California Energy Commission Research Development Research Development Food

California Energy Commission Research && Development Research Development Food Production Investment Program (FPIP) TITLE OF PRESENTATION Staff Draft Guidelines Name of Presenter Energy Research and Development Division Laurie ten Hope and Virginia Lew Title 9, of conference/meeting May 2018 Location presentation was given Date of meeting

California Food Producers Third largest manufacturing sector in California $82 billion contribution to CA economy Substantial job provider (198, 000 direct jobs, 562, 000 indirect jobs)* Large user of energy (7, 000 million k. Wh and 500 million therms in 2015) - costing over $1. 6 billion Emits over 3. 3 million metric tons of CO 2 equivalent emissions each year Helping these industries remain competitive and the jobs remain in California are crucial and this can be done by updating and improving facilities to reduce operating costs and GHG emission. * California League of Food Processors, Food Processing Industry Report, 2015, http: //clfp. com/flipbooks/files. NV 2015/assets/common/downloads/publication. pdf 2

Food Production Investment Program (FPIP) Established under the Budget Act of 2017, AB 109 “…shall be used to provide grants, loans, or any financial incentives to food processors to implement projects that reduce greenhouse gas emissions. ” $60 million from the Greenhouse Gas Reduction Fund to fund projects that reduce GHG emissions FPIP and proposed guidelines were developed with input from the following: Food Processing Task Force (industry, trade organizations, government agencies and utilities) Public comments received from public workshops Public comments received at the FPIP docket 3

Program Goals Reduce GHG emissions Adopt commercially available and advanced energy technologies Provide technical confidence for further technology adoption Benefit priority populations (disadvantaged communities, low income households)* *as defined by SB 535 and AB 1550 4

FPIP Guidelines provide information on: • How the program will be structured • Who and what technologies are eligible • What criteria will be utilized in application scoring Periodic grant solicitations will be issued, in conformance with the Guidelines 5

Eligibility for FPIP All Food Processors Defined as NAICS codes 311 -3121* (Food & Beverage) Applicant must be the food processor Facility must be located in California Projects must have GHG emission reductions Meet other eligibility criteria defined in the Guidelines * North American Industry Classification System: https: //www. census. gov/eos/www/naics/2017 NAICS/2017_NAICS_Manual. pdf 6

Proposed Project Funding Categories Tier I Focus is commercially available, drop-in replacements or additions • List of technologies identified in the Guidelines • Flexibility to add “other” if it meets all the following attributes: • Commercially available technology • Energy efficient equipment that is a drop-in replacement or addition to current systems • Result in greater GHG emission reductions and higher efficiency than current best practices or industry standard equipment 7

Proposed Project Funding Categories Tier II Focus on adoption and demonstration of cutting -edge emerging technologies • List of technologies identified in guidelines • Flexibility to add “other” if it meets all the following attributes: • • Cutting-edge and emerging technology Technology is not widely used in California Not drop-in ready equipment replacement or addition Proven elsewhere to reduce greenhouse gas emissions 8

Proposed Eligible Costs and Funding Levels Tier Percent of FPIP Funds Eligible Costs Items I Up to 100% • • II Up to 50% • • • Estimated Award Size Maximum Grant Minimum Match Equipment M&V* $100, 000 to $3 million 65% of eligible cost 35% of eligible cost Equipment M&V* Engineering & design $2 million to $8 million 85% of eligible cost 15% of eligible cost No installation costs allowed for either tier. Technologies eligible for Tier I are not eligible for Tier II and vice versa. * Measurement and verification 9

Bundling and Priority for Funding Tier I II Bundling Allowed: • Bundling of technologies within the same facility • Bundling of multiple facilities within the same company Allowed: • Bundling of technologies within the same facility Not Allowed: • Bundling of multiple facilities Priority for Funding Priority assigned as follows: 1. Capped facilities* + facilities under the same ownership 2. Facilities required to report GHG emissions** + facilities under the same ownership Priority assigned as follows: 1. Capped facility* 2. Facility required to report GHG emissions** * Capped facilities are those emitting ≥ 25, 000 MTCO 2 e/yr ** Facilities covered under CARB mandatory reporting that emit between 10, 000 and 25, 000 MTCO 2 e/yr 10

Proposed Project Selection Criteria Application Screening: pass/fail administrative requirements—must pass all to continue to technical scoring Technical Scoring Criteria: Technical Merit and Need – justification for the project Technical Approach – critical factors for success and information sharing Impacts and Benefits – estimates of GHG emission reductions and cost benefit analysis (CEC $/per ton of GHG emissions reduced) Capped and Uncapped Facilities – priority consideration for capped facilities and those that are required to report GHG emissions Preference Areas (optional) Proposals that meet all the requirements of being located in and benefiting priority populations Equipment selected for installation is purchased from a California-based vendor 11

Solicitation Process • Provisions to fund additional round(s) if funds remain or if there additional funds in the future • Energy Commission reserves the right to: Ø Solicit proposals/applications for each tier separately or together in a solicitation Ø Limit the number/amount of awards per entity Ø Limit the number of applications per organization for each grant solicitation or for each tier Ø Narrow the specific pool of eligible projects for a particular solicitation 12

Errata Ø Chapter 2, page 5 Ø Quantification Methodology: Adoption of energy efficient and/or on-site renewable energy technologies Ø will reduce demand for electricity, natural gas and other fossil fuels. Reduction of natural gas and other fossil fuel demand will reduce criteria pollutants which could improve local air quality in communities near the food processing facility. Measurement and Verification: All targeted equipment and systems for retrofits must reduce GHG emissions through on-site reductions in electricity, and/or natural gas and/or other fossil fuel use or through the use of low global warming refrigerants. Limit the number/amount of awards per entity Ø Chapter 2, page 8 Ø Alternatives to natural gas or other fossil fuels Ø Internal metering and software to manage and control electricity, and natural gas and/or other fossil fuel use if part of a larger project that reduces energy usage Ø Chapter 2, Table 5, page 11, Technical Scoring Criteria 3. a. , item 2 Ø Other potential benefits for California including the following (as applicable): direct and indirect annual electricity, fossil fuel and thermal savings, (kilowatt-hour, and therms, Btu), energy cost reductions, other air emission reductions (e. g. , nitrogen oxides (NOx)), and any other co-benefits. Ø Chapter 3, page 14, Audits and Access to Facilities Ø … allow the Energy Commission or its designee to collect project-related data including the data required to measure and verify natural gas, electricity, other fossil fuels, and GHG emission reductions. 13

Tentative Schedule Date Event May 2, 2018 Release final draft guidelines May 9, 2018 Consider adoption of guidelines at Energy Commission Business Meeting May 2018 Release grant solicitation (GFO) June 2018 Pre-application workshop August 2018 Grant applications due September 2018 Post Notice of Proposed Award (NOPA) November 2018 Grant awards to Business Meeting for consideration December 2018 Anticipated first round projects start date* * A second round or additional rounds may be held if funds remain from the first round or if there additional funds in the future. 14

Energy Commission Staff Acknowledgement The following Energy Commission staff have been instrumental in developing the program and the guidelines Kathryn Colson Mark Kootstra Pamela Doughman Elizabeth Flores Anish Gautam Cyrus Ghandi Donald Kazama 15

FPIP Contact: Cyrus Ghandi Email: Cyrus. Ghandi@energy. ca. gov Phone: (916) 327 -1506 Information on the FPIP and to subscribe to the listserv: http: //www. energy. ca. gov/research/fpip/index. html Public comments, guidelines, and other FPIP documents can be viewed at: https: //efiling. energy. ca. gov/Lists/Docket. Log. aspx? docketnumber=18 MISC-01 Workshop documents can be viewed at: http: //www. energy. ca. gov/research/fpip/documents/ 16