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Home My WebLink About03.g. Proposed Resolution 2024-XXX. Make Findings Required by Gov. Code Section 4217.12; Energy Services Contract with EcoGreen Solutions using PG&E's On-Bill Financing for LED Lighting Upgrades at Martinez Campus and Find the project exempt from CEQAPage 1 of 6 Item 3.g. DCENTRALSAN BOARD OF DIRECTORS POSITION PAPER DRAFT MEETINGDATE: JULY15,2024 SUBJECT: REVIEW DRAFT POSITION PAPER TO CONSIDER ADOPTING PROPOSED RESOLUTION 2024-XXX, MAKING FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 4217.12, AND AUTHORIZE THE GENERAL MANAGER TO ENTER INTO AN ENERGY SERVICES CONTRACT WITH ECOGREEN SOLUTIONS (ECOGREEN) USING PACIFIC GAS & ELECTRIC (PG&E) ON -BILL FINANCING (OBF) INAN AMOUNT NOT TO EXCEED $984,000 FOR LIGHT EMITTING DIODE (LED) LIGHTING UPGRADES AT THE MARTINEZ CAMPUS; AND FIND THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITYACT (CEQA) SUBMITTED BY: INITIATING DEPARTMENT: CLINTSHIMA, SENIOR ENGINEER OPERATIONS-RELIABILITYENGINEERING REVIEWED BY: NEIL MEYER, PLANT MAINTENANCE DIVISION MANAGER GREG NORBY, DEPUTY GM - ENGINEERING & OPERATIONS ROGER S. BAILEY, GENERAL MANAGER ISSUE The Board of Directors (Board) approval is requested to enter into an energy services contract with EcoGreen using PG&E OBF. In accordance with California Government Code Section 4217.12, the Board may forego its standard low -bid public procurement process to implement this energy service project so long as the cost to Central San to implement the energy related improvements will be less than the anticipated marginal cost to Central San of electrical energy that would have been consumed by Central San in the absence of purchasing the energy improvements. BACKGROUND Central San's Wastewater Treatment Facility in Martinez consumes an average of three megawatts (MW) of electricity to process wastewater and operate the treatment plant, headquarters office building (HOB), and laboratory. A fraction of this load is composed of over 4,100 light fixtures used throughout the campus. Over the past decade, Central San has been upgrading lighting to LED technology to reduce energy consumption. These upgrades have been implemented through both capital projects, and ongoing plant optimization efforts by the Electric Shop Maintenance staff. July 15, 2024 Special EOPS Committee Meeting Agenda Packet - Page 78 of 85 Page 2 of 6 To date, approximately 22 percent of the Martinez campus lighting has been upgraded to LED lighting, which has proven to be both efficient and reliable. Plant Maintenance Division staff actively collaborates with PG&E on various energy -saving measures. Central San applied for and was selected to PG&E's 2021 Risk Assessment, Process Improvement, and Decision Support (RAPT DS) Wastewater Treatment Program. This program was designed and implemented by Alternative Energy Systems Consultants, Inc. (AESC). In 2022, AESC partnered with EcoGreen to conduct a thorough lighting audit at the Martinez campus, including HOB, Plant Operations Building (POB), Pump & Blower Building, Solids Conditioning Building (SCB), the laboratory, filter plant, and substations, but does not include Household Hazards Waste Collection Facility, 4737 Imhoff, or the Annex Buildings. A payback analysis was completed in 2023, estimating an energy savings of approximately 490,000 kilowatt hours annually, with a payback period of just under five years. This payback period aligns with Government Code Section 4217 et seq., which requires findings of marginal energy cost savings and Board Policy 27, which requires energy service projects to provide a positive cash flow within five years and strive towards Net Zero Energy. PG&E has reviewed and approved the analysis, recognizing the opportunity for significant energy savings. PG&E electricity rates have increased by about 20 percent in 2024, which may result in an even quicker payback period than initially calculated. The recently installed 1.7 MW Largiss solar panels could extend the payback period since it provides better rates than PG&E rates, but it is difficult to quantify the effects without data. An OBF loan through PG&E will be utilized for this effort, resulting in no out-of-pocket costs to Central San and zero percent interest rate. The loan principal will equal the cost of the lighting retrofit project estimated to be about $984,000. Repayment of that loan principal will be through a monthly "on utility bill" charge associated with the predicted energy savings estimated to be about $16,900 per month. This amount is in lieu of electricity costs that would otherwise be paid to PG&E. This amount also represents the approximate savings realized following the payback period. I n other words, the "on utility bill" charge will offset the energy savings until such time as the loan principal is paid off. Central San's electricity invoices will be the same whether the Board decides to proceed with this effort, or not. Since the audit was performed about two years ago, additional lighting fixtures have been upgraded, reducing the overall scope and cost of the project. This true -up process will occur after completion of the project and reviewed by PG&E before the OBF loan is finalized. EcoGreen has successfully completed similar projects at other agencies including Oro Loma Sanitary District, Sewerage Commission - Oroville Region, City of Davis, and City of Pacifica. They are currently working on a project with Silicon Valley Clean Water. Another consideration is California Assembly Bill (AB) 2208, which prohibits the sale of fluorescent lights in California. Opting for EcoGreen's upgrade at this time will benefit Central San by phasing out fluorescent bulbs. Once the ban is enforced, replacing a burned -out fluorescent bulb will require a more extensive retrofit of a new lighting fixture for Maintenance staff. Moreover, the absence of lighting can pose safety hazards. Furthermore, upgrading to LED lighting will lower the baseline electrical load, thereby ensuring the uninterrupted operation of essential equipment during a load -shedding event. In accordance with California Government Code Section 4217.12, the Board may forego its standard low - bid public procurement process to implement energy service projects so long as the cost to Central San to implement the energy related improvements will be less than the anticipated marginal cost to Central San of electrical energy that would have been consumed by Central San in the absence of purchasing the energy improvements. Therefore, competitive pricing was not solicited for this project, however the unit cost is comparable with what Central San Maintenance staff would spend to carry out this work and the ultimate cost is anticipated to be less than what Central San would have otherwise spent. To initiate a July 15, 2024 Special EOPS Committee Meeting Agenda Packet - Page 79 of 85 Page 3 of 6 formal bidding process for the same upgrade project, Capital Projects would need to allocate substantial resources toward staffing, consultants, and the development of plans and specifications. Opting for EcoGreen to perform the LED upgrades will result in financial savings for Central San and reduce staff time and consultant fees typically associated with drafting plans and specifications. Based on this analysis, staff recommends proceeding with the work. Staff is seeking the Board's approval to enter into an energy services contract with EcoGreen for LED lighting upgrades. CEQA: Staff has concluded that this contract is exempt from CEQA under Central San CEQA Guidelines Section 15301, since it involves replacement of existing sewer facilities at substantially the same locations and with the same purpose and level of activity as the facilities being replaced. Approval of this project will establish the Board's independent finding that this project is exempt from CEQA. ALTERNATIVES/CONSIDERATIONS Central San could continue upgrading lighting to LED technology through typical means: Capital Projects could select a consultant through a Request for Proposal (RFP) process to design and bid an LED upgrade project. This option would be more costly and require another one to two years to implement. Central San's electrical staff could continue LED retrofits, but this will take many more years to complete the rest of the campus. FINANCIAL IMPACTS Central San will not incur out-of-pocket costs as the proposed work will be financed through a zero percent interest OBF loan with PG&E and paid through the standard invoicing process. COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this matter at its special meeting on July 15, 2024 and recommended RECOMMENDED BOARD ACTION 1. Adopt the proposed Resolution 2024-XXX making findings required by Government Code Section 4217.12; 2. Authorize the General Manager to enter into an energy services contract with EcoGreen Solutions using PG&E On -Bill Financing in an amount not to exceed $984,000 for LED lighting upgrades at the Martinez campus; and 3. Find that the energy service project is exempt from CEQA. Strategic Plan Tie -In GOAL TWO: Environmental Stewardship Strategy 4 - Identify and advance sustainability initiatives, including reducing energy usage and emissions GOAL SIX: Infrastructure Reliability Strategy 1 - Manage assets optimally July 15, 2024 Special EOPS Committee Meeting Agenda Packet - Page 80 of 85 Page 4 of 6 ATTACHMENTS: 1. Proposed Resolution July 15, 2024 Special EOPS Committee Meeting Agenda Packet - Page 81 of 85 Page 5 of 6 RESOLUTION NO. 2024- A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT APPROVING AN ENERGY SERVICES CONTRACT WITH ECOGREEN SOLUTIONS USING PG&E ON -BILL FINANCING FOR LED LIGHTING UPGRADES PROJECT WHEREAS, Section 4217.10 to 4217.18 of the California Government Code authorizes the District Board of Directors to enter into an Energy Services Contract for the implementation of energy related improvements if the District Board of Directors finds that it is in the best interest of the District to enter into such Energy Service Contract and that the anticipated cost to the District for electrical energy or conservation services provided by EcoGreen Solutions under the contract will be less than the anticipated marginal cost to the District of electrical energy that would have been consumed by the District in the absence of those purchases; and WHEREAS, EcoGreen Solutions is offering a cost-effective means to upgrade the treatment plant lighting to LED technology using On -Bill Financing through PG&E, thereby extending the service life of the lighting system and increasing reliability and maintainability; WHEREAS, District staff has evaluated various means to upgrade lighting to LED technology and concluded no other service providers offer the same value and completion schedule; WHEREAS, the proposed Energy Service Contract by and between the Central Contra Costa Sanitary District (Central San) and EcoGreen Solutions for the implementation of certain energy measures whose cost to the District for such electrical energy services provided under the Energy Service Contract will be less than the anticipated marginal cost to the Central San of electrical energy that would have been consumed by the District in the absence of the implementation of the improvements under the Energy Service Contract; and WHEREAS, the Central San promotes sustainability and desires to implement measures to reduce contributions to climate change and mitigate its impacts. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District (the Board) as follows: 1. Central San hereby declares its intention to enter into the proposed agreement with EcoGreen Solutions for electrical energy services for the Central San facilities as defined by the Energy Services Contract. July 15, 2024 Special EOPS Committee Meeting Agenda Packet - Page 82 of 85 Page 6 of 6 Central Contra Costa Sanitary District Resolution 2024- Energy Services Contract — EcoGreen Solutions Page 2 of 2 2. THAT the Board hereby adopts the recitals set forth above as the basis of its findings. 3. THAT that the project is exempt from the California Environmental Quality Act (CEQA) under the CEQA Guidelines Section 15301 since it involves maintenance to an existing public facility involving no expansion of use. 3. THAT, in accordance with Section 4217.12 of the California Government Code, the Board finds that the services offered by EcoGreen Solutions, shall be utilized in the District's treatment plant campus to upgrade lighting to LED technology, and that an agreement with EcoGreen Solutions, meets the criteria set forth in that section. 4. THAT the Board authorizes the General Manager to enter into an energy services agreement with EcoGreen Solutions, at an estimated amount of $984,000 for LED lighting upgrades. PASSED AND ADOPTED this 15t" day of August 2024, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Mariah N. Lauritzen President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Katie Young, CPMC, CIVIC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form- D. Joan Cox, Counsel for the District July 15, 2024 Special EOPS Committee Meeting Agenda Packet - Page 83 of 85