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The Seven Prop 39 Pressure Points

Critical for California Schools to Get on their Best Energy Efficiency Footing

Jim Maclay
Altura Associates

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California Proposition 39 (Prop 39) offers schools across the state a leg-up in their efforts to reduce energy costs and carbon emissions, while providing students, teachers and staff comfortable spaces that support learning. Since the 2012 passage of the California Clean Energy Jobs Act, schools can apply to the California Energy Commission (CEC) for funds to cover energy upgrades. $5B over five years has been made available. It’s a welcome program, especially to distressed school districts that have long deferred HVAC equipment maintenance. Energy management and education departments in other states are watching the rollout and hoping that success in California will help inspire similar tax-funded programs for their own schools.

GraphicWhat differentiates Prop 39 funding and makes it more palatable to taxpayers is that participating districts are required to set and achieve energy efficiency targets. It’s not simply free money to buy new HVAC units to replace the old. It has stipulations that challenge school districts to strive toward facility operation and maintenance best practices.  It is valuable for districts to get familiar with the new world of digital controls and data analytics so they can deliver credible tracking and reporting of energy savings. It is usually necessary to bundle control measures with HVAC retrofits in order to meet Prop 39 criteria for funding.  It’s a lot to ask of school business officers, culturally and technologically. Concepts like retro-commissioning and ongoing building commissioning are new territory. And the vision that guides any early investment in automation and control should encompass the eventual addition of renewables. Energy consultancy firms like Altura Associates deal with these topics everyday, and some California school districts are turning to us to walk them through the Prop 39 process. Here is a short list of the pressure points we know exist and some notes on how our oversight can help in acquiring Prop 39 funding: 

1. Sales Pitch Immunity
Adding to the potential for wrong first steps, the lure of the Proposition 39 money pot has energy service companies (ESCOs), big equipment vendors and new players in HVAC control, lighting and renewable energy knocking on school district doors to pitch their products and services. All this sales attention and sense of urgency to act on Prop 39 can be overwhelming. Districts do need help putting together their energy expenditure plans as stipulated by the program. But, it would be a mistake to take too many cues from any one service or product vendor. The Prop 39 project team needs unbiased leadership and a focus on the unique situation of the particular schools targeted for funding. Each site may differ in terms of community support structure, the current state of buildings, the particular equipment already installed and, most importantly, the skills of the maintenance and operations staff. Outside vendors with their profit motives are not going to be sensitive to all these factors, so don’t hand over the reins to them.

2. Initial Benchmarking Audit
The Prop 39 process calls for a preliminary benchmarking of the current energy use intensity (EUI) of each school in a district’s portfolio to establish baseline usage. This step is about gathering utility bill histories to see which properties are showing energy waste tendencies and ripe savings opportunities. Usually you can collect or derive sufficient EUI data without a laborious onsite inspection or conventional ASHRAE audit. The objective here is high-level, portfolio-wide decision-making.

However, be careful about using energy bill data alone: It can be deceiving! Someone unfamiliar with the actual properties might see one building on campus paying $4.50/sqft in energy and conclude that it is operating much less efficiently than surrounding buildings at $2.50/sqft. This might not be the case at all. The former building may hold summer school, energy-intensive lab equipment, or house a central kitchen facility with ovens and freezers. Its space may be booked longer hours or have much higher occupant density. So, it could be operating very efficiently while paying $4.50/square foot for energy, while some $2.50/sqft building could be unoccupied for long periods and wasting energy.

The initial benchmarking audit should not be an opportunity wasted. When combined with the utility data, a few samples of building equipment trend data carefully-selected to represent different operating conditions (occupied vs unoccupied, school day vs week-end, summer vs winter) can tell a lot about current efficiency. This data is readily available from any school buildings already equipped with digital-control HVAC units or a building automation system (BAS). Districts can use Prop 39 funds to get BAS connectivity into more schools as a first measure. Then they can do Connected Building Commissioning (CBCx) for subsequent EUI benchmarking and measurement and verification (M&V) of any efficiency measures.  This will ensure that energy conservation measures truly deliver savings and that those savings persist.

3. Energy Management Skills Development
In previous school building booms, commissioning was considered an optional extra cost tacked on to the design and construction process. Many times this step was skipped. So, today it is not unusual for Altura to find in its Prop 39-related school audits that up to half of the HVAC units installed are not operating as they should be. There’s a likelihood that the automation control sequence programs have never been correctly tuned. Some facilities people don’t effectively schedule the BAS to shut down building equipment over holidays and during the summer when school is out. Sometimes you’ll see that controls have been ripped out.  Operator skills development is wise allocation of Prop 39 funds.

Some fortunate districts have a dedicated energy manager that knows how to use the BAS systems for remote visibility and controllability. But, often the first-priority investment of Prop 39 funds is the hiring of someone with up-to-date skills in automation and controls to fill this need. In some cases, if it’s feasible given the number of district properties, neighboring districts are joining forces to share energy manager staff. Altura will help train the people that school districts hire or promote into the energy manager role.

4. Tracking and Reporting via Connected Commissioning
To fulfill the energy tracking and reporting requirement of the Prop 39 program, it is helpful to set up school buildings for ongoing commissioning. Altura is an advocate of Connected Building Commissioning, or CBCx, which involves the use of cloud-hosted fault detection and diagnostics (FDD) software to remotely monitor a building looking for issues such as aberrant space temperatures, insufficient cooling capacity, equipment operating during unoccupied periods, short cycling problems and other anomalies that signal energy waste and lead to equipment degradation. To do CBCx you need to be able to capture and archive trend data from potentially thousands of measured HVAC, water and lighting points in the school building. Basically, the FDD software compares the trend data against rules that define acceptable tolerances for measured points when the building is operating as intended. Certainly, some local school facilities teams are dubious at first about how automated FDD is going to save them time. But, when we show them how it works when set up correctly—how it gives them a new window into the inner workings of the buildings they already know so well—they embrace the concept.

5. Energy Expenditure Plan
Based on the energy audit, school districts submit an energy expenditure plan to the CEC. Beyond guiding Prop 39 teams to prioritize investment in the hardware, software and skills that will put their building operational data at the fingertips of knowledgeable district staff, Altura brings certain budgeting and financial strategies to the planning table. Districts have separate capital and operating budgets and it may be challenging to fund HVAC and DDC control upgrades. Prop 39 allows schools to bundle HVAC retrofits with other energy conservation measures (ECMs) - that is, combine controls with capital retrofits - to meet funding criteria. ECMs need to meet a minimum savings to investment ratio (SIR) of 1.05 to qualify and it is important to know how to effectively bundle ECMs.

Then, because there’s always more work than can be funded by Prop 39, we help schools evaluate financing options for the rest of their energy expenditure plan. For most applicants, Prop 39 money is seed funding, that may be combined with bond funding or utility incentives to cover all project costs. It’s also important to focus on measures that establish a sound foundation for future steps — like additional ECMs and renewable energy systems.

6. RFPs and Bid Review
Altura can also guide a public RFP process for contractors such as design-build firms and ESCOs. This can help districts interested in performance contracts or power purchase agreements (PPA). We work to encourage a good sample of competitive bids. Then we use life-cycle calculation tools to run an analysis on the bids to show the district where their best options are.

When reviewing PPA bids from third-party solar developers, you must compare initial PPA electricity rates and escalators to the business as usual scenario of purchasing utility electricity. Escalation rates can have a significant impact on PPA costs over time since they are compounding. Therefore, you must know what escalation rates are realistic for your utility provider in order to compare a PPA to utility purchases. This may be challenging territory for districts to navigate. When Altura is involved in the RFP, we stipulate the escalator, asking "what initial electricity rate can you give us based on a fixed escalator." This allows us to compare each bidder apples-to-apples. Then we ask "Is this a solid provider?  Are they going to be around for 20 years?” In one case, a school district had a persuasive PPA provider for solar come in off the street.  We advised the school’s Chief Business Officer to not take the offer and instead initiate a public bid process.  In the end, when you compared the deal they went with after the Altura-led public bid, their life cycle savings were 16 times greater than what the first PPA provider was offering.

Control Solutions, Inc 7. Workflow Design
Another way an expert building commissioning firm like Altura can work to stretch Prop 39 funding to higher levels of payback is by helping school district facilities teams rethink their workflow. For example, one district is using the funding to retrofit its HVAC equipment and Altura is suggesting that each classroom be equipped with wireless thermostats with space and supply air temperature sensors, as an additional component of that retrofit. We’re designing a workflow such that when a teacher says “It’s too warm in my classroom," district staff can remotely view data from the equipment and thermostats to know if cold air is being delivered to the space. If no cold air is delivered, resolution may come in the form of a maintenance call. However many times the unit is operating properly, and the fix may be as simple as asking someone onsite to open a vent. This visibility makes for smarter capital maintenance decision making. That's powerful.

Due to California’s chronic education budget shortfalls, too many children are sitting in classrooms where heating, cooling, ventilation and lighting is not only inefficient, but non-functional. This can have a significant effect on the learning environment. California Prop 39 is an opportunity for districts to upgrade old equipment and empower staff to oversee classrooms that are comfortable and conducive to learning. With an energy management consultant like Altura Associates on the project team, school districts will not only be able to stretch the funds available, they will protect themselves from missteps and gain expert guidance toward a more solid energy management future.


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