Creative Energy Financing and Employee Behavior in City of Tempe

Location: City of Tempe, Arizona, USA

Population: 187,454 (2019)

Climate: Arid, the average annual temperature is 23.1 °C, and the average yearly precipitation is about 258 mm.

Duration: 2010-2012

Sector: Buildings

Funding sources: Public-private

City networks: Southwest Energy Efficiency Project (SWEEP) (since 2001, still ongoing [source])

Savings: 30% saving in annual energy costs for the 23 public buildings covered under the project and a reduction of 4246 tCO2 in GHG yearly emissions [source].

Solutions: Energy savings performance contract (ESPC) between the municipal government and an ESCO for public building upgrade and operation.

Multiple benefits: Job creation, energy cost-saving, and GHG emission reduction

Objective – To improve the energy efficiency of municipal public buildings; to promote energy conservation behaviours among employees in public buildings; to reduce energy costs in public buildings.

Solutions – In 2010, the City of Tempe selected Ameresco (formerly APS Energy Services) to audit 23 city facilities and identify ways to reduce energy consumption and utility costs. The 23 city facilities include City Hall, five fire stations, one fire training facility, one police substation, three community centres, the Performing Arts Centre, and Diablo Stadium (the spring training home of the Los Angeles Angels baseball team).

The ESCO designed and implemented projects to improve building energy efficiency. As part of the contract, the ESCO guaranteed that building improvements would generate energy cost savings sufficient to pay for the project over the contract term. In turn, the agency paid the ESCO a share of its savings due to conservation improvements. Upon contract termination, all additional cost savings accrue to the agency. The ESCO was responsible for maintaining the installed equipment and measuring building energy consumption and savings in the interim.

Energy conservation measures included lighting retrofits, heating, ventilation, air conditioning (HVAC) retrofits; control system installations; retro-commissioning; water-saving opportunities; and operation and procedural maintenance changes. The ESCO provides measurement and verification services for four years and an equipment guarantee for fifteen years.

Apart from equipment upgrades, the project also includes behavioural changes in operations and maintenance procedures. For example, the custodial shift changed from nighttime to daylight hours in order to reduce evening HVAC and lighting loads. New thermostats were set to 23.9 °C in summer and 20 °C in winter. Employees can only adjust their office thermostats by 1.7°C up or down, instead of any range, to help save energy city and money. Employees also helped by emptying recycling and trash cans in common areas, vacuuming their own offices, and turning off computers and lights when not needed.

Funding – The $8.7 million project was funded using $930,000 in Energy Efficiency and Conservation Block Grant (EECBG) funds, $375,000 in utility rebates, and $7.3 million in Qualified Energy Conservation Bonds (QECB). A QECB is a taxable bond issued by the local government to finance one or more qualified conservation projects. The $7.3 million special low-interest bonds, which will be paid over 15 years through utility cost savings of $550,000 per year due to reduced power consumption.

Innovation – Energy savings performance contract (ESPC) between the municipal government and an ESCO, shared energy-saving to pay ESCO company, and including behaviour change of users in public building energy retrofit project.

Success factors – The use of creative alternative financing, the involvement of an energy service company (ESCO), and employee participation.

Significant outcomes

• The entire project is estimated to save the City $550,000 annually – $440,000 each year from the building upgrade work and $110,000 from operations and maintenance procedures changes.
• A reduction of 4246 tCO2 in annual GHG emissions.

Synergies with local policies:

• As utility costs continue to increase, the City must look for new ways to conserve resources and energy [source].
• Tempe’s Climate Action Plan: the city has set a goal of carbon neutrality in municipal operations by 2050 with a 100% renewable energy strategy by 2035. Baseline (2015): 40,670 metric tons.

Political alignment: N/A

Marketability: N/A