PROPOSAL FOR DEVELOPMENT OF GRASS ROOTS GROCERY SUSTAINABLE ENERGY MANAGEMENT PLAN

November 15, 2016

Prepared By: Justin Mason on behalf of G3 Consulting

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Grass Roots Grocery SEMP Development

EXECUTIVE SUMMARY Grass Roots Grocery is quickly gaining a reputation for selling first-rate natural and

organic food sourced from sustainable farmers. Grass Roots has expressed a desire to

extend sustainability into all aspects of their operations. Specifically, they aim to target

climate change by reducing their carbon footprint by reducing energy consumption. To

help achieve this goal, Grass Roots has requested proposals for the development of a

Strategic Energy Management Plan (SEMP). G3 Consulting is pleased to submit this

proposal outlining our methodology to develop a customized SEMP and showcasing our

understanding of energy management.

The G3 team will get to know your organization in detail in order to develop a holistic

energy management plan tailored to Grass Roots’ needs. To do this we will:

• Engage executives to determine the company’s vision for energy management. • Study market trends and the political landscape to understand the external

drivers influencing energy consumption and utility costs. • Meet with stakeholders to determine barriers and benefits to implementing

energy conservation measures so we that can leverage opportunities and plan for solutions.

• Study existing policies and procedures to identify gaps that may prevent effective implementation of the SEMP.

• Investigate buildings to find the most impactful and cost-effective energy conservation measures.

• Get to know your financial drivers to ensure our proposals meet your hurdle rates and other financial constraints.

Understanding this information will enhance G3’s ability to facilitate goal development

and to identify a range of effective energy conservation measures (ECMs) from low-cost

retrofits, high impact investments, operational integration, and behavioral change

campaigns.

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Grass Roots Grocery SEMP Development

The result will be a customized Strategic Energy Management Plan that is tailored to

match your needs. The following proposal will demonstrate G3’s expertise in

developing strategic plans that benefit the client by providing a roadmap to reducing

energy consumption and greenhouse gas emissions.

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Grass Roots Grocery SEMP Development

TABLE OF CONTENTS

TABLE OF FIGURES Figure 1 - SEMP Development Process 2 ........................................................................................Figure 2 - ECM Development 13 ......................................................................................................Figure 3 - SEMP Implementation Scope 14 .....................................................................................

EXECUTIVE SUMMARY i ................................................................................................................

1. Project Background 1 .................................................................................................................

2. Project Scope 2 ..........................................................................................................................

2.1. Deliverables 3 ......................................................................................................................

2.2. Exclusions 3 ........................................................................................................................

3. Project Methodology 3 ................................................................................................................3.1. Situation Analysis 4 ..............................................................................................................

3.1.1. Organizational Review and Vision Development 4 ........................................................

3.1.2. Project Kickoff Workshop 5 ............................................................................................

3.1.3. Technical Review 7 .........................................................................................................3.2. Strategy Development 11 .....................................................................................................

3.2.1. Core Activities and Goals Workshop 11 .........................................................................

3.2.2. Identify and Develop Energy Conservation Measures 12 .............................................

4. Optional Services: Implementation and Progress Monitoring 15................................................

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1. PROJECT BACKGROUND Grass Roots Grocery has identified climate change as a real concern to management,

employees, and their customers and is interested in developing a five-year Strategic

Energy Management Plan (SEMP) to guide initiatives surrounding sustainability and

energy management. Implementing a SEMP will provide direction for energy

management initiatives and help the company to save money and reduce its carbon

footprint. This document outlines G3’s proposed process and methodologies to develop

a comprehensive SEMP for Grass Roots Grocery.

With rapid expansion across BC and Alberta, and a newly formed HR department and

Green Team, Grass Roots Grocery is well-situated to develop a strategic plan for energy

management. Developing a SEMP now, while the company’s policies and practices are

in the early stages of growth will help Grass Roots Grocery to establish energy

management as a key pillar of the company’s organizational culture. A SEMP can also

serve as a marketing platform to engage your existing environmentally-conscious

customer base as well as to attract new customers.

According to Natural Resources Canada, retail grocery stores are “among the most

energy-intensive commercial buildings” and that “$1 in energy savings is equivalent to

$59 in increased sales.” This research shows that even a small reduction in energy 1

consumption can have a big impact on a grocery store’s bottom line.

Another driver of energy management is energy security. Utility prices are projected to

rise significantly in both BC and Alberta over the next five years. The introduction of the

http://www.nrcan.gc.ca/energy/efficiency/buildings/capacity-building-resources/newsletter/17356) 1

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carbon tax in Alberta is expected to result in an electricity price increase of $10/MWh in

the next year . Significant price increases are also projected in BC. A well-developed 2

SEMP will strengthen your organization’s resilience against increasing and

unpredictable energy costs.

2. PROJECT SCOPE The scope of this project comprises the development of a SEMP, which will holistically

address energy and sustainability management within Grass Roots Grocery’s

organization. The SEMP will include technical, behavioral, and organizational activities

which will enable the company to reach its overall energy management vision.

To develop a comprehensive SEMP that aligns with Grass Roots Grocery’s vision and

culture, a situation analysis will be performed which will evaluate all existing aspects of

the organization. G3 will work with stakeholders to develop vision, goals, and targets

which will be integrated into the SEMP, and form the basis for the selection of proposed

energy conservation measures, behavioral changes, and organizational changes (see

Figure 1).

http://www.cbc.ca/news/canada/calgary/alberta-electricity-aeso-firstenergy-climate-1.3536363 2

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Figure 1 - SEMP Development Process (Alexandre Herbert, CESA 5850 BCIT 2016)

Refer to Section 3 Project Methodology for a detailed description of G3’s proposed

project execution.

2.1. DELIVERABLES

1. Building energy benchmarks & energy use index (EUI): G3 will use Energy Star Portfolio Manager to develop an EUI for each of Grass Roots Grocery’s buildings.

2. ASHRAE Level 1 energy audit report for each of Grass Roots Grocery’s buildings.

3. 99% draft SEMP for review and approval by senior management. 4. An approved, detailed five-year SEMP incorporating any changes requested

during the 99% review.

2.2. EXCLUSIONS

1. Detailed development and design of energy conservation projects. The delivered SEMP will include opportunities that have been identified as beneficial to the organization with class D cost estimates only.

2. Development of specific organizational policies to facilitate organizational and behavioral change.

3. PROJECT METHODOLOGY Sustainable energy management goes beyond commissioning ad hoc energy audits

and picking ‘low hanging fruit’ (even if it is organic!). We believe that by fostering a

continuous-improvement approach, organizations can successfully integrate energy

management into the very core of their business practices. This holistic approach must

be built upon a comprehensive understanding of an organization’s present state, in

order to identify areas where improvements and changes could lead to reduced energy

consumption that is sustained over time. Our team has the experience and expertise to

facilitate an effective situation analysis and develop a comprehensive SEMP which

incorporates technical, behavioral, and organizational aspects. In short, we have a well-

equipped tool box and we will work with you to determine the best tools for the job.

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3.1. SITUATION ANALYSIS

Before identifying measures to reduce energy consumption and GHG emissions, G3 will

perform a situation analysis. This process will provide G3 with an in-depth

understanding of Grass Roots Grocery’s existing resources, policies and operational

attitudes prior to the development of energy conservation measures. Applying this

knowledge helps to align any proposed energy conservation activities with your

company’s overall vision.

The situational analysis is comprised of two key components: technical and

organizational. G3’s proposed process for performing this analysis is described in detail

below.

3.1.1. Organizational Review and Vision Development

A preliminary policy review will be performed immediately upon project award. This

review will provide G3 with a better understanding of Grass Roots Grocery’s operations

and serve as G3’s starting point to develop the agenda for a project kickoff workshop.

A review of initiatives already implemented by Grass Roots Grocery’s competition will

also be performed to determine the overall direction of the organic retail grocery market

and to identify illustrative examples of initiatives that have been supported by

consumers sharing this particular market space. One such example is Greens Organic

+ Market who are participating in Metro Vancouver’s Zero Waste Challenge with the

objective of increasing the diversion of solid waste from the landfill. Another trend is

grocery stores expanding their local food selections to support the local agricultural

community as well as to supply products with less-intensive GHG emissions.

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To complete a comprehensive organizational review, G3 will require the following

minimum documentation. G3 will review these documents immediately on project

award. Additional documentation and information may be requested as the review

progresses.

1. Corporate Vision, Mission Statement and Values documents

2. Company construction and operations policies, and internal company standards.

3. Procurement policies

4. Financial policies

5. Job descriptions

The preliminary policy review will prepare G3 to conduct the project kickoff workshop

which will further develop our knowledge of Grass Roots Grocery’s existing operations

and corporate culture.

3.1.2. Project Kickoff Workshop

Two weeks after project award, G3 will hold a meeting with Grass Roots’ executive.

This project kickoff workshop will comprise four main topics: an executive questionnaire,

vision development, stakeholder review and financial constraints review. These topics

are discussed in more detail below.

To help Grass Roots Grocery staff to prepare for this meeting, and to ensure an efficient

use of time, G3 will provide details on any required information one week prior to the

meeting date.

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3.1.2.1. Executive Questionnaire

An energy management and sustainability questionnaire will help Grass Roots Grocery

to identify the highest priority areas in energy management and sustainability and to

provide a focus for the development of the company’s SEMP. It will also help to guide

the development of your company’s energy management vision and provide G3 with a

better understanding of Grass Roots Grocery’s corporate culture (e.g. risk tolerance,

corporate strategic plan and priorities, stakeholders, corporate social responsibility, etc.)

3.1.2.2. Vision Development

Developing an energy management vision is fundamental to creating an energy strategy

for the organization. G3 will facilitate the development of the company’s energy

management and sustainability vision. This vision will help to guide G3’s focus during

the analysis of Grass Roots Grocery’s present state, and will form the foundation for

energy management goal development tailored to Grass Roots Grocery’s specific

needs for inclusion in the SEMP. It will reflect Grass Roots Grocery’s core values and

outline at a high level where the executive sees sustainability and energy management

within the organization at the end of the implementation of the five-year SEMP.

3.1.2.3. Stakeholder Review

A facilitated review will be performed with the company’s executive to identify Grass

Roots Grocery’s internal and external stakeholders. This review will help G3 to

understand each stakeholder’s roles and responsibilities, including how they influence

company operations and culture. Stakeholder identification is important to ensure all

parties who have an influence on financial or policy decisions, and company culture, are

included in the SEMP development, and that proposed energy conservation measures

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will not have undesireable impacts on the stakeholders. When stakeholders see value in

your company’s SEMP, they are more likely to do their part to support your objectives

whether as energy consumers, facility operators, or decision makers.

3.1.2.4. Financial Constraints Review

It is important to determine the level of financial investment Grass Roots Grocery is

willing to make in sustainability and energy management prior to identifying Energy

conservation measures for inclusion in the SEMP. Some of the financial constraints that

must be identified to ensure the development of a feasible SEMP include:

1. Marketing value of ‘Green’ Projects. Is funding available for visible ‘green’ projects from the company’s marketing budget?

2. Acceptable ROI of energy savings projects. Is Grass Roots willing to accept a longer ROI in the effort to address climate change and promote sustainability?

3. Annual capital budgets. How much is Grass Roots willing to spend to replace and/or upgrade equipment and long-term assets?

4. Energy efficiency project budgets. Has Grass Roots Grocery already allocated a budget to energy efficiency projects such as energy audits, capital projects or building retro-commissioning?

5. Maintenance budget. Does Grass Roots’ budget already include regular preventative maintenance measures and inspection of their systems?

3.1.3. Technical Review

A technical review of Grass Root’s facilities will provide quantitative information on the

current state of energy consumption and GHG production associated with your

buildings. It will also serve as the starting point for developing technical energy

conservation measures for inclusion in the SEMP.

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To perform the technical review of our facilities, G3 will require the following

documentation from Grass Roots Grocery. Additional documentation and information

may be requested as the review progresses.

1. Electrical, Mechanical, and Architectural drawings of buildings (where available).

2. Utility bills for a minimum of the past 12 months at each location. If possible, utility bills for the past 24 months is preferable for a more accurate analysis.

3. Equipment inventories for all buildings.

4. Standard operating procedures for operations and maintenance.

5. Existing technical standards specific to Grass Roots Grocery.

Details of the technical review that G3 proposes to perform are discussed below.

3.1.3.1. Utility Rate Review

G3 will examine the rate structure of Grass Roots Grocery’s electrical and natural gas

utility bills in each province, and use this information in combination with projected rate

increases when determining the projected payback of any energy conservation

measures included in the SEMP. The impact of fuel costs on the price of products due

to an increase in transport costs will also be considered. To determine the impact of

these factors, G3 will require authorization to discuss Grass Roots Grocery’s energy

billing directly with their utility providers.

3.1.3.2. Building and Equipment Inventory Review

Grass Roots Grocery has indicated that the company owns all buildings and that there

are accurate equipment inventories for each location. These inventories will be

reviewed in detail to identify high-energy consuming equipment, with particular attention

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on high-energy consuming equipment that is common to all facilities. Any locations with

insufficient inventory information will be flagged as requiring further assessment.

3.1.3.3. Energy Benchmarking

The adage “you can’t manage what you don’t measure” is especially true in energy

management. An Energy Star Portfolio Manager account will be developed for Grass

Roots Grocery. This is an industry standard tool used to benchmark building energy

consumption. It can help identify Grass Roots Grocery’s highest energy-intensive

buildings and prioritize locations for the implementation of energy management

measures. Energy benchmarking is also necessary to enable quantitative monitoring of

the progress and success of efficiency measures post-implementation.

3.1.3.4. Energy Audits

ASHRAE Level 1 (walk-through) energy audits will be performed at each of Grass Roots

Grocery’s locations using existing equipment inventories. G3 will require the assistance

of a building maintenance staff member who is knowledgeable with the building

operation at each location during the audit.

Prior to attending each site, G3 will review equipment inventories and utility

consumption data for the location. It is assumed that Grass Roots Grocery retail stores

are fitted with smart meters with electrical demand and consumption data available in at

least 1-hour increments. For any locations which do not have this data available,

temporary metering may be recommended once the walk-through audit has been

completed and a building energy use index has been determined.

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The information collected during the energy audits will help to identify obvious sources

of energy waste and inefficiency, such as equipment that is found to be operating

unnecessarily or building areas that are overlit. Depending on the results of the walk

through audits, a more comprehensive ASHRAE Level 2 audit may be recommended

for some locations.

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3.2. STRATEGY DEVELOPMENT

With the information obtained through the situation analysis and with a concrete vision

established, Grass Roots Grocery will be well positioned to build a solid SEMP. The plan

will provide a detailed roadmap on how to achieve the company’s energy management

vision.

3.2.1. Core Activities and Goals Workshop

G3 will facilitate a workshop focusing on defining core activities and goals which target

the realization of your energy management vision. A cross-section of stakeholders,

which could include executives, store managers, green teams, and operations, should

participate in the workshop. Including representatives from different business areas

improves coordination, leads to more informed decisions, helps to identify benefits and

barriers, as well as generally fosters trust in the process.

Core activities provide broad categories for the development of energy conservation

measures, and allow for appropriate resources to be allocated to each. The workshop

will aim to define the core activities and to understand the level of commitment available

for each. These categories may include technical, behavioral, and operational

measures.

Once the core activities are agreed upon, the workshop attendees will participate in

defining specific goals. Goals are necessary to quantify progress towards attaining the

vision. G3 endeavors to develop “SMART Goals” which are specific, measurable,

attainable, relevant, and time bound. Voluntary energy management and sustainability

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certifications may also provide a starting point for the goals development process.

Some examples of these certifications and programs include:

1. LEED

2. BOMA BEST

3. Grocery Stewardship Certification

4. Zero Waste Program

A fundamental part of the goal development process is establishing key performance

indicators (KPI) which can be used to identify Grass Roots Grocery’s best and worst

performing buildings. These KPIs will also be used to monitor progress, and compare

energy performance with competitors. KPIs for Grass Roots could include energy

intensity, carbon intensity, reduced utility bills, customer satisfaction, employee

wellness, or the marketing value gained through energy initiatives. The workshop will

provide a forum to consult with stakeholders to understand which reporting metrics have

the potential to provide the greatest benefit for your organization.

The workshop will also identify how progress towards goals will be monitored and

communicated throughout the life of the plan.

3.2.2. Identify and Develop Energy Conservation Measures

Upon completion of the situation analysis and goal development, G3 will begin to

develop a list of energy conservation measures (ECM) which will help Grass Roots

Grocery to achieve its goals. Class D cost estimates will be developed for each

recommended ECM.

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The proposed ECMs will be separated into three categories: technical, organizational,

and behavioral. Evaluation of ECMs will be performed using a triple bottom line

framework, which considers social and environmental factors such as greenhouse gas

reduction, solid waste and food waste reduction, as well as the financial impact of

potential measures. G3 will work with Grass Roots Grocery to determine how much

weight the company places on the non-financial portions of this evaluation process.

We have created an infographic (see Figure 2 below) to highlight some illustrative

examples of technical, organizational and behavioral ECMs that may be considered for

Grass Roots Grocery, depending upon the outcome of the situation analysis and

strategy development.

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Figure 2 - ECM Development

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4. OPTIONAL SERVICES: IMPLEMENTATION AND PROGRESS MONITORING

Writing a SEMP does not guarantee that the strategies and measures included in the

document will be implemented. Progress monitoring is essential to ensuring that

proposed measures are implemented and that the SEMP stays on track. G3

recommends conducting a formal SEMP progress update annually, along with semi-

annual reviews to resolve any roadblocks as soon as possible. G3 will work with Grass

Roots Grocery to identify metrics that are meaningful to your organization and that can

be used as the basis for ongoing progress monitoring and reporting.

A big part of what makes G3 the top choice for organizations in Western Canada when

they decide to become more energy efficient is the option to have our team help them

successfully implement the actions identified in their strategic plans. Once our team of

consultants has developed a SEMP for Grass Roots, we can work with you to help

implement the action items that have been identified in the plan. We look forward to the

opportunity to work closely with your company to assist with the initiation and

implementation of projects.

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Figure 3 - SEMP Implementation Scope (Alexandre Herbert, CESA 5850 BCIT 2016)