Within the state of California, many community college districts are currently taking advantage of Prop 39 funding by developing first year projects. Districts must be proactive in utilizing Prop 39 funding—which will allocate approximately $550 million to energy efficiency and clean energy projects over the course of five years—since the projects must be fully implemented, or substantially complete by the end of the state’s fiscal year on June 30th, 2014. The next round of funding is anticipated shortly after the end of the state’s fiscal year around July or August 2014.
As I have been attending several conferences and discussions focused on Prop 39, there are two important themes that seem to resonate with those attending:
1. Leverage Prop 39 Funding
From the local utility companies and local stakeholders all the way up to the State Chancellor’s Office, districts are being encouraged to leverage Prop 39 money for all community colleges. So, what exactly does that mean? Leveraging the Prop 39 funding districts have been allocated, means combining it with:
- CCC/IOU partnership rebates or local utility rebates and incentives
- Energy efficiency grants
- 0% interest financing
By combining this funding with other sources of money, districts are able to increase scope, maximize energy savings and have a greater impact on their operational savings, carbon footprint, and greenhouse gas reduction.
2. Develop a Comprehensive 5-year Energy Plan
Following the state’s loading order, it is imperative that districts take a comprehensive approach to energy efficiency, demand response, and renewable/distributed energy generation. I have personally observed many of the districts moving full steam ahead by scoping out and implementing the “low hanging fruit” type of projects such as lighting. Lighting measures typically result in high energy savings with a fantastic return on investment and easily meet the Savings Investment Ratio (SIR) requirements of 1.1 or greater, as required in the official Prop 39 guidelines. However, I seriously caution districts from running out and implementing all of these smaller projects because, as many will find out, the challenge comes down the road: It will be very difficult to identify projects that meet the SIR requirements in the future years of this program. If districts cannot identify projects that meet the SIR requirements, they will not receive their annual allocations for these future years!
My recommendation is to take a comprehensive and holistic approach to implementing these projects. Lighting upgrades, for example, can be phased and bundled with longer payback measures like HVAC replacements or metering/sub-metering data acquisition and demand response systems. With this approach, longer payback measures can lean on the energy savings provided by the faster payback measures like lighting and can be included in your projects while still meeting the required SIR ratio. It may take longer to complete lighting projects as they are executed in phases, but it will ultimately benefit districts in that they are also executing longer payback measures—ones that may otherwise not be possible—and, therefore, reducing the risk of not qualifying for funding in the later years of the program.