Alternative Uses of Williams Settlement Funds
BOS Agenda Date June 13, 2006
County of Santa Clara
Facilities And Fleet Department
FAFOl 061306
Prepared by: Caroline Judy
Manager,Intragovemmental
Support Services
DATE:
June 13,2006
TO:
Board of Supervisors
FROM:
Larry Jinkins
Director of Facilities and Fleet Department
SUBJECT: Budget Letter #9: Alternative Uses of Williams Settlement Funds
RECOMMENDED ACTION
Accept report relating to budget workshop referral on alternate uses of Williams Settlement
Funds.
FISCAL IMPLICATIONS
There are no fiscal impacts associated with accepting this report.
CONTRACT HISTORY
Not Applicable.
Board of Supervisors: Donald F. Gage. Blanca Alvarado. Pete McHugh,Jim Beall. Liz Kniss
Count/ Executive: Peter Kutras Jr.
1
BOS Agenda Date :June 13, 2006
REASONS FOR RECOMMENDATTON
During Budget Workshops, Supervisors Gage and Kniss requested information on unfunded
energy conservation projects. Following the Finance and Government Operations Committee
meeting, Supervisor Kniss requested information on local firms doing business in the
alternative energy market segment, and the job growth potential for these markets. This
budget letter responds to both referrals.
BACKGROUND
Energy Conservation
Energy Conservation remains a high priority for the Facilities and Fleet Department(FAF).
Energy Conservation projects are annually proposed as part of the 10-Year Capital
Improvement Plan (CIP), and are recommended to the Board in relation to other projects
during the Capital Project review process.
In FY 2002, the Board of Supervisors created the Energy Task Force. Chaired by Supervisors
Kniss and McHugh, the task force identified and implemented many energy conservation
measures. In FY 2003, two million dollars were allocated to Energy Conservation projects in
the CIP.
Since FY 2003, Energy Conservation projects have been proposed each year but ultimately
have not received funding in the annual Capital Budget process. These decisions have resulted
from a shortage of one-time funds, and the prioritization of life safety and critical building
maintenance and County program issues. Although not prioritized for one-time funding.
Building Operations continues to replace HVAC systems and appliances with more energy
efficient models as part of the Backlog / Lifecycle Replacement maintenance program.
Funding for this maintenance program has been reduced by 33 % since FY 2002.
The attached list describes 141 unfunded energy conservation projects worth $11.6 million
with financial payback periods varying from less than one year to 12 years. As the list
demonstrates, Santa Clara County would realize a positive ongoing savings of $1.3 million
given a one-time $11.6 million investment in energy conservation. The $1.3 million in
ongoing savings would be greater if State incentives and rebates were included. Calculating
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
2
BOS Agenda Date June 13, 2006
rebate savings was beyond the scope of this referral.
Investment. Entrepreneurial Activity and .Tob Growth Potential in the Bay Area Alternative
Energy Market Segment
In an effort to "future proof or reduce risks associated with increasing energy costs, local
companies, Bay Area counties, and states nationwide are investing in a mix of energy cost
reduction strategies and efforts to reduce global warming including;
• energy conservation,
• on-site alternative energy production,
• reduced C02 emissions.
At a recent presentation to Sustainable Silicon Valley members, Alza Corporation described
how they are using methane from the Shoreline Amphitheater landfill to generate electricity,
thereby achieving grid independence, and reduced carbon emissions for a net investment of
$7.5 million. Cisco Systems has invested in energy conserving lighting fixtures saving $4.5
million in annual operating costs. Alameda County has invested in a one megawatt fuel
cell/photovoltaic system to power the County jail. Both public sector and private sector
entities face energy cost increases and future price volatility such that reducing energy costs
are a budget priority.
The Bay Area is host to several companies and venture capital investors at the leading edge of
"clean technology." Clean technology covers a range of industry segments from alternative
energy to water purification to advanced materials. Although not a comprehensive list, a few
of these local firms are described below:
• Aurora BioFuels (Berkeley, CA)- creating bio-diesel with 125 times higher yields and
50% lower costs than current production methods.
• Electro Automotive (Santa Cruz, CA)- a company that sells gas-to-electric
conversion kits for cars.
• Evogy Inc.(San Jose, CA)- a start-up company making tubular solid oxide fuel cell
systems
• Miasole (Santa Clara, CA)- a company that manufactures a thin-film photovoltaic
cell. It consists of an ultra-thin layer of photoactive material on a stainless steel foil that
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete tvIcHugh, Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
3
BOS Agenda Date June 13, 2006
can be incorporated into building materials.
• Nanosys and Nanosolar (Palo Alto, CA)- a company that creates flexible thin film
photovoltaic plastics that are spread across rooftops or built into building materials.
The Bay Area venture capital community continues to invest in clean technology, albeit this
support appears to be increasing at a slower rate relative to other areas of the nation.
Nationally, clean technology as a market segment now ranks 6th in size behind venture capital
investment in software, biotechnology, telecommunications, medical equipment, and
semiconductors. West Coast investment at $41 million has slipped to 4% of the over $1 billion
in national venture capital committed annually to clean technology.
California appears to lag other major states in creating incentives for local investment. A
recent study shows that other regions of the Country are more active than California in
establishing state and local incentives that encourage alternative energy investment,
development and demonstration projects. FAF staff compared the study results for California
with New York, Florida, Massachusetts and Ohio. The attached table illustrates the
differences in state and local incentives. Some highlights include:
• California has fairly comparable clean energy rebate programs , but is weaker in
research and development support.
• Massachusetts offers a unique personal and income tax credit exemption for earnings
resulting from alternative energy or energy conservation patents.
• Pennsylvania has a dedicated State Venture Capital fund of $60 million that leverages
private equity of over $180 million.
Many of the locally supported demonstration projects in other states are offered to specific
local fuel cell vendors such as Plug Power in New York. New York clearly leads with more
stationary fuel cell demonstration projects outranking California almost two to one. Although
California has a strong venture capital base and an active entrepreneurial environment, this
does not appear to translate into stationary distributed generation demonstration projects. This
may be the result of the Governor's focus on Hydrogen Highway refueling and vehicle
projects instead of stationary fuel cell projects.
Board of Supervisors; Donald F. Gage, Blanca Alvarado, Pete McHugh, Jim Beall, Liz Kniss
County Executive; Peter Kutras Jr.
4
BOS Agenda Date June 13, 2006
Other regions are using local incentives to attract firms and compete for future job growth in
the clean technology sector. Federal, state and local investment is widely believed to generate
significant job growth. The Renewable Energy Project, a Washington D.C. based nonprofit,
has studied job growth potential resulting from investment in wind and solar power. The study
indicates that a national investment in wind power has the potential to benefit 20 states. Those
states would receive 80% of the job creation. In an in-depth study for Ohio State,job growth
was analyzed for each of the individual manufacturing sectors involved in a wind turbine
project. The study concluded that an estimated 11,688 jobs would be created from a single
project.(See http://www.crest.org).
Summary
In summary, FAF administration recommends the County identify ongoing sources offunding
for both energy conservation and alternative power generation projects. Building Operations
has identified $11 million in Energy Conservation projects, many with payback periods of5
years or less. These projects will continue to be incorporated into the 10-Year Capital
Improvement Plan and will be evaluated during the annual Capital Budget process. In
addition, consistent with the Green Building Policy, Capital Programs will review potential
opportunities for alternative power generation on a project by project basis.
CONSEQUENCES OF NEGATIVE ACTION
None.
STEPS EOT J.OWfNG APPROVAT.
None
ATTACHMENTS
• Comparative Analysis of California and 5 Other States
•List of Energy Projects
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
5
County of Santa Clara
Facilities And Fleet Department
FAFOl 061306
Prepared by: Caroline Judy
Manager,Intragovemmental
Support Services
DATE:
June 13,2006
TO:
Board of Supervisors
FROM:
Larry Jinkins
Director of Facilities and Fleet Department
SUBJECT: Budget Letter #9: Alternative Uses of Williams Settlement Funds
RECOMMENDED ACTION
Accept report relating to budget workshop referral on alternate uses of Williams Settlement
Funds.
FISCAL IMPLICATIONS
There are no fiscal impacts associated with accepting this report.
CONTRACT HISTORY
Not Applicable.
Board of Supervisors: Donald F. Gage. Blanca Alvarado. Pete McHugh,Jim Beall. Liz Kniss
Count/ Executive: Peter Kutras Jr.
1
BOS Agenda Date :June 13, 2006
REASONS FOR RECOMMENDATTON
During Budget Workshops, Supervisors Gage and Kniss requested information on unfunded
energy conservation projects. Following the Finance and Government Operations Committee
meeting, Supervisor Kniss requested information on local firms doing business in the
alternative energy market segment, and the job growth potential for these markets. This
budget letter responds to both referrals.
BACKGROUND
Energy Conservation
Energy Conservation remains a high priority for the Facilities and Fleet Department(FAF).
Energy Conservation projects are annually proposed as part of the 10-Year Capital
Improvement Plan (CIP), and are recommended to the Board in relation to other projects
during the Capital Project review process.
In FY 2002, the Board of Supervisors created the Energy Task Force. Chaired by Supervisors
Kniss and McHugh, the task force identified and implemented many energy conservation
measures. In FY 2003, two million dollars were allocated to Energy Conservation projects in
the CIP.
Since FY 2003, Energy Conservation projects have been proposed each year but ultimately
have not received funding in the annual Capital Budget process. These decisions have resulted
from a shortage of one-time funds, and the prioritization of life safety and critical building
maintenance and County program issues. Although not prioritized for one-time funding.
Building Operations continues to replace HVAC systems and appliances with more energy
efficient models as part of the Backlog / Lifecycle Replacement maintenance program.
Funding for this maintenance program has been reduced by 33 % since FY 2002.
The attached list describes 141 unfunded energy conservation projects worth $11.6 million
with financial payback periods varying from less than one year to 12 years. As the list
demonstrates, Santa Clara County would realize a positive ongoing savings of $1.3 million
given a one-time $11.6 million investment in energy conservation. The $1.3 million in
ongoing savings would be greater if State incentives and rebates were included. Calculating
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
2
BOS Agenda Date June 13, 2006
rebate savings was beyond the scope of this referral.
Investment. Entrepreneurial Activity and .Tob Growth Potential in the Bay Area Alternative
Energy Market Segment
In an effort to "future proof or reduce risks associated with increasing energy costs, local
companies, Bay Area counties, and states nationwide are investing in a mix of energy cost
reduction strategies and efforts to reduce global warming including;
• energy conservation,
• on-site alternative energy production,
• reduced C02 emissions.
At a recent presentation to Sustainable Silicon Valley members, Alza Corporation described
how they are using methane from the Shoreline Amphitheater landfill to generate electricity,
thereby achieving grid independence, and reduced carbon emissions for a net investment of
$7.5 million. Cisco Systems has invested in energy conserving lighting fixtures saving $4.5
million in annual operating costs. Alameda County has invested in a one megawatt fuel
cell/photovoltaic system to power the County jail. Both public sector and private sector
entities face energy cost increases and future price volatility such that reducing energy costs
are a budget priority.
The Bay Area is host to several companies and venture capital investors at the leading edge of
"clean technology." Clean technology covers a range of industry segments from alternative
energy to water purification to advanced materials. Although not a comprehensive list, a few
of these local firms are described below:
• Aurora BioFuels (Berkeley, CA)- creating bio-diesel with 125 times higher yields and
50% lower costs than current production methods.
• Electro Automotive (Santa Cruz, CA)- a company that sells gas-to-electric
conversion kits for cars.
• Evogy Inc.(San Jose, CA)- a start-up company making tubular solid oxide fuel cell
systems
• Miasole (Santa Clara, CA)- a company that manufactures a thin-film photovoltaic
cell. It consists of an ultra-thin layer of photoactive material on a stainless steel foil that
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete tvIcHugh, Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
3
BOS Agenda Date June 13, 2006
can be incorporated into building materials.
• Nanosys and Nanosolar (Palo Alto, CA)- a company that creates flexible thin film
photovoltaic plastics that are spread across rooftops or built into building materials.
The Bay Area venture capital community continues to invest in clean technology, albeit this
support appears to be increasing at a slower rate relative to other areas of the nation.
Nationally, clean technology as a market segment now ranks 6th in size behind venture capital
investment in software, biotechnology, telecommunications, medical equipment, and
semiconductors. West Coast investment at $41 million has slipped to 4% of the over $1 billion
in national venture capital committed annually to clean technology.
California appears to lag other major states in creating incentives for local investment. A
recent study shows that other regions of the Country are more active than California in
establishing state and local incentives that encourage alternative energy investment,
development and demonstration projects. FAF staff compared the study results for California
with New York, Florida, Massachusetts and Ohio. The attached table illustrates the
differences in state and local incentives. Some highlights include:
• California has fairly comparable clean energy rebate programs , but is weaker in
research and development support.
• Massachusetts offers a unique personal and income tax credit exemption for earnings
resulting from alternative energy or energy conservation patents.
• Pennsylvania has a dedicated State Venture Capital fund of $60 million that leverages
private equity of over $180 million.
Many of the locally supported demonstration projects in other states are offered to specific
local fuel cell vendors such as Plug Power in New York. New York clearly leads with more
stationary fuel cell demonstration projects outranking California almost two to one. Although
California has a strong venture capital base and an active entrepreneurial environment, this
does not appear to translate into stationary distributed generation demonstration projects. This
may be the result of the Governor's focus on Hydrogen Highway refueling and vehicle
projects instead of stationary fuel cell projects.
Board of Supervisors; Donald F. Gage, Blanca Alvarado, Pete McHugh, Jim Beall, Liz Kniss
County Executive; Peter Kutras Jr.
4
BOS Agenda Date June 13, 2006
Other regions are using local incentives to attract firms and compete for future job growth in
the clean technology sector. Federal, state and local investment is widely believed to generate
significant job growth. The Renewable Energy Project, a Washington D.C. based nonprofit,
has studied job growth potential resulting from investment in wind and solar power. The study
indicates that a national investment in wind power has the potential to benefit 20 states. Those
states would receive 80% of the job creation. In an in-depth study for Ohio State,job growth
was analyzed for each of the individual manufacturing sectors involved in a wind turbine
project. The study concluded that an estimated 11,688 jobs would be created from a single
project.(See http://www.crest.org).
Summary
In summary, FAF administration recommends the County identify ongoing sources offunding
for both energy conservation and alternative power generation projects. Building Operations
has identified $11 million in Energy Conservation projects, many with payback periods of5
years or less. These projects will continue to be incorporated into the 10-Year Capital
Improvement Plan and will be evaluated during the annual Capital Budget process. In
addition, consistent with the Green Building Policy, Capital Programs will review potential
opportunities for alternative power generation on a project by project basis.
CONSEQUENCES OF NEGATIVE ACTION
None.
STEPS EOT J.OWfNG APPROVAT.
None
ATTACHMENTS
• Comparative Analysis of California and 5 Other States
•List of Energy Projects
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
5
Document
Budget Letter #9: Alternative Uses of Williams Statement Funds. Facilities and Fleet administration recommends the County identifies ongoing sources of funding for both energy conservation and alternative power generation products
Initiative
Collection
James T. Beall, Jr.
Content Type
Budget
Resource Type
Document
Date
06/13/2006
District
District 4
Creator
Larry Jinkins
Language
English
Rights
No Copyright: http://rightsstatements.org/vocab/NoC-US/1.0/