalProgram.pdf for Pennsylvania. (March 2004). http:// City-Owned Facilities: Final Report and cleanenergywins.org/wp-content/ Recommendations. (Nov. 2013). 145. DOE Audit Report, The Department uploads/2014/03/CleanEnergyWins_ of Energy’s Energy Efficiency and 172. http://www.nyc.gov/html/dem/html/ PolicyRoadmap.pdf Conservation Block Grant Program conservation/operations.shtml Funded under the American Recovery 158. Ibid. and Reinvestment Act for the City of 173. Agalloco, A., City Energy Manager for Philadelphia http://energy.gov/sites/prod/ 159. International Code Council. International the Philadelphia Energy Office. (2014). files/OAS-RA-12-09.pdf Green Construction Code. http://www. Informal Interview with Jill Kowalski. iccsafe.org/CS/IGCC/Pages/default.aspx Philadelphia, Pennsylvania. 146. Ibid. 160. Ibid. 174. http://www.nyc.gov/html/dem/html/ 147. Agalloco, A., City Energy Manager for training/training.shtml the Philadelphia Energy Office. (2014). 161. Ibid. 175. http://www.nyc.gov/html/dem/html/ Informal Interview with Jill Kowalski. 162. International Code Council. ICC Fact Sheet: conservation/operations.shtml Philadelphia, Pennsylvania. First International Green Construction Code 148. Ibid. (IgCC) Adoptions. http://www.iccsafe. org/cs/IGCC/Documents/First_IgCC_ Adoptions_FactSheet.pdf
Municipal Energy Profile: The General Fund 41 references
176. Agalloco, A., City Energy Manager for 184. Smart Grid Consumer Collaborative. 192. The District of Columbia. OpenDataDC. the Philadelphia Energy Office. (2014). Become a Smart Power Consumer. (May http://www.opendatadc.org/ Informal Interview with Jill Kowalski. 2013). http://smartgridcc.org/wp-content/ 193. Agalloco, A., City Energy Manager for Philadelphia, Pennsylvania. uploads/2013/05/SGCC-Pricing- the Philadelphia Energy Office. (2014). FactSheet.pdf 177. Ibid. Informal Interview with Jill Kowalski. 185. Ibid. Philadelphia, Pennsylvania. 178. Ibid. 186. Agalloco, A., City Energy Manager for 194. Ibid. 179. Ibid. the Philadelphia Energy Office. (2014). 195. Knox, T. City of Philadelphia Sustainability 180. Ibid. Informal Interview with Jill Kowalski. Working Group. Mayor’s Task Force on Philadelphia, Pennsylvania. 181. Knox, T. City of Philadelphia Sustainability City-Owned Facilities: Final Report and Working Group. Mayor’s Task Force on 187. Ibid. Recommendations. (Nov. 2013). City-Owned Facilities: Final Report and 188. Ibid. 196. Ibid. Recommendations. (Nov. 2013). 189. The City of New York. NYC Open Data. 197. Clean Energy Wins. A Policy Roadmap 182. Pennsylvania Public Utilities Commission. https://nycopendata.socrata.com/ for Pennsylvania. (March 2004). http:// Smart Meter Q & A. http://www.puc. cleanenergywins.org/wp-content/ pa.gov/General/consumer_ed/pdf/13_ 190. The District of Columbia. Build Smart DC. uploads/2014/03/CleanEnergyWins_ Smart%20Meters.pdf http://www.buildsmartdc.com/ PolicyRoadmap.pdf 183. Energy Coordinating Agency. PECO 191. The District of Columbia Office of the City to Install Smart Meters for 1.6 Million Administrator. Open Data Catalog. http:// by End of 2014. Energy News. http:// data.dc.gov/ ecasavesenergy.org/news/peco-install- smart-meters-16-million-end-2014
42 Municipal Energy Profile: The General Fund acknowledgements
This report is a result of compiling over 200 documents provided by the Energy Office, informal interviews, case study research, and on-going working group sessions. It was an ambitious task, but a valuable exercise in creating a consolidated record of General Fund energy management. It would not have been possible without collaboration with the Energy Office, MOTU and MOS.
CITY WORKING GROUP:
Adam Agalloco, Energy Office Mardi Ditze, Energy Office Katherine Gajewski, Mayor’s Office of Sustainability Andrew Stober, Mayor’s Office of Transportation and Utilities Kristin Sullivan, Former Mayor’s Office of Transportation and Utilities
CONTRIBUTORS:
J.Barry Davis, Office of the Law Department Judith Mondre, Mondre Energy, Inc. Research Interns: Adebayo Adejare, Philadelphia Energy Authority Barbara McNutt, Philadelphia Energy Authority Paul Molta, Philadelphia Energy Authority Christian Pezanowski, Philadelphia Energy Authority Lu Xu, Philadelphia Energy Authority
PEA BOARD OF DIRECTORS:
Christopher A. Lewis, Chairman Emily Schapira, Vice Chair E. Mitchell Swann, Secretary Ken Ogawa, Treasurer Barbara Adams, Director
PRIMARY AUTHORS:
Jill Kowalski, Philadelphia Energy Authority Samantha Merkh, Philadelphia Energy Authority Municipal Energy Profile: The General Fund 43 City Hall Room 780 Philadelphia, PA 19107 (215) 356.2316
44 Municipal Energy Profile: The General Fund