PURPOSE

To recommend to the Burbank City Council the adoption of four new programs and revisions to three existing programs. 

1.      New Business Green Energy Program and Revisions to the Existing �Clean Green Support� Residential Program

In 2001, Burbank Water and Power (BWP) rolled out a green energy program called �Clean Green Support.�  Through this program, Burbank residents can elect to support the production of renewable energy in California.  Participants sign up for a $3 monthly fee to cover at least half of their electric use or for a $5 fee that covers 100% of their electric use.  BWP purchases Green Tickets on their behalf.  Green Tickets, also referred to as Renewable Energy Credits, represent the environmental value of renewable energy.  Typically, renewable energy costs more to generate than non-renewable options, an average of 15% more.  That translates to about 2 cents per kilowatt-hour at current rates.  Revenue raised by renewable energy producers from the sale of Green Tickets supports the above-market cost of producing renewable energy.  This system provides a more level playing field, economically speaking, for green energy producers. 

About 900 Burbank households currently participate in the Clean Green Support program, the majority at the 100% level.  Staff is now proposing a renewable energy support program for Burbank businesses.  We also recommend revising the Residential Clean Green Support program so that it is in line with the proposed business program.  Movement to the proposed business format provides residents with expanded green energy support options and the provision of green energy itself.  Staff believes residents will prefer this method to the current flat contribution option model. 

Our goals in creating this proposed green energy program is to make it easy for Burbank residents and businesses to participate in while providing meaningful results for the environment.   

How the Program Would Work

Residents and businesses interested in supporting renewable energy will be able to select from a Bronze, Silver, or Gold �Environmental Champion� designation.  All rate classifications will have the same three designations open to them, each with specific green energy percentage requirement.  Each green kilowatt-hour signed up for would be billed at two cents above the existing rate, reflecting the additional cost to produce renewable energy.  The following table shows the proposed renewable energy percent requirements:

Business customers would be required to show a corporate-wide commitment and designate all their City of Burbank electrical accounts to the program.  The majority of businesses have multiple electrical accounts.  Requiring a business to enroll all their accounts limits claims of being �green� by signing up for just one smaller account.  Staff is striving for a program that is meaningful and equitable across-the-board for all business customers. 

What does this mean to customers in terms of the additional cost to support green energy?  Staff has looked up the typical energy use of residents and a variety of business types in order to determine what the additional monthly cost would be:

Using the Environmental Champion funds, BWP would procure renewable energy.   However, renewable energy is not always commercially available or may not be available at a competitive rate.  Should renewable energy not be competitively available, BWP would place the renewable energy funding in a separate holding account.  These funds would be used solely for the purchase of renewable energy or for the creation of new renewable energy resources. 

Green energy purchases made with Environmental Champion funds will be in addition to renewable energy growth plans that the utility already has committed to.  In this way, this program directly contributes to an enhanced �greening� of Burbank. 

In creating Bronze, Silver, and Gold designations, customers have choice in terms of how green they want to go and how much of a dollar commitment they want to make.  Participating customers� monthly bills will reflect their green energy commitment. 

Participant Recognition

BWP will provide recognition to participating residents and businesses.  There are many ways that this can be accomplished.  For instance, businesses may appreciate a storefront sticker and/or other means of physically showcasing their renewable energy sponsorship.  Another suggestion is to place an annual ad in publications such as the Burbank Leader and Burbank Chamber of Commerce newsletter, listing program participants.  Additional recognition avenues that are expected to be used include Channel 6, the BWP website, and BWP�s Currents newsletter. 

2.      Conversion to a Plug-in Hybrid Electric Vehicle

What is a Plug-In Hybrid Electric Vehicle?

Plug-in Hybrid Electric Vehicles (PHEV) are a blend of the gasoline hybrid car (such as the Toyota Prius and Honda Civic Hybrid) and the all-electric car.  PHEVs are like regular hybrids but with larger batteries and the ability to re-charge from a standard electric outlet.  PHEVs represent the best of both worlds: most local travel is electric, yet the vehicle has unlimited gasoline range.  The first 30 to 50 miles are equivalently fueled with about $1 per gallon in electricity costs and generate almost zero auto emissions.  Since most of the U.S. electric supply is generated without oil, this helps reduce our need for imported oil.  When a longer range is necessary, the PHEV can switch back to being a normal gasoline-electric hybrid with unlimited range.  This dual fuel concept provides 100 miles or more to a gallon of gasoline!

A major benefit of PHEVs is that their widespread use promises to not only reduce consumption of non-renewable fossil fuels but also curtail atmospheric pollution and greenhouse gases.  A 2004 climate-change study by the California Air Resources Board found that gas/electric hybrid vehicles produce 62% fewer greenhouse gases than conventional gasoline-powered vehicles. 

Unfortunately, no auto manufacturer is currently building a commercially available PHEV.  However, even without leadership by auto manufacturers, organizations such as the South Coast Air Quality Management District and Electric Power Research Institute have supported PHEV development since 2000.  These efforts are beginning to pay off.  To demonstrate, DaimlerChrysler has built five PHEV Sprinter delivery vans.  Pacific Gas and Electric and 12 other electric utilities across the U.S. have also commissioned PHEV bucket trucks.  These demonstrations offer a proof of concept.  Auto manufactures have taken note and there are indications that adoption of this technology will take place. 

Burbank�s Role

Burbank has long been a leader in promoting alternative fuels to help evaluate and demonstrate the viability and environmental benefits of clean fuel transportation options.    

In keeping with this track record, Burbank�s City Council in July 2006 approved staff recommendations related to promoting the commercial production of PHEVs, including:

• Burbank joining the National Plug-in-Partner Campaign

• adding PHEVs to BWP�s existing electric vehicle mileage credit program;

• a Council Resolution supporting PHEVs in Burbank;

• submitting a City-wide soft fleet order commitment form for up to 88 fleet vehicles that could be replaced over the next few years with PHEVs;

• providing a vehicle rebate, amount to be determined, to foster support for PHEVs among Burbank residents; and

• submitting community petitions in support of PHEVs to the Plug-in Partnership clearinghouse

Burbank now wants to take an additional step in promoting PHEV technology by converting a Toyota Prius to a plug-in hybrid electric vehicle.  This PHEV would be used as part of the BWP fleet and would have appropriate signage to showcase its status as a demonstration vehicle of an emerging technology.  The following photo is one example of how this might look.  The �100+ MPG� text certainly demands attention!

BWP�s Proposal

BWP proposes to go out to bid for a PHEV conversion on a Toyota Prius.  Preliminary discussions indicate that the cost may run anywhere from $15,000 to $40,000 depending primarily on the size of the battery selected.  The larger the battery, the longer the distance the PHEV can run off electricity. 

How a Conversion Works

To convert a Prius to a PHEV, the standard 77-pound battery is removed and installed in its place is a larger battery pack stored under the floor of the luggage compartment.  The most obvious sign that a Prius has been converted to a PHEV is the plug-in outlet on the rear bumper.  Everything else on the car operates as normal, including the Prius' regenerative function that captures energy dissipated while braking and coasting and stores it in the battery.

Several California agencies currently have prototype PHEVs, including environmental nonprofits, government organizations (including the South Coast Air Quality Management District which generously provided their PHEV for display at BWP�s October 7^th Energy Expo event), the City of Santa Monica, and California utilities, including Southern California Edison and Sacramento Municipal Utilities District. 

3.  Business Energy Education Program

In efforts to help Burbank businesses understand and implement energy-efficiency projects BWP recommends providing free educational seminars.  BWP would work with ASW Engineering, a company that has long provided efficiency training for several utilities.  ASW Engineering has a contract with the Southern California Public Power Authority (SCPPA) of which Burbank, as a SCPPA member, can take advantage. 

Staff recommends providing workshops for four half-day courses during Spring 2007:

• How to Manage your Business�s Energy Costs

This course is designed for owners of small and medium-sized businesses and non-technical personnel who want to learn ways to reduce energy costs at their place of business. 

• Energy Efficient Lighting Systems

Lighting systems often provide energy conservation opportunities that can mean significant cost savings.  The goal of this course is to help identify and weigh options for more effective and energy efficient lighting solutions.

• Package Unit Air Conditioning (Basic Heating, Ventilation and Air Conditioning)

The fundamentals of air conditioning systems found in small-to-medium commercial facilities.  This course introduces package unit system components, controls, and applications and presents energy efficient maintenance and operations concepts.  Package unit replacement economics will also be discussed. 

• Implementing Energy Efficiency Projects: From Concept to Contractor

This workshop will present several options to help businesses develop a plan for implementing energy efficiency projects.  Attendees will learn how to weigh options, determine the most appropriate and economically viable direction to take, and how to measure savings post-implementation. 

Each session would cost $1,200.  The Fiscal Year 2006-07 Public Benefits budget includes $15,000 for these workshops, providing for up to a dozen sessions, depending on customer demand for the workshops.  With the approved budget, as many as 400 businesses can be served with energy efficiency training. 

4.  Solar Photovoltaic Workshops

BWP�s resident expert on solar energy is John Joyce, Electrical Engineering Associate.  John fields numerous calls throughout the year from residents and businesses alike inquiring how solar photovoltaic energy works, how much energy solar systems are likely to produce, incentives provided by Burbank Water and Power, and so on.  At BWP�s October 7 Energy Expo event John provided tours of BWP�s 4-kilowatt solar system and answered a myriad of questions about solar energy.  Following the Energy Expo, staff recommends we invite interested members of the community to come and learn about solar photovoltaic energy.  Costs to do so will depend on the number of attendees but are expected to be nominal.

PROPOSED REVISIONS TO EXISTING PROGRAMS

Program tracking is conducted on a monthly basis for all BWP programs and services.  This process allows staff to keep a �finger on the pulse� of each program.  Additionally, program managers annually review their programs for improvement recommendations.  In addition to proposing new programs, BWP staff is also recommending some changes to existing programs.   

5.  Energy Solutions Business Rebate Programs

BWP introduced a business rebate program for energy-efficient installations in 1998.  Over the years, the Energy Solutions program has evolved and morphed to include a wider variety of projects.  One constant has been how BWP determined the rebate amount: a flat 25% of the total project cost up to $10,000 per year for the vast majority of Burbank businesses, with a handful of very large electric users qualified for up to $50,000.  Staff is now recommending that more specific rebate calculations be made that take energy savings into consideration and not just project cost. 

BWP�s 2006 Integrated Resource Plan (IRP) provides the policy foundation for our revised rebate amount determinations.  The IRP lists the expectation for market price of power.  This in turn allows for analysis of the average cost to the utility to fund conservation and energy efficiency. 

Staff offers the following rebate determination methods for distinct retrofit project types:

• Lighting retrofits: BWP will pay the greater of five cents per kilowatt-hour saved or $150 per kilowatt demand saved, both over half the expected lifetime of the installation.  Lighting rebates not to exceed 50% of the project cost. 

• Heating, Ventilation, and Air Conditioning (HVAC) retrofits: BWP will provide a three-tier sliding scale for rebates based on the efficiency rating of the HVAC unit purchased.  The higher the SEER or EER efficiency rating, the greater the rebate.   Rebates of $150 to $500 per ton will be paid:

• Heat Pump retrofits: A heat pump is essentially an air conditioner modified to allow it to operate as a heater as well.  Staff proposes a three-tier rebate system for heat pumps, paying $175 to $525 per ton.  The enhanced rebate amounts relative to conventional HVAC options reflect the higher efficiency inherent in heat pumps. 

• Motor replacements: BWP will provide incentives of $35 to $1,260 for premium efficiency motors as determined by the standards established by the U. S. Department of Energy�s Federal Energy Management Program (FEMP).  FEMP has become the standard used by many utilities for motor efficiency.  The FEMP table shows efficiency requirements for the given horsepower (Hp) of motors by revolutions per minute (RPM) and motor type (open or enclosed):

• Thermal Energy Storage: Thermal Energy Storage (TES) is a method of shifting the demand of small commercial air conditioning systems from peak energy demand times to off-peak hours.  TES systems make ice during off-peak hours and use the stored thermal energy during peak demand hours to provide cooling.  BWP has been testing TES for smaller commercial applications with an �Ice Bear� installed at Fire Station 16.  The excellent results of the Ice Bear have given staff a high comfort level for promoting TES via financial incentives. 

Staff proposes an incentive of $800 per kilowatt demand saved.  The California Energy Commission provides peak kilowatt demand saving estimates for TES units.  From these estimates, the following rebates are determined:

• Miscellaneous Energy-Saving Retrofits: The vast majority of business retrofit projects will fall into the categories listed above.  For those energy-saving projects that don�t fall neatly into one of the above categories, staff has created a catch-all category.  Staff proposes to pay the greater of five cents per kilowatt-hour saved or $150 per kilowatt demand saved, both over half the expected lifetime of the installation.  Rebates not to exceed 50% of the project cost. 

In all cases, the incentive provided will not exceed 50% of the installed cost of the measure.  Additionally, the annual customer rebate totals may not exceed $100,000.  Complete rebate applications must be submitted within four months of the project completion date in order to be considered for payment.  Rebates will be accommodated on a first come basis and limited annually to available funding of commercial programs. 

How will the Proposed Rebates Compare to Existing Rebates?

Out of about 50 Energy Solutions rebates issued annually, the vast majority are for either lighting or air conditioning retrofits.  Overall, lighting retrofits under the proposed methodology will tend to pay significantly higher rebates compared to the existing rebate methodology, about 56% more.  The reverse is true for air conditioning rebates which will pay an average of 50% of the previous rebate. 

Again, under the proposed approach, the rebate amount will be tied to energy savings and not project installation cost.  Staff feels that this is a far more equitable and meaningful approach for rebate determination. 

6.  Ultra-Low Flush Toilet Rebate Program

Low water using toilets provide significant and durable water savings.  As such, BWP has offered an ultra-low flush toilet (ULFT) rebate program to Burbank residents for the past 16 years.  The funding for the rebate program runs as a pass-through from the Metropolitan Water District (MWD).  BWP processes the rebate applications and bills MWD monthly for the approved rebates. 

In 1992 California�s plumbing code changed, making it a requirement that only ULFTs be installed in any new construction or bathroom remodel.  In 1994, Federal regulations required retailers to sell only tested ULFTs.  Given these changes, it was just a matter of time before toilets using more than 1.6 gallons per flush would be obsolete. 

Technology has also evolved resulting in a new generation of toilets that use even less water than ULFTs.  These include dual-flush toilets and high efficiency toilets (HET). 

The pervasive feeling is that California has largely achieved saturation of ULFTs in households.  At this point, staff suspects that the vast majority of ULFT rebates fall under the �free ridership� category.  This means that the toilet replacement is likely due to either a faulty toilet or a remodel situation and not because the owner is looking for water savings.  In either case, replacement with a ULFT is the minimum requirement. 

BWP currently provides rebates of up to $60 for the purchase of ULFTs.  Staff recommends that we no longer provide residential ULFT rebates.  The program fundamentally no longer achieves the intended water-savings goals due to code changes.  Instead, BWP will promote and continue to offer rebates on High Efficiency Toilets that achieve higher water savings than the baseline requirement. 

Residents replacing a high-water using toilet (one that uses more than 1.6 gallons per flush) with a High Efficiency Toilet (any toilet using less than 1.6 gallons per flush) will receive rebates totaling the cost of the toilet or $265, whichever is lower.  Dual flush toilets with two flushing options -- one 1.6 gallon and the other 0.8 gallon -- are considered High Efficiency Toilets and thus eligible for this very generous rebate.  BWP also offers $30 rebates for High Efficiency Toilets replacing standard ULFTs.

FISCAL IMPACT

The Fiscal Year 2006-07 Public Benefits budget has sufficient funds to cover all proposed programs detailed in this report.

Public Benefits is a state mandated expenditure equal to 2.85% of electric retail revenues required of all California electric utility companies.  Public Benefits spending must be used for projects and programs that fall into at least one of four categories:

1.      Low-income rate assistance

2.      Energy-efficiency

3.      Research, development and demonstration of electric technologies

4.      Renewable energy

RECOMMENDATIONS

Staff respectfully requests that the Council adopt the proposed new programs and revisions to existing programs as outlined in this report:

1.      BUSINESS GREEN ENERGY PROGRAM

Provide Burbank businesses with a green energy program that allows them to select from three participation options. 

2.      CLEAN GREEN SUPPORT FOR RESIDENTS

Modify the existing Clean Green Support to match the options and pricing methodology of the proposed business green energy program. 

3.      CONVERSION TO A PLUG-IN HYBRID ELECTRIC VEHICLE (PHEV)

Convert a Toyota Prius to a PHEV with a bid-process selected vendor. 

4.      BUSINESS ENERGY EDUCATION PROGRAM

Create an energy education workshop program provided at no charge to Burbank businesses. 

5.      SOLAR PHOTOVOLTAIC WORKSHOPS

Provide education on solar energy to interested Burbank residents and businesses. 

6.      ENERGY SOLUTIONS BUSINESS REBATE PROGRAMS

Revise how the rebate amount is determined for this program by focusing on energy-savings and not project cost. 

7.      ULTRA-LOW FLUSH TOILET REBATE PROGRAM

Dissolve this rebate element as ultra-low flush toilets are the state�s standard plumbing requirement and focus instead on promoting and rebating High Efficiency Toilets. 

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