HomeMy WebLinkAboutAgenda Report - May 19, 2021 C-23CAGENDA ITEM ,0 23
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Authorizing City Manager to Amend Lodi Electric Utility
Commercial Rebate Program By Increasing Eligibility to Seventy -Five Percent
(75%) of Total Project Cost Up to a Maximum of $75,000 Per Project
MEETING DATE: May 19, 2021
PREPARED BY: Business Development Manager
RECOMMENDED ACTION Adopt a resolution authorizing the City Manager to amend the Lodi
Electric Utility (LEU) Commercial Rebate Program by Increasing
Eligibility to Seventy -Five Percent (75%) of Total Project Cost Up to
a Maximum of $75,000 Per Project.
BACKGROUND INFORMATION: Since 2019, LEU staff and its third party contractor, ESG, have been
working closely with its commercial customers to help utilize energy
efficiency products and services as a means to recover variable
operating costs and improve profits. By helping commercial customers operate successfully, LEU
achieves at least two objectives. First, it makes a long-term commitment to cost-effective energy
efficiency as an energy resource for its largest energy customers. Second, it helps LEU meet its energy
savings target as required by the State.
Currently, the commercial rebate program includes both standard, prescriptive rebates and customized
rebates. Prescriptive incentives are specific dollar amounts for completing qualifying energy efficiency
measures characterized by a direct one for one replacement for commonly installed equipment and for
which technology qualifications and incentive amounts can be found on the application forms. Custom
incentives, on the other hand, are based on energy saved in the first year of operation and are
characterized by calculating the energy to be saved with more efficient equipment. Custom incentives
must receive pre -approval before equipment is ordered and a detailed scope of work and project
information is required in the documentation process.
Since 2017, custom commercial program participation has decreased significantly. Staff believes that
increasing the cap along with greater program promotion and customer education should produce
positive results. A number of larger projects are being brought forward for consideration, producing more
significant energy savings, but are limited in terms of funding assistance under the current project funding
limitation of up to fifty percent (50%) of the total project cost with a maximum rebate of $27,500 per
project. Therefore, staff recommends the cap for customized commercial rebates be increased to fund
up to seventy-five percent (75%) of the total eligible project cost, with a maximum rebate of $75,000 per
project.
By comparison, a survey of other utilities reveals caps ranging from 50-100 percent of total project cost
and anywhere from $150,000 up to $750,000 per project.
APPROVED:
tephen Sch uer ity Manager
Adopt Resolution Authorizing City Manager to Amend Lodi Electric Utility Commercial Rebate Program Increasing Eligibility to 75
Percent of Total Project Cost Up to Maximum of $75,000 Per Project
May 19, 2021
Page 2
FISCAL IMPACT: Expenditures for the custom commercial rebate program is anticipated to be
approximately $50,000 in FY 21. The impact of increasing the cap on total funding for the program will
depend on the number of applications, project size, and estimate of kilowatt hour energy savings. If
seven commercial customers participate in the new program in the next fiscal year and qualify for the
maximum rebate of $75,000 per project, a total of $525,000 in program costs could be anticipated
compared to $192,500 under the existing program and cap. This would result in an estimated annual
increase of approximately $332,500. However, smaller projects and fewer kilowatt hour energy savings
will result in program costs which fall short of this estimate.
FUNDING AVAILABLE: Public Benefits Fund Accout No. 50465100.72920.
Andrew Keys
Andrew Keys
Deputy City Manager/Internal Services Director
Astrida Trupovnieks
Astrida Trupovnieks
Business Development Manager
Signature: NATrupovnrekr Signature: Q,r,A� xv�obj
Email: atrupovnieks@lodi.gov Email: akeys@lodi.gov
RESOLUTION NO. 2021-146
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE
CITY MANAGER TO AMEND THE LODI ELECTRIC UTILITY
COMMERCIAL REBATE PROGRAM BY INCREASING ELIGIBILITY
TO SEVENTY-FIVE PERCENT (75%) OF TOTAL PROJECT COST
UP TO A MAXIMUM OF $75,000 PER PROJECT
WHEREAS, energy efficiency programs have been delivered by large and small utilities
since the late 1980s and successful programs regularly assess energy efficient products and
services to meet changing demand; and
WHEREAS, the current commercial rebate program is based on kilowatt hour savings of
$0.15 per kilowatt hour, not to exceed $27,500 per project, and not to exceed fifty percent
(50%) of total project costs; and
WHEREAS, energy efficiency best practices include regularly assessing multiple
customer needs and stakeholder perspectives ensuring the programs deliver products and
services which optimize customer operations and budgets; and
WHEREAS, Lodi Electric Utility has surveyed other municipal utilities' rebates to
commercial customers and has determined these municipal utilities have increased the
monetary caps of customized energy efficiency rebates, and the percent of total project costs to
be reimbursed; and
WHEREAS, Lodi Electric Utility staff seeks to increase the participation of its
commercial customers in the customized energy efficiency program by offering the most cost-
effective opportunities for efficiency programming.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to amend the Lodi Electric Utility Commercial Rebate Program by
increasing eligibility to seventy-five percent (75%) of total project cost up to a maximum of
$75,000 per project.
Dated: May 19, 2021
I hereby certify that Resolution No. 2021-146 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held May 19, 2021 by the following votes:
AYES: COUNCIL MEMBERS — Chandler, Hothi, Khan, Kuehne, and
Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
NNIF CUSMIR
City Clerk
2021-146