PURPOSE

To request City Council approval of Burbank Water and Power�s proposed program offering free energy surveys and up to $1,000 in efficiency retrofits to eligible Burbank businesses.

BACKGROUND

On September 16, 2003, BWP staff updated the Council on current and proposed BWP Public Benefits programs.  One of the proposed programs was a business audit program that would target small to medium electricity users.  These energy users are less likely to take advantage of BWP�s energy-efficiency rebate programs.  Staff believes that this is because smaller businesses typically do not have personnel on staff who are knowledgeable about energy and efficiency issues or, if they do have the knowledge, lack the time to dedicate to this area.  The reality tends to be that business owners and operators are tasked with the daily and consuming business of running the business.  This limits their ability to follow through on less weighty issues that might include energy consumption.  Our own research indicates that this group feels under-served by BWP and would very much appreciate energy assistance and interaction with us. 

Staff�s proposal is to enter into a contract with an experienced and reputable company to perform energy surveys for eligible business customers.  Burbank businesses with annual energy use in the range of 10,000 to 250,000 kilowatt-hours would be eligible to participate in this service.  This energy usage range includes just over 2,000 businesses with monthly energy costs running the gamut from just over $100 to $3,000.

This range of energy usage was selected as it is broad enough to encompass the vast majority of Burbank businesses that can benefit most from the proposed service.  Businesses using more than 250,000 kilowatt-hours of energy yearly are likely to employ personnel knowledgeable about energy issues and who are already in contact with BWP and aware of our rebate programs.  Businesses using less than 10,000 kilowatt-hours annually are not energy intensive facilities.  With limited energy costs, there will be limited energy savings.  BWP�s recommendation is to target the higher energy users within the proposed usage band, thereby receiving the biggest impact with our program dollars. 

The energy surveys would be an important service provided to eligible Burbank businesses for free.  The surveys would be conducted at competitive and pre-determined costs to BWP.  However, BWP�s goal is not to simply provide interesting energy information and recommendations.  We want to significantly encourage Burbank businesses to take action on those energy-saving recommendations.  The most effective way to do so is by providing a turnkey energy retrofit investment component to the program. 

BWP proposes to include up to $1,000 in installations without the business having to kick in one dollar.  Businesses participating in the program will be able to select preferred options from a list of energy-saving recommendations included in the survey report.  Options shown on the pre-priced list will include installation of programmable thermostats, changing out incandescent lights to compact fluorescent lights, retrofitting fluorescent tube lighting from T-12 to high efficiency T-8 or T-5 models, and air conditioning and refrigeration tune-ups.  Given the experience of Glendale Water and Power in a similar program, BWP expects that a fair number of businesses would invest additional funds to increase the scope of work of their retrofit projects for further energy and operating cost savings.

How the Program Would Work

Briefly, the program would follow these steps:

1. BWP and the selected vendor would work together in publicizing the program. 

2. Customers would call the vendor�s dedicated 800-number directly to schedule time for the comprehensive energy survey. 

3. An accredited energy auditor employed by the vendor would arrive at the business at the scheduled time and conduct the energy survey.  Lighting, air conditioning, refrigeration, motors, water heating, and building envelope analysis will be included in the surveys.  The auditor will also recommend and install water-saving devices, such as low-flow showerheads, faucet aerators, toilet displacement devices and flappers.    

4. BWP and the participating business will receive a report from the vendor.  The report will include analyses of existing energy systems, potential efficiency upgrades, estimated installation costs, simple payback, any other benefits for each measure recommended, and BWP rebate opportunities for energy-saving retrofits conducted. 

5. Vendor will meet with the business to review the report and answer any questions. 

6. The vendor will work with Burbank businesses in implementation of recommended and customer-selected retrofits.  A BWP-approved Energy-Saving Retrofit Opportunities and Fee Schedule will be developed prior to Program introduction.  Customers can select any number of report-recommended energy-saving retrofits they desire from this document.  BWP will pay up to $1,000 in recommended retrofits and will be charged the amount shown on the Fee Schedule.  Customers who exceed the $1,000 limit do so at their financial responsibility.  However, retrofits in excess of the $1,000 Survey Program limit may be eligible for rebate under BWP�s Energy Solutions Program.  The vendor will assist customers in understanding and taking advantage of this rebate program. 

7. The contractor would also be responsible for pulling any required permits.

8. The vendor will oversee all retrofit activity and ensure that it is installed to customer satisfaction.

9. Vendor will provide BWP with monthly reports and invoices detailing Program activity.

Why BWP Selected RHA

Working with the Southern California Public Power Authority in late 2002, a Request for Proposal for audit services was sent to several respected auditing agencies.  Five proposals were received and staff met with four of the agencies, including RHA.  RHA provided the most competitive pricing, however the structure of the Request for Proposal was for the involvement of multiple utilities.  In December 2001, Glendale Water and Power issued a bid request for energy surveys.  RHA again prevailed and was awarded the competitive bid. 

With few modifications, BWP plans to offer the same program as Glendale Water and Power�s successful �Smart Business� program, which RHA manages.  Beyond offering competitive pricing, RHA comes highly recommended with a proven track record of working effectively with business customers and City staff.  Glendale recently extended its contract with RHA to continue managing their program through June 2006.  

Council approved the concept of this program in September 2003.  Tonight, staff is asking for Council�s approval to enter into a Professional Services Agreement with Richard Heath and Associates (RHA) to provide energy surveys and retrofit installations to Burbank businesses. 

FISCAL IMPACT

RHA�s pricing structure includes three elements:

Energy Survey and Reporting                                      $475 fee/survey

Annual Program Administration Costs                       $55,000

Installation of Energy-Saving Measures                     Up to $1,000 per business

The FY 2003-04 Public Benefits budget includes $350,000 for the support of this proposed business energy survey and energy-saving retrofit installation program.  BWP estimates that 200 Burbank businesses can be served annually through this program with this level of funding.  Our current plan is to annually fund the program at this level and review the Program at the end of Fiscal Year 2004-2005. 

The requested Professional Services Agreement term is March 1, 2004 through June 30, 2005.  This 15-month time frame results in a cost of service not to exceed $437,500. These funds are available through BWP�s Public Benefits commitment.  An estimated 250 Burbank businesses will receive service through the program during this time frame.

RECOMMENDATION

Staff requests that the City Council approve staff�s recommendation to enter into a Professional Services Agreement with Richard Heath and Associates, Inc. to provide energy surveys and installation of energy-saving retrofits to eligible Burbank businesses.  

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