Energy Innovation Committee Minutes of May 31, 2007

[Diane Blevins]

Proceedings of the Board of Trustees

District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

May 31, 2007

 

Call to Order

 

The Energy Innovation Committee Meeting of the Board of Trustees of School District No. 2, Yellowstone County, Montana, and High School District, Yellowstone County, Montana, was duly held at The Lincoln Center, 415 North 30th Street, Billings, Montana, on May 31, 2007 at 4:00 p.m.

 

Members present included Rich Whitney, Trustee Joel Guthals, and Jeffrey Gruizenga. Members absent were Larry Grendal and Ed Gulick. Others present included Jim Jelle, Scott Anderson, Ed Graff, and Tom Harper.

 

Communication from the Public

 

Ron Pecarina reported he was attending to observe the direction of the committee.

 

Approval of Minutes of February 22, 2007

 

The Chair tabled the minutes until the next meeting so members would have an opportunity to review.

 

Evaluate Two Proposals for Resource Conservation Management Program

 

Rich Whitney, Director of Facilities, presented the handouts on the proposals submitted for reducing the District’s energy costs. The Request for Proposals were advertised throughout the region and two proposals were received. One proposal was from Energy Education Inc. (EEI) and the other was from Integrated Energy Solutions (IES). The proposals contain the answers to the eight questions given by Mr. Whitney. The committee reviewed the proposals.

 

Integrated Energy Solutions would provide all of the personnel without direct cost to the District. There is 10% of the cap as a mobilization fee and is part of the not-to-exceed fee of $208,737, which is the annual fee and is calculated on savings. The companies were provided with the actual utility costs and information on the buildings and they projected the savings. Three options were included in the proposal. The first option is a three-year program and the District would hire the specialist. The second and third option contains a person employed by Integrated Energy Solutions. The third option offers the least risk to the District. Savings are generated because details are being watched carefully. The cost of the program in the first option is $208,737 in the first and second year. It is $149,098 a year for five years in the second option. The third option is for a two-year program without the District hiring a specialist and the District would have no risk, but would be able to witness the development of the program for two years.

 

Savings in the first option from Integrated Energy Solutions would be $238,557 the first year, and in the second option it would be $298,196. The company uses a software program to validate the savings and is a web-based utility tracking program called EASE-G. The number of on-site consultant visits each year will be determined by how the program is progressing but will normally have between two and four visits a month. The proposal is based on behavior and working with current hardware, the company will point out capital investment opportunities that have a quick payback option.

 

The committee reviewed Energy Education’s proposal which projects a $4,284,000 savings in seven years. The savings matrix is similar to the second option from Integrated Energy Solutions. Energy Education requires the District to employ the manager. An extra $600,000 would be incurred in the proposal but would be two years longer than the proposal from Integrated Energy. The seven-year program would cost $1,370,000 which would be $600,000 over the proposal from Integrated Energy.

 

Option #2’s focus is on the intensity by maintaining over a five-year period. Mr. Whitney felt if the committee could get the ball rolling and maintain focus, there is a potential to show the savings as projected. Another suggestion was to use a software to validate the progress. The second option is based on behavior and current hardware and would aide capital investments and would have a rapid payback. Energy Education projects $4,284,000 over a seven-year period. The matrix savings is about the same as option #2 on IES. Energy Education requires the District to employ the manager. An extra $600,000 would be incurred but their proposal is more years. EEI also gives more extensive references than IES. However, neither companies allocate anymore dollars to fix inefficiencies so funds should be allocated to fix the programs that might arise. Mr. Gruizenga stated he liked both proposals and wanted the savings to go back to the District in order to put them into the large white elephants when needed. A suggestion would be to put 25% into the general fund and 25% into the emergency building maintenance fund. Incentive programs for schools were also suggested. Mr. Gruizenga felt the approach is that both companies could save the District money if they could fix the problems. He voiced his skepticism on the total projected amounts and felt they were high but there is a potential to make savings. He projected reasonable savings between 12-15%, not 20%. He was not familiar with IES but liked the proposal on the percentage of savings and the costs appeared to be more manageable.

 

Trustee Guthals suggested that the members call the references listed by each company before the next meeting. White elephant projects were listed as Skyview’s chiller, projects at Big Sky, Will James, Career Center, and the Central Heights boiler. Mr. Whitney reported he would check references on IES so that similar information is received on both proposals. Ed Graff, EEI, stated he was totally comfortable with the projected numbers and his company exceeds their numbers 80% of the time. Trustee Guthals asked Mr. Graff if EEI would go with a straight percentage of the savings and he reported he did not have the authority but would let them know as soon as possible. When asked if EEI has had any past litigations, Mr. Graff replied he was not aware of any.

 

Scott Anderson voiced his concern about the buy-in by the teachers and principals. Mr. Graff stated that it was usually only the custodial staff, facilities staff, and food service staff that save the most. Mr. Anderson felt there would be good support in the departments.

 

Ron Pecarina reported the energy program has been part of the energy audits that have been done in the last few years. The percentage of 10-15% savings is reasonable and is based on behavioral management. The greater savings will come from making sure things are being done.

 

Explanation of Clean Renewable Energy Bond Program and Status Report on Progress in Identifying Projects

 

Trustee Guthals reported there are funds available under the Clean Renewable Energy Program for the District. The deadline to get the proposals submitted is July 13, 2007. The Board has authorized the engagement of Matney-Frantz Engineering Firm to work on putting together applications to get into the programs. Mr. Guthals hoped that they will identify some projects and the committee would need to review them before the filing of the applications. The project is being conducted by a special division of the IRS. After the feasibility study, the District would make a decision if they want to go forward. There is a $1,000 fee per application and the board has authorized up to $3,000 or three applications. If feasibilities are approved, the Board would meet to determine if it would commit on the applications. A concern was raised about infrastructure. Trustee Guthals stated the market now is for wind power and Matney-Frantz reported there are funds available but would have to be paid back in 16 years. It is projected the project would pay for itself in nine years and there would be no more payments in year ten. Mr. Gruizenga felt sound might be a problem as schools are in residential areas. City Council will be contacted for their input.

 

Identification of Energy Saving Projects for FY2008 (Fast Payback Projects That Can Be Funded with Deferred Maintenance and Weatherization Money

 

Trustee Guthals stated that he would like the committee to work with the Board on the 2007/08 budget and earmark deferred maintenance and weatherization funds for identified projects. The committee reviewed the handout given by Rich Whitney. The Skyview heat exchanger is a project that should be done now and would payback itself ($100,000) in 18 months. For building management systems, the plan is to continue to get schools onto current internet based building management systems and off the 1980 STAEFA system that we can no longer buy parts for and the potential sites include Senior, Lincoln, West, McKinley and other elementary schools. There are 5 rooftop HVAC units at the Career Center that need to be replaced for a cost of $725,000 and would pay itself back in 7 years. The Senior High Phase 2 HVAC Project’s cost is $2,500,000. Big Sky Elementary and Will James variable frequency drives need to be replaced and could pay back within a few years. The cost for the equipment at Will James is $40,000.

 

Mr. Whitney reported he wanted to wait until the final budget figures are known before making any decisions on elementary projects. Trustee Guthals stated he did not want to let the dollars and opportunities slip away. The final budget adoption date is by August 15th. Mr. Guthals suggested the focus be on projects that will show a return and the building management system is a critical item. Thomas Harper and Rich Whitney will work on some proposals before the next meeting. Rich Whitney will also do the initial engineering work and confer with Thomas Harper. The list will be refined and the committee will be called back together too make recommendations for the Board.

 

Trustee Guthals stated he appreciated Mr. Pecarina’s input and hoped he would consider joining the committee.

 

As there was no further business, the meeting adjourned at 6:15 p.m.

 

 

 

 

Joel Guthals, Chair

 

 

 

Diane Blevins, Recorder