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Peoria City Council Has Stimulus Funds for Energy Efficiency

May 15, 2009

As part of the stimulus package from the federal government, the Peoria City Council has $1.1 million to be used in Peoria for energy efficiency measures. At the April 14th, 2009 City Council meeting, a Request for Council Action was received relating to this grant.  The suggestions of City staff have been very promising, but the Global Warming Solutions Group coalition is suggesting taking it one step further by creating a revolving energy fund.

By doing so, this grant money supplied by the federal government can help Peoria fund many more energy efficiency projects without using local tax payer dollars for funding.  The fund can assist Peoria and its citizens for many years to come with investments in energy efficiency, renewable energy and a “greener” municipal transportation fleet all offering continuous future savings to Peoria’s operating budget.

What are the requirements of the federal stimulus funds?

The city is receiving $1,174,300.00 from the Federal government to spend solely on energy efficiency. The purpose of this stimulus funding is to

  1. Reduce fossil fuel emissions in a manner that is environmentally sustainable and, to the maximum extent practicable, maximize benefits for local and regional communities

  2. Reduce the total energy use of the city

  3. Improve energy efficiency in the building sector, the transportation sector, and other appropriate sectors.

Results will be measured by jobs created/retained, energy savings, renewable energy capacity created, emissions reduced and funds leveraged.

What is a revolving energy fund?

Revolving Energy Fund is a recommendation on how this grant money can assist Peoria and its citizens for many years to come with investments in energy efficiency, renewable energy and a “greener” municipal transportation fleet all offering continuous future savings to Peoria’s operating budget.

A portion of the current grant money and later a portion of realized savings from the energy efficient retrofits made could be used to create a fund for additional projects. This would ensure the longevity of the current grant money and continue to provide the City with more realized savings with each new implemented project. This fund would be self sustaining and used for future projects such as the recommendations made earlier this year by the Energy Efficiency Task Force and future recommendations coming from the Peoria Sustainability Commission.

These federal dollars already require city staff to track the benefits of implemented projects. It will not take significant additional city staff time to calculate a percentage of the energy savings from projects implemented from the federal funds and then placed into a revolving energy fund to create a long term investment out of a one time bonus. The rest of the dollars saved will go into the capital budget.

A revolving energy fund (REF) is a sum of money dedicated to energy efficiency, clean energy, or other energy reduction measures. Revolving energy funds can be structured in a variety of ways with an array of overarching objectives. Regardless of their structure, REFs provide a unique opportunity for municipalities to guarantee a continual stream of funds for energy efficiency, conservation, and clean energy work without tapping into existing capital cycles.

Common objectives for REFs.

  • To facilitate energy management and/or energy retrofits
  • To demonstrate a municipality’s commitment to environmental stewardship and/or energy conservation
  • To internalize energy conservation into existing operations
  • To make operations more resilient to rising energy costs
  • To help finance the installation of energy saving measures
  • To promote the implementation of innovative environmental projects
  • To promote the use of and further promote renewable resources
  • To reduce operating expenses by installing more energy efficient measures

Common identified goals for REFs:

  • Achieve a predetermined level of cost savings
  • Achieve a predetermined level of energy savings
  • Build to a predetermined financial level
  • Use REF to finace innovative projects that would traditionally be unfunded.
  • Use the REF to educate municipal emplyees about energy and climate
  • Use the REF to help institutionalize climate and energy work in to existing departments

Benefits of a Revolving Energy Fund

  1. Allow completion of a project that would not be funded through the capital budget cycle. You are ensuring a pot of money to implement worthy energy efficiency projects without impacting the capital budget.
  2. Reduces competition for municipal internal capital. By having a pot of funds specifically focused on energy efficiency, you remove some internal competition for limited municipal funds.
  3. Demonstrates leadership and dedication to energy conservation
  4. Builds internal resilience to rising energy costs. Since REFs promote energy efficiency, REF monies will reduce energy consumption and Peoria’s overall energy costs. This helps protect us from the impacts of rising energy prices and amplifies the dollar amount saved from efficiency measures.
  5. Stimulates the development of jobs and expertise in the local energy services industry.
  6. Allows Peoria to make a long-term investment in renewable energy or energy efficiency. No significant budget cuts will be necessary in order to finance the new investment of renewable energy installations.

A Revolving Energy Fund is Municipally Focused

Funding is open to all departments within the city. There may be priority departments to direct funding towards. If a disproportionate amount of energy is being consumed inefficiently in a number of departments, it may be in the City’s best interest to target a portion or all of REF funding towards projects in those departments.

Specific Reasons why a Revolving Energy Fund is a good idea for Peoria:

  1. Energy Efficiency Task Force: This task force was comprised of city employees from various departments. The report generated included several recommendations reducing electrical use and fuel.  The city council received the Energy Efficiency Task Force Report in January 2009. The report documented that a number of capital improvements could be undertaken to reduce the cost of energy as well as emissions but that the price tag of upgrades to lighting, heating and cooling, roofs and other systems was often cost prohibitive with funds coming from the capital budget. With a Revolving Energy Fund the city will have the money to provide funding to implement these ideas over a long period of time.
  2. The Peoria Sustainability Commission: The purpose of the Peoria Sustainability Commission is to provide the city with a working short and long term best practices plan to formulate a sustainable Peoria. Creating a REF will provide funding to invest in the recommendations coming from the Sustainability Commission such as the building of a “Sustainability Center” for public use.
  3. We are getting the most bang for our buck. This is the best way to immediately reap the benefits of energy savings into the capital budget and provide the city with funding for future savings.
  4. This is a one time bonus from the federal government. There are no guarantees Peoria will ever see “free” money like this again. Wouldn’t it be better to have a long term savings plan in place to essentially make this federal money last forever versus using it all on a short term basis?
  5. Creating a REF meets one of the criteria on the application for the funds by implementing a long term investment strategy.
  6. Continuous ability to improve air quality in Peoria.

Here is a simple graph of proposed energy efficiency upgrades city staff have already submitted to the Mayor and City Council. A column for a proposed REF is included in this example as a demonstration of savings.

Municipal Building Energy Efficiency Measure Estimated Cost Estimated Annual Savings Possible % into REF % into Capital Budget
Police Headquarters Replace Air Handling Unit 1 $60,000.00 $46,933.00 $23,466.50 $23,466.50
Replace Air Handling Unit 2 $60,000.00 $46,933.00 $23,466.50 $23,466.50
Install energy efficient lighting $60,000.00 $ 5,168.22 $ 2,584.11 $ 2,584.11
City Hall Insulate Attic $45,000.00 $42,300.00 $21,150.00 $ 21,150.00
Municipal Services Building Install energy efficient lighting $40,000.00 $ 3,445.00 $ 1,722.50 $ 1,722.50
Twin Towers Offices Install energy efficient lighting $60,000.00 $ 5,168.00 $ 2,584.00 $ 2,584.00
Totals for 2009: $325,000.00 $149,947.22 $74,973.61 $ 74,973.61
The REF money will be saved every year and then invested in other energy efficient measures such as:
Municipal Services Building Replae Air Handling Unit #1 $60,000.00 $ 1,168.00 $ 584.00 $ 584.00
Twin Towers Deck Replace exit lighting with LED $ 1,050.00 $ 856.00 $ 428.00 $ 428.00
Niagara Deck replace exit lighting with LED $ 1,800.00 $ 1,467.00 $ 733.50 $ 733.50
Jefferson Deck replace exit lighting with LED $ 1,800.00 $ 1,467.00 $ 733.50 $ 733.50
Tech Deck replace exit lighting with LED $ 2,850.00 $ 2,322.00 $ 1,161.00 $ 1,161.00
Totals for 2010: $ 67,500.00 $ 7,280.00 $ 3,640.00 $ 3,640.00
The REF money will be added to the $75k continuing from 2009 giving Peoria $78k for investments in 2011. Note the city is continuing to save as well.

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