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AGENDA TITLE: Adopt Resolution Authorizing $250,000 in Public Benefit Program Funds for the
Energy Efficiency Financing Pilot Project and Authorizing the Electric Utility
Director to Administer the Project
MEETING DATE: October 20, 2010
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: Adopt resolution authorizing $250,000 in Public Benefit Program
funds for the Energy Efficiency Financing Pilot Project and
authorizing the Electric Utility Directorto administer the Project.
BACKGROUND INFORMATION: In an effort to enhance customer participation, pursue energy
efficiency/conservation projects and put available Public Benefits
Program funds to work, the Electric Utility Department (EUD) has
created the Energy Efficiency Financing Pilot Project.
The Pilot Project involves establishing a loan fund, from which G2 electric utility rate
commercial/industrial customers may borrow money to implement energy conservation projects at their
respective faciIities. EUD serves 372 G2 customers. G2 customers are those who use over 8,000 kWh
in a month but do not use 400 kWh in any hour. These businesses run the gamut from grocery stores to
mid-sized industrial customers to restaurants and service stations.
Currently, two California electric service providers have implemented financing programs: San Diego Gas
& Electric(SDG&E) and Southern California Edison. Meanwhile, the City of Palo Alto is investigating an
on -bill financing program.
SDG&E's program, which EUD is attempting to model, has been in effect since June 2008, and has
loaned in excess of $9 million to 420 commercial/industrial customers for energy conservation projects,
while keeping defaults at a minimum (less than 1 percent). An additional $5 million in loan applications
have been submitted to SDG&E staff in recent months. The typical loan of SDG&E customers ranges
from $20,000 to $34,000.
As proposed, the Pilot Project will provide zero -interest loans, for a term of up to 24 months (duration of
the loan will be determined by the projected monthly energy savings in dollars). All loans will be
distributed on a first-come, first -serve basis once the EUD-approved energy efficiency project is installed
and confirmed operational. Loan amounts are capped at $50,000 per customer of record. The customer
must have been current on City of Lodi utility bills for the prior 18 -month period to qualify for participation
in the Pilot Project. The customer, or its chosen third -party contractor, will receive the loan proceeds.
The energy efficiency projects approved under this Pilot Project may include, but not be limited to, the
following: lighting retrofits, building envelope improvements, mechanical system upgrades, process
Interim City Manager
Adopt Resolution Authorizing $250,000 in Public Benefit Program Funds for the Energy Efficiency Financing Pilot Project and
Authorizing the Electric Utility Directorto Administer the Project
October 20,2010
Page 2 of 2
equipment retrofits, and energy management system installations. All applications for energy efficiency
projects must be accompanied by the customer projected annual energy savings, potential maintenance
savings and manufacturer's cut sheets on proposed equipment. Staff anticipates annual energy savings
derived from the Pilot Project to exceed 300,000 kilowatt hours (this figure could increase depending
upon total customer participation and the energy efficiency measures installed), a customer savings of
approximately $45,000 per year.
A total of $893,410 was budgeted for Public Benefits programs in FY 2010/11. This additional $250,000
comes from the fund balance, which was $3,223,432 as cf June 30, 2010. Loan payments will be
returned to the Public Benefits Program.
FISCAL IMPACT: Increased efficiency will reduce utility revenue by approximately $45,000 per year,
and reduce the need for future electricity purchases. Funds come from the State -
mandated Public Benefits Program.
FUNDING: Public Benefits Fund, Fund 164
Jordan�Ayers
Deputy City Manager/Internal Services Director
Eli abeth A. Kirkiey
U
Electric Utility Director
PREPARED BY: Rob Lechner, Manager, Customer Service & Programs
EAK/RSUIst
RESOLUTION NO. 2010-181
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING PUBLIC
BENEFIT PROGRAM FUNDS IN THE AMOUNT OF $250,000 FOR THE
ENERGY EFFICIENCY FINANCING PILOT PROJECTAND AUTHORIZING
THE ELECTRIC UTILITY DIRECTORTO ADMINISTER THE PROJECT
WHEREAS, the Lodi Electric Utility would create the Energy Efficiency Financing Pilot
Project (Pilot Project) to encourage commercial/industrial energy efficiency; and
WHEREAS, the Pilot Project would be available to commercial utility customers
assigned to the G2 electric rate class who pursue targeted energy efficiency projects and would
be made available on a first-come, first-served basis.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize Public Benefit Programs funds in the amount of $250,000 for the creation of the
Energy Efficiency Financing Pilot Project in accordance with the specific regulations outlined in
Attachment A and authorize the Electric Utility Directorto administerthe project.
Dated: October 20, 2010
hereby certify that Resolution No. 2010-181 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held October 20, 2010, by the following vote:
AYES: COUNCIL MEMBERS— Hansen, Hitchcock, Johnson, Mounce, and
Mayor Katzakian
NOES: COUNCIL MEMBERS— None
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS— None
2010-181
City Clerk
Attachment A
The Lodi Energy Efficiency Financing Pilot Project (the Pilot Project) involves the establishment
of a loan fund, from which G2 electric utility rate commercial/industrial customers may borrow
money to implement energy conservation projects at their respective facilities.
The Pilot Project will provide zero -interest loans, for a term of up to 24 months (duration of the
loan will be determined by the projected monthly energy savings in dollars). All loans will be
distributed on a first-come, first-served basis, and only once the EUD-approved energy
efficiency project is installed and confirmed operational. Loan amounts are capped at $50,000
per customer of record, and the customer must have been current on City Cf Lodi utility bills for
the prior 18 month period in order to qualify for participation in the Pilot Project. The customer,
or its chosen third -party contractor, will receive the loan proceeds.
The energy efficiency projects approved under this Pilot Project may include, but not be limited
to:
9 lighting retrofits;
9 building envelope improvements;
9 mechanical system upgrades;
9 process equipment retrofits;
9 energy management system installations.
All submissions for energy efficiency projects proposed to be installed must be accompanied by:
9 projected annual energy savings;
9 potential maintenance savings associated with the project;
9 manufacturer's cut sheets on equipment to be installed; and
9 completed application (signed and dated by the customer).
Loans will be secured by:
9 a promissory note inform satisfactory to the City Attorney;
9 the promissory note shall call for repayment of the note in 24 or fewer installments
coincident with the immediately following 24 or fewer utility payments and authorize the
City of Lodi to terminate electric service if the payments are not made.
Lodi City Council
October 20.2010
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- creative financing for commercial
customer's energy efficiency measures
- an interest-free, unsecured loan
up to $50,000, up to 2 years
- repayment charged on customer's monthly
utility bill
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- customer service
- energy conservation
- economic development
- leadership
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- $250,000 for pilot project
- from Public Benefits Program
- energy efficiency, renewable energy, low-
income customer
assistance, and RD&D
- G-2 commercial/industrial customers
372 customers now on this rate
Over 8000 kWh/mo
Less than 400 kWh peak hour
- typical G-2 customers: restaurant, retail,
offices, light manufacturing
- secure City Council approval
- finalize program documents
- direct mailer to targeted G-2 customers
- make loans on or about Dec 15.2010
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