Making MUSH Energy Efficient

Satya Rhodes-ConwayCOWS

June 16 2011

COWS“Milk for the Movement”

Research center at UW Madison

“Think-and-do tank” for high-road economic development

Good jobs and clean energy

MUSH?

Municipal/Government, University, School, and Hospital - Buildings under governmental control State, County, City, Town, etc. schools (public and private);

colleges, universities, and technical colleges

hospitals, clinics, and other healthcare facilities

assorted large institutional buildings, such as museums, places of worship, and nonprofits

Number of buildings?

Type of Building Owner Number

State 50

City 19,492

County 3,033

Town 16,519

Special District 37,381

School District 13,629

Private K-12 School 33,740

Charter School Agency 2,236

Public Higher Education 2,672

Private Higher Education 2,823

Hospital 5,795

Total 137,370

Key Attributes Decision-makers usually control multiple

buildings Energy intensive buildings

Older significant energy users such as water utilities,

water treatment facilities, hospitals Energy costs can be up to 10% of a municipal

Beyond the profit motive No split incentive Longer time horizon

Energy Efficiency Investment-grade audit measures that increase the energy

efficiency and are cost effective over a reasonable time horizon efficient lighting improved heating, ventilation and air

conditioning systems tightening the building envelope Motors and appliances Etc.

Ongoing building management

Why?

Pete Davis

Save Money Reduce Emissions

air quality public health global climate

disruption Increase Energy

Security price volatility supply disruption

Economic Development direct spending redirection of dollars

saved Comfort and Health

Increased productivity Decreased

absenteeism higher student test

scores

Current Status Energy Services Corporations

(ESCOs) have worked in this sector for decades

market penetration in the MUSH sector: 20% to 50% comprehensiveness of the retrofits

performed? new technology

Plenty of opportunity

Barriers Upfront capital cost Inability/limited ability to borrow/bond and

impact of project bonding on credit rating Diffuse control of buildings and/or building

systems Lack of reliable information on energy

expenditures Turnover in elected/appointed leadership Lack of experience with energy efficiency,

ESCOs, etc.

Principles Job Quality and Opportunity

Direct control over the contracting process Ensure that jobs created are good

Sustainable Financing Managing your own project may be cheapest

General Obligation bonds (secured by the ability to levy taxes) Revenue bonds (secured by the expected revenue, in this

case the expected savings) Qualified Energy Conservation Bonds (QECBs), a relatively

new type of taxable bond subsidized by the Federal Government

Work with ESCOs Capture a portion of the savings for use on future

projects

Principles Data-driven decisions

which buildings ought to be retrofitted, in what order, using which technologies? EnergyStar Portfolio Manager

measurement and verification Deep Retrofits

longer payback periods and higher upfront costs increases in energy savings, job creation, and

environmental benefits energy savings from buildings with significant

savings potential can be used to offset the cost of pursuing retrofits in buildings with less potential

Principles Build strong and independent partnerships

Housed in a non-political department or in a separately created new entity

If a program is contracting with an ESCO, the use of an Owners Agent

Build a coalition Maximize scale

aggregating properties with similar entities bundled with other capital improvement or renewable

energy generation larger organizations (especially states) assist smaller

entities by facilitating aggregation, providing technical assistance, or creating a pool of capital

Principles Best practices in workforce development

connecting individuals to construction apprenticeships Community Workforce Agreement (CWA) high-quality pre-apprenticeship or contextualized basic skills

training social services

Implement complementary policies drive demand for in the commercial and residential support a contractor base and workforce able to meet that

demand Generating market demand for efficiency through labeling Requiring energy efficiency upgrades through

Residential/Commercial Energy Conservation Ordinances or retro-commissioning programs

Possible savings MUSH floor space

about16.5 billion sq ft. uses about 3.87 quadrillion BTU a year energy costs about $40.7 billion a year 20% savings would be $8.1 billion dollars per year

Example: City of Milwaukee municipal operating budget of $69 million per year controls 229 buildings spends approximate $16 million per year on energy. could save nearly $5 million per year

Possible jobs Primarily construction jobs Every $1 million spent on energy

efficiency projects creates or retains between 4.3 and 8.6 FTE

Between $38.3 billion to $61.2 billion needed to upgrade the entire MUSH sector

Potential to create between 164,690 and 526, 320 FTE

How? Assess your building stock energy use and

prioritize Audit Financing options

Bonding ESCO, municipal lease Design/Build

RFP owner’s agent Include labor standards

Capture savings Track building performance

It makes sense… economic crisis unemployment rates (especially in the construction

sector) environmental imperative large-scale energy efficiency building retrofits drive

job creation economic, environmental, and community benefits Relatively straightforward

buildings are controlled by those who have a broader public interest

can determine how much energy they use can finance the retrofits can ensure that jobs created are good jobs

….it doesn’t make sense not to

satya@cows.org608 262 5387www.cows.org

www.efficiencycities.org