Agenda Report - City of Pasadena

Agenda Report
November 3, 2014
Honorable Mayor and City Council
THROUGH: Municipal Services Committee (October 28, 2014)
It is recommended that the City Cou neil:
1. Find that the action proposed herein is exempt from the California Environmental
Quality Act ("CEQA") pursuant to State CEQA Guidelines Section 15061 (b )(3), the
general rule that CEQA applies only to projects that have the potential to cause a
significant effect on the environment; and
2. Authorize the City Manager to enter into a Master Inter-Utility Agreement
("Agreement") between the City of Pasadena and the Southern California Gas
Company ("So Cal Gas") for the joint coordination and implementation of electric,
natural gas, and water efficiency programs in an amount not to exceed $500,000 per
year for up to five years. The proposed Agreement is exempt from competitive
bidding requirements pursuant to City Charter Section 1002 (C), Contracts for labor,
material, supplies, or services available from only one vendor; Southern California
Gas Company is the sole natural gas provider in Pasadena.
3. Grant the proposed contract an exemption from the competitive section process of
the Competitive Bidding and Purchasing Ordinance pursuant to Pasadena Municipal
Code Section 4.08.049 (B), contracts for which the best interests of the City are
The proposed Agreement will establish a cooperative partnership between So Cal Gas
and Pasadena Water and Power ("PWP") to jointly develop, promote, and implement
various customer programs aimed at reducing water, electricity, and natural gas usage
(collectively, "Conservation Programs") for customers who take utility services from both
PWP and So Cal Gas ("Joint Service Territory Customers").
Partnership Agreement with Southern California Gas Company
November 3, 2014
Page 2 of 5
The proposed Agreement will serve as an umbrella agreement (also known as an
enabling agreement) that sets forth the general terms and conditions under which
conservation programs can be jointly developed and implemented by the two utilities.
Under the proposed Agreement, So Cal Gas would administer and implement
Conservation Programs that PWP does not currently have the resources to offer, such
as a broad scale low-income housing retrofit program and a multi-family direct install
program. So Cal Gas would invoice PWP for costs attributable to electricity and water
conservation measures. Such costs would be limited to the lesser of $500,000 per year
or funds available in approved annual budget for Conservation Programs in the Public
Benefits Fund budget. PWP would claim and report the corresponding energy and water
savings towards meeting its conservation goals.
PWP would be able to expand current offerings, such as the successful small business
Water and Energy Direct Install Program ("WeDIP"), to include natural-gas saving
measures. Each utility will be responsible for its own costs. For programs administered
by PWP, So Cal Gas would either reimburse PWP or pay the third-party vendor directly
for costs attributable to natural gas efficiency measures. In either case, the utilities
would exchange sufficient data to verify customer participation and the savings that may
be counted for conservation goals and regulatory filings.
Under the proposed Agreement, the utility responsible for implementing a given
Conservation Program would follow its respective hiring and procurement rules for any
staff or contractors retained to perform the work.
So Cal Gas has entered into similar arrangements with other utilities, including the Los
Angeles Department of Water and Power, Burbank Water and Power, Anaheim Public
Utilities, and Riverside Public Utilities. This approach has been shown to increase the
efficiency and reduce costs for implementing Conservation Programs while increasing
customer satisfaction by having a "one-stop" source for participating in Conservation
PWP is constantly seeking innovative ways to offer customers more comprehensive and
easy-to-use programs while meeting yearly water and energy conservation goals. One
effective way to achieve greater energy and water conservation in Pasadena is to
leverage existing successful programs provided by other utilities. Through the
administration of the proposed Agreement, PWP will be able to better serve its
customers by offering more comprehensive utility savings programs, find new and
additional electric and water savings through existing So Cal Gas programs, and have
expanded resources to achieve energy and water conservation goals.
Proposed Master Inter-Utility Agreement
The proposed Agreement would serve as an umbrella agreement that sets forth general
terms and conditions under which Conservation Programs are implemented by PWP
Partnership Agreement with Southern California Gas Company
November 3, 2014
Page 3 of 5
and So Cal Gas for Joint Service Territory Customers. Through the proposed
Agreement, PWP staff will have the ability to partner with So Cal Gas on multiple
Conservation Programs that will benefit different types of electric and water customers.
Under the proposed Agreement, each utility will continue to follow its individual
procurement rules for each contract executed with a third-party vendor. The goals of
the proposed Agreement are to:
1. Establish enhanced
2. Enable collaborative marketing of each utility's Conservation Programs to
increase awareness and participation by Joint Service Territory Customers.
3. Leverage program development and resources of each party to better serve the
electric, gas and water efficiency and resource savings needs of Joint Service
Territory Customers.
4. Develop a process that standardizes the sharing of information regarding So Cal
Gas and PWP's Joint Service Territory Customers participating in each utility's
respective Conservation Programs as necessary to verify customer participation,
amount of savings achieved, and respective cost shares.
The proposed Agreement allows for individual program elements to be clearly defined
through Program Orders.
Program Orders
The proposed Agreement provides for the development and implementation of Program
Orders for specific joint programs. The Program Orders will describe the joint program
and provide the roles, responsibilities, and specific work activities that will take place
under the program. In addition, Program Orders will specify cost sharing allocations and
any billing provisions or cost and budget limitations that may apply. Each program order
will also outline which organization will serve as the implementer for that specific
program. Program Orders will be signed by PWP's General Manager, and become part
of the proposed Agreement in a manner similar to change orders or task orders for
service agreements.
PWP and So Cal Gas aspire to have numerous Program Orders through the proposed
partnership, such as the joint administration of the Energy Savings Assistance Program
to qualified low-income customers and enhancement of the WeDIP. As outlined in
Table 1, this program would use local contractors to provide attic and pipe insulation,
door weather stripping, faucet aerators, caulking, window and door repairs, water heater
blankets, and more to customers. Through the PWP and So Cal Gas partnership, the
co-branded program would provide additional electric saving measures such as LED
light bulbs, and refrigerator replacements.
Partnership Agreement with Southern California Gas Company
November 3, 2014
Page 4 of 5
Table 1: Low-Income Energy Savings Assistance Program Enhancements
Attic insulation
Door weather-stripping
Low flow shower heads
Water heater blankets
Water heater re ·r or re
Pipe insulation
Caulking repairs
Faucet aerators
Furnace repair or replacement
As shown in Table 2, PWP and So Cal Gas also aspire to enhance the offerings of
PWP's WeDIP program and add various gas saving measures that our small-business
customers could receive free of charge.
Table 2: WeDIP Program Enhancements
Services currently
Lighting Upgrades
Occupancy Sensors
Faucet Aerators
Low-Flow Showerheads
Refrigeration Gaskets
LED Refrigerated Case Lighting
Auto Door Closers
Anti-Sweat Heaters (ASHs)
"·redtiy· PWP
LED Exit Signs Upgrades
Programmable Thermostats
Pre-Rinse Spray Valves
Efficient Toilets and Urinals
Strip Curtains
Electronically Commutated Motors
Evaporator Fan Controllers
Additional Services Offered by Joint Administered Program
Pipe insulation
Tank insulation
In the implementation of new and expanded Conservation Programs under the
proposed Agreement, PWP and So Cal Gas will make opportunities available for local
businesses and labor to participate.
The proposed contract is consistent with the ten-year energy effiCiency goals adopted
by the City Council on January 28, 2013, the City's Urban Environmental Accords
Goals, the General Plan Energy Element, the City Council's Strategic Planning Goals,
and the 2012 Integrated Resource Plan. The proposed contract will contribute to
greenhouse gas reduction goals by reducing electric energy use in Pasadena.
The proposed contract has been determined to be exempt from the CEQA pursuant to
State CEQA Guidelines Section15061 (b)(3), the general rule that CEQA applies only to
projects that have the potential for causing a significant effect on the environment.
Where it can be seen with certainty that there is no possibility that the activity in
question may have a significant effect on the environment, the activity is not subject to
Partnership Agreement with Southern California Gas Company
November 3, 2014
Page 5 of 5
CEQA. Such is the case with the proposed contract authorization for the joint
implementation of Conservation Programs with So Cal Gas.
The physical construction that could occur as a result of the Program would be
individual and minor home or commercial property improvement projects that
individually or cumulatively would not have a significant effect on the environment.
The cost of this action will be $500,000 per year for up to 5 years. Funding for this
action will be addressed by the utilization of existing budgeted appropriations in
accounts 410-831700-8716 (Utility Rebates) and 410-831700-8215 (Direct Install
Rebates). It is anticipated that $200,000 will be spent in the current fiscal year. The
remainder of costs will be spent up to a maximum of $500,000 each year of the
remaining 4 year period.
The anticipated impact to other operational programs or capital projects as a result of
this action will be none.
Respectfully submitted,
General Manager
Prepared by:
Congurred by:
Wendy De\Leon
Customer ~~~ ons Manager
Director of Finance
Finance Department
City Manager