Pasadena Water and Power Authorize a Contract with

Pasadena Water and Power Authorize a Contract with Staples Energy for Commercial Energy and Water Direct Installation Program Services City Council August 28, 2017 Item 11

Recommendation Pasadena Water and Power • CEQA Exemption: Section 15301 (Class 1: Existing Facilities) • Authorize a Contract with Staples Energy: > For the installation of energy and water conservation devices, equipment and services for the Pasadena Water and Power (“PWP”) Water and Energy Direct Install Program (“We. DIP”) > Not to exceed $3, 685, 285 over two-years > Option to extend 1 year, not to exceed $1, 314, 715 > Total not to exceed $5, 000 over 3 years 2

Background Pasadena Water and Power • PWP Launched We. DIP in 2013 > Commercial customers with less than 30 k. W rating > Free installation of water and energy saving measures > Limited to $7, 500 per customer account > Typical customers include restaurants, convenience stores, hair salons, small retail and business services > Completed 1, 000+ projects for over 600 customers > Annual water and energy savings exceed § 2. 5 million gallons per year § 1 million k. Wh per year 3

We. DIP History Pasadena Water and Power • Annual Funding in $000 Fiscal Year 2014 2015 2016 2017 PBC Funding 743 402 552 700 Water Funding 54 15 152 150 Total Funding 797 417 704 850 1, 015, 000 1, 027, 000 1, 300, 000 662, 813 4, 806, 000 4, 500, 000 Energy Savings (k. Wh) 2, 299, 000 Water Savings (gal. ) 2, 606, 808 4

We. DIP Expansion Pasadena Water and Power • PWP awarded Grant > $1. 2 million from the California Department of Water Resources (“DWR”) for FY 18 -FY 19 > Enables PWP to serve an additional 125 customers per year over the 24 -month grant period § Customers with up to 50 k. W rating § 85% located in the Disadvantaged Community (“DAC”) census tract area > Additional efficiency measures targeted in the grant > Continued limit of $7, 500 per qualifying account > Expanded program expected annual savings of 7. 7 million gallons of water, 4. 1 million k. Wh in energy and 2, 359 MMBtu of natural gas 5

DAC Map Pasadena Water and Power 6

Recommended Contract Term Pasadena Water and Power • Contract: $3, 685. 285 over 2 years > One-year extension at additional $1, 314, 715 § Estimated $1. 2 million reimbursement from DWR Grant § Estimated $225, 000 reimbursement from So. Cal Gas > PWP’s net cost is estimated at $2, 214, 715 over initial two year term and additional $1, 314, 715 if extension is granted > Funding through combination of DWR Grant, So. Cal Gas, PWP’s Public Benefits Charge (“PBC”) and the Water Conservation Fund budget 7

Funding for Proposed Contract 1 Pasadena Water and Power Efficiency Type Energy (E) Water (W) PWP Net Cost Natural Gas (NG) E, W, NG Total Cost Funding Source PBC Fund (PWP) Water Fund (PWP) So. Cal Gas* DWR Grant* Costs Year 1 & 2 Cost Year 3 Extension Annual Savings 2 Lifetime Savings 2 1, 914, 715 1, 164, 715 4, 172, 637 51, 839, 013 k. Wh $. 06 300, 000 150, 000 7, 770, 653 85, 477, 185 gallons $. 005 $2, 214, 715 $1, 314, 715 225, 0003 0 1, 245, 5703 0 $3, 685, 285 $1, 314, 715 Lifetime Cost per Unit Saved Excludes PWP direct expenditures for program marketing and implementation. annual and lifetime savings over a three year Program if the optional one-year extension is approved. 3 Grant and So. Cal Gas funds cover a 24 -month period. 1 2 Cumulative 8

Recommended Vendor Pasadena Water and Power • Request For Proposals > 4 Responses • Staples Energy Experienced with commercial direct install programs Comprehensive and detailed statement of work Focused on a high level of customer service Cost competitive with other proposals 9 9 > >

Environmental Pasadena Water and Power • Exempt from CEQA > CEQA Guidelines Section 15301 (Class 1: Existing Facilities) > Proposed contract provides for improvements, but no expansion of use 10

Fiscal Impact Pasadena Water and Power • Cost of action up to $5, 000 over a three-year period, FY 18 -FY 20 Funding Source Account FY 2018 FY 2019 FY 2020 * Total So. Cal. Gas 41600010 -702300 112, 500 0 225, 000 PBC Fund 41609140 -821510 750, 000 1, 164, 715 3, 079, 430 Water Fund 41407820 -821500 150, 000 450, 000 CDWR Grant Funding 41600010 -702300 622, 785 0 1, 245, 570 Staples Energy Contract Total $3, 685, 285 $1, 314, 715 $5, 000 Net Cost to PWP $2, 214, 715 $1, 314, 715 $3, 529, 430 *Optional one-year program extension 11