Title
Discussion informing City Council that the Public Works Department will not be re-subscribing to the American Municipal Power Energy Efficiency Program for the 2014-16 term.
Executive Summary: As part of the 2010 EPA settlement to close down the American Municipal Power (AMP) Gorsuch coal generation power plant, all participating owners of the plant (Hudson being one of those participants) were required to participate in a three (3) year Energy Efficiency Program developed and managed by AMP. The program was subsequently developed as the "Efficiency Smart Program". As of December 31, 2013 the City will have met its legal obligation to participate in the Efficiency Smart Program. The Public Works Department will not be renewing the program subscription at this time.
Body
Purpose & Explanation
History
The 2010 settlement requirements for the closing of the Gorsuch Coal Power Plant mandated that AMP develop and implement an energy efficiency program on behalf of the 48 participants and commit to investing $15 million into energy efficiency over a three (3) year period.
The Efficiency Smart program offers cost saving opportunities to Hudson Public Power commercial and industrial customers by providing energy audits, recommended efficiency projects, and rebates. Residential customers are offered free energy efficient light bulbs, appliance recycling and sustainability/recycling education programs.
In 2013, Efficiency Smart program participants had met, and/or exceeded the total MWh reduction requirements outlined in the initial program. Additionally, AMP will meet the $15 million dollar investment goal by the end of the current contract period (12/31/13). The City of Hudson has met its three (3) year obligation to participate in the program.
Program Participation
Currently there has been over $155,000 in rebates and incentives paid to program participants by AMP. There are currently thirteen (13) local businesses active in the program. The annual total customer savings is at $266,242 which equates to a project lifetime customer savings estimate for installed efficiency measures of over $4.1 million (5-30 year return depending on project).
Program Costs
The annual cost of the program is based on the City's total annual retail power sales. Power sales for 2012 were 184, 963 MWh. This equated to an annual Efficiency Smart Program cost for 2012 of $277,444 at a unit price of $1.50 per MWh. The total estimated retail power sales for 2013 is 183,548 MWh. The estimated annual cost for the 2014-16 Efficiency Smart Program subscription is $256,967 at a unit cost of $1.40 per MWh. The total cost for the subscription period of 2014-16 is $770,901.
Program Subscription
With the City meeting its participation commitment and taking into consideration the rising cost of power and transmission services, staff does not see an acceptable or reasonable return on investment by continuing to participate in the AMP Efficiency Smart program.
Moving forward the Public Works Department will assist current participants complete any existing projects utilizing other AMP services and/or professional service consultants. Further, the Public Works Department will begin working on creating a City sustainability program in-house for the benefit of all Hudson Public Power customers.
Timing Considerations
Current program subscription will expire on December 31, 2013.
Fiscal Impact
Currently Budgeted
Supplemental Appropriation Required
X Appropriation Not Required.
Recommendation
Suggested Action
No formal action required.
Submitted by,
Scott N. Schroyer, Interim City Manager
Frank J. Comeriato, Jr., Director of Public Work