Inventory and Audit All Buildings For more information, see www.sustainablejersey.com Municipalities can realize significant energy savings by upgrading their existing buildings. There is an often confusing array of options for municipalities that wish to audit and upgrade their buildings, but there are also numerous subsidies and ways to finance upgrades. This action is intended to provide municipalities with a clear protocol to choose the right strategy and take full advantage of all the energy and cost saving programs that are available. This action requires municipalities to make an inventory of all their occupied and conditioned buildings, assess them against the major available programs, and then, as warranted by the assessment, enroll in one of the state backed or private programs. If done correctly, this action can cost little or no money up front, and can significantly decrease operating costs, energy consumption, and greenhouse gas emissions. To meet the requirements of this action, and reap the benefits, it is important to follow the directions in the ”How To” section of this action. To make things as simple as possible, there are different procedures that are geared toward municipalities at different stages of the process. NOTE: This action was revised and updated on 6/27/11 with new requirements. The past requirements will still be accepted for the 2001 certification cycle. The older action and past requirements can be accessed by clicking here. Who should lead and be involved with this action? Form an Energy Management Team composed of representatives from different municipal departments to ensure that any departments affected by future implementation of energy audit recommendations have the opportunity to share ideas and raise concerns. Alternately, the task of managing the inventory and assessment process can be given to an existing entity, such as the Green Team,
environmental commission, or Green Building Task Force. Many of these entities share the same personnel. At the very least, the individual or department responsible for paying and recording utility bills, as well as facility managers and key staff should be directly involved. Successful implementation will probably require participation from the administrator, the township engineer, the purchasing agent, and the finance department. The governing body should support the effort and approve the municipality’s participation in New Jersey’s Clean Energy Programs. Timeframe The time needed to complete an inventory of all occupied and conditioned facilities owned and operated by a municipality can range from several weeks to several months, depending on the number of buildings owned and the availability of information. Enrollment in state-backed Clean Energy Programs and initial assessments can usually be accomplished in about two months, while in-depth audits require approximately eight months to complete. Implementation of upgrade recommendations varies, depending on the activity and resources available; however, many can be completed within several months to two years, depending on the extent of the scope-of-work. Project Costs and Resource Needs This action is designed to leverage state and private funding for energy audits and building upgrades. The cost can vary widely once actual building upgrades are underway. However, getting started should only require staff time to get organized. See the "How to" section for more details. To give you an idea of the scope of possible costs, we have detailed some of the basic programs that will be covered and their cost structures.
If you are just getting started, The Clean Energy Program offers a free “Energy Benchmarking” assessment that will help you evaluate your building for eligibility in all of the various programs. There is no cost, except for staff time spent to gather information needed by the state contractor, TRC.
Most municipal buildings will be eligible for participation in a Direct Install program. Direct Install programs aim to reduce energy costs and emissions in smaller buildings whose peak loads do not exceed 100Kw. Direct Install programs utilize state and ratepayer funds to pay for 60% of the cost of building efficiency upgrades. The municipality is required to finance the remaining 40%.
Larger facilities and those with significant shell issues (i.e. those affecting the exterior of the building, such as the roof, doors, etc.) are more likely to benefit from the New Jersey Board of Public Utilities’ Local Government Energy Audit (LGEA) program which provides 100% reimbursement for the cost of the audit. The LGEA program also sets municipalities up to participate in more lucrative “next step” programs that go well beyond Direct Install. These include the New Jersey Board of Public Utilities’ Pay for Performance program and Energy Savings Improvement Programs.
Pay for Performance will fund up to 50% of building upgrades that have a guaranteed savings of at least 15%. The program also covers building envelope issues (such as roof, windows, doors) and takes a more comprehensive whole-building approach to energy efficiency. The total program benefit is up to 1.5 million dollars.
The Legislature has authorized municipalities to engage in Energy Savings Improvement Programs. The idea is that for zero upfront money, a robust slate of efficiency and renewable projects can be completed that are paid off with the future savings generated by the projects. The program also attempts to capture the best available subsidies from all of the other state programs which can be rolled into the ESIP. This is the gold standard of smart government, leveraging external public and private funds to lower municipal operating costs and improve the environment. This option takes the most work, but has the greatest reward at no cost.
Staff time will be required to coordinate the building inventory and facilitate enrollment in applicable state and utility programs for energy audits and upgrades. The amount of staff time involved varies, depending on the data management of existing utility records; the size, number, and complexity of the facilities to be analyzed; and a staff member’s prior experience with analyzing energy use data. Why is it Important? Energy is a defining issue that will shape our quality of life in the future. Global warming, nuclear waste, economic viability, and reliance on foreign fuels are all energy-related issues that can fundamentally change how we live. At the local level, energy costs are an increasingly burdensome aspect of municipal budgets. According to the Pew Center on Global Climate Change, buildings in the United States account for over 40 percent of our nation's carbon dioxide emissions. Most of these emissions occur during building operation (i.e. resulting from fossil fuels burned at the power plants that provide heating, cooling, lighting, and electricity for equipment and appliances in the buildings). Experts agree that carbon dioxide emissions and climate changes associated with their accumulation in the atmosphere pose serious concerns and challenges.
Conducting inventories and audits of all municipal buildings is a first step toward reducing municipal greenhouse gas emissions. The audits identify opportunities to cost-effectively reduce energy use and associated greenhouse gas emissions. In addition, energy audits improve indoor air quality, lighting quality, and building occupant satisfaction. The audits will provide information necessary to make informed decisions now and in the future about which energy saving strategies can both save money and improve energy efficiency and occupant comfort. Close to 100 mayors in New Jersey have signed the U.S. Conference of Mayors’ Climate Protection Agreement, pledging to meet or exceed the Kyoto Protocol’s greenhouse gas reduction targets. Energy audits not only provide important data about a municipality’s carbon footprint and establish a baseline upon which progress toward greenhouse gas reduction targets can be evaluated, but also detail recommended upgrades that the municipality can implement to realize immediate energy and cost savings. What to do, and how to do it (“How to”) Below we have listed the requirements for earning points for this action. 1. Create an inventory of all your buildings that includes the data specified in part 1 below for all occupied and conditioned facilities owned and operated by the municipality. 2. Enroll each building, in the applicable programs. For any buildings which were not enrolled in a program, provide an explanation of why no action was taken. We have provided detailed guidance and recommendations for implementing the action below. To meet the requirements of this action, and reap the benefits, it is important to follow the directions in the ”How To” section. I. There are two strategies for implementing this action. The first is to assemble your data and take it to the State’s Clean Energy contractor, TRC, for a “Free Benchmarking Report.” Benchmarking is a rating system that assesses building performance by tracking and scoring energy use in your facilities and comparing it to similar buildings. That can be a big help in locating opportunities for cost-justified energy efficiency upgrades. The benchmarking report will also provide enough information for TRC to make recommendations to you about how to proceed with future upgrades. From that point, TRC will guide you in identifying and enrolling each of your buildings in the appropriate program. II. The second option is to assess and triage your building portfolio yourself. If your buildings have already had Local Government Energy Audits; if you are somewhat familiar with the various Clean Energy Programs, or, if you want to put in the time and effort to get the maximum return for your municipality, this is the better option.
Which one is best for you depends on your staff capacity, how involved you want to be in guiding the process (vs. letting state or private consultants lead), and what programs and activities you have already implemented. On this last point, we recognize that you will have to take this guidance and mix-and-match the recommendations based on where your municipality is in the process, and what buildings you have already enrolled in a building efficiency upgrade or renewable energy program. To implement this action, follow the steps detailed below. By answering the questions (and doing the work) in each step below, you will achieve the 50 points toward your certification and know that you have taken a responsible path to lower your energy costs and greenhouse gas emissions. Step 1.Create a list and inventory of all municipally-owned, occupied, and conditioned buildings. Owned, occupied and conditioned means:
You own the building or are responsible for the maintenance of the building (e.g. if the roof needs replacement, would you have control and responsibility for that?), and,
The building has heating or cooling systems (conditioned), and,
You turn on those systems because people occupy the building.
If these apply, you should include the building in this inventory. This includes buildings with historic preservation restrictions and smaller buildings. They can all benefit, and benefit the municipality, from this action. Buildings that are seasonal in use, infrequently occupied, or are not frequently conditioned, may be excluded from the inventory. Collect the following information for each facility. This information is necessary to identify the best program for each building, and to enroll the buildings in the state supported programs and reap the benefits of this action. Most of the information requested is the information that you will need to provide to TRC or other contractors to apply for the various programs: a. Address/location of each building b. Description, including building type, square footage, year built, occupancy (hours of operation/number of employees stationed there)
c. Description of energy systems, including types of systems (e.g. ventilation, lighting, heating), HVAC equipment, utility accounts, metering setup, peak load during last 12 months d. Any known or suspected shell issues to address (e.g. roofing, windows, doors, insulation). This is most common in older buildings. Step 2. Enroll all your buildings in free “Energy Benchmarking” Free Energy Benchmarking is a quick and easy way to get a professional, but cursory, assessment of the efficiency of your building. It will also result in your establishing a relationship with the NJ Clean Energy Program’s contractor, TRC. They will work with you to review your benchmarking report and determine which of the many programs available to you is the best fit. You should enroll every one of your buildings that has not had any building upgrades or renovations for a full year. Information on how to enroll in the program is found on the New Jersey Clean Energy Program’s website: http://www.njcleanenergy.com/commercialindustrial/programs/benchmarking/energy-benchmarking-home Step 3. Evaluate the results and your municipal goals and choose an upgrade strategy There are numerous state-backed programs available to help municipalities upgrade their buildings. - There are some that are quick and easy, but don’t maximize your potential savings. Direct Install is the main program in this category. - There are some that are more involved, but provide greater return (with potentially no money down) for more effort. An Energy Savings Improvement Program (or energy performance contract) is the best example of this type. In this case “effort” does not necessarily mean “cost.” The more involved programs often cost less, or nothing, and have a large return. But they do take more time and effort. Based on your level of staff capacity (time and expertise) and your municipal goals, choose one of the following options for upgrading your buildings: Option A. Less Effort, Reasonable Reward Work with TRC to enroll all eligible buildings in the Direct Install program. In addition to Direct Install, there are other state-backed programs that may be a good fit. TRC
will review those options with you based on the results of your Benchmarking report. These programs include Pay for Performance, Smart Start, and the Local Government Energy Audit. All of these programs are detailed at the end of this section. However, for the majority of municipalities, Direct Install is the most likely fit. The NJ Board of Public Utilities’ Direct Install program is designed to progress quickly from application to installation and can be accomplished in as little as 30 to 45 days. Selected Participating Contractors, coordinated by State controlled “Market Managers” performing program services, will perform energy assessments to identify measures that have been determined in advance to be eligible for the Direct Install program. These efficiency upgrades include lighting, HVAC, motors, variable frequency drives (VFDs), and/or natural gas and refrigeration equipment. Incentives are paid directly by the program to contractors. The municipality would pay approximately 40% of the total cost of the upgrade while leveraging funds from New Jersey's Clean Energy Program for the remaining 60%. Also consider enrolling in a utility backed Direct Install program. These programs vary among utilities, and are not always available. Check with your local utility for details. The Direct Install program is a good choice and focuses on lighting and other potential low hanging fruit for a quick win. However, it will often leave many potential money saving upgrades undone. If you decide to move beyond low hanging fruit later, this may prove disadvantageous because the most cost effective upgrades can often be used to leverage the financing of the larger but moderately cost effective upgrades when bundled together in an Energy Savings Improvement Program. Direct Install Pros: Relatively quick and easy Implements the most cost-effective actions Is 60% subsidized Highly likely to have a return on investment of 1-3 years, and profit in each subsequent year Direct Install Cons: Does not cover the building structure, such as insulation, roof, or other shell issues Does not cover renewable energy installations Municipality must cover 40% of the cost Often leaves many valuable upgrades that save money and energy undone Potentially makes it more difficult to do a large Energy Savings Improvement Program (Option B) later on because many of the most lucrative upgrades will be complete Option B. More Effort, Great Reward
The best value that municipalities can get in upgrading their buildings is to implement an Energy Savings Improvement Program, or ESIP. An ESIP is simply a way that you can leverage the value of the energy savings over 15 years to pay for the cost of the upgrades today. It is like a loan that is secured against the future savings and profits of the energy upgrades you implement. A strong advantage of an ESIP is that it will take advantage of all the State subsidies and programs (such as Direct Install or Pay for Performance), AND take care of the municipal portion of the cost through financing. Simply put, an ESIP is a specialized contract with a vendor to perform all of your building upgrades for no money upfront, AND it l guarantees you energy savings and lowered utility bills from day 1. The specifics of the program are complicated but manageable, and we detail them later in this section. More information is available from the State at http://www.njcleanenergy.com/files/file/CPI/4_15ESIP%20General%20Presentation. pdf Sustainable Jersey will be launching a program of extensive support to municipalities on ESIPs in 2011 and information will be posted on the website and through the list serve. ESIP Pros: There is no cost to the municipality and the savings start immediately. The total savings, and total value of the upgrades performed, is much larger. An ESIP will include and pay for building shell upgrades like a new roof, insulation, windows, etc. An ESIP will allow you to capture the value TODAY of building upgrades that have a longer return on investment. Thus, you can get more upgrades done with an ESIP. You can roll a solar installation (a Power Purchase Agreement) into an ESIP. An ESIP will often enable a municipality to bundle the cost of needed deferred maintenance (like a new roof) into the contract. ESIP Cons: Setting up an ESIP takes time and effort. Below we detail the additional New Jersey Clean Energy Programs that could be layered into an ESIP, and describe the ESIP steps in more detail. Please note that you may choose to utilize some of these programs ala carte outside of an ESIP. If you have the funds to do so (most require a municipal match) there is no reason not to employ such a strategy. State Backed Programs The following describes the various state backed programs that subsidize the cost of energy audits and upgrades. An Energy Savings Improvement Program will attempt to integrate the best subsidy from each of these.
Direct Install: Most municipal buildings will be eligible for participation in a Direct Install program. Direct Install programs aim to reduce energy costs and emissions in smaller buildings whose peak loads do not exceed 100Kw. Direct Install programs utilize state and ratepayer funds to pay for 60% of the cost of building efficiency upgrades. The municipality is required to finance the remaining 40%.
Local government Energy Audit: Larger facilities and those with significant shell issues (i.e. those affecting the exterior of the building, such as the roof, doors, etc.) are more likely to benefit from the New Jersey Board of Public Utilities’ Local Government Energy Audit (LGEA) program which provides 100% reimbursement for the cost of the audit. The LGEA program also sets municipalities up to participate in more lucrative next step programs that go well beyond Direct Install. These include: a) the New Jersey Board of Public Utilities’ Pay for Performance program and Energy Savings Improvement Programs.
Pay for Performance: Larger facilities and those with shell issues can utilize the Pay for Performance program to finance upgrades. The program will fund up to 50% of building upgrades that have a guaranteed savings of at least 15%. The program also covers building envelope issues (such as roof, windows, doors) and takes a more comprehensive whole-building approach to energy efficiency.
More on ESIPS A summary of the basic steps for implementing an ESIP are below. You can manage each of these steps yourself, or you can hire an Energy Services Company or consultant to manage the process for you: 1. Conduct an audit of the buildings you wish to upgrade. The audit should be an ASHRE Level II Audit. The NJ Local Government Energy Audit program (that is offered at no cost to a municipality) is a Level II Audit. 2. Contract with a second firm (not the firm that did the audit) to prepare an “Energy Savings Plan.” This plan will detail the scope of work that is most advantageous for you. 3. Get the Plan verified by a 3rd party auditor. The Energy Savings Plan is the key to your project. To ensure that it is accurate, and that you will reap the savings predicted in the Plan, it is required that you contract with a 3rd party to check the Plan’s accuracy.
4. Put the work up for bid and conduct the upgrades. This is the final step where you take the Energy Savings Plan and contract with a new vendor to conduct the work. More detail on these steps is here: NJ Department of Community Affairs’ Power Point: http://www.njcleanenergy.com/files/file/CPI/4_15ESIP%20General%20Presentation. pdf Gabel and Associates’ Power Point: http://www.acua.com/acua/uploadedFiles/Home/Robert%20Chilton%20Financing%2 0EE%2003-10-11.pdf There are two ways to finance an ESIP. You can get private capital through a bank, or more likely an ESCO. Or a public agency can finance the cost; which is cheaper. To do this, a public agency arranges the issuance of “energy savings obligations” to finance improvements. The size of Energy Savings Obligations is determined by the savings projected in the Energy Savings Plan. The financing can be provided by the local government, another public agency (like a county or utilities authority) or by the ESCO. If done by the ESCO the municipality will have to pay a higher rate for financing. The financing can be in the form of lease--purchase/capital leases or refunding bonds. Some key advantages to ESIPS, and Energy Savings Obligations, are that they do not count against a municipal debt limit and do not require voter approval. The cost of the debt has been precisely matched to ensure that it is covered by savings generated from the upgrades, so at worst, a municipality is breaking even from day one. In addition, all agencies are granted authority to use operating budget funds to repay Energy Savings Obligations. What to submit to get credit/points In order to earn points, your submission must meet the following standards: 1. Conduct a building inventory that includes the data specified in part 1 below for all occupied and conditioned facilities owned and operated by the municipality. 2. Enroll each building in the applicable programs. For any buildings which were not enrolled in a program, provide an explanation of why no action was taken. Submit the following documentation to verify the action was completed to the above standards. (Log in to the password protected webpage where you submit your online application for certification to write in the text box and upload documents). In the text box, please provide a short narrative (300 word max) to summarize what was accomplished and the general steps taken to accomplish it. Specifically, summarize the upgrades and projects that have been undertaken
1. "upload file 1," submit a building inventory that includes the data specified in Part 1 of the "How to" section for all occupied and conditioned facilities owned and operated by the municipality. 2. In "upload file 2," show that all appropriate buildings have been enrolled in the applicable State-backed programs: For Category A buildings, submit the results of the Energy Assessment as provided by the BPU/PSEG/NJNG Direct Install Participating Contractor. For Category B buildings, submit an energy performance summary report from the BPU approved Energy Service Company (i.e. The Audit or summary). Or if you have enrolled in Pay for Performance or other relevant programs ala carte, provide official documentation of the audit summaries and suggested scopes of work. : Document your work by submitting the results of the energy audits or benchmarking reports for each building as one large file OR submit work orders, contracts, or other documentation that shows that buildings indicated were enrolled in specific programs or have undergone specific work. 3. In “upload file 3,” summarize the recommended upgrades that have been implemented. IMPORTANT NOTES: Please excerpt relevant information from large documents. Please remember that your submissions will be viewable by the public as part of your certified report. Spotlight: What NJ towns are doing Coming Soon Resources New Jersey Clean Energy Programs NJCEP Benchmarking http://www.njcleanenergy.com/benchmarking NJ CEP Direct Install Program http://www.njcleanenergy.com/commercial-industrial/programs/direct-install or call 1-866-NJSMART (1-866-657-6278) NJ CEP Local Government Energy Audit Program http://www.njcleanenergy.com/commercial-industrial/programs/local-governmentenergy-audit/local-government-energy-audit
or call 1-866-NJSMART (1-866-657-6278) NJ BPU New Jersey Smart Start Buildings Program http://www.njcleanenergy.com/commercial-industrial/programs/nj-smartstartbuildings/nj-smartstart-buildings or call 1-866-NJSMART (1-866-657-6278) NJ BPU Pay for Performance Program http://www.njcleanenergy.com/commercial-industrial/programs/pay-performance or call 1-866-NJSMART (1-866-657-6278) Other Funding Resources Database of State Incentives for Renewables and Efficiency http://www.dsireusa.org/ New Jersey Natural Gas Direct Install http://www.njng.com/save-energy-money/commercialPrograms.asp PSE&G Direct Install Program for Government Facilities http://www.pseg.com/business/small_large_business/save_energy/gov_efficiency.js p Education/Training Resources NJ Department of Environmental Protection Office of Planning and Sustainable Communities (2007) “How to Conduct an Energy Audit: A Short Guide for Local Governments and Communities.” http://www.nj.gov/dep/opsc/docs/conduct_an_energy_audit.pdf
U.S. EPA Energy Star for Local Government http://www.energystar.gov/index.cfm?c=government.bus_government_local U.S. EPA, ENERGY STAR Portfolio Manager - an online energy tracking and benchmarking tool https://energystar.gov/istar/pmpam/ Sample Request for Proposals (RFPs) to hire professional energy auditing services: Bordentown’s Energy Audit RFP http://www.sustainablejersey.com/document/Action%20Documents/EnergyAuditRFP -Ex_BordentownCity.pdf General Resources
Department of Energy - Energy Efficiency and Renewable Energy (EERE) http://www.eere.energy.gov/ Energy Information Administration http://www.eia.doe.gov/