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Home My WebLink About05. Review revised draft Board Policy BP No. 027 - EnergyCentral Contra Costa Sanitary District BOARD OF DIRECTORS POSITION PAPER DI Board Meeting Date: August 4, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. 027 — ENERGY 5. Submitted By: Initiating Dept./Div.: Jean -Marc Petit, Director of Engineering Engineering & Technical Services / & Technical Services Planning & Development Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: Kent Alm Roger S. Bailey Counsel for the District General Manager ISSUE: Adoption of new Board Policies (BP) requires the review and approval of the Board of Directors. BACKGROUND: Energy is one of the highest operating costs for a water sector utility, and fossil fuels are the basis of most energy sources, including purchased electricity. There has been a recent surge in interest in the clean water sector to strive towards energy independence by minimizing energy demands, improving energy efficiency, maximizing recovery of the energy embedded in the wastewater solids, installing renewable energy generation systems (e.g. solar and wind), and minimizing or eliminating imported electricity and non-renewable fuels. The District's wastewater treatment plant currently meets the majority of its energy demand by generating power and heat from its natural gas cogeneration unit. The power from cogeneration is used to meet the majority of the District's electrical demands. Heat produced from the cogeneration unit, and waste heat from the multiple hearth furnaces, is sent to boilers that convert the heat to steam energy. This steam, in addition to steam produced from the District's auxiliary boilers, is primarily used to drive the aeration turbines, which provide air to the District's biological treatment process. This provides a significant reduction in the amount of imported energy which would otherwise be required to operate the aeration turbines. The remainder of the District's electrical demand is met with imported grid electricity from PG&E. The District's current energy approach at the treatment plant campus has been cost effective; however, it requires relying on imported grid power and imported natural gas. While the cost of using the natural gas cogeneration unit is Tess than imported grid power, the natural gas accounts for a significant portion of the District's anthropogenic greenhouse gas (GHG) emissions. The energy demand for the treatment plant will significantly increase as additional treatment processes (e.g. nutrient removal, membrane bioreactors, filtration, reverse osmosis, and ultraviolet disinfection) are implemented in the future to meet potential Page 1 of 2 POSITION PAPER Board Meeting Date: August 4, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. 027 ENERGY new effluent discharge permit requirements and/or increase recycled water production. As part of the District's Comprehensive Wastewater Master Plan, staff is exploring opportunities to achieve net zero energy. The District's collection system relies primarily on imported grid electricity and some diesel driven equipment; however, the District is currently completing a solar power purchase agreement project that will offset approximately 80 percent of the Collection System Operations Building annual power demand. On June 16, 2016, staff presented current and future projected energy profiles for the District's wastewater treatment plant to the Board of Directors. As part of the June 2016 Board workshop, staff also presented a suggested definition for net zero energy and multiple opportunities (e.g. co -digestion of high strength wastes, solar, and wind) for the District to explore to strive towards a potential net zero energy goal for the treatment plant campus. Board Members present at the workshop provided input to staff for an energy policy and requested that staff develop a draft energy policy. The District also owns and operates the Collection System Operations building in Walnut Creek, and other facilities located throughout the service area such as remote pumping stations. The purpose of this energy policy is to promote cost-effective projects to minimize imported grid power and fossil fuels by implementing energy efficiency and renewable energy generation projects that will also reduce the District's anthropogenic GHG emissions. The proposed energy policy is intended to provide the District with a direction for future consideration of energy efficiency, demand reduction, and renewable energy projects that is consistent with the District's Vision, Mission, and Values outlined in the District's Fiscal Year 2016-2018 Strategic Plan. ALTERNATIVES/CONSIDERATIONS: The Board of Directors may choose not to adopt an energy policy. FINANCIAL IMPACTS: None by this action. COMMITTEE RECOMMENDATION: This matter was discussed by the Administration Committee on July 14, 2016 and July 25, 2016. The Administration Committee recommended Board approval of the attached new BP No. 027 — Energy. RECOMMENDED BOARD ACTION: Adopt new BP No. 027 — Energy. Attached Su000rtina Document: 1. Final proposed BP No. 027 - Energy Page 2 of 2 Number: BP 027 Central Contra Costa Sanitary District Authority: Board of Directors Effective: August 4, 2016 Revised: Reviewed: Initiating Dept./Div.: Engineering & Technical Services Department BOARD POLICY ENERGY PURPOSE www.centralsan.org To promote energy efficiency and proactive energy management practices within the District's wastewater treatment plant campus, collection system facilities, pump stations, and other District own buildings and facilities by promoting cost-effective projects to minimize imported grid power and fossil fuels, by implementing energy efficiency and renewable energy generation projects while also reducing the District's anthropogenic greenhouse gas emissions. The District also desires to strive towards net zero energy at its wastewater treatment plant campus in Martinez. DEFINITIONS 1. Net Zero Enerav for the District's wastewater treatment plant campus is defined as: "A wastewater treatment plant campus that uses or produces enough renewable energy to meet its own annual energy consumption requirements." 2. Greenhouse Gases (GHGs): Any gas, both biogenic and anthropogenic, that absorbs infrared radiation in the atmosphere (Reference: USEPA). 3. Anthropogenic GHG Emissions: GHG emissions that are a produced as a direct result of human activities or are the result of natural processes that have been affected by human activities (Reference: USEPA). 4. Types of GHG Emissions: The definition of direct and indirect GHG emissions as follows: a. Direct GHG emissions are emissions from sources that are owned or controlled by the District. b. Indirect GHG emissions are emissions that are a consequence of the activities of the District, but occur at sources owned or controlled by another entity. 5. California Assembly Bill 32 (AB32) - California Global Warming Solutions Act of 2006: The law seeks to fight climate change through a comprehensive program reducing GHG emissions from virtually all sources statewide. The Act requires Number: BP 027 DISTRICT ENERGY POLICY Page 2 of 3 the California Air Resources Board (CARB) to develop regulations and market mechanisms that will cut the state's GHG emissions to 1990 levels by 2020 - a 25% reduction statewide. AB 32 requires CARB to take a variety of actions aimed at reducing the state's impact on the climate. 6. Cost-effective Proiects: are defined as projects that meet the following minimum requirements: a. Projects requiring capital investment must have a simple payback period of not more than 15 years. b. Projects that do not require capital investment (e.g. power purchase agreements (PPAs), energy service agreements, and energy savings performance contracts) must offer a net present value of savings when compared to the cost of using the District's existing energy sources AND positive cash flow within 3 years. POLICY It is the Policy of the District to encourage and promote an energy management approach that will pursue: 1. Cost-effective projects for its wastewater treatment plant campus and collection system facilities, and other District own buildings and facilities that achieve the following: a. Development of a cost-effective energy program for the District's wastewater treatment plant that strives towards Net Zero Energy. b. Identification and implementation of energy efficiency improvement projects to reduce costs and overall energy usage. c. Increased opportunities that recover renewable energy in wastewater, wastewater solids, and biogas. d. Captured and conversion of waste heat from treatment processes to energy. e. Import of high strength wastes to increase on-site renewable energy generation. f. Increased use of renewable energy, such as solar and/or wind power. 9. Improvement of District's operational reliability and stabilization of operating energy costs. Number: BP 027 DISTRICT ENERGY POLICY Page 3 of 3 2. Cost-effective projects for its wastewater treatment plant campus that reduces direct and indirect anthropogenic GHG emissions. 3. Active Management of GHG emissions to comply with AB32 and other regional, state, and federal GHG requirements. [Original Retained by the Secretary of the District]