PURPOSE

BWP staff is requesting City Council approval to offer additional energy-efficiency rebates to the Burbank Unified School District (BUSD) in support of two solar water heating pool projects. 

BACKGROUND

Through the Energy Solutions Program, BWP offers rebates to Burbank businesses that install energy-efficient equipment.  Most businesses in Burbank can receive up to $10,000 in fiscal year rebates through this program.  However, a handful of extremely large organizations can receive up to $50,000.  The BUSD is included in this category. BWP pays 25% of the total costs of eligible projects up to the annual customer maximum.  For example, BWP would rebate $50,000 on projects totaling $200,000 or more.  Every year the BUSD has far exceeded what is required for it to spend to receive the maximum dollar advantage from the Energy Solutions Program and has diligently taken full advantage of this energy-efficiency program since its inception.

The City is currently renegotiating the BUSD�s Electric Service Agreement and has prepared a deal points memo to serve as a discussion starting point.  One important element of this draft document is the proposal that BWP offer conservation and efficiency incentives to the BUSD.  These incentives would be tied to the District�s ability to contain energy usage at or below a pre-determined energy baseline.  However, it is not currently feasible to determine with any accuracy what that baseline should be as the BUSD is undergoing extensive renovations at several school sites through 2006.  Until such time that a workable baseline can be developed, staff proposes that we tie billing incentives to two specific energy conservation projects.  These projects are passive solar water heating systems for the two high school pools. 

Advantages of Solar Water Heating

Solar water heating for pools has a long-standing history of success, as recently witnessed by the City�s McCambridge Park pool project.  A solar water heating system run year-round can reduce natural gas heating costs by 33%.  The typical 20-year system life span results in an exceptionally quick payback period followed by over 15 years of pure savings.  Additionally, solar water heating systems help hedge against rising gas prices. 

In the case of the McCambridge Park project, the total cost to install the 4,500 square foot project was $93,000.  The expected payback period is 3.3 years.  This results in a stunning 36% annual return on investment. 

BUSD Pool Projects

The District and BWP agree that installing solar water heating systems at Burbank and John Burroughs high schools makes both fiscal and environmental sense.  These are sound community projects that BWP would like to support.  With the Council�s approval, Staff proposes to support these two installations by providing additional efficiency rebates to the BUSD.  As with the existing Energy Solutions Program, staff proposes to rebate 25% of the total project costs of the two solar water heating system installations. 

Planning for the pool projects is underway.  The District projects annual fuel savings of anywhere from 50% to 70%.  Reducing natural gas fuel requirements by this amount results in a three to five year simple payback period.  Where the actual savings fall will depend on a number of factors, including the cost of natural gas, the temperature setting of the pools, use of a pool blanket to retain heating, and the number of solar water heating panels installed for each project.  Regardless of it being three years, four, or five before each system is paid for in fuel savings, all savings beyond that point would be free and clear.  And, as mentioned earlier in this report, solar water heating systems can reliably be expected to last for upwards of 20 years. 

FISCAL IMPACT

The BUSD has received preliminary estimates for the projects.  The Burbank High School and John Burroughs High School installations are estimated at $170,000 and $210,000, respectively.  At these costs, BWP would award the BUSD with a one-time additional rebate of $95,000.  The final rebate amount would be calculated from actual project costs that are expected to come in at or below these estimates. 

BWP has funds available to cover this amount in its current Public Benefits budget.  There will be no adverse impact on other programs as a result of extending these additional rebates. 

RECOMMENDATION

Staff requests that the City Council approve the recommendation for BWP to provide the Burbank Unified School District with up to $95,000 in additional energy efficiency rebates in support of the installation of two pool solar water heating systems. 

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