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HomeMy WebLinkAboutRes 2013-01 VEEP Resolution - Final Signed MEMORANDUM TO: Board of Directors Alaska Energy Authority FROM: Sara Fisher-Goad Executive Director DATE: March 20, 2013 SUBJECT: Village Energy Efficiency Program (VEEP) Regulations Staff recommends the adoption of the attached regulations which will enable the Alaska Energy Authority (“AEA” or “Authority”) to implement and administer the village energy efficiency grant program. A. VEEP Background The Village Energy Efficiency Program (VEEP) is an AEA grant program established under AEA’s general statutory authority AS 44.83.080. In 2010 the Alaska Legislature passed, and the Governor signed HB306 which included a statewide goal of reducing per capita consumption by 15% through energy efficiency. VEEP will help the state achieve its 15% goal by addressing energy consumption in public and community buildings in Alaska’s small communities. The primary purpose of VEEP is to lower the cost of energy in public and community buildings in small, high-energy-cost communities through the implementation of energy efficiency measures and conservation programs. The Authority has run similar programs, using a combination of state and federal funding. From 2003 through 2010, the Village End Use Efficiency Program used state and Denali Commission funds. From 2010 through 2012, the Village Energy Efficiency Program used federal funds under the American Recovery and Reinvestment Act of 2009 (ARRA). Both of these programs were well received and resulted in reduced cost of energy to the communities that participated. Results from the most recent three year program funded through ARRA include:  Participation in over 22 villages with measures in 150 buildings and pieces of public infrastructure  Implemented energy efficiency measures had an estimated simple payback period of 3.8 years  Projected benefits in reduced energy costs are returned at a rate of $2.61 for every $1 invested in efficiency measures (assuming a conservative 10-year life of efficiency measures and current energy prices) B. VEEP Proposed Regulations A new article will be added to the Authority’s regulations in 3 AAC 108 to provide procedures and details regarding the VEEP program. Board of Directors Memo VEEP Regulations Page 2 of 3   The proposed VEEP program will provide grants for energy audits, efficiency and conservation measures.  Efficiency measures are improvements made to a building or facility that incorporates a technology or building practice which improves the energy efficiency of that building or facility, including lighting retrofits, increased insulation, weather stripping, and automated controls. An end-use efficiency measure does not include conservation measures such as behavior change programs.  Conservation measures are limited to no more than $10,000 of the total grant award and may be used only for specific purposes detailed in the regulations 3 AAC 108.420. Eligible applicants for VEEP grants must represent an eligible community (8,000 population or smaller) and include:  Municipalities  School districts  Unincorporated villages  Native regional corporations  Village corporations  501c3 tribal consortiums  Regional housing authorities  Councils organized under 25 U.S.C. 476  Traditional councils The Authority will rank applicants based on a criteria described in the regulations in section 3 AAC 108.450. Description of Regulations and Changes. The following describes the regulations, including changes the Authority made to the initial publicly noticed draft regulations. 3 AAC 108.400. This section describes the purpose of the program, to conduct energy audits and implement cost saving energy efficiency improvements in public buildings and facilities, and implement conservation programs in eligible communities. 3 AAC 108.410. This section describes eligible applicants and communities. 3 AAC 108. 420. This section describes eligible projects. Program grants may be used to conduct energy audits of public buildings and facilities and for energy efficiency improvements to public buildings and facilities. No more than $10,000 of the total grant award may be used for energy conservation with eligible activities limited to: establishing workplace policies or programs, design and adoption of public building and public facility conservation programs, and conducting public education to increase community participation in conservation activities and implementation of efficiency measures. 3 AAC 108.430. This section describes the solicitation and public notice of application period. 3 AAC 108.440. This section describes the grant application requirements and optional information. Applicants may, but are not required to, include a specific intended purpose Board of Directors Memo VEEP Regulations Page 3 of 3   for the grant. In many cases it is anticipated that identification of specific efficiency measures will be part of the grant coming from an energy audit of buildings and facilities. 3 AAC 108.450. This section describes how the Authority will evaluate applications. Priority will be given to communities with high cost of electricity and heating energy, high energy demand due to climate, how recently the community has received other state funded efficiency in public buildings and infrastructure, community match, potential timing synergies with other energy programs, geographic distribution, and administrative capacity. 3 AAC 108.460. This section describes requirements of the grant agreement including a description of the circumstances under which the Authority will not require an energy audit to develop a project work plan and an outline of the components of the project work plan. 3 AAC 108.470. This section describes how the project will be implemented. In most cases the grants will be administered by the Authority through a third party service provider on behalf of the community, except in cases where the community requests to administer the grant directly. Project implementation and reporting requirements are also covered in this section as is a provision allowing third party service providers to provide efficiency services to entities within the community who are not part of the project if they do so without use of grant funds. 3AAC 108.480. This section details requirements of grant closeout. 3 AAC 108.490. Describes the process of reconsideration for applicants who are denied funding. 3 AAC 108.499. Definitions of terms used in the regulations. C. Public notice and comment Public notice was published by newspaper and on the State of Alaska Online Public Notice System. The notice was also sent to all members of the Alaska Energy Efficiency Partnership mailing list and forwarded on to individual interested parties. A public hearing was held on February 14, 2013. The public notice period closed March 6, 2013. The comments made at the public hearing and received by the Authority are provided in an attached report. D. Conclusion Staff recommends adoption of the proposed VEEP regulations. The VEEP program serves important public purposes to meet the 15% energy savings through efficiency by 2020 goal and to reduce the energy cost burden and improve sustainability in rural communities. Attachments Public comment and response matrix  Comment Submitted by Response Add Regional/Indian Housing Authorities to the list of examples of types of eligible applicants Association of Alaska Housing Authorities (AAHA)  Tanana Chiefs Conference (TCC)  Interior Region Housing Authority (IRHA)  Renewable Energy Alaska Project (REAP)  Cook Inlet Housing Authority Regulations were edited to incorporate the requested change (see 3 AAC 108.410(b)).  The edit is non‐substantive and clarifies the original intent. Add 501c3 Tribal Consortiums to the list of examples of types of eligible applicants IRHA TCC REAP Regulations were edited to incorporate the requested change (see 3 AAC 108.410(b)).  The edit is non‐substantive and clarifies the original intent. Add churches to the list of examples of types of eligible applicants.   In past, third‐party service provider when implementing a grant project has offered energy efficiency services to churches, but at the church’s expense.  Clarify policy regarding circumstances under which a church might participate associated with a grant project.  Daniel Lung The comment appears to address both the eligibility of applicants, and the types of buildings and facilities that might be included in a grant project. Eligible applicants must represent the interests of the community, and work with the community to develop a project work plan which describes how grant funds will be expended.  3 AAC 108.410(b) lists types of entities that would normally be expected to represent a community.     It is in the State’s best interests to maximize community benefits from any cost efficiencies that might arise from a grant project, as long as grant funds are not used for ineligible purposes. Comments regarding churches participating also apply to other private entities.  3 AAC 108.470(d) was added to clarify how grantees or third‐party service providers may offer services to others outside a grant funded project.  Increase upper population limit to 10,000 to allow smaller communities like Sitka to be eligible AAHA No change to regulations. The population limit was set at 8,000 by looking at Bethel, Alaska's largest high energy cost community, and estimating population growth for the next decade at around 3% per year. The program is intended to serve small communities with high energy costs.   Add indoor lighting retrofit, efficiency electric motor/pump retrofit to list of examples of types of efficiency measures that do not require an energy audit IRHA TCC REAP No changes made. Outdoor lighting retrofit is the only identified energy measure excepted from the audit requirement under 3 AAC 108.460(b)(2).  That energy measure has a well‐established efficiency performance.  It also is not part of a building energy system.  Addressing a building’s energy use as a system is a fundamental purpose of an energy audit; both lighting and motors/pumps efficiency improvements benefit from being evaluated as part of this system. Evaluating the building as a system considers how different efficiency measures within a building impact each other both in terms of performance and potential savings. Energy audits also provide valuable information to building owners and operators that have benefits beyond implementation of physical efficiency measures including guidance on operations and maintenance and system settings.   ALASKA ENERGY AUTHORITY RESOLUTION NO. 2013-01 RESOLUTION OF THE ALASKA ENERGY AUTHORITY ADOPTING VILLAGE ENERGY EFFICIENCY PROGRAM REGULATIONS FOR THE AUTHORITY WHEREAS, the purpose of the Village Energy Efficiency Program (VEEP) is to lower the cost of energy in public and community buildings and facilities in small, high-energy-cost communities through the implementation of energy efficiency measures and to help meet the state goal of 15% energy savings through efficiency by 2020. The 15% goal was established in HB306 passed by the Alaska Legislature and signed by the Governor in 2010 . WHEREAS, the Authority must adopt regulations for the Authority to establish, implement and administer the VEEP program, and make VEEP grants; WHEREAS, the Authority has provided public notice of the proposed regulations, solicited public comment through March 6, 2013, conducted a public hearing on February 14, 2013, and otherwise followed procedures required by the Administrative Procedures Act; WHEREAS, the time period for public comment has passed, and the Authority has reported about the oral and written public comment received and the consideration the Authority gave to each public comment received; and WHEREAS, the proposed regulations attached as Exhibit A reflect the originally proposed regulations, as revised by the Authority in response to public comments and further evaluation by the Authority. NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS FOLLOWS: Section 1. The Board of Directors of the Authority adopts as regulations of the Authority 3 AAC 108.400 -3 AAC 108.499, a copy of which is attached as Exhibit A. Section 2. The Executive Director of the Authority is authorized and directed to file the regulations with the Lieutenant Governor, and take other steps necessary or desirable under the Administrative Procedures Act to make the regulations become effective. Section 3. approval. This Resolution shall become effective immediately upon its passage and DATED at Anchorage, Alaska, this 2 ( ~1mb--~ Secretary