New EBMUD WaterSmart PAYS · 2015. 5. 15. · Pre-Screened & Pre-Approved PAYS Measure Calculation...
Transcript of New EBMUD WaterSmart PAYS · 2015. 5. 15. · Pre-Screened & Pre-Approved PAYS Measure Calculation...
EBMUD WaterSmart PAYS
“Pay as You Save”
On-Bill Financing Pilot Concept
Finance-Administration Committee
January 28, 2014
Presentation Outline
• Bay Area Regional Energy Network (BayREN)
“PAYS” Offer and Concept
• Other Utility Programs/Pilots
• EBMUD Pilot and Evaluation
• Next Steps
2
BayREN PAYS Development
Funding
• $650,000 in CPUC funding to expand PAYS to
water utilities
• Established consultant team (BayREN, Energy
Efficiency Institute Inc., Bevilacqua-Knight,Inc.)
• 1-3 water utility jurisdictions
– Up to 2,000 projects per utility
– Program launch January 2014
– Design development Spring 2014
3
PAYS Financing Framework
Added fixed surcharge
on water bill
Pay as You Save (PAYS)
Concept
Intended as RISK FREE offer for customer
• No upfront payment
• Utility bills are immediately lower
• No loan, no lien, and no debt
• If customer leaves, payment obligation stays
with property (and meter)
• Contractor bonding ensures problems found
will be fixed
• General program design to cover cost of
implementation 5
PAYS Financing Framework
Capital
Provider
Program
Operator
Certified
Contractors
and Suppliers
Customer
Utility
6
- Provides funds to pay
contractors
- Pays for
completed
work
- Provides/installs
program measures
- Pays surcharge
with water bill
• Sends amount
billed in program
Self-
Sustaining
System
• At least 50% of customers accept “PAYS Offer”
• 11 Pilots in 5 states over 15 years
• California: toilets & showerheads, landscaping,
appliances
• Hawaii: solar hot water
• Kansas & Kentucky: weatherization and heating
systems
• New Hampshire: street lighting, indoor lighting,
HVAC, CFLs
PAYS Success To Date
• Windsor – Multifamily residential, commercial
landscaping
• Hayward – Multifamily residential
• EBMUD – Multifamily residential, landscaping,
food services
• SFPUC – Multifamily Residential
Bay Area PAYS Pilots
• ~5% of all residential units increased
participation in conservation program
• Average single family savings of:
– 10% of energy use
– 20% of indoor water use
– $15 per month in net utility costs
• Enrolled >50% of eligible multifamily units
1st year w/30% indoor water savings
Windsor Efficiency PAYS
Green Hayward PAYS
• A water and energy efficiency program:
– multifamily goal: retrofit 2,000 housing units
– landscaping goal: up to 100 controllers for
multifamily, commercial, institutional
• Procurement of Contractors and Suppliers in
process
• February City Council approval date
• Target March launch of $1M
11
EBMUD WaterSmart PAYS
On-Bill Financing Approach
• Assess feasibility of conservation revolving fund
– Self-sustaining program model
– Stretch District’s conservation budget
– Repurpose rebate funds
• Increase customers participation for
conservation improvements
– Target hard to reach sectors
– Target multiple conservation measures
• Achieve water supply reliability goals
EBMUD WaterSmart PAYS Pilot
Efforts To Date
Concept Introduction
Discovery Phase
Concept Paper
• Pilot Design
• Pilot Implementation
13
Proposed EBMUD PAYS Ph. 1
Pilot Candidates (e.g. 25 Accts.)
Market Sector Business Classification Candidate Water-Efficient
Products
MF Residential
(6) Accts
(60) units
5 or more units on one meter, and mobile home parks
• high-efficiency toilets
• high-efficiency washers
• faucets
• turf conversion
• drip irrigation
• submetering
• sprinkler retrofit
• weather-based controller
• graywater systems
• boilerless steamers
• waterless wok ranges
• air-cooled ice machines
• pre-rinse spray valves
• commercial dish machines
Landscape
(12) SF Resid.
(4) Comm.
planter strips, median strips, golf
and country clubs, botanical
gardens, aquariums
Food Service
(1) General
(1) Franchise
(1) Institution
commercial eating places, restaurants; commercial eating places, fast food; commercial food sales
Pre-Screened & Pre-Approved
PAYS Measure Calculation Tool
14
EBMUD Efficiency PAYS® Multi-Family Basic Measures Performance Screen
PAYS®
Charge Calculation
Baseline Conditions Default
Apartment Units in this Property: 30
Average Residents per Occupied Apartment: 2 2.3
Average Vacancy: 8% 7.3%
Interest Rate (per annum): 8%
Payment Term for Baseline Measures (years): 10
Billing Frequency (per year) 6
Retrofit Assumptions
Percentage of Existing Toilets flushing at 3.5 gpf: 45% 0-100%
Toilet Replacement Strategy:Replace all
except HETs
Drop-down
box
Average Number of Toilets per Apartment: 1.0 1.2
Average Number of Showerheads per Apartment: 1.0 1.1 Parameter
Avg Showerhead Flowrate measured onsite (existing): 2.0 2.2 Rate:
New Showerhead Nominal Flowrate: 1.5 1.5 Unit Cost:
Water Heater Thermal Efficiency: 75% 80%
Water Heater Setpoint: 125 135
Per Capita Consumption as % of National Average: 100% 75%
per Apt per Bldg gl Th kWh Water Gas Electricity Total
Basic Measures
Installed Toilet $270.00 1.0 30 $8,100 164,322 0 0 $1,564 $0 $0 $1,564
1.5 gpm Showerhead $59.56 1 30 $1,787 57,825 270 0 $550 $266 $0 $817
Kitchen & Bath Aerators w/ shwrhd 40,296 198 0 $384 $195 $0 $579
LEDs $15.00 5 150 $2,250 0 0 0 $0 $0 $0 $0
Rebates ($1,400)
Subtotal $10,737 262,443 469 0 $2,498 $462 $0 $2,960
Annual Cost SavingsAnnual Resource SavingsItem Delivered
QuantityUnit Cost Cost
APPLICABLE UTILITY RATE FACTORS
METER TYPE
Residential: 5+ units
ELEVATION BAND
Band 1 Oakland
SEWER AGENCY
Indoor Water (CCF) Outdoor Water (CCF) Natural Gas (Th)
ENERGYWATER & WASTEWATER
Electricity (kWh)
Utility Rates at Which Savings are Valued
Existing Rebate ScheduleEBMUD: Select Rebate Protocol:
Basic Measure Contractor to Complete Yellow-shaded Cells
select factor from list in each yellow-shaded cell above
select rate from list in yellow cells aboveunit costs above are auto populated
PG&E Rate Class
Regular
$0.99 $0.31$7.12 $3.36
Baseline Tier 3Water & Sewer Peak Water
15
EBMUD WaterSmart PAYS Pilot
Eligibility Criteria
Property owner
– application/agreement
– demonstrate financial stability
– good payment history of water bills
– agrees to repayment through on-bill surcharge
– works directly with certified contractor
Water Conservation Staff
– completes site audit
– confirms proposed measures meet criteria
– certifies contractor work and payment
16
Pilot Program Evaluation:
What we want to measure/setup
• Process and procedures
• Roles and responsibilities (internal/external)
• Target water savings
• Customer interest, satisfaction
• Are there sufficient certified contractors to
perform work?
• Program cost-effectiveness
Next Steps:
Proposed Phased Pilots
Phase One (FY14Q3/Q4)
• Develop pilot w/budget of approx. $125K (w/grant funds)
• Approximately 25 accounts
• Manually enter surcharge on water bill
• Pilot evaluation to inform larger second phase
Phase Two (FY15)?
• Increased budget of $500,000-$750,000 (pending grant
funding from Prop. 84 Round 3)
• 100 - 200 accounts
• Manual processing or consider automation
• Evaluation to inform standard program in FY16 17
EBMUD WaterSmart PAYS
“Pay as You Save”
On-Bill Financing Pilot Concept
Finance-Administration Committee
January 28, 2014
Presentation Outline
• Bay Area Regional Energy Network (BayREN)
“PAYS” Offer and Concept
• Other Utility Programs/Pilots
• EBMUD Pilot and Evaluation
• Next Steps
2
BayREN PAYS Development
Funding
• $650,000 in CPUC funding to expand PAYS to
water utilities
• Established consultant team (BayREN, Energy
Efficiency Institute Inc., Bevilacqua-Knight,Inc.)
• 1-3 water utility jurisdictions
– Up to 2,000 projects per utility
– Program launch January 2014
– Design development Spring 2014
3
PAYS Financing Framework
Added fixed surcharge
on water bill
Pay as You Save (PAYS)
Concept
Intended as RISK FREE offer for customer
• No upfront payment
• Utility bills are immediately lower
• No loan, no lien, and no debt
• If customer leaves, payment obligation stays
with property (and meter)
• Contractor bonding ensures problems found
will be fixed
• General program design to cover cost of
implementation 5
PAYS Financing Framework
Capital
Provider
Program
Operator
Certified
Contractors
and Suppliers
Customer
Utility
6
- Provides funds to pay
contractors
- Pays for
completed
work
- Provides/installs
program measures
- Pays surcharge
with water bill
• Sends amount
billed in program
Self-
Sustaining
System
• At least 50% of customers accept “PAYS Offer”
• 11 Pilots in 5 states over 15 years
• California: toilets & showerheads, landscaping,
appliances
• Hawaii: solar hot water
• Kansas & Kentucky: weatherization and heating
systems
• New Hampshire: street lighting, indoor lighting,
HVAC, CFLs
PAYS Success To Date
• Windsor – Multifamily residential, commercial
landscaping
• Hayward – Multifamily residential
• EBMUD – Multifamily residential, landscaping,
food services
• SFPUC – Multifamily Residential
Bay Area PAYS Pilots
• ~5% of all residential units increased
participation in conservation program
• Average single family savings of:
– 10% of energy use
– 20% of indoor water use
– $15 per month in net utility costs
• Enrolled >50% of eligible multifamily units
1st year w/30% indoor water savings
Windsor Efficiency PAYS
Green Hayward PAYS
• A water and energy efficiency program:
– multifamily goal: retrofit 2,000 housing units
– landscaping goal: up to 100 controllers for
multifamily, commercial, institutional
• Procurement of Contractors and Suppliers in
process
• February City Council approval date
• Target March launch of $1M
11
EBMUD WaterSmart PAYS
On-Bill Financing Approach
• Assess feasibility of conservation revolving fund
– Self-sustaining program model
– Stretch District’s conservation budget
– Repurpose rebate funds
• Increase customers participation for
conservation improvements
– Target hard to reach sectors
– Target multiple conservation measures
• Achieve water supply reliability goals
EBMUD WaterSmart PAYS Pilot
Efforts To Date
Concept Introduction
Discovery Phase
Concept Paper
• Pilot Design
• Pilot Implementation
13
Proposed EBMUD PAYS Ph. 1
Pilot Candidates (e.g. 25 Accts.)
Market Sector Business Classification Candidate Water-Efficient
Products
MF Residential
(6) Accts
(60) units
5 or more units on one meter, and mobile home parks
• high-efficiency toilets
• high-efficiency washers
• faucets
• turf conversion
• drip irrigation
• submetering
• sprinkler retrofit
• weather-based controller
• graywater systems
• boilerless steamers
• waterless wok ranges
• air-cooled ice machines
• pre-rinse spray valves
• commercial dish machines
Landscape
(12) SF Resid.
(4) Comm.
planter strips, median strips, golf
and country clubs, botanical
gardens, aquariums
Food Service
(1) General
(1) Franchise
(1) Institution
commercial eating places, restaurants; commercial eating places, fast food; commercial food sales
Pre-Screened & Pre-Approved
PAYS Measure Calculation Tool
14
EBMUD Efficiency PAYS® Multi-Family Basic Measures Performance Screen
PAYS®
Charge Calculation
Baseline Conditions Default
Apartment Units in this Property: 30
Average Residents per Occupied Apartment: 2 2.3
Average Vacancy: 8% 7.3%
Interest Rate (per annum): 8%
Payment Term for Baseline Measures (years): 10
Billing Frequency (per year) 6
Retrofit Assumptions
Percentage of Existing Toilets flushing at 3.5 gpf: 45% 0-100%
Toilet Replacement Strategy:Replace all
except HETs
Drop-down
box
Average Number of Toilets per Apartment: 1.0 1.2
Average Number of Showerheads per Apartment: 1.0 1.1 Parameter
Avg Showerhead Flowrate measured onsite (existing): 2.0 2.2 Rate:
New Showerhead Nominal Flowrate: 1.5 1.5 Unit Cost:
Water Heater Thermal Efficiency: 75% 80%
Water Heater Setpoint: 125 135
Per Capita Consumption as % of National Average: 100% 75%
per Apt per Bldg gl Th kWh Water Gas Electricity Total
Basic Measures
Installed Toilet $270.00 1.0 30 $8,100 164,322 0 0 $1,564 $0 $0 $1,564
1.5 gpm Showerhead $59.56 1 30 $1,787 57,825 270 0 $550 $266 $0 $817
Kitchen & Bath Aerators w/ shwrhd 40,296 198 0 $384 $195 $0 $579
LEDs $15.00 5 150 $2,250 0 0 0 $0 $0 $0 $0
Rebates ($1,400)
Subtotal $10,737 262,443 469 0 $2,498 $462 $0 $2,960
Annual Cost SavingsAnnual Resource SavingsItem Delivered
QuantityUnit Cost Cost
APPLICABLE UTILITY RATE FACTORS
METER TYPE
Residential: 5+ units
ELEVATION BAND
Band 1 Oakland
SEWER AGENCY
Indoor Water (CCF) Outdoor Water (CCF) Natural Gas (Th)
ENERGYWATER & WASTEWATER
Electricity (kWh)
Utility Rates at Which Savings are Valued
Existing Rebate ScheduleEBMUD: Select Rebate Protocol:
Basic Measure Contractor to Complete Yellow-shaded Cells
select factor from list in each yellow-shaded cell above
select rate from list in yellow cells aboveunit costs above are auto populated
PG&E Rate Class
Regular
$0.99 $0.31$7.12 $3.36
Baseline Tier 3Water & Sewer Peak Water
15
EBMUD WaterSmart PAYS Pilot
Eligibility Criteria
Property owner
– application/agreement
– demonstrate financial stability
– good payment history of water bills
– agrees to repayment through on-bill surcharge
– works directly with certified contractor
Water Conservation Staff
– completes site audit
– confirms proposed measures meet criteria
– certifies contractor work and payment
16
Pilot Program Evaluation:
What we want to measure/setup
• Process and procedures
• Roles and responsibilities (internal/external)
• Target water savings
• Customer interest, satisfaction
• Are there sufficient certified contractors to
perform work?
• Program cost-effectiveness
Next Steps:
Proposed Phased Pilots
Phase One (FY14Q3/Q4)
• Develop pilot w/budget of approx. $125K (w/grant funds)
• Approximately 25 accounts
• Manually enter surcharge on water bill
• Pilot evaluation to inform larger second phase
Phase Two (FY15)?
• Increased budget of $500,000-$750,000 (pending grant
funding from Prop. 84 Round 3)
• 100 - 200 accounts
• Manual processing or consider automation
• Evaluation to inform standard program in FY16 17
Refunding Wastewater General Obligation Bonds
Finance/Administration Committee
January 28, 2014
Proposed Financings for FY14
Description Issue/Approximate Size Date of
Board Action Pricing or
Issuance Date
1 Replace Royal Bank of Canada and Barclays Bank as remarketing agents for the District’s outstanding Water Series 2008A-1, 2008A-2 and 2008A-3 Bonds
W 2008A-1: $61.7 million W 2008A-2: $46.3 million W 2008A-3: $46.3 million
9/24/2013 12/2013
2 Authorization for Opportunistic Water and Wastewater Restructurings for De-Risking and Fixed Rate Refundings
Based on Market Opportunities 9/24/2013 TBD
3 Remarket the Water Series 2009A-1 and Series 2009A-2 Securities Industry and Financial Markets Association (SIFMA) Index Bonds to establish a new interest rate period
W 2009A-1: $41.04 million W 2009A-2: $41.04 million
10/22/2013 12/2013
4
Renew or replace Bank of America (BofA) and JPMorgan Chase Bank (JPM) as liquidity providers for Water Series 2008A-4, Water Series 2008B-3 and Wastewater Series 2008C Bonds and extend term
W 2008A-4: $46.3 million W 2008B-3: $15.1 million WW 2008C: $51.7 million
10/22/2013 12/2013
5 Competitive Sale Refunding of Wastewater Series F (2003) G.O. Bonds
WW $18.6 million 1/28/2014
2/2014 (price)
2/26/14 (close)
6 Remarket the Water Series 2011A-1 and A-2 SIFMA Index Bonds to establish a new interest rate period or refund with another product
W 2011A-1: $74.1 million W 2011A-2: $74.1 million
1st Q 2014 5/2014
7 Renew or replace Wells Fargo Bank (WFB) as liquidity provider for Water Series 2008A-1 Bonds and extend term
W 2008A-1: $61.7 million 10/22/2013 12/2013
8 Issue additional “New Money” Water Revenue Bonds $170.0 million 4/2014 5 – 6/2014
2
General Obligation Bonds
•Wastewater System General Obligation Bonds, Series F
– $18,555,000 outstanding
– maturing in 2018
– District’s only G.O. Bonds
– Voter approved
– Repaid from property tax levy
3
Wastewater G.O. Issuance
G.O. Bond History
1970: voters authorized $60 million
1971-1993: entire amount issued
1993: refunding Series E
2003: refunding Series F
2014: proposed refunding Series G
4
Refunding Plan
• $15.4 million to be refunded by Proposed Series G
• G.O. Bonds will be sold by Competitive Sale
• Savings estimated at $1.27 million net present value
• Lower annual property tax levy by estimated 6%
5
Cost of Issuance
Costs of Issuance Co-Bond Counsels $127,500 Co-Financial Advisors 83,000 Rating Fees 32,500 Tax Counsel 30,000 Printer 10,000 Reimbursable Expenses & Contingency 10,000 Other* 4,750
$297,750
Underwriter's Discount $75,000
*paying agent, refunding escrow agent, verification agent
6
Requested Action
7
• Adopt resolution providing for issuance of Wastewater G.O. Bonds Refunding Series G
Dodd-Frank Protocol Amendment of Interest Rate
Swap Policy
Finance/Administration Committee January 28, 2014
2 2 2 2 2 2 2 2 2 2 2
Agenda
•Debt and swap portfolio
• Swap policy
•Dodd-Frank Protocol
2
3 3 3 3 3 3
Variable14.3%
Synthetic Fixed17.2%
Fixed68.5%
Water System $2.60 Billion
Wastewater System $463.7 Million
Variable3.2%
Synthetic Fixed24.3%
Fixed72.5%
District Debt Portfolio
4 4 4 4 4 4 4
District Swap Portfolio
Water Swap Portfolio Wastewater Swap Portfolio
Bond Series Counterparty
Outstanding Balance
($million)
Bond Series Counterparty Outstanding
Balance
2011A Bank of NY Mellon 98,780,000 2011A Dexia
Credit Local 61,725,000
2011A JP Morgan Chase 49,390,000 2008C Citigroup, Inc. 25,845,000
2008A JP Morgan Chase 70,965,000 2008C JP Morgan Chase 25,845,000
2008A Bank of America 70,965,000
2008A Merrill Lynch 30,850,000
2008A Bank of NY Mellon 27,770,000
2009/ 2008B Deutsche Bank 61,050,000
2009 Citibank, N.A. 15,675,000
2009 Merrill Lynch 20,350,000
445,795,000 113,415,000
5
District Swap Policy
Interest Rate Swap Policy 4.23
• Created and adopted by the Board in April 2007
• Contains guidelines for use and ongoing monitoring of swaps:
– Considerations for evaluating use of swaps
– Permitted uses of swaps
– Counterparty credit standards
– Method of procurement
– Documentation guidelines
6
Dodd-Frank Act
• Dodd—Frank Wall Street Reform and Consumer Protection Act—July 2010
• Title VII—Wall Street Transparency & Accountability
– Regulates swap dealers – Commodity Futures Trading Commission (CFTC) – Securities and Exchange Commission (SEC) – Finalized rules which are effective May 1, 2013
• “External business conduct” of swap dealers
– Duty to determine suitability of swap recommended to a counterparty
– Obligation to report information on counterparties – Municipal agencies considered “special entity” – “Safe harbor” if special entity exercises independent
judgment regarding swap transaction
7
Dodd—Frank 2012 Protocol
•Dealers will not execute, modify or terminate swaps without safe harbor
•DF Protocol is a standard way to disclose and exchange information to meet safe harbor provisions, primarily:
– We have not relied on the dealer
– We have a qualified, independent advisor
8
Dodd—Frank 2013 Protocol
•DF 2013 Protocol allows District to make elections minimizing burdensome administrative requirements: – Choose not to transfer swaps to clearing facility,
eliminating such requirements as receiving and reviewing daily mark-to-market and collateral posting reports
– Opt out of a periodic portfolio review process that would be burdensome without material offsetting benefits
Requested Action
9
• Adopt a resolution:
i. authorizing the District to adhere to the Dodd-Frank March 2013 Protocol and subsequent protocols, and
ii. approving an amendment to the Interest Rate Swap Policy 4.23 to provide for compliance with the the August 2012 Dodd-Frank Protocol, the March 2013 Protocol, and any subsequent protocols and similar agreements to be adhered to by the District
• Accept the annual report for the District’s swap portfolio.
Viridis Project Update
Finance/Administration Committee
January 28, 2014
Agenda
• Project Background
• Key Project Issues
– Building Demolition
– Power Service
– Rail access
•Next Steps
2
Project Background
Timeline
3
2013 2011
Execution of
Lease
Agreement
(Oct)
Current Lease
Commencement
Date
(May 1, 2014)
2014 2015
Execution of
Lease Agreement
Amendment
(Sep)
Building
Demo
(Jan-May)
Original Lease
Commencement Date
(July 1, 2013)
PG&E Application
(Sep ‘13 – May ‘14)
Biodiesel Production Facility
Construction/Operation
Project Background
Site Location
4
Key Project Issues
Building Demolition
• Building Demolition
– 8 buildings/structures
– Hazardous materials removal – paid by
District
– Building demolition – paid by Viridis
• If Viridis does not proceed with lease
commencement, these improvements
would increase revenue from other
future lessees
Key Project Issues
Building Demolition (cont’d)
Building demo
Parcel A
Parcel B
Key Project Issues
Power Service
7
• Power to West End property was originally supplied
through an agreement with City/Port
– City to disconnect power in early February
• Per lease agreement, Viridis is responsible for
furnishing all utilities and paying associated costs
• Viridis has requested that the District coordinate its
application to accommodate the biodiesel facility
• District is proceeding with a PG&E application to
provide power to the lease area
– Supports Viridis facility (reimbursed by Viridis), or
– Adds additional revenue from future land lessees
Key Project Issues
Rail Access
8
• Viridis is interested in constructing a new rail spur to
provide site access
• Per lease agreement, Viridis is responsible for securing rail
access to its proposed site
• Viridis has not received support during initial
discussions with the rail operator
• Staff has raised the issue with City of Oakland staff
and will continue to support discussions going
forward
Next Steps
9
• Staff will continue to implement the
building demolition and new electrical
service work
– Prepare the site for occupancy on May 1, 2014
• Continue to support project development
– Respond to information and coordination
requests
– Execute lease agreement amendment to
address power service cost reimbursement
– Assist in coordinating with City on rail issue