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HomeMy WebLinkAboutagenda.council.worksession.20180925 CITY COUNCIL WORK SESSION September 25, 2018 4:00 PM, City Council Chambers MEETING AGENDA I. Update and Discussion on Council Goal #7 to Decrease the Community's Carbon Footprint P1 Page 1 of 7 MEMORANDUM TO: Mayor and City Council FROM: Ashley Perl, Climate Action Manager; Jack Wheeler, Capital Asset Director; David Hornbacher, Director of Utilities; CJ Oliver, Environmental Health and Sustainability Director DATE OF MEMO: September 21, 2018 MEETING DATE: September 25, 2018 RE: City Council Goal #7 Update REQUEST OF COUNCIL: There is no formal request of City Council. This memo and complementary work session provides an update on the activities of City Council’s BYY #7 goal along with a staff recommendation for next steps. PREVIOUS COUNCIL ACTION: · The City of Aspen established the Canary Initiative, now known as the Climate Action Office, in 2005, with the goal of reducing Aspen’s carbon footprint and preparing Aspen for a changing climate. At the same time, the community of Aspen set a goal to reduce local greenhouse gas emissions by 30% by the year 2020 and 80% by the year 2050, below the 2004 baseline. City Council and the Aspen community have taken countless steps towards this goal and continue to do so every year. · On February 26, 2017 City Council formally adopted the Aspen Community Climate Action Plan and re-committed to achieving the 30x20 and 80x50 goals via Resolution #021_2017. Through this commitment, City Council set forth a bold vision for local climate action work for the coming years. · At City Council’s annual retreat in 2017, Council established nine major goals and focus areas. Goal #7 is as follows. Decrease the carbon footprint of the community’s energy supplies by maintaining Aspen Electric’s 100% carbon free electric generation portfolio; working with other electric providers to increase renewable energy in their generation plans; and planning for a reduced need for natural gas in Aspen buildings. BACKGROUND: To curb the hazardous impacts of climate change, City Council and the Aspen community are committed to reducing greenhouse gas emissions and energy use. Understanding that 56% of the community’s greenhouse gas emissions come from energy use in buildings, Council felt it would P2 I. Page 2 of 7 be most impactful to focus on reducing the carbon associated with the operation of Aspen’s homes and buildings. The goal has three parts: 1. Maintain Aspen Electric’s 100% carbon free electric generation portfolio 2. Work with other electric providers to increase renewable energy in their generation plans 3. Plan for a reduced need for natural gas in Aspen buildings City Council’s goal is an all-encompassing goal, in that it focuses on both energy supply as well as energy demand. This approach follows the recommendation from leading experts in this field that when reducing carbon in homes and buildings there are three key elements that are critical to success. Those elements are: Provide energy that is renewable and clean burning - Supply Ensure that buildings are well-built, maintained, and upgraded to run efficiently - Demand Use efficient appliances to minimize energy need - Demand City Council’s goal focuses both on providing renewable energy to buildings as well as encouraging the use of high-efficiency appliances in those homes and buildings. The City of Aspen, in partnership with the Community Office for Resource Efficiency (CORE), provides additional programming to ensure that buildings are maintained and run efficiently. For more information about Aspen’s energy efficiency programs see Attachment A. Although this goal encompasses many parts, the primary focus of this work session is to provide an update on the third part of Council’s goal, which is further described in the Discussion section below. With regards to the first and second parts of the goal, here are brief updates. 1. Maintain Aspen Electric’s 100% carbon free electric generation portfolio The City of Aspen Electric Department, known as Aspen Electric, is responsible for providing reliable power to over 3,000 customer meters. In 2015, the City of Aspen achieved a long-standing community goal of sourcing and providing 100% renewable electricity to its customers. Every day since, Aspen Electric customers have received reliable and renewable power. Through City ownership and operation of 2 hydroelectric facilities, long-term energy contracts, and a partnership with our wholesale electric supplier, MEAN (Municipal Energy Agency of Nebraska), Aspen Electric is on track to supply renewable power into the near future. 2. Working with other electric providers to increase renewable energy in their generation plans This part of the goal is focused on building a renewable energy partnership with Holy Cross Energy, Aspen’s neighboring electricity provider. Holy Cross Energy currently provides power to customers in the Roaring Fork Valley, the Eagle Valley, and other nearby communities. That power consists of 39% renewable sources. Recently, the Holy Cross Energy board of directors committed to providing 70% renewable electricity by the year 2030. The City of Aspen maintains a strong partnership with Holy Cross Energy, and staff is currently exploring a partnership opportunity that would bring more renewable energy to the Aspen community. Further work needs to be completed on this part of Council’s goal, and an P3 I. Page 3 of 7 update with City Council will be scheduled for early winter to provide details on the exciting opportunities that exist to expand on the partnership between the City of Aspen and Holy Cross Energy. DISCUSSION: While the first two parts of goal 7 focus on energy supply and ensuring that supply is as carbon- free as possible, the third part focuses on demand and reducing the need for energy in the first place. It should be noted that all aspects of this goal focus on electricity and not natural gas. While there is vast potential for electricity to become more renewable and cleaner burning, natural gas remains a carbon-based energy source. To achieve greenhouse gas emissions reductions, communities across the world are encouraging the use of electricity to heat, cool and power buildings instead of natural gas. This shift has begun and will continue over the next few decades. According to NEEP (Northeast Energy Efficiency Partnerships), ‘over 95% of residential fuel sales and 78% of commercial sales will be for electric fuel by 2035’. Understanding that if Aspen wants to reduce its carbon footprint, more of Aspen’s homes and buildings need to be powered by renewable electricity instead of natural gas. This goal aims to increase the understanding of what the role of local government is in accelerating that transition and supporting the community in switching from natural gas to renewable electricity. Definitions: For the purposes of this goal, staff is referring to the transition away from natural gas towards electricity as ‘Strategic Electrification’. That is to say that once a building is well-sealed and powered by renewable electricity, it is strategic for that building owner and the tenants of that building to consider using electric appliances instead of appliances that run on natural gas. For clarity, it is ‘strategic’ for the purposes of reducing overall energy use and greenhouse gas emissions, although it is not always strategic from other standpoints. The pros and cons of electrification are discussed below. Strategic electrification or beneficial electrification is a term for replacing direct fossil fuel use (e.g., propane, heating oil, gasoline) with electricity in a way that reduces overall emissions and energy costs. There are many opportunities across the residential and commercial sectors. (Environmental and Energy Study Institute) This goal focuses on both supply and demand because the move to electricity away from natural gas is only strategic if that electricity is partially or completely from renewable sources. According to the Rocky Mountain Institute, a grid emissions rate of ~1300 lbs CO2/MWh is the break-even point for achieving carbon benefits from electrification. This is significant because it means that even though Holy Cross Energy is 39% renewable, not 100%, switching away from natural gas to Holy Cross Energy electricity still delivers greenhouse gas savings over natural gas. Holy Cross Energy is 1,180 lbs CO2/MWh, which is 9% better than the breakeven threshold. For those customers on Aspen Electric, the greenhouse gas savings is significantly more due to Aspen Electric’s 100% renewable portfolio. For more information on the economics of strategic electrification, the Rocky Mountain Institute has prepared a report that can be found at this link https://rmi.org/insight/the-economics-of-electrifying-buildings/ Examples: It is important to note that strategic electrification refers to the use of electric appliances as a replacement for natural gas appliances and is focused on appliance switching not necessarily full P4 I. Page 4 of 7 overhauls of community-wide energy systems. Electrification can be accomplished through the use of standard or traditional electric appliances. However, the efficiency gains from newer, high efficiency appliances are more significant. Standard Efficiency Appliances: Space heating 1. Electric baseboard 2. Electric boilers Water Heating 1. Traditional electric storage tank High Efficiency Appliances: Space heating 1. Air Source Heat Pump 2. Ground Source Heat Pump Water Heating 1. Heat Pump Water Heater The US Department of Energy describes how these appliances work in the following description. DOE Description of Heat Pump Systems: For climates with moderate heating and cooling needs, heat pumps offer an energy- efficient alternative to furnaces and air conditioners. Like your refrigerator, heat pumps use electricity to move heat from a cool space to a warm space, making the cool space cooler and the warm space warmer. During the heating season, heat pumps move heat from the cool outdoors into your warm house and during the cooling season, heat pumps move heat from your cool house into the warm outdoors. They move heat rather than generate heat. There are three types of heat pumps: air-to-air, water source, and geothermal. They collect heat from the air, water, or ground outside your home and concentrate it for use inside. The most common type of heat pump is the air-source heat pump, which transfers heat between your house and the outside air. Today's heat pump can reduce your electricity use for heating by approximately 50% compared to electric resistance heating such as furnaces and baseboard heaters. High-efficiency heat pumps also dehumidify better than standard central air conditioners, resulting in less energy usage and more cooling comfort in summer months. For homes without ducts, air-source heat pumps are also available in a ductless version called a mini-split heat pump. In addition, a special type of air-source heat pump called a "reverse cycle chiller" generates hot and cold water rather than air, allowing it to be used with radiant floor heating systems in heating mode. Geothermal (ground-source or water-source) heat pumps achieve higher efficiencies by transferring heat between your house and the ground or a nearby water source. Although they cost more to install, geothermal heat pumps have low operating costs because they take advantage of relatively constant ground or water temperatures. Geothermal (or ground source) heat pumps have some major advantages. They can reduce energy use by 30%-60%, control humidity, are sturdy and reliable, and fit in a wide variety of P5 I. Page 5 of 7 homes. Whether a geothermal heat pump is appropriate for you will depend on the size of your lot, the subsoil, and the landscape. Ground-source or water-source heat pumps can be used in more extreme climates than air-source heat pumps, and customer satisfaction with the systems is very high. A new type of heat pump for residential systems is the absorption heat pump, also called a gas-fired heat pump. Absorption heat pumps use heat as their energy source and can be driven with a wide variety of heat sources. Benefits: There are three clear benefits to switching from a natural gas appliance to an efficient electric appliance. - GHG Reductions: Aspen’s goal of achieving deep carbon savings by 2050 is achievable, according to modeling projections. However, it is only possible if all the actions in Aspen’s Climate Action Plan are implemented and current efforts to reduce energy are increased. Below is the exact wording from the recently adopted Climate Action Plan. - Reduced Energy Need - If the appliance is a high-efficiency appliance, the overall energy need is reduced. As more homes and buildings (and cars) rely on the electric grid for most of their power, local utilities will need to ensure there is enough power available to meet the growing demand. High-efficiency appliances reduce the need for more electricity on the grid. - Combined Power - If a home or building requires both heating and cooling, one appliance can be used for both, reducing the overall investment in appliances and saving money for the consumer. P6 I. Page 6 of 7 Additional benefits may also exist, as explained in the Action Plan to Accelerate Strategic Electrification in the Northeast. ‘These advanced electric technologies may also offer other benefits that consumers and stakeholders value, including reduced operations costs in some scenarios, reduced maintenance costs, increased safety, and lower pollution levels in the home and neighborhood.’ Risks and Unknowns: Although there are benefits to both the community and the consumer from electric technologies, there are also risks associated with this new technology. - Unproven – Heat and air pumps and other high-efficiency electric appliances are new and unfamiliar to consumers. Purchasing these appliances may represent a significant upfront investment for a business or homeowner and investing in a new technology could be too risky for some. - Upfront Cost – The initial purchase prices are typically higher for electric appliances. - Local Maintenance – In Aspen and other parts of Colorado, it can be challenging to find a maintenance technician with the experience and know-how to repair and maintain these technologies. This puts the burden of education on the homeowner or business. - Energy Cost – Some utilities, including Aspen Electric, charge more per kilowatt hour of energy for those customers in the higher ‘tiers’ of use. It is possible that by transitioning away from natural gas and putting more of a home’s energy use on electricity, that home or business could move to a higher tier and be required to pay a higher rate for electricity. If the increased use does not push the consumer into a higher tier, the consumer is still faced with paying the same rate, but for more energy. In this scenario, the decreased natural gas use and associated cost could offset the higher electricity costs, but not always. For further information regarding Strategic Electrification the U.S. Department of Energy produced the report ‘Electrification of buildings and industry in the United States’, available here http://eta- publications.lbl.gov/sites/default/files/electrification_of_buildings_and_industry_final_0.pdf Summary: The intention of this memo and presentation is to provide an update on City Council’s goal 7 and to familiarize City Council and staff with the terms and technologies associated with Strategic Electrification. This is the first detailed update to City Council on this goal, and staff is aware that additional information and updates will be required to move towards action. At this time, staff is not recommending a formal policy, but is recommending a ‘watch and learn’ approach that includes the following focus areas and steps: · Support Aspen Electric’s upcoming installation of Automatic Metering Infrastructure (AMI) to increase the understanding of current and future uses. Then use the AMI data to inform future infrastructure, rates and policies for Aspen Electric planning. · Continue to build a renewable partnership with Holy Cross Energy. Staff will return to City Council later this year with a formal plan for this partnership and identified project opportunities. P7 I. Page 7 of 7 · Identify electrification projects in Aspen and similar communities. Gather the learnings from these other projects to inform City of Aspen projects and policies. · Continue and expand existing community programs for commercial and residential buildings so that buildings are well-sealed and insulated and ready to accept new electric appliances when the time is right. · For City of Aspen projects – staff will assess the viability of using electric appliances, and present City Council with the option to choose electric over natural gas, when appropriate. FINANCIAL/BUDGET IMPACTS: There is no dedicated funding, outside of staff time, for this goal, and currently there is no request for additional funding. Should City Council request additional expertise or staff time to support this goal, supplemental funding may be required. ENVIRONMENTAL IMPACTS: This goal is primarily focused on improving 3 of City Council’s Sustainability Measures: 1. Percent of electrical energy from renewable sources 2. Community-wide greenhouse gas emissions 3. Total energy consumption from the built environment Additional health and community benefits are associated with reduced emissions including improved air quality and reduced energy costs. ATTACHMENTS: Attachment A: Aspen’s Energy Efficiency Programs P8 I. Attachment A: City of Aspen and CORE Energy Efficiency Programming – 2018/2019 Commercial Programs: 1. Energy coaching site visits: This free service is available to all Aspen businesses and includes a site visit to assess energy-efficiency opportunities, identify rebates the business may be eligible for, and a brief report. It is considered a gateway to implementing energy efficiency upgrades. 2. Rebates: Aspen businesses are eligible for rebates from utilities (including City of Aspen’s Electric Utility) and the Community Office for Resource Efficiency (CORE). For example, Aspen Electric customers are eligible for combined Aspen Electric and CORE rebates of 50% of project cost, up to $5,000 for electricity-saving measures. 3. Special promotions: Every year, the City of Aspen and CORE partner to offer targeted special promotions aimed at realizing deep energy savings within the community. For example, in 2018, this includes an extra incentive for large commercial buildings that install motor controls that modulate unnecessary energy use. 4. Small Lodges Energy Efficiency Program (SLEEP): is a part of the Small Lodge Preservation Program, established in 2015, which recognizes the cultural and economic value provided to Aspen by small lodges, and incentivizes improvements that contribute to the longevity of those lodges. The underlying SLEEP program is a partnership between the City of Aspen and CORE to provide energy coaching and grant funds to lodges for energy efficiency assessment and improvements. Residential Programs: 1. Home energy assessments: With this service, a certified energy professional will perform a comprehensive evaluation of the home and create a report outlining opportunities for energy improvements that are specific to that space. Plus, homeowners get free “quick fix” installations and combustion analysis testing. A $400 value, this service is offered to Aspen residents for $100. Assessments are considered the gateway to implementing smart, impactful, and cost- effective energy efficiency upgrades at home. 2. Rebates: For energy saving projects, Aspen residents are eligible for rebates from utilities (including City of Aspen’s Electric Utility) and the Community Office for Resource Efficiency (CORE). 3. Special Promotions: Every year, the City of Aspen and CORE partner to offer targeted special promotions for Aspen residents to save energy at home. For example, in October 2018, the City of Aspen and CORE are giving away 50 free home energy assessments. 4. Income Qualified (IQ) Program: The City of Aspen is proud to support CORE’s IQ program and make it available to Aspen residents. Residents (homeowners and renters) with a limited income qualify for a free Home Energy Assessment and free energy improvements. This can lead to improved home comfort and significant utility bills savings. P9 I. 5. Affordable Housing Energy Upgrades: In 2019, the City of Aspen hopes to build on a 2016 project to bring increased energy efficiency, comfort, and utility bill affordability to residents of workforce housing. In 2016, the City of Aspen partnered with CORE and utility partners to perform energy efficiency upgrades at Burlingame Seasonal, Truscott, and Marolt Seasonal housing complexes. Upgrades included in-unit upgrades such as LED lighting and low-flow water fixtures, as well as larger building improvements like insulation, tunes and controls to boilers and solar thermal systems, air sealing, and HVAC pump upgrades. On average, the buildings upgraded saw a 17% reduction in total energy use and realized approximately $32,000 in utility bill savings. P10 I.