HomeMy WebLinkAbout2016-05-16 PC AGDENDA ADJOURNED MEETING1
ADJOURNED MEETING AGENDA
Planning Commission
CITY OF HERMOSA BEACH
CITY HALL COUNCIL CHAMBERS
1315 VALLEY DRIVE
HERMOSA BEACH, CA 90254
May 16, 2016
6:00 P.M.
Peter Hoffman, Chairperson
Kent Allen, Vice Chair
Michael Flaherty
Rob Saemann
Marie Rice
Note: No Smoking Is Allowed in the City Hall Council Chambers
THE PUBLIC COMMENT IS LIMITED TO THREE MINUTES PER SPEAKER
Agendas and staff reports are available for review
on the City’s web site at www.hermosabch.org.
Wireless access is available in the City Council Chambers for mobile devices:
Network ID: City Council and Password: chb13
To comply with the Americans with Disabilities Act (ADA) of 1990, Assistive Listening Devices
will be available for check out at the meeting. If you need special assistance to participate
in this meeting, please call or submit your request in writing to the Community Development
Department at (310) 318-0242 at least 48 hours (two working days) prior to the meeting time
to inform us of your needs and to determine if/how accommodation is feasible.
1. Pledge of Allegiance
2. Roll Call – Planning Commission
3. Public Comment
4. Presentation - PLAN Hermosa (General Plan/Local Coastal Program)
Sustainability + Conservation Element
Staff Report
Attachments:
1. City Council Consideration of EV Charging Fees
2. City of Hermosa Beach Annual Waste Diversion Report 2015
3. City Council Update Carbon Neutral Issue Paper
4. ARB Greenhouse Gas Reduction Funds Appropriations
5. Carbon Neutral Goals of Other Cities
6. Economic Benefits of Carbon Neutrality Analysis and Recommendations
7. Carbon Offsets Purchasing Guide
8. PLAN Hermosa Relevant Carbon Neutral Planning Goals
2
Supplemental Information (added 5/16/16 at 2:01 p.m.)
5. Planning Commission Discussion and Deliberation - PLAN Hermosa Sustainability
+ Conservation Element
6. Adjourned
Description 2015 Program Notes 2015
Tonnage
Xeriscaping,
Grasscycling HERMOSA BEACH:: The Public Works Department continues to mulch and grasscycle 47.39 acres of parks and Green Belt
annually with approximately 16 acres in turf. Grasscycling Diversion per USEPA: 6.5 tons per acre =104 tons. The City’s
parks, playing fields and Green Belt demonstrate the benefits of mulching, grasscycling and the use of native, drought-
tolerant plantings in landscaping. City Hall has a Low Water Demonstration Garden and has also installed drought-
tolerant plants in landscaped beds surrounding the building. Residents continue to be encouraged to grasscycle and
incorporate indigenous plants in landscaping. The West Basin Metropolitan Water District sponsored and promoted two
drought-tolerant landscaping workshops with rain barrels given away to all participants. The City offered a Turf Removal
Rebate Program to residents. Public / Private partnership between the City, Water District, Kiwanis Club and Boy Scouts
in developing a Native Garden in Valley Park featuring xeriscaping and reclaimed water usage. Recycled water is used on
the Green Belt and parks. The City continues to sponsor and promote California Friendly Landscape workshops.
104
Backyard & On-Site
Composting/Mulching HERMOSA BEACH:: The Public Works Department continues to use mulch mowers in City parks, playing fields and Green
Belt with approximately 16 acres in turf. The tree-trimming vendor mulches / chips on-site applying the processed
trimmed materials to the Green Belt. Franchise hauler sponsors Free Compost Give-Away events to residents and will
provide compost to the Public Works Department and other City departments upon request. The City continues to
encourage residents to compost at home offering composting and vermiculture bins at reduced cost to residents upon
request. The City sponsors a Soil Saver Backyard Composting display. The City has established a new, redesigned
Community Garden at South Park and encourages residents to participate in its operation. The new Community Garden
features wicking planters that distribute the irrigation water low in the planters close to the plant roots for more
efficient water usage. The City continues to sponsor a Composting Workshop. Starbucks’ continues to offer the “Shared
Plant Grounds for Your Garden” program providing free coffee grounds to City residents.
Business Source
Reduction
HERMOSA BEACH: Consultant continues to conduct 20-25 on-site business waste assessments annually encouraging
waste prevention / reduction and the reuse of materials when possible. Businesses continue to reuse plastic toters,
cardboard boxes and pallets.:
Procurement HERMOSA BEACH: The City has a Recycled Products Procurement Policy implemented in 2006. The City purchases 30%
post-consumer recycled-content office paper. The City will continue to explore options for the purchase of other post-
consumer recycled-content products. The City continues to develop an Environmental Preferred Purchasing (EPP) Policy.
1
Description 2015 Program Notes 2015
Tonnage
School Source
Reduction HERMOSA BEACH:The City continues to work with the franchise hauler and Hermosa Beach City School District on source-
reduction and waste prevention programs in the two schools. The franchise hauler will implement a source-separated
recycling program at the two schools by fall, 2016 including a food waste recycling program. Students currently source-
separate paper, beverage cartons and organics in classrooms and the cafeteria.
Government Source
Reduction HERMOSA BEACH:The City continues to mulch and grasscycle 47.39 acres of City Parks, ball fields and Green Belt. City
departments continue to practice double-sided copying and returned 241 ink jets / toner cartridge to vendors for reuse.
The Public Works Department continues to reuse pallets and metal street signs and posts.
Material Exchange,
Thrift Shops HERMOSA BEACH: CalMax continues to be promoted during business technical assistance site-visits. Grocery stores
continue to make donations to local and regional food banks. The City has several vintage, second-hand clothing stores.
Residents continue to have garage / yard sales and are required to obtain a permit from the City for $7.00 to conduct a
garage / yard sale; there were ************** permits for garage sales issued. A DARE Clothing collection bin and a
World Books collection bin are located in the shopping mall next to the Vons Grocery Store. The Friends of the Library
conduct year-round book sales and ten scheduled Saturday Book Sale dates annually.
Residential Curbside
HERMOSA BEACH: Franchise hauler reports 2347 tons of commingled residential recycling and an additional 360 tons
recovered from mixed waste processing. The franchise hauler provides 20, 35, 64 and 90 gallon waste bins; residential
customers select the size of their recycle and waste bins based on their anticipated disposal rate and the service rate
varies according to size. The franchise hauler reports that 75% of residents choose the 64 gallon bin. Single-family
dwellings are provided with a green waste collection bin upon request to the franchise hauler; franchise hauler reports a
10% participation rate in this residential green waste recycling program. There is a charge by the franchise hauler for
residential green waste recycling bins. The green bin is for the collection and recycling of yard trimmings only, including
organic materials generated in landscapes or gardens. Food waste cannot be placed in the green waste bin. The franchise
hauler mails a brochure quarterly to residential accounts with information on community events including document
shredding-E-Waste collection, composting workshops, giveaways and the Christmas tree collection program. Residential
recycling bins are taken to RockTenn Recycling Facility in Torrance, California for processing.
The franchise hauler continues to mail Earth Wise Newsletter quarterly to all residential accounts.
2707
2
Description 2015 Program Notes 2015
Tonnage
Residential Drop-Off HERMOSA BEACH::The City and franchise hauler continue to promote and sponsor free document shredding events,
Household Hazardous Waste (HHW) and E-waste collection events and Christmas tree recycling to City residents.
Residents are encouraged to take HHW to Los Angeles County S.A.F.E drop-off centers and HHW roundup events.
Residential Buy-Back HERMOSA BEACH: CalRecycle reports 5.19 tons of aggregate diversion.
5.19
3
Description 2015 Program Notes 2015
Tonnage
Commercial On-Site
Pickup
HERMOSA BEACH: Franchise hauler reports 3755 tons diversion from mixed waste processing including paper, plastics,
cardboard and mixed metals.
MCR (AB 341) Plan:
I. EDUCATION AND OUTREACH
A. All Media: The franchise hauler continues to assist the City upon request with AB 341 articles and/ or press releases.
B. Electronic Media:
1. Website: The franchise hauler continues to develop and maintain an interactive webpage providing contact
information to customers, the display of holiday schedules, sharps program information, proper HHW disposal
procedures and other solid waste information. The city continues to post AB 341 and other solid waste information on its
website.
2. Twitter: The franchise hauler continues to maintain a Twitter account providing environmental information and local
community news. The franchise hauler continues to offer social media consultation to any City-based organization upon
request. The City maintains a “Sustainable” Twitter feed.
3. Link to LARA: The City provides a link on its website to the Los Angeles Regional Agency’s (LARA) web page with MCR
(AB 341) requirements and information.
C. Mailouts and Print Media:
1. Instructional “How-To” Packets: The franchise hauler provided MCR informational packets to each commercial and
multifamily account at the beginning of the new service contract. The franchise hauler continues to provide a MCR
packet to each new commercial and multifamily account and will continue to do so throughout the franchise term. The
MCR packet provides a description of available recycling and diversion programs and the effect these programs have on
waste reduction.
2. Billing Insert: The franchise hauler includes a City-generated MCR, waste reduction and / or recycling insert in
commercial billings biannually.
3. Informational Flyers: The City has placed MCR informational flyers on the public counters and bulletin boards in the
Community Development and Building Departments. The City’s solid waste consultant continues to distribute AB 341
informational flyers during business technical assistance site visits to City businesses.
D. Direct Contact
General Outreach:
3755
Commercial Self-Haul HERMOSA BEACH: Grocery stores and drug stores continue to back-haul recyclable materials including pallets, organic
scrap, cardboard, office paper and plastic totes / racks.
4
Description 2015 Program Notes 2015
Tonnage
School Recycling HERMOSA BEACH: Hermosa Beach City School District includes two elementary schools. Both schools’ waste stream is
currently being sent to the franchise hauler’s Materials Recovery Facility (MRF) for mixed waste processing. Diversion
tonnage is included in commercial /industrial diversion tonnage. Students and Grades to Green continue to source-
separate organics, paper and beverage containers in the lunch room. The City, school district and franchise hauler are in
the process of developing source-separated recycling programs including food waste and 3Rs curriculum in the two
schools with implementation scheduled for fall, 2016. Grades to Green, a school parents group, continues to provide
3Rs and other environmental educational materials to the students. Grades of Green curriculum and educational
outreach focused on water conservation in 2015. The school parent group also sponsors The Garden Club with parent
docents operating the school community garden with students participating in its operation. The franchise hauler
donated $1000.00 to Grades to Green program.
Government Recycling HERMOSA BEACH: The Public Works Department recycled 130 tons of C & D including asphalt and concrete reported in
4060-SP-CAR, 99 tons of green waste, 4.8 tons of mixed metal scrap reported in 4040-SP-SCM, 2.19 tons of automobile
and truck tires reported in 4020-SP-TRS and 26 tons of wood scrap. 180 gallons of used oil and 36 oil filters were
recycled, as special waste this diversion is not included Government Recycling tonnage. Sensitive document shredding
service for the Finance and Police Departments is provided by the franchise hauler with diversion tonnage included in
the commercial sector recycling tonnages. The City auctioned eight surplus vehicles in 2015 including sedans, small
SUVs, small vans and light trucks, unable to quantify diversion tonnage at this time. The City recycles mixed paper, office
/ computer paper, sensitive document shredding, cardboard and CRV plastics, glass and aluminum through the franchise
hauler's mixed waste processing. The diversion tonnages of these materials through mixed waste processing by the
franchise hauler are combined with and included in the annual commercial sector diversion totals, unable to separate or
quantify at this time.
125
Special Collection
Seasonal (regular-not
special waste
collection)
HERMOSA BEACH:The franchise hauler continues to provide residential curbside collection of Christmas trees for a
designated amount of time immediately following the holiday, after this City residents are allowed to drop-off Christmas
trees at a roll-off bin serviced by the franchise hauler. Diversion tonnage is included in 3000-CM-RCG and 7040-FR-ADC.
Special Collection
Events
HERMOSA BEACH: The franchise hauler conducted two free document shredding events in partnership with the City.
Each shredding event was for eight hours.
5
Description 2015 Program Notes 2015
Tonnage
Other Recycling HERMOSA BEACH:The City continues to auction surplus office equipment, furniture and office supplies. In 2015 the City
auctioned **************surplus vehicles including small vans, sedans, light trucks and small SUVs, unable to quantify
diversion tonnage at this time. Textiles, carpeting, e-waste, pallets and food waste are recovered during franchise
hauler’s mixed waste processing, unable to quantify at this time.
Residential Curbside
Greenwaste Collection
HERMOSA BEACH: Franchise hauler continues to offer residential greenwaste collection services upon request with a fee
charged for a green waste collection bin. The franchise hauler estimates a 10% participation rate in the residential
curbside greenwaste program.330
Commercial Self-Haul
Greenwaste
HERMOSA BEACH: Landscapers continue to haul green waste to facilities that provide a decreased disposal cost for green
materials. Unable to quantify diversion tonnage at this time.
School Composting HERMOSA BEACH: The Hermosa Beach City School District’s Grades of Green Garden Club continues to promote and
sponsor on-site composting and vermiculture programs in the designated school garden. Students participate in the
garden’s daily operations. The franchise hauler made a $1000.00 donation to the further development of the Grades of
Green program.
Tires HERMOSA BEACH: The Public Works Department recycled 46 automobile tires at 20 lbs. each per USEPA and 46 truck
tires at 75 lbs. each per USEPA totaling 2.19 tons diversion. Franchise hauler recovered tires during mixed waste
processing, unable to quantify diversion tonnage at this time.2.19
White Goods HERMOSA BEACH: Franchise hauler continues to provide white goods collection to residents upon request and is
classified as a “Bulky Item Pickup”; residents are allowed two “Bulky Item” Pickup requests annually. Metal scrap
recovered from white goods is combined and included in residential recycling diversion tonnage by the franchise hauler,
unable to quantify diversion tonnage at this time.
Scrap Metal HERMOSA BEACH:4040-Scrap Metal: Scrap metal continues to be recovered by the franchise hauler during mixed waste
processing of both residential and commercial waste streams. Franchise hauler continues to combine residential and
commercial metal scrap diversion tonnage with all other recycled materials in annual report. The Public Works
Department recycled 4.8 tons of mixed metals.
4.8
6
Description 2015 Program Notes 2015
Tonnage
Concrete/Asphalt/Rub
ble HERMOSA BEACH:4060-C & D: The City’s Building Division continues to require a Construction and Demolition Reduction
Plan that meets CALGreen Code requirements to be submitted during the building permit process. The permitting is not
finalized until the contractor has provided a C & D Recycling Report to the City’s Building Department. The City reports
diversion of 3124 tons from this program resulting in a 82% recycling rate. The Public Works Department recycled 130
tons of C&D. The franchise hauler reports 913 tons of C&D diversion.
4167
Rendering HERMOSA BEACH: City businesses continue to render meat scrap, bone and grease. Unable to quantify at this time.
Other Special Waste HERMOSA BEACH:The Public Works Department recycled 180 gallons of used oil and 36 oil filters. Classified as "Special
Waste" this diversion tonnage is not included in reporting.
Electronic (radio, TV,
Web, Hotlines)HERMOSA BEACH:The City and franchise hauler continue to post AB 341, solid waste and recycling information on their
websites, the City and franchise hauler will be posting AB 1826 information and links on their websites in preparation for
the implementation of this regulation in 2016. The City continues to update its Green Webpage promoting
environmental events and collections and has posted this information on its Go Green / Sustainability Facebook page:
https://www.facebook.com/HermosaBeachGTF. Regional radio stations and newspapers continue to promote County
special waste roundups and HHW collection events. The Community Development Department’s webpage provides MCR
information with a link to the franchise hauler's website.. The City also has a Twitter feed that features “Sustainable”
information. The City posted "Hermosa Beach, A Leader in Sustainability" and "Keep Hermosa Beach an Environmental
Sustainability Leader - Water Conservation" on its website. The City and franchise hauler posted Earth Wise Newsletters
quarterly on their websites. The City posted information on its e-waste reccyling and shredding event on its website and
on Facebook, the event was held in conjunction with Earth Day. The franchise hauler posts recycling, HHW and Compost
Giveaway events on Twitter. The West Basin Metropolitan Water District sponsored and promoted drought-tolerant
landscaping workshops, the events were posted on the City's website.
7
Description 2015 Program Notes 2015
Tonnage
Print (brochures,
flyers, guides, news
articles)
HERMOSA BEACH: The City’s solid waste consultant continues to distribute AB 939, AB 341, and Reduce, Reuse, Recycle
and waste prevention educational outreach materials during business technical assistance site visits. The franchise hauler
mails AB 341 brochures to all commercial accounts annually and the Earth Wise Newsletter quarterly to all residential
and commercial accounts. The City and NexCycle, a CRV buy-back center, sponsor and distribute an annual
environmental calendar with “Tips for Greener Living and Keeping the Environment Clean”. The franchise hauler
continues to insert informational flyers including AB 341 brochures and recycling options in billings to all commercial and
residential accounts annually. The franchise hauler has a local office that provides printed information on recycling and
waste hauling services to residential customers. The Community Development and Building Departments place County
of Los Angeles Too Toxic To Trash HHEW Roundup brochures and AB 341 flyers on the public counter. The City also has
Storm Water Pollution brochures, Hermosa Beach Environmental Programs flyers, HERO Energy Efficiency Program
brochures, West Basin Free Water Education brochures, and The Metropolitan Water District of Southern California's
bewaterwise.com Tips for Waterwise Living brochures available at public counters in City Hall. An article was placed in
the Beach Reporter and the local newspaper promoting The West Basin Metropolitan Water District drought-tolerant
landscaping workshop events.
Outreach (technical
assistance,
presentations,
awards, fairs, field
trips)
HERMOSA BEACH: The franchise hauler continues to make direct contact throughout the year with all commercial
accounts providing recycling options, source-separation options and information on AB 341. The City’s solid waste
consultant continues to make twenty business technical assistance site-visits annually providing businesses with
educational outreach materials, waste prevention, waste reduction, source-separated recycling options and information
on AB 341 and AB 1826. The franchise hauler participated in the following community events: St. Patrick’s Day Parade,
Compost Giveaway, Document Shredding, E-waste, HHW Collection Events and Earth Day. The City sponsers a Soil Saver
Backyard Composting Display. The City and Heal the Bay sponsored and promoted a Coastal Cleanup Event. The City and
the Surfrider Foundation sponsored and promoted a Beach Cleanup Event. Assemblyman Hadley and Grades to Green
Youth Corp sponsored and promoted a Beach Cleanup Event. The franchise hauler made AB 1826 presentations to the
City Council and Chamber of Commerce. The West Basin Metropolitan Water District sponsored and promoted two
drought-tolerant landscaping workshops, the events were posted on the City's website.
Schools (education &
curriculum)
HERMOSA BEACH: Franchise hauler continues to work with the Hermosa Beach City School District, the City and the
Grades to Green parent group in developing 3Rs curriculum for the schools. In 2015 Grades to Green promoted water
conservation curriculum in the classrooms and in the school community garden. The Hermosa View Elementary School is
developing a Butterfly Garden and Nature Habitat.
8
Description 2015 Program Notes 2015
Tonnage
Economic Incentives HERMOSA BEACH: Residential accounts are offered a variable can rate with the choice of 20, 35, 64 or 96 gallon waste
bins with corresponding reduced rates for each bin size. Residents receive a recycling bin of corresponding size to the
chosen waste bins. Commercial accounts are offered 2, 3 and 6 cubic yard waste bins with corresponding reduced rates
for each bin size.
Ordinances HERMOSA BEACH:The City has a C & D Waste Reduction Policy, a MCR Policy and a Recycled Products Procurement
Policy. The City will implement a Plastic Bag Ban Ordinance April 1, 2016. The City will distribute reusable bags on April 1,
2016, the day the Plastic Bag Ban Ordinance goes into effect. The City has also adopted a Polystyrene Food Service
Container Ban.
Alternative Daily
Cover (ADC)
HERMOSA BEACH: Franchise hauler reports 15 tons of green waste taken to Mid Valley Landfill, Rialto-San Bernardino
County which is used as ADC at the facility. 15
Waste-to-Energy HERMOSA BEACH: Franchise hauler reports 1072 tons of transformation.1072
Permanent Facility HERMOSA BEACH: The City continues to promote County of Los Angeles HHWE collection events. The franchise hauler
provides upon request e-waste curbside collection service to residents. Requested residential curbside collection of e-
waste is counted as a “Bulky Item” pick-up; residents are offered two “Bulky Item” pick-ups annually by the franchise
hauler.
Mobile or Periodic
Collection
HERMOSA BEACH: The franchise hauler continues to offer residential curbside collection of e-waste upon request;
residential curbside collection of e-waste is classified as a “Bulky Item” pick-up by the franchise hauler. The franchise
hauler collected 2.56 tons of CRTs (65 units) and flat screens (7 units). The County of Los Angeles Sanitation District
HHEW Program reported 1420 households participated in the City's HHEW Collection Event with 9.5 tons of e-waste ,
296 CRT units, 160 gallons of used oil, 3414 gallons of paint, 2077 miscellaneous gallons, 96 gallons of coolant and 190
car batteries collected. The City provides a Med Return Drug Collection bin in front of the Police Department that
accepts prescription medications , vitamins, ointments and patches for humans and pets. Sharps are not accepted in this
bin.
Education Programs HERMOSA BEACH: Ocean Friendly Hermosa Beach program includes recycling and HHWE education elements. The City
continues to publicize and promote County of Los Angeles HHWE collection roundups and events.
Total Tonnage Diverted from Landfills:12287.18
9
Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Honorable Mayor and Members of the Hermosa Beach City Council
Special Meeting of January 9, 2016 Adjourned Meeting of March 2, 2016
ISSUE PAPER - CARBON NEUTRAL IMPLEMENTATION
(Environmental Analyst Kristy Morris)
Background:
The purpose of this issue paper is to provide City Council with an update on the implementation of
the Municipal Carbon Neutral Plan and to seek policy direction and clarification on key projects as
necessary.
The City of Hermosa Beach has demonstrated its commitment to environmental sustainability
through numerous policy directives and planning documents including Council’s 2020 Strategic Plan,
Goal 4-More Livable,Sustainable Beach City and development of the Municipal Carbon Neutral Plan
which was a "Top Policy Priority"in 2013.The Municipal Carbon Neutral Plan was adopted on
February 24,2015 and implementing the plan was identified by Council as a “Top Management
Priority”for 2015.
The Hermosa Beach Municipal Carbon Neutral Plan (Attachments 1 and 2)is a specific plan to
neutralize gross emissions in support of an aggressive 2020 Carbon Neutrality goal for municipal
facilities and operations.The expeditious implementation of the Municipal Carbon Neutral Plan will
position the City as a leader in addressing carbon reduction.
There are many potential pathways that will lead Hermosa Beach toward achieving the climate and
renewable energy goals described in the Plan.Examples of recommended implementation measures
include pursuing Community Choice Aggregation (CCA),accelerating the Clean Fleet Master Plan,
upgrading street lighting,installing solar photovoltaic systems on municipal property,and dedicating
staff to accelerate the implementation of the employee commute reduction program.Following the
acceptance of the Plan,City Council authorized the Brendle Group (Fort Collins,CO)to develop a
Municipal Carbon Neutral Tool to assist with prioritizing implementation measures based on cost-
effectiveness and emissions reductions.
Immediately following its acceptance,staff commenced implementing the recommendations and
measures in the Plan with available resources.Specifically,over the past ten (10)months staff have
worked to:
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·Purchase 10 dual-port electric vehicle charging stations to expand EV chargers and
infrastructure for use by City fleet, employee vehicles, residents and visitors.
·Conduct a Community Choice Aggregation study session to update City Council and the
community on potential CCA options for the City of Hermosa Beach.
·Attended meetings for both the County of Los Angeles CCA working group and Lancaster
Choice Energy to explore the opportunities and challenges of each program for the City.
·Revise and update the Clean Fleet Master Plan to consider innovations and advancements in
vehicle technology and availability.
·Accelerate the Clean Fleet Master Plan by replacing four (4)regular-fuel pick-up trucks with
CNG vehicles and purchasing four (4)all-electric cars for use by City fleet and the employee
rideshare program.
·Successfully secure MSRC grant funding for the upgrade of two (2)CNG pick-up trucks,to
purchase five (5)electric-assist bicycles,and to increase the employee alternative commute
incentive from $30 to $50 month.
·Expand bicycle parking for City employees and the community.
·Pursue projects described in the GSE solutions report including upgrading city-owned
streetlights and traffic signals, and upgrades and retrofits of municipal buildings.
·Develop a draft request for proposals (RFP)to install solar photovoltaic systems on municipal
property
Policy Considerations:
The Municipal Carbon Neutral Plan recommends that the City take a highly-visible climate action step
by installing solar photovoltaic systems on municipal property and explore various financing options.
Prior to developing an RFP for the project,staff received technical assistance from ICLEI-Local
Governments for Sustainability USA,to understand the advantages and limitations of available
products and financing options.Following this,staff developed a draft RFP for a small-scale,solar
photovoltaic demonstration project on a municipal facility (Attachment 3)which will be discussed at
the January 12,2016 City Council meeting.While concurrently assessing CCA options for the City,
staff identified opportunities for municipal solar projects to be integrated with a future CCA and are
requesting City Council’s direction on proceeding with solar photovoltaic projects in the short-term.
The Municipal Carbon Neutral Plan recommends that the City commence purchasing municipal
electricity through CCA starting in 2017.Staff are concurrently exploring two opportunities for CCA
for the City through the Los Angeles County CCA working group,and Lancaster Choice Energy CCA
(City of Lancaster).On November 10,2015 City Council approved a contract with the City of
Lancaster to prepare an implementation plan,including a feasibility study,for CCA for the City of
Hermosa Beach.The City of Lancaster is expected to complete the implementation plan by June
2016.Following this,should City Council decide to pursue CCA through a partnership with the City of
Lancaster,staff will request direction on numerous elements of the CCA including branding
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Lancaster,staff will request direction on numerous elements of the CCA including branding
(Attachment 4), product options, price structures, and education and outreach.
The Municipal Carbon Neutral Plan identifies offsets as an important part of an aggressive climate
commitment since they put a price signal on carbon emissions and show that there is a real
environmental cost to emitting greenhouse gases (GhG).The Plan suggests that the City should
seek to reduce gross municipal emissions by 40%by 2020.Council has expressed the need to
reduce emissions even further to increase the legitimacy of their commitment and reduce the amount
of offsets purchased.The total GhG emissions for Hermosa Beach were estimated at 1,372 MT
CO2e in 20121.The annual cost to neutralize 60%of these emissions could range from $4,1162 to
$12,3483 by purchasing either voluntary or compliance offsets at current prices,respectively.Staff is
requesting City Council provide direction for the future purchase of offsets.
The Municipal Carbon Neutral Tool will be used to explore different combinations of various initiatives
and offsets to achieve neutrality by 2020 in a realistic and financially sound manner.To illustrate this,
the Brendle Group memo to City Council dated June 16,2015,provides models for two scenarios
(Attachment 5).Scenario 1 represents the results of all initiatives included in the Municipal Carbon
Neutral Plan projected through 2045.Scenario 2 removes initiatives with high costs and little carbon
return,such as employee commuting initiatives and purchasing electricity at a premium using Green
Rate.It adds in a new initiative to purchase streetlights and shifts the rooftop solar being
investigated for City Hall and the Civic Center from a Power Purchase Agreement (PPA)to direct
purchase/ownership.In total,Scenario 2 has an estimated net present value of $514,000 through
2045 compared to ($4,906,000)for Scenario 1.Staff will provide City Council with a budget for
implementing various initiatives and projects in the Municipal Carbon Neutral Plan through 2020 as
part of the mid-year budget review in February 2016.In March 2016,staff will be requesting City
Council provide direction for prioritization of projects based on the cost estimates and to provide
direction on when to purchase offsets.
_________________________ 1 City of Hermosa Beach GHG Inventory, Forecasting, Target-Setting Report for an Energy Efficiency Climate
Action Plan, January 2015
2 Low price: $5 per metric tonne for voluntary offsets reported in the City of Hermosa Beach Municipal Carbon
Neutral Plan (February 2015)
3 High price: $15 per metric tonne for compliance offsets reported in the City of Hermosa Beach Municipal Carbon
Neutral Tool (Brendle Group, CO)
Next Steps:
To support an aggressive 2020 Carbon Neutrality goal for municipal facilities and operations,City
Council needs to commit funding towards implementing the Plan in the 2016-17 budget process
(June 2016).Over the next six (6)months staff will continue implementing actions and measures
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described in the Hermosa Beach Municipal Carbon Neutral Plan following City Council’s direction.
Specifically, staff will work to:
·Develop a budget for implementing the Municipal Carbon Neutral Plan initiatives through 2020
to present to Council during the mid-year budget review.
·In March 2016,request City Council direction for prioritization of projects based on the cost
estimates provided in February 2016.
·Develop a webpage and hold a community forum to educate staff,residents and businesses
about Community Choice Aggregation.
·Assess solar opportunities for municipal and residential buildings that reduce gross emissions
and provide ancillary benefits.
·Use the Municipal Carbon Neutral Tool to assist with prioritizing implementation measures.
·Report on our progress towards achieving carbon neutrality goals through quarterly or mid-
year reports, City website, print and social media.
·Determine the cost associated with purchasing offsets to neutralize remaining emissions and
explore innovative opportunities to reduce the amount of offsets required.
·Implement the employee rideshare program.
·Purchase regular and electric-assist bicycles for shared fleet and employee commute use.
·Install additional bicycle parking for employees, residents and visitors.
·Install EV chargers and infrastructure for use by City fleet, employees, residents and visitors.
Attachments:
1.Hermosa Beach Municipal Carbon Neutral Plan
2.Hermosa Beach Municipal Carbon Neutral Plan- Executive Summary
3.Draft RFP for Municipal Solar Installation
4.Examples Logos for City of Hermosa Beach CCA
5.Brendle Group Memo:Municipal Carbon Neutrality Follow-up response to City Council
Requests (June 16, 2015)
Respectfully Submitted by: Kristy Morris, Environmental Analyst
Noted for Fiscal Impact: Viki Copeland, Finance Director
Approved: Tom Bakaly, City Manager
Hermosa Beach Printed on 4/19/2016Page 4 of 4
powered by Legistar™
Greenhouse Gas Reduction Fund Programs – Appropriations as of September 2015
Agency / Program Potential Projects Identified
by Implementing Agencies
2013-14
($M)
2014-15
($M)
2015-16
($M)
High Speed Rail (HSRA) Construction of the initial construction segment in the Central Valley and further environmental and design work on the statewide system. The Budget also provides an ongoing commitment that allows for the advancement of the project on multiple segments concurrently, which yields cost savings and creates an opportunity for earlier potential private sector investment. These investments in the high-speed rail system will alleviate pressure on California’s current transportation network and will provide both environmental and economic benefits.
Planning/Design
$250 $500*
Right-of-way acquisition and construction of Initial Operating Segment
Transit and Intercity Rail Capital Program (CalSTA)
Competitive grant program for rail and bus transit operators for capital improvements to
integrate state and local rail and other transit systems, including those located in
disadvantaged communities, and those that provide connectivity to the high-speed rail
system. The Transportation Agency will prepare a list of projects recommended for
funding, to be submitted to the California Transportation Commission for programming
and allocation.
Connectivity to existing/future rail systems by adding new rail cars/engines
$25 $200* Increase service and reliability, and decrease travel times, of intercity and commuter rail systems
Rail integration (e.g. integrated ticketing/scheduling)
Low Carbon Transit Operations Program (Caltrans to local agencies)
Support new or expanded bus and rail services, with an emphasis on disadvantaged
communities. Expenditures are required to result in an increase in transit ridership and a
decrease in GHG emissions.
New/expanded bus or rail services or expanded intermodal transit facilities $25 $100* Equipment, fueling, and maintenance to support improved transit service or facilities
Affordable Housing and Sustainable Communities (SGC and member agencies) Implementation of sustainable communities strategies required by SB 375, and to provide similar support to other areas with GHG reduction policies, but not subject to SB 375 requirements. Projects that benefit disadvantaged communities will be given priority. Also, projects will reduce GHG emissions by increasing transit ridership, active transportation (walking/biking), affordable housing near transit stations, preservation of agricultural land, and local planning that promotes infill development and reduces the number of vehicle miles traveled.
Transit-oriented development (e.g. affordable housing near transit)
$130 $400* Integrated connectivity projects (e.g. van pooling, active transportation/complete streets)
Agricultural land preservation
Low Carbon Transportation (ARB)
Accelerate the transition to low carbon freight and passenger transportation, with a
priority for disadvantaged communities. This investment will also support the
Administration’s goal to deploy 1.5 million zero-emission vehicles in California by 2025.
ARB administers existing programs that provide rebates for zero-emission cars and
vouchers for hybrid and zero-emission trucks and buses. These expenditures will respond
to increasing demand for these incentives, as well as provide incentives for the pre-
commercial demonstration of advanced freight technology to move cargo in California,
which will benefit communities near freight hubs.
Clean vehicle rebates $20 $111
$95 Heavy duty hybrid/ZEV trucks and buses $10 $5
Light duty pilot projects in disadvantaged communities (e.g. car sharing, financing, etc.) $9
Truck and bus pilot projects in disadvantaged communities $25
Freight demonstration projects $50
2/4/2016 SUMMARY DEVELOPED BY THE CALIFORNIA AIR RESOURCES BOARD 1
Greenhouse Gas Reduction Fund Programs – Appropriations as of September 2015
Agency / Program Potential Projects Identified
by Implementing Agencies
2013-14
($M)
2014-15
($M)
2015-16
($M) Weatherization Upgrades/Renewable Energy (CSD) Installation of energy efficiency and renewable energy projects in single and multifamily low-income housing units within disadvantaged communities. Weatherization measures typically include weather-stripping, insulation, caulking, water heater blankets, fixing or replacing windows, refrigerator replacement, electric water heater repair/replacement, and heating and cooling system repair/ replacement. Renewable energy measures include installation of solar water heater systems and photovoltaic systems.
Single-family weatherization
$75 $79 Multi-family weatherization
Solar photovoltaic and water heating
Energy Efficiency in Public Buildings (CEC) Energy efficiency and energy generation projects in public buildings. Energy savings projects will include lighting systems, energy management systems and equipment controls, building insulation, and heating, ventilation, and air conditioning equipment.
Building retrofits for energy efficiency $20
Energy generation
Agricultural Energy and Operational Efficiency (CDFA) Projects that reduce GHG emissions from the agriculture sector by capturing greenhouse gases, harnessing greenhouse gases as a renewable bioenergy source, improving agricultural practices and promoting low carbon fuels, agricultural energy, and operational efficiency.
Energy and water use efficiency $10 $10 $40
Dairy digesters $12 Alternative and renewable fuels $3
Water Action Plan - Water-Energy Efficiency (DWR) Funding for grants that support water use efficiency and conservation projects, and leak detection and repair projects that reduce GHG emissions, with additional consideration given to disadvantaged communities. The funding will also support projects at the Thermalito and Hyatt State Water Project facilities.
Hydro energy turbine efficiency $10 $10
Water conservation and efficiency $20 $10 $20
Water Action Plan - Wetlands and Watershed Restoration (DFW) Implement projects that provide carbon sequestration benefits, including restoration of wetlands (including those in the Delta), coastal watersheds, and mountain meadows. In addition to furthering the goals of AB 32, these types of projects are integral to developing a more sustainable water management system statewide.
Delta coastal wetlands
$25 $2 Mountain meadows
Water efficiency on Dept. lands
Sustainable Forests (CAL FIRE) Urban forests in disadvantaged communities and forest health restoration and reforestation projects that reduce wildfire risk and increase carbon sequestration. These expenditures will enhance forest health and reduce fuel loads in light of climate change increasing wildfire intensity and damage.
Urban forestry
$18
Forest health restoration (e.g. reforestation, fuels reduction, avoided conversion, pest control) $24
Waste Diversion (CalRecycle) Financial incentives for capital investments that expand waste management infrastructure, with a priority in disadvantaged communities. Investment in new or expanded clean composting and anaerobic digestion facilities is necessary to divert more materials from landfills, a significant source of methane emissions. These programs reduce GHG emissions and support the State’s 75 percent solid waste recycling goal.
Organics composting/anaerobic digestion
$20
Increased recycling manufacturing
Organics and recycling project loans $5 $6
Total $70 $862 $1,442 *Approximate appropriations based on 2015 May Revise budget proposal. Actual dollar amounts will be determined by a percentage of quarterly auction proceeds. In addition to the $500 million shown above, SB 862 states that $400 million shall be available to the High Speed Rail Authority beginning in FY 2015-16, as repayment of a loan to the General Fund. This money shall be repaid as necessary, based on the financial needs of the High-Speed Rail project.
2/4/2016 SUMMARY DEVELOPED BY THE CALIFORNIA AIR RESOURCES BOARD 2
1
Summary of Leading City Climate Action Goals
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
International Communities
Aarhus
Denmark
(Pop. 242,914
City limits 100% by 2030 No mention of offsets
They have no set
amount of GHG to
reduce b/c they want
to be 0 MTCO2e by
2030. No baseline
year.
British Columbia1
Public sector (schools,
post-secondary,
government offices,
Crown operations,
hospitals)
100% Carbon neutrality in 2010 Offsets included, %
varies
Copenhagen
Denmark2 (pop:1.2
million)
City limits 20% reduction by 2015
100% reduction by 2025 Not mentioned.
Jönköping,
Sweden
(Pop. 126,331)
City limits3 40% from 1990 levels by 2020 No mention of offsets
Melbourne,
Australia
(Pop. 2009-10
98,162; 429,000
workers)
City limits
Zero net emissions by 2020;
relative to a 2002 base year
this is a reduction of 3.75
MTCO2e
Expects to reduce
emissions 35%
relative to BAU in
2020 and will offset
the remainder,
estimated at 5 million
tons4
Currently updating
their climate action
plan
Munich
Germany
(Pop. 1.4 million)
City limits
50% below 1990 levels by 2030
(10% every 5 years)
3.15 tons CO2e per capita by
2030
No mention.
Örebro, Sweden
(Pop.2010
135,000)
City limits, using a
partial consumption-
based method
(Energy use, transport,
air travel, and food)5
40% Per Capita below 2000
level by 2020
90% reduction by 2050
None mentioned
Long term goal set less
than one ton per
person, “ a level
where, if it were to be
applied
globally, it would not
endanger the climate”
1http://www2.gov.bc.ca/gov/topic.page?id=DF281B134D19469E98679E9A91CF043E&title=Carbon%20Neutral%20
Government
2 Source: Copenhagen CPH Climate Plan 2025
3 Values taken from Jönköping Sustainable Energy Action Plan submission to EU Covenant of Mayors
4 Melbourne expects to source its offsets from the National Emissions Trading Scheme
5 Climate Plan Summary for Örebro
2
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
York
England
(Pop. 2008
197,800)
City limits
80% reduction below 1990
levels by 2050
40% reduction below 1990
levels by 2020
No mention of offsets
in 2010-2013 CAP
Zurich,
Switzerland
(Pop. 2005
366,809)
Energy-related CO2
emissions within the
City limits6
1 ton CO2e per resident Per
capita primary energy
consumption goal “2000 Watt
Society”: 2,500 watts, of which
2,000 watts renewable energy
per person (equals 1
tCO2e/capita); 2050 (interim
targets in 2020, 2035)
No mention of using
offsets
“2000-Watt Society”
also used by other
Swiss cities, such as
Basel
United States Communities
Austin, TX and
Travis County
USA
(City Pop. 812,025;
County Pop.
1,030,588)
County limits, using
ICLEI’s 2012
Community Protocol)7
25% below 2007 levels by 2015
70% below 2007 levels by 2030
Not specified.8
Municipal utility
(Austin Energy)
considering divesting
in its share of coal
power plant
Bellingham, WA
USA
(Pop. 2012 81,360)
City limits, using ICLEI
CACP software9
2000 Base Year:
7% reduction by 2012
28% reduction (by 2020
None specified.
Mentioned offsets
may play a role post
2020.
Boulder, CO10 City limits 80% GHG reductions below
1990 levels by 2050
Burlington, VT
USA
(Pop. 2010 42,417)
City limits, using ICLEI
CACP software
20% reduction from 2007
baseline year by 2020.
80% reduction from 2007
baseline year. By 2050
No mention of
offsets, but new 2013
draft CAP update
mentions the use of
urban forestry to
sequester co2 as a
strategy
Updating CAP in 2013.
Have draft on their
website.
6 http://helpdesk.eumayors.eu/docs/seap/16_1348132236.pdf
7 Source: CDP-2012 Responses
8 Austin’s Climate Action report discusses local projects available for individual offsets (tree-planting and supporting
solar panels) funded and verified by Austin Energy
9 Source: City of Bellingham GHG Inventory and Climate Protection Action Plan
10 https://bouldercolorado.gov/climate/boulders-climate-commitment
3
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
Fort Collins, CO
USA
(Pop. 143,986)
City limits
*see notes section
80% from 2005 levels by 2050
(2,032,000 tons reduced by
2050)
20% from 2005 level by 2020
0.34% by 2020
They estimate offsets
will provide 7,000
tons of savings by
2020
No stated goal
involving offsets
Scope includes direct
emissions (natural gas,
transport), and indirect
(elec., landfill gas,
discarded recyclables,
and air travel).
Madison, WI
USA
(Pop. In 2010
240,000)
City limits 80% reduction below 2010 or
1990 levels by 2050 No mention of offsets
Oberlin, OH USA
(Pop. 2010 8,286)
City limits using ICLEI
CACP11
2007 Base Year:
50% reduction by 2015
75% reduction by 2030
>100% reduction by 2050
Not specified. In
order to achieve
carbon positive will
require Climate
Positive Credits.
Striving for local
carbon offset market
with a Greenhouse
Pilot.
Goal is to become a
“Climate Positive City”,
reducing GHGs below
zero, for which it lists
measures outside the
city limits related to
land use and food
Portland, OR
USA12 40% reduction by 2030; 80%
reduction by 2050 Update underway
Seattle, WA
USA13 City limits
Net zero by 2050; By 2030 -
Reduce emission from
passenger vehicle
transportation by 82%, VMT by
20% and emissions per mile
traveled by 75% from 2008
baseline; By 2030 reduce enegy
use in commercial buildings by
10% and residential buildings
by 20%, and GHG intensity of
all fuels by 25%
11 2013 Climate Action Plan
12 http://www.portlandoregon.gov/bps/49989?
13 http://www.seattle.gov/Documents/Departments/OSE/2013_CAP_20130612.pdf
4
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
California Communities
Berkeley14 City Limits
Reduce entire community’s
greenhouse gas emissions by
80% below 2000 levels by 2050
Davis15
28% below 1990 levels by
2020; Carbon neutrality by
2050
Combination of actions
at various levels and
carbon offsets. Similar
target set by the UC
system, City of
Berkeley, and Norway.
Lancaster16 Electric Supply Pursuing net zero power (100%
renewable energy) by 2020
2012 “Solar energy
capital of California” by
the California Clean
Energy Authority
Palo Alto17 City utilities/City
Limits
100% carbon neutral electric
resources (2013 – achieved)
By 2020, the City and
Community will reduce
emissions by 15% of 2005
levels, equal to 119,140 metric
tons of CO2, and bring the
community in line with State
emission reduction goals. (The
Plan is currently under revision
and these goals may be set
even higher.)
Near term (2013
through 2016)---the
City will purchase
short-term
renewable resources
and/or renewable
energy certificates
(RECs) to supplement
existing and
committed long-term
renewable and
hydroelectric
resources, which
account for 65% to
83% of the portfolio.
Longer term (beyond
2016)---long-term
renewable resources
will provide about a
50% RPS level within
the existing 0.5 ₵/kWh
annual RPS rate limit.
Since about 50% of the
electric supply
portfolio is already
sourced from carbon-
free hydroelectric
resources, the
additional cost of
achieving carbon
neutrality between
2017 and 2020 is very
small.
San Francisco18
Recent CAP goals
include zero waste,
50% sustainable trips
and 100% renewable
energy; also require
departmental Climate
Action Plans and GHS
reporting
14 http://www.ci.berkeley.ca.us/climate/
15 http://www.cooldavis.org/wp-content/uploads/2010_Davis_Climate_Action_Adaptation_Plan.pdf
16 http://www.forbes.com/sites/peterdetwiler/2014/05/13/can-a-city-get-to-net-zero-lancaster-california-mayor-
thinks-so/, http://www.cityoflancasterca.org/index.aspx?page=1499
17 http://www.cityofpaloalto.org/gov/depts/utl/residents/resources/pcm/carbon_neutral_portfolio.asp
18 http://www.sfenvironment.org/cas/goals
5
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
San Rafael19 City Limits
25% reduction of greenhouse
gas (GHG) by 2020
80% reduction by 2050 to meet
state targets.
Santa Cruz20 City Limits
30% reduction by 2020, 80%
reduction by 2050 (compared
to 1990 levels); require all new
buildings to be emissions
neutral by 2030
19 http://www.cityofsanrafael.org/citymgr-green-home/
20 http://www.cityofsantacruz.com/index.aspx?page=1544
CITY OF HERMOSA BEACH
COMMUNITY DEVELOPMENT DEPARTMENT
MEMORANDUM
Date: April 11, 2016
To: Honorable Mayor and Members of the City
Council
From: Ken Robertson, Director of Community Development
Subject: Supplemental – Direction Regarding Carbon Neutral Goals in the Draft
General Plan (Agenda Item 6a)
The question has been raised of how the EIR and alternatives for PLAN Hermosa will incorporate the
potential cost implications of implementing a carbon neutral goal.
The California Code of Regulations relative to Environmental Impact Reports explicitly states that
alternatives should focus on "lessening any significant effects of the project, even if the alternatives
would impede to some degree the attainment of project objectives, or would be more costly."
Council could provide direction that Staff also compares the fiscal implications and community
costs/benefits between any of the alternatives. The potential additional investment needed to achieve a
2030 goal are generally described in the fiscal implications section of the staff report but could be more
detailed when the alternatives are presented. This additional technical work will may also affect the
estimated additional expenses that will be necessary to conduct the analysis.
FURTHER BACKGROUND - ECONOMIC ANALYSIS CONDUCTED BY THE BRENDLE GROUP
Attached is further background information related to analysis prepared on carbon neutrality prepared
by the Brendle Group, who atthe November 5, 2014 Adjourned Regular Meeting of the Hermosa Beach
City Council presented findings focused on the potential economic benefits of carbon neutrality,
including the potential of a “first-to achieve” position (Attachment 1). A summary of City Council
questions and comments is provided below.
Explain the potential role of the City in implementing community carbon neutrality.
Present the costs and savings in a way that shows the direct investment needed by and benefits
to the City organization.
Further define and quantify the health and other indirect benefits of reduced emissions.
Expand the process to allow for greater exploration of the potential benefits of carbon neutrality
investment from a range of community stakeholders.
The February 3, 2015 memorandum: Economic Benefits of Carbon Neutrality Follow-Up Response to
City Council Questions (Attachment 2) and the subsequent Carbon Planning Tool identify and have the
ability to compare relative costs/benefits of different scenarios. The Community Investment and
Community Cost savings can be divided into the categories of energy efficiency improvements,
distributed renewables, vehicle mile traveled reductions, adoption of more efficient vehicles and
purchases of offsets.
Memorandum
To: Tom Bakaly, City Manager
From: Judy Dorsey and Shelby Sommer
CC: Shelli Margolin-Mayer, Pamela Townsend, Ken Robertson
Date: October 30, 2014
Re: Economic Benefits of Carbon Neutrality Analysis and Recommendations
Project Purpose and Overview
This memorandum explores options for the City of Hermosa Beach to pursue carbon neutrality and the
potential economic benefits and other advantages of a “first-to achieve” position. It is based on review
of existing City efforts related to climate planning, as well as research of and benchmarking against
other leading communities, both in California and across the world, in terms of aggressive carbon
reduction goals.
Because of its small size (just over one square mile), Hermosa Beach is in a unique position to pursue
carbon neutrality. The community’s entire greenhouse gas (GHG) emissions (estimated at 134,243
metric tons of carbon dioxide equivalent, MTCO2e) are at a scale similar to many other communities’
neighborhoods or districts, so the reductions necessary to achieve carbon neutrality can be realistically
achieved or offset through changes in energy use, and the waste and transportation sectors. In addition,
there are many exiting initiatives already underway that will naturally evolve emissions downward. For
example, .the State of California’s building codes will require net zero construction by 2020, and national
vehicle fuel economy standards are increasing.
To explore the potential economic and other benefits of carbon neutrality to the City of Hermosa Beach,
it was necessary to begin with a definition of carbon neutrality. Five potential definitions or options for
carbon neutrality emerged, and are described in detail in Appendix A. In short, they include community-
wide, municipal operations, transportation sector, electricity, and Eco-District options.
After identifying the options for achieving carbon neutrality, high-level estimates of the first costs,
annual savings, and offset costs were developed for each option. The methodology for developing these
estimates is summarized in Appendix B.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 2
In addition to exploring the costs, savings, and other benefits of the carbon neutrality options, seven
qualitative criteria were identified as important factors in the screening and evaluation of the options.
These criteria are defined below.
A. Differentiating: The option helps establish a unique identity or brand that helps set Hermosa
Beach apart from its peers.
B. Credible: The option is meaningful and realistic, and generates traction to build on existing
efforts. The option could be realistically achieved within the stated timeline.
C. Ambitious: The option is achievable but aggressive in terms of timeline, scale, or other factors.
Its magnitude would significantly exceed existing policy frameworks at the regional and state
level.
D. Attracts Investment: The option will generate interest in and draw resources to the community.
E. Drives Innovation: The option will spur new ideas, approaches, and improvements
F. Reflects Community Character: The definition taps into and enhances the existing community
assets and atmosphere of Hermosa Beach.
G. Replicable: The definition is transferrable to other communities and addresses a common
barrier or challenge for achieving carbon neutrality. Others will look to Hermosa Beach for
guidance and leadership.
SUMMARY OF FINDINGS
If Hermosa Beach opted to pursue carbon neutrality simply by purchasing GHG offsets equivalent to the
community’s total emissions, the estimated cost per year would be approximately $2 million per year,
with the total cost of neutrality by 2030 exceeding more than $30 million. By opting for such as strategy,
the community would not experience the other economic, environmental or social savings or benefits of
reducing local GHG emissions through efforts such as increased energy efficiency, installation of
distributed renewable energy sources, or reductions in vehicle miles traveled (VMT) and waste.
Instead, Hermosa Beach could invest in itself, employing a suite of local strategies to achieve carbon
neutrality and generate other benefits. Using a multi-pronged approach that integrates major
reductions in energy use through efficiency improvements, installation and use of distributed solar
voltaic for generation, purchase of green energy through Southern California Edison, significant
reductions in VMT, and purchase of GHG offsets for some activities, the estimated initial cost of
investment into carbon neutrality would range from nearly $2 million to roughly $130 million,
depending on the carbon neutrality pathway selected (see the table on the following page for a cost and
savings summary of all options).
It should be noted that this investment estimate reflects the estimated size of the overall “carbon
neutrality program” – one that is based on partnerships and contributions from not just the City of
Hermosa Beach, but also developers, residents, businesses, utility providers, transportation agencies,
and other organizations.
While the initial investment into these activities are much higher than simply purchasing offsets, for all
of the carbon neutrality options, the overall net benefits to the community far exceed the costs. For
example, as illustrated in the summary table on the following page, the investment of an estimated
$130 million into myriad efficiency, vehicle miles traveled reductions, and other improvement projects
to achieve community-wide carbon neutrality, could return an annual savings of roughly $36 million.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 3
Option 1.
Community
Option 2.
Municipal
Operations
Option 3.
Transportation
Sector
Option 4.
Electric
Supply
Option 5.
Eco-District
Target Year 2030 2020 2030 2025 2025
Emissions
Reduction
Required (MT
CO2e)
134,000 1,728 79,388 29,391 18,760
Estimated Level of
Investment to
Achieve Goal –
One Time*
$130M $1.9M $31M $98M $14M
Annual Offsets,
Green Rate $2.6M/yr $116k/yr $780k/yr $1.8M/yr $250k/yr
Estimated Annual
Cost Savings from
Achieving Goal
$36M/yr $450k/yr $24M $12M/yr $1.8M/yr
Qualitative Evaluation Criteria
A. Differentiating
Yes No Yes Somewhat Yes
B. Credible
Somewhat Yes Yes Yes Yes
C. Ambitious
Yes No Yes Yes Yes
D. Attracts
Investment Yes Somewhat Yes Yes Yes
E. Drives
Innovation Yes Somewhat Yes Yes Yes
F. Reflects
Community
Character
Yes Yes Somewhat Somewhat Yes
G. Replicable
Yes Yes Yes Yes Yes
* Level of investment is the estimated size of the program to be financed in partnership with the City of
Hermosa Beach, homeowners, business, contractors, developers, utilities, transportation agencies,
federal/state agencies, grants, and other organizations and foundations.
** Note: Totals may not sum due to rounding.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 4
POTENTIAL BENEFITS OF A “FIRST-TO” POSITION
In addition to the cost savings and return on investment opportunities identified for all of the carbon
neutrality options identified for Hermosa Beach, aggressive pursuit of a “first-to” position to achieve
carbon neutrality is expected to generate additional benefits and levels of investment interest and
activity. While there is a lack of specific published materials demonstrating a proven statistically
significant increase in funding available to “first-to” projects, there are some other similar efforts from
which assumptions can be developed to estimate the benefits of a “first-to” position for community-
wide carbon neutrality for Hermosa Beach.
To begin, Brendle Group has supported several projects at the building scales that have achieved “first-
to” positions, and these experiences show that “first-to” status can generate about 10 to 20 percent of
implementation costs from equipment donations, demonstrations, reduced contractor and supplier
fees, and outside grants and rebates. This estimate is supported by several projects in Fort Collins,
Colorado, including Brendle Group’s headquarters, a project with Woodward, and Colorado’s first LEED
home.
At a larger scale, partnerships and cost-sharing opportunities can also support implementation of “first-
to” opportunities. For example, with FortZED, there was a 50 percent cost-sharing opportunity with the
Department of Energy for implementation of a “first-to” demonstration of peak load management.
Pecan Street Inc., a University of Texas at Austin-based initiative focused on research and innovation in
water and energy, is also attracting volunteers, sponsorships and investment into smart grid
technologies. Likewise, Xcel Energy has partnered with technology providers for the donation of
equipment and services in their smart-grid city initiative.
If the 10 to 30 percent assumptions materialized for Hermosa Beach, the community could bring in an
estimated $12 to $40 million in contributions and in-kind donations to support implementation by virtue
of being the “first-to” community in pursuit of carbon neutrality by 2030. More specifically, a portion of
the contributions and funding would likely come from rebates, grants, and other financial assistance and
resources available to any community adopting and pursuing aggressive carbon neutrality goals.
Another portion could come from active solicitation of partners and in-kind contributions in exchange
for association with the brand/profile of the endeavor, meaning that the City would need to establish a
brand position and lead an active campaign to garner these benefits.
RECOMMENDATIONS AND NEXT STEPS
The City of Hermosa Beach has an opportunity to credibly pursue carbon neutrality community-wide
and to be among the first, if not the first city to attain this goal nationwide. The City’s small size, political
climate, and location in a state that is leading the country in renewable energy and climate action
planning are all factors that can contribute to its success. That said, because Hermosa Beach is so small
compared to other cities, attaining carbon neutrality would be on the order of neighborhood or district
scale efforts in other cities. By extension, any economic benefits from investment in carbon neutrality
would also be comparable to a district or neighborhood in a larger city.
As such, it is recommended that the City adopt and begin to pursue an aggressive goal for carbon
neutrality. By taking a no-regrets approach towards carbon reduction, at a minimum the community will
benefit from proactive planning and reduced risk from delayed action. The projected economic benefits
from a leadership position around any of the carbon neutral options are added benefits, with the
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 5
potential opportunities surrounding a “first-to” position serving as an extra incentive or implementation
driver.
Moving forward, it is recommended that Hermosa Beach begin implementation of its carbon neutrality
goal with investment in and pursuit of carbon reduction strategies that improve building efficiency and
expand renewable energy generation. The cost savings realized from these initiatives can help offset the
investments needed to reduce vehicle miles traveled and waste generated. However, early action is less
expensive than later action, and Hermosa Beach should integrate carbon reduction strategies into all
upcoming building, transportation, and waste projects and efforts such as building upgrades, corridor
improvements, events, and revitalization activities.
Hermosa Beach should also work to establish its “carbon neutral” brand, developing and sharing the
community’s aspirations and commitment. The City must also determine, dedicate, and sustain
adequate resources not only to ongoing implementation, but also ongoing monitoring and
communication of its progress. Additional next steps include the alignment of City policies and
regulations to support the goals, and the ongoing pursuit of partners to leverage opportunities and
maximize community benefits.
Benefits of Carbon Neutrality
The case for taking action to reduce carbon emissions is well-documented and summarized in a recent
report by the Carbon Disclosure Project, Wealthier, Healthier Cities: How Climate Change Action is
Giving Us Wealthier, Healthier Cities (2013).1 The report shares the results from review of 110 cities
worldwide who are taking action to reduce GHG emissions. Key findings from the report include the
following:
1. Climate change action is making cities leaner and richer. One out of every two actions that
cities are taking to reduce emissions in their municipal operations is focused on efficiency.
Cities report nearly $40 million in savings per year from tackling climate change.
2. Emissions reduction activities by cities are pro-business. 62% of actions that cities are
taking to reduce GHG emissions at the city-wide level have the potential to attract new
business investment and grow the economy. Furthermore, 91% of cities believe that
working to combat climate change will lead to economic opportunities for their cities.
Inaction could be costly—98% of cities say that climate change poses physical risks to their
cities, including impacts to business.
3. Reducing emissions and adapting to climate change makes for healthier citizens. More
than half of reporting cities (55%) are undertaking emissions reduction actions that promote
walking and cycling, which directly and indirectly lead to improved public health. And over
three-quarters of cities’ reported adaptation actions will protect human health from the
negative effects of climate change.2
1 Wealthier, Healthier Cities: How Climate Change Action is Giving Us Wealthier, Healthier Cities. Carbon Disclosure
Project (2013). https://www.cdp.net%2FCDPResults%2FCDP-Cities-2013-Global-
Report.pdf&ei=3Nw7VLDsGuqK8QHJp4HwBA&usg=AFQjCNFRhbqKFIospvbjxdQ0z1yEcyoVOA&sig2=mntKcjNFC99c
9cxBMG6OfQ&bvm=bv.77161500,d.b2U (Accessed October 13, 2014).
2 Wealthier, Healthier Cities: How Climate Change Action is Giving Us Wealthier, Healthier Cities. Carbon Disclosure
Project (2013).
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 6
The City of Cleveland Climate Action Plan (CAP, 2013)3 draws similar conclusions, finding that the key
benefits of taking climate action include “local job creation and economic development; reduced utility
and operational costs for homes, businesses, and government; improved risk management and
resilience to the impacts of climate change; healthier, more comfortable homes; improved air quality,
public health, and quality of life; improved water quality and habitats; and a more educated and
empowered population with the tools to take action at home, at work, and in their community.”
The Cleveland CAP identified three major job-generating components related to the plan: 1) demand
related to annual household and business utility cost savings; 2) demand related to the construction of
infrastructure; and 3) demand related to the plan’s ongoing actions. It recognizes that the potential
energy savings is significant, but notes that “the economic case is even greater when considering the
multiplier effect from households and businesses having more money to spend elsewhere. For
households, additional money translates into greater expenditure on retail goods and services, as well
as potentially greater rates of investment and saving, all of which generate demand for jobs in the
existing economy.”
Rocky Mountain Institute’s (RMI) recent report, Stepping Up: Benefits and Cost of Accelerating Fort
Collins’ Energy and Climate Goals (2014)4 also explores the potential opportunities and benefits of more
aggressive climate action goals in Fort Collins, Colorado. Like the Wealthier, Healthier Cities report,
RMI’s Stepping Up report concludes that the “accelerated scenario represents a fundamentally different
paradigm for investment in energy-related assets and infrastructure compared with the business as
usual scenario, providing greater local job creation, economic development, stimulus for innovation, and
growth for local businesses.” It also highlights the opportunity to “invest in efficiency and renewables
now, to reduce outflows of cash for decades to come.” According to the Stepping Up report, an
estimated 400-500 jobs and $20 million per year for the period between 2013 and 2030 would result
from a shift in investment from distant energy resources (e.g., coal and natural gas) to more local assets
(e.g., efficiency, distributed solar, and smart grid).
THE COSTS OF INACTION
A recent report issued by the Executive Office of the President of the United States, The Cost of Delaying
Action to Stem Climate Change,5 recognizes that there is an ongoing debate over whether to act now to
mitigate and adapt to climate change, or to delay action until the future, and explores the economic
impacts of delaying action. It discusses the negative externalities and economic damages that are
generated from the emissions of GHGs such as CO2, including but not limited to the costs to health,
costs from sea level rise, and damage from increasingly severe storms, droughts, and wildfires.
3 City of Cleveland Climate Action Plan (2013). http://www.sustainablecleveland.org/wp-
content/uploads/2013/10/Cleveland-Climate-Action-Plan-Final2013-web.pdf (Accessed October 13, 2014).
4 Stepping Up: Benefits and Cost of Accelerating Fort Collins’ Energy and Climate Goals. Rocky Mountain Institute
(2014). http://www.rmi.org/cms/Download.aspx?id=10913&file=80FortCollinsReport-WEB_2014-
02.pdf&title=Stepping+Up%3a+Benefits+and+Cost+of+Accelerating+Fort+Collins%27+Energy+and+Climate+Goals
(Accessed October 13, 2014).
5 The Cost of Delaying Action to Stem Climate Change. Executive Office of the President of the United States
(2014).
http://www.whitehouse.gov%2Fsites%2Fdefault%2Ffiles%2Fdocs%2Fthe_cost_of_delaying_action_to_stem_clima
te_change.pdf&ei=AN47VKfxNOa48gGPuYG4DQ&usg=AFQjCNFgnTGAGCi9c-
oBx3GMMIpf6eVCFA&sig2=pSPDdJeNP1gBPRhyN-q74w&bvm=bv.77161500,d.b2U (Accessed October 13, 2014).
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 7
The Cost of Delaying Action to Stem Climate Change report concludes that “although delaying action can
reduce costs in the short run, on net, delaying action to limit the effects of climate change is costly,“ and
also that “climate policy can be thought of as ‘climate insurance’ taken out against the most severe and
irreversible potential consequences of climate change.” In short, if a delay in action leads to higher CO2
emissions, it creates a ripple effect of economic damages from a changing climate, and means that
future actions to reduce emissions will likely be more costly. Moreover, action now to reduce the
chances of “climate catastrophes” is wise because the severity of consequences and impacts from
climate change are still unclear.
While the report examines the economic costs of delayed action, it also notes that the “total costs of
climate change include much that does not trade in the market and to which it is difficult to assign a
monetary value, such as the loss of habitat preservation, decreased value of ecosystem goods and
services, and mass extinctions.”
The Risky Business Project recently released a report that serves as a climate risk assessment for the
United States.6 It finds that the US economy is beginning to experience the effects of climate change,
and these impacts will continue to grow. It identifies the following major climate risks that will impact
the national economy and natural and human systems:
Large scale losses of costal property and infrastructure.
Extreme heat across the nation, threatening labor productivity, human health, and energy
systems.
Shifting agricultural patterns and crop yields.
The Risky Business report also details the risks by region – California is included in the assessment of the
Southwest region. The report states that, “On our current path, by the end of the century, the average
Southwest resident will likely experience an additional 33 to 70 days of extreme heat due to climate
change, or one or two additional months of days over 95 degrees Fahrenheit each year.” The report also
notes that “87% of all Californians live in coastal counties, and 80% of the state’s Gross Domestic
Product (GDP) is derived from those counties.” It notes that along the coastline of Los Angeles, if current
trends continue, sea level will likely rise by 1.5 to 3.0 feet by 2100.
The report concludes that “if we continue on our current path, many regions of the U.S. face the
prospect of serious economic effects from climate change. However, if we choose a different path—if
we act aggressively to both adapt to the changing climate and to mitigate future impacts by reducing
carbon emissions—we can significantly reduce our exposure to the worst economic risks from climate
change, and also demonstrate global leadership on climate.”
HERMOSA BEACH OPPORTUNITIES
Perhaps the greatest opportunity for GHG emissions reductions and significant cost savings is in the
buildings sector. Comprehensive investment by the City, homeowners, businesses, developers, utilities,
and others to increase building efficiency to reduce electricity and natural gas demand, paired with
efforts to install and use distributed solar energy generation could yield more than $14 million annually
in savings. Not only would this multi-pronged, local investment approach lead to direct cost benefits,
6 Risky Business: The Economic Risks of Climate Change in the United States. Risky Business Project (2014).
http://riskybusiness.org/pdf (Accessed October 13, 2014).
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 8
but the direct investment into efficiency upgrades and renewable energy integration would also lead to
other direct and indirect economic benefits.
Efficiency is local in nature, and investment into efficiency upgrades creates opportunities for local
employment and creates revenue for local suppliers and service providers. In addition, the cleanest
energy resource is the one that is not used at all, meaning that the more that Hermosa Beach can
reduce its energy demand, the less it needs to invest in energy supply.
Likewise, investment in local renewable energy generation would support local economic development
opportunities and potential. Widespread distribution of solar photovoltaic systems across the
community could also add visibility and credibility to Hermosa Beach’s carbon neutrality commitment by
showing that it is making a significant effort to generate its own clean energy.
Other benefits to Hermosa Beach from investing in local strategies to achieve carbon neutrality would
include more efficient and comfortable buildings, improved climate change resiliency, engaged and
empowered local residents, and expanded opportunities for businesses and investment.
In terms of the transportation sector, there are major opportunities to reduce overall vehicle miles
traveled (VMT) by Hermosa Beach residents and employees. However, due to Hermosa Beach’s location
within a greater metropolitan region and resulting commuting patterns, it is likely that a significant
portion of the community’s transportations will need to be offset (at least in the near-term) in order to
achieve carbon neutral status. Ongoing investment into transportation demand management, transit,
and bicycling and pedestrian infrastructure can help reduce VMT, and can also support the creation of
local jobs and enhanced community character. However, it is important to note that the costs of
investment into the transportation sector will largely be borne by the public sector, with most of the
cost savings associated with those investments primarily benefitting commuters and community
residents. In addition to overall VMT reductions, continued adoption and integration of more fuel-
efficient vehicles and alternative fuel vehicles at the household, business, and municipal levels will also
help drive down annual transportation emissions.
Other communities have started to realize the benefits of local investment into carbon reduction efforts,
and help provide some insight into potential opportunities that could emerge if Hermosa Beach
aggressively pursues a leadership position. For example, FortZED, in Fort Collins, Colorado, is the
nation’s first major urban zero-energy district. The initiative integrates partners from local government,
academia, and industry in collective pursuit of transforming the downtown area and Colorado State
University main campus into a net Zero Energy District through conservation, efficiency, renewable
sources, and smart technologies.
FortZED includes more than 7,000 residential and commercial customers, representing approximately 10
percent to 15 percent of the Fort Collins Utilities’ distribution system, and over 200,000 megawatt hours
per year (MWh/year) in energy usage. For comparison, the City of Hermosa Beach is approximately 57
percent larger than the FortZED area in terms of number of customers (estimated at 11,000); however
overall estimated energy use in Hermosa Beach is nearly 101,000 MWh/year (based on the 2005
Community GHG Inventory), or roughly half of FortZED’s usage (this is due to the large number of
industrial user in the FortZED boundary).
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 9
FortZED has positioned itself to be a model for a leading and replicable net Zero Energy District, and as
such, it has attracted over $6.3 million in federal economic stimulus-related grants from the U.S.
Department of Energy, plus an additional $5.1 million from local participants, investors, and utilities.
Given its compact scale and relatively low existing energy usage, it is likely that Hermosa Beach’s carbon
neutrality efforts would drive similar levels of innovation and investment in the community, which
coupled with potential annual cost savings from improved building efficiency, reduced VMT, and
reduced waste expenses, could generate further ripples of direct and indirect economic benefits across
the local economy.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 10
Appendix A: Options for Carbon Neutrality
This appendix describes each of five potential options for Carbon Neutrality in terms of a “first to”
position and provides seven criteria for comparing the strengths and weaknesses of each option,
especially as they relate to and support the City through a “carbon neutral” branding effort. Based on
research and benchmarks, most existing community carbon neutral goals are based on mid-century
implementation horizons. Because this project is driven by a “first-to” viewpoint, for each option an
aggressive target date for achieving neutrality was assumed in order to credibly establish and reap the
benefits of a “first-to” position. Assuming a 2015 goal adoption year, this would provide a 5 to 15-year
runway to accomplish the various options for carbon neutrality.
It is also assumed that each carbon neutrality option would be achieved using consistent and recognized
protocols for estimating greenhouse gas (GHG) emissions, and that monitoring of carbon neutral status
would need to occur on an annual basis. Local efforts in pursuit of carbon neutrality in Hermosa Beach
would also need to be aligned with other state climate and GHG initiatives, including California’s cap and
trade and Renewable Portfolio Standard programs. California’s regulatory climate around the topic of
carbon neutrality is nuanced, and opportunities exist for communities to achieve carbon neutral status
by retiring California-eligible GHG emissions allowances equal to their gross emissions inventories.
However, this study does not explore this pathway to carbon neutrality, primarily because such actions
do not lead to the greater local economic, environmental, and social opportunities that result from local
investment into strategies to actually reduce GHG emissions. Instead, this appendix focuses on five
potential carbon neutrality options for Hermosa Beach:
1. Community
2. Municipal Operations
3. Transportation Sector
4. Electric Supply
5. Eco District (e.g., Downtown)
The following pages discuss each option, outlining the pathway to neutrality and identifying existing
efforts to build on to achieve carbon neutral status. Each option also includes discussion of existing
benchmarks and competition in achieving a “first-to” position.
Note that for each option, the pathway for achieving carbon neutrality would likely involve a
combination of various voluntary and regulatory approaches to reduce emissions. For example, through
building codes, the State of California will require net-zero energy construction for all new buildings by
2020. This regulatory approach is just one example of the many voluntary and regulatory strategies that
will need to come together to reduce building energy use to achieve carbon neutrality.
OPTION 1. COMMUNITY CARBON NEUTRALITY BY 2030
Description/Scope
Under this option, Hermosa Beach would eliminate or offset all greenhouse gas emissions by a target
date using the International Council for Local Energy Initiatives (ICLEI) U.S. Community Protocol for
Accounting and Reporting of Greenhouse Gas Emissions. Hermosa Beach’s existing GHG emissions
inventories estimated 138,464 metric tons of carbon dioxide equivalent (MT CO2e) emissions in 2005,
134,253 MT CO2e in 2007, and emissions are projected to increase to 136,944 MT CO2e by 2020.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 11
Under this carbon neutrality goal, net GHG emissions would need to be reduced to zero through a
combination of direct mitigation strategies and likely offsets or ‘over production’ of renewable energy to
meet the goal. Since several other communities have established 2050 as a target date for community
carbon neutrality, an aggressive target date of 2030 is suggested in order for the City of Hermosa Beach
to benefit from a “first to” position.
Groundwork and Pathway to Neutrality
In 2010, the Hermosa Beach City Council established a goal to become a carbon neutral city after
adopting the Sierra Club’s Cool Cities Program in 2006. The program included a commitment to reduce
GHG emissions to at least 7% below 1990 levels by 2012. While emissions did drop 3.7% from 1990 by
2007, it’s not clear whether the remaining reductions were achieved by 2012.
The target date for carbon neutrality in Hermosa Beach was not defined when the goal was established.
However, regardless of the target date, this ambitious goal would dramatically shift from incremental
reductions to complete elimination of GHG emissions, effectively decarbonizing the economy – from
transportation, to buildings, waste, and processes/services.
The Hermosa Beach Carbon Neutral Scoping Plan, prepared by students of the UCLA Institute of the
Environment and Sustainability in 2013, serves as a resource in understanding options for the City’s
pathway to neutrality. It summarizes community and municipal GHG inventories, and provides analysis
of emissions conditions by sector including building energy, transportation and land use, water and
wastewater, and materials consumption and waste. Through analysis of different scenarios, various
models and approaches to reduce GHG emissions are explored.
The Carbon Neutral Scoping Plan’s recommended scenario for achieving carbon neutrality in Hermosa
Beach is ambitious and identifies long-term measures that may be difficult to implement, but would also
lead to the greatest GHG emissions reductions. Implementation of this scenario would entail extensive
community participation in and adoption of the following measures:
Enhanced residential, commercial, and industrial building energy upgrades and retrofits
HVAC solar driven adsorption heat pump systems in all residential buildings
Biogas as part of the local natural gas distribution system
Renewable energy procurement by Southern California Edison by 2020
50% of households and commercial/industrial buildings generating 100% of their electricity from
photovoltaic
100% of governmental buildings generating 100% of their electricity from photovoltaic
Community Choice Aggregation (CCA) to contract with other utilities with larger renewable
supplies and allocate funds to wave power
Households participating in a neighborhood electric vehicle program
Growth in the use of electric, hydrogen fuel cell, and natural gas vehicles
Community carpooling and carshare programs
Improvements to City infrastructure to enhance pedestrian, bicycle, and low speed vehicle
access
Neighborhood oriented development to reduce trip length and encourage non-vehicle mode
choices
Improved transit service
Efficiency improvements related to fuel standards and vehicle type improvements
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 12
Pay-as-you-throw program
Green waste composting program
Ecofriendly guide and reuse retailers (e.g., thrift/consignment shops)
Methane capture technology
Even under this aggressive scenario, the Carbon Neutral Scoping Plan recognizes that Hermosa Beach
might not be able to completely neutralize its impact on global climate change, and that emissions
offsets, while not a first choice plan to achieve carbon neutrality, are likely a necessary addition to the
carbon neutral strategy after aggressive pursuit of other implementation measures. For example, even if
Hermosa Beach implements all of the measures identified in the most aggressive scenario in the Carbon
Neutral Scoping Plan, the community would only realize approximately 90% GHG emission reductions.
As such, it is estimated that approximately 10% of the community’s GHG emissions would need to be
offset in order for the community to realistically achieve carbon neutrality. Offset expenditures,
especially those that might come from the City’s General Fund, would likely be heavily scrutinized,
particularly in years when the City’s budget is lean. For that reason, a special funding source for offsets,
such as a Utility Users Tax, may make help add credibility to offset purchasing strategies.
Benchmarks
Several communities have committed to carbon neutrality by 2050 including Davis, California, Fort
Collins, Colorado, Seattle, Washington, and Oberlin, Ohio. Only a handful of communities have
established goals of achieving carbon neutrality before 2050 including Melbourne, Australia (2020),
Copenhagen, Denmark (2025), and Aarhus, Denmark (2030). The various strategies for these first
communities to reach carbon neutrality are summarized below.
Melborne’s roadmap to climate neutrality by 2020 focuses on Council operations and leadership
(maintaining carbon neutrality), increasing the efficiency of commercial and residential buildings
and industry, shifting the energy supply to renewable sources, increasing the percentage of trips
using low emissions transportation, and decreased landfill waste per capita.
Copenhagen’s goal to reach carbon neutrality by 2025 hinges primarily on converting the energy
supply to less carbon-intensive options including biomass, wind, geothermal, and solar. It also
includes district heating and cooling infrastructure, demanding energy efficiency and
transportation goals, and net-zero energy construction by 2020.
Aarhus’ pathway to carbon neutrality by 2030 involves significant reduction of energy
consumption through improved energy efficiency in buildings, energy efficient transportation
and intelligent energy systems, combined with conversion of the remaining consumption to
fossil free production. The first phase of the initiatives include efficiency retrofits to municipal
properties, connecting homes to a municipal district heating system, and a network of charging
locations for electric vehicles. Additional initiatives will include a light-rail transit system,
expansion of the bike path network, and switching to wood pellets, straw and domestic waste as
fuels at the City power plant.
OPTION 2. CARBON NEUTRAL MUNICIPAL OPERATIONS BY 2020
Description/Scope
Under this option, the City of Hermosa Beach would lead by example, eliminating greenhouse gas
emissions associated with municipal operations by 2020, using the Local Government Operations
Protocol (LGOP) as recommended by the California Environmental Protection Agency Air Resources
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 13
Board. The community would commit to achieving carbon neutrality by 2020 (an aggressive but realistic
goal) and to maintaining that status over time.
Total municipal GHG emissions for Hermosa Beach were estimated at 1,508 MT CO2e in 2005, and 1,552
MT CO2e in 2007, or nearly 1% of community-wide emissions. Municipal GHG emissions under a
business-as-usual scenario are forecast to reach 1,728 MT CO2e by 2020.
Groundwork and Pathway to Neutrality
Various efforts to explore Hermosa Beach’s pathway to carbon neutral operations have already been
completed or are currently underway. When the City Council declared intent to pursue carbon neutrality
in 2010, it was determined that the first area of focus would be municipal facilities and operations. The
City’s Sustainability Plan, adopted in 2011, identifies programs and high-level estimates of carbon
reduction that might be achieved by providing an approximately 25% reduction of the baseline.
Implementation of the Sustainability Plan continues, as do many parallel efforts to plan for and achieve
carbon neutrality in municipal facilities, as follows:
Carbon Neutral Roadmap for Municipal Facilities & Operations (2013) – provides a summary of
accomplishments, targets and future actions for achieving carbon neutrality in municipal
facilities and operations. Various timeframes are outlined for achieving the carbon neutral goal,
including the Sustainability Plan target (25% reduction from 2005, by 2020), more aggressive
(50% by 2020 for example), or a more accelerated target.
Staff Report: Strategy and Steps to Accelerate Energy Reduction and Cost Savings (2013) –
provides recommendations to implement City building, park lighting and street lighting energy
reduction projects through Capital Improvement Project (CIP) funds and on-bill financing
agreement with Southern California Edison (SCE) and adoption of a Municipal High Efficiency
Product Procurement Policy. As summarized in the table below, these projects represent an
annual GHG reduction of 337 MT CO2e, or approximately 25% of the municipal GHG emissions.
Employee Commute Reduction Strategies (2014) – summarizes the findings of the 2013
Employee Commute Survey and identifies strategies for an Employer Commuter Program to
support the City's carbon neutrality goal. The report does not identify a target date for
implementation, nor the preferred program(s).
Clean Fleet Policy and Action Plan (2013) – a Council-adopted policy that establishes targets and
a plan to green the City’s fleet vehicles. An interim target of 50% emissions reduction from City
fleet and 20% emissions reduction for contractor service vehicles is proposed. Long-term goals
2013 Strategy and Steps to Accelerate Energy Reduction and Cost Savings: Summary of Recommended Projects
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 14
of net zero GHG emissions for City fleet vehicles and alternative fuel for 100% of contracted City
service vehicles are also identified.
Moreover, the Hermosa Beach Carbon Neutral Scoping Plan also provides information in its three
scenarios related to achieving carbon neutrality in municipal operations. Some of these efforts have
already been initiated to reduce carbon emissions across municipal facilities and operations, such as the
2013 energy audit, lighting retrofits, addition of clean fleet vehicles, and fleet-dedicated electric vehicle
stations.
Future municipal efforts will be defined in the Hermosa Beach Municipal Carbon Neutral/Climate Action
Plan, currently under development as a separate, but related effort. Preliminary objectives identified for
the municipal carbon neutral pathway include a focus on actions that can be quickly implemented,
visible evidence of renewable energy generation within the community (especially solar photovoltaic),
visible alternative fuel vehicle additions to the City fleet, an innovative program that addresses
employee commutes, regular evidence of reductions in gross emissions attributable to the City
demonstrated through an ongoing monitoring program, valid environmental claims within the state’s
complex policy environment, and cost-effective reductions that don’t crowd out expenditures on City
services and infrastructure.
Benchmarks
Like Hermosa Beach, most best-practice communities conduct separate GHG inventories for municipal
operations in conjunction with the community GHG inventory and often set analogous goals for
municipal operations as for the community. Many communities have established aggressive carbon
neutral goals and target dates for municipal operations, and some have already achieved those goals, as
follows:
British Columbia: many local governments achieved 100% carbon neutrality for public sector
facilities in 2010. Carbon offsets are used to achieve carbon neutrality, and all offsets used must
meet stringent eligibility criteria. However, few have maintained this status to due to a changing
political climate and offset purchasing issues.
Austin, Texas: committed to make all City fleets, facilities, and operations carbon neutral by
2020. Part of that commitment will involve the purchasing of carbon offsets. The municipal plan
also includes the development of departmental climate protection plans and an employee
education campaign and program. As of 2012, the City’s municipal carbon footprint decreased
from the 2007 baseline of 286,000 MT CO2 to 190,000 MT CO2. Major contributions to this
decrease include the fact that the City of Austin became the largest local government in the US
to subscribe to 100% renewable energy power to all municipal facilities in 2011, and more than
45 solar photovoltaic installations totaling over 614 kW (AC).
OPTION 3. CARBON NEUTRAL EMISSIONS FROM TRANSPORTATION SECTOR BY 2030
Description/Scope
Under this option, Hermosa Beach would eliminate or offset all greenhouse gas emissions associated
with transportation activities within its current GHG inventory by 2030 (the same time period
established for community carbon neutrality). This would be challenging but also a unique approach to
carbon neutrality and possibly a significant contribution to the region.
In Hermosa Beach, transportation was responsible for 59% of total annual emissions according to the
City’s 2007 community GHG inventory (79,388 MT CO2e). The main sources of transportation GHG
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 15
emissions are commuting and work trips, as only a small portion of the City’s residents are employed
within the community. According to the 2008-2012 American Community Survey 5-year estimates, the
average commute time for Hermosa Beach is nearly 30 minutes, and more than 80% of residents drive
to work alone.
By establishing a pathway to decarbonize the transportation sector, Hermosa Beach would not only be
addressing one the largest sources of emissions in the community, but could also generate other
regional interest and participation since it is a mobile source not confined to community boundaries.
Additionally, a carbon neutral transportation sector is an important element of an overall community
carbon neutrality goal.
Groundwork and Pathway to Neutrality
While it contains recommendations to address and target all sources of emissions, the Hermosa Beach
Carbon Neutral Scoping Plan recommends that the City specifically focus on the largest source of the
community’s emissions, transportation. As the Carbon Neutral Scoping Plan notes, Hermosa Beach has
little or no control over many aspects of the vehicle manufacturing and energy production processes,
and so the boundary for GHG accounting for Hermosa Beach’s transportation sector would likely need
to be focused around components of vehicle travel and the refueling aspects of energy production
processes. Strategies for achieving carbon neutrality would need to focus on reducing fuel consumed
per mile traveled, vehicle miles traveled, and fuel carbon intensity.
Measures such as a municipal clean fuel or zero emission purchasing policy, alternative fueling stations,
carshare programs (such as Car2Go), carpooling and rideshare programs, City fleet vehicle efficiency,
neighborhood electric vehicle program, “Complete Streets” planning and improvements, neighborhood
oriented development, and parking management strategies would help the community achieve the goal.
While many of these efforts are already underway to some degree, widespread community participation
would be a critical component in achieving carbon neutrality.
The Southern California Area Council of Governments (SCAG) Regional Electric Vehicle Program is one
effort to leverage if Hermosa Beach decides to pursue a carbon neutral transportation system. The
program is focused on preparing Southern California for an influx of plug-in electric vehicles (PEVs), and
provides resources such as a Southern California PEV Readiness Plan, Interactive PEV Atlas, and other
links and information to support the growth of PEVs in the region.
In addition to changes in vehicle types, physical improvements to existing infrastructure and facilities
would be necessary to accommodate and increase the number of trips on other modes, such as
pedestrian, bicycle, and transit usage. The Pacific Coast Highway and Aviation Boulevard Street
Improvement Plans identify some steps towards that end, but additional improvements would be
necessary community-wide.
Though electrification of the transportation system would drive up energy use, a renewable source for
that energy, such as solar, could help balance out the increased emissions. For example, continued
installation of solar photovoltaic systems on community facilities, such as schools, parking structures,
and City properties could be used to generate the energy needed to charge fleets of electric vehicles.
As with the community carbon neutrality option, carbon offsets are likely a necessary part of the
equation since it will be nearly impossible to reduce all transportation-associated emissions coming into
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 16
the community given its location within a larger metropolitan area. Even if the City of Hermosa Beach
became a car-free community, emissions from other transportation-related sources such as transit and
freight would need to be accounted for and potentially offset.
Benchmarks
As part of its effort to achieve carbon neutrality by 2025, the City of Copenhagen is aiming for 75% of
trips to be made by foot, bike, or public transit and is investing heavily into improvements that attract
cycling and public transit users. Copenhagen is also aiming to have 85% of smaller fleet vehicles running
on electricity, hydrogen, and biofuels, and is exploring hybrid biogas models for the bus fleet.
Around the world, a handful of communities (mostly in Europe, such as Helgoland, Germany, Hydra
Island, Greece, and Geithoorn, Netherlands) are essentially car-free, or have major sections that prohibit
cars. While the reasons for their car-free nature vary, many of these communities are smaller towns or
villages in historic, resort, or island settings, and other modes of transportation like walking, bicycling,
boat, golf carts, and public transit are the primary options. While such communities are not officially
recognized as having carbon neutral transportation systems, they offer valuable lessons and
perspectives for communities looking to de-emphasize the role of automobiles in the overall
transportation system.
OPTION 4. CARBON NEUTRAL ELECTRIC SUPPLY BY 2025
Description/Scope
Under this option, Hermosa Beach would eliminate or offset all greenhouse gas emissions associated
with electricity use within its GHG emissions inventory. The target date for this goal is 2025 – an
ambitious but attainable goal five years ahead of the community and transportation sector targets.
Hermosa Beach’s existing electricity consumption is approximately 101,000 Megawatt Hour (MWh) per
year. Previous GHG emissions inventories estimated emissions of approximately 30,253 MT CO2e from
electricity sources in 2005, and 29,391 MT CO2e in 2007, or approximately 22% of all community
emissions.
As noted in the Carbon Neutral Scoping Plan, although emissions from electricity have decreased, this
does not equate to less electricity consumption. Instead, consumption has increased, but the emissions
factor of the electricity provider (Southern California Edison, or SCE), has decreased, meaning that SEC is
improving efficiency of energy generation and increasing the use of renewable sources and natural gas
in electricity generation. As of 2013, SCE served 21.6% of its retail electricity sales with renewable
power. California’s Renewables Portfolio Standard (RPS) currently requires investor-owned utilities to
increase procurement from eligible renewable energy resources to 33% by 2020. California’s
Greenhouse Gas Cap-and-Trade Program also sets the limit and annual caps for GHG emissions to
encourage electricity providers to shift toward clean sources of energy by requiring electricity
companies to purchase allowances for the carbon pollution that is associated burning coal or natural
gas.
Groundwork and Pathway to Neutrality
Because Hermosa Beach is reliant upon an external provider for electricity, achieving a carbon neutral
electric supply would need to involve coordination with the provider as well as local efforts to decrease
emissions associated with electricity usage.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 17
The 2014 UCLA senior practicum report, Assessing Options to Deliver Carbon Neutral Electricity to the
City of Hermosa Beach, builds on the work completed in the Carbon Neutral Scoping Plan, and explores
avenues for attaining carbon neutral electricity. Recommendations from the report include the
following:
Implement Energy Efficiency Programs: renewable energy resources alone are not enough to
supply all electricity if current usage trends continue, and increased efficiency is a major step in
the pathway to carbon emission reduction. Two programs are already available in Hermosa
Beach to help finance energy efficiency improvements – the LA Property Assessed Clean Energy
(PACE) program for commercial properties, and the new HERO program for residential
properties – so the next step would be to encourage participation in these programs.
Community Choice Aggregation via a Joint Powers Authority: a CCA grants decision-making
powers over energy procurement to local authorities, thus by forming a CCA the City of
Hermosa Beach could potentially decide to use only carbon neutral electricity. In order to
reduce the potential price premium associated with carbon neutral electricity, Hermosa Beach
should explore joining with other communities in the area to form a Joint Powers Authority
(JPA) in pursuit of a CCA. A larger CCA would have greater electricity demand, which would give
it more options and bargaining power with electricity providers, and would also help distribute
the fixed costs of forming and running a CCA among multiple communities. One option might be
for the City of Hermosa Beach to join Lancaster, CA in its CCA pursuit, but other potential
JPA/CCA candidates in closer proximity include Manhattan Beach, Inglewood, Redondo Beach,
Palos Verdes Estates, and Rancho Palos Verdes.
Future municipal actions around reducing electricity use and related emissions include pursuing
Platinum Level in the SEC Energy Leader Program, considering a net zero carbon standard for
new/upgrading municipal facilities, streetlight retrofits, and adopting a renewable energy plan
and policies. These initiatives are also discussed in the Staff Report: Strategy and Steps to
Accelerate Energy Reduction and Cost Savings (2013). In addition, a conceptual proposal for a
solar project was recently provided to the City of Hermosa Beach by PsomasFMG. The proposal
is for solar energy installations on carports at two sites in the community: City Hall and the
Community Center. The total system size would be 176 kW, with a net purchase price of $740,
843 and annual operations and maintenance costs of approximately $4,893. All of these
municipal actions could be implemented by 2020 or earlier, as discussed in the Carbon Neutral
Municipal Operations section above.
Green Tariff Shared Renewables Program: while it may be a potential route, the Green Rate
program with SCE may not be the best avenue for Hermosa Beach to achieve a carbon neutral
electricity system due to price, structure, and legislative issues. Instead, a newly formed
Community Choice Aggregation (CCA) could help ensure a lower rate for renewable energy for
Hermosa Beach electricity customers.
Electricity Grid Improvements: upgrades to the current electricity grid system, such as
infrastructure to support bidirectional power and energy storage units, are necessary in order
for Hermosa Beach to support higher levels of distributed generation through renewable energy
sources, such as solar. Since SEC owns the transmission infrastructure in Hermosa Beach, it is
likely that the City would need to establish a Municipal Utility District (MUD) to gain jurisdiction
of the electricity service and to purchase and upgrade the existing grid infrastructure. This
approach could also be tied to Option 5 whereby the MUD is focused on a district within the
City.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 18
Other recent electricity-related efforts by the City of Hermosa Beach include a 2013 Energy Audit which
identified potential energy efficiency improvements, miscellaneous lighting retrofits (completed and in-
progress), using an Enterprise Energy Management Information System (EEMIS) to track electricity and
other data in real-time, participation and Silver Level achievement in SCE’s Energy Leader Program, and
a municipal high-efficiency product procurement policy.
Benchmarks
While a carbon neutral electric supply is an ambitious goal, the City of Hermosa Beach will not be the
first community to achieve it. In 2013, Palo Alto, California became one of the first communities to
achieve a carbon neutral electric supply. In the near-term (2013 through 2016) Palo Alto will maintain
this status by purchasing short-term renewable resources and renewable energy certificated (RECs) to
supplement existing and committed long-term renewable and hydroelectric resources. The City’s
Utilities Carbon Neutral Electric Plan also establishes a pathway for more renewable resource
development long-term, including three major solar electric power purchase agreements that will
support up to 18% of the City’s electric needs via solar photovoltaic electric power beginning in 2017.
Lancaster, California is aggressively pursuing net zero power (or even net-positive – meaning more
power is generated than consumed), primarily through achievements and advancements in alternative
energy. While a target date has not been identified, they are well on their way through efforts that
include a solar thermal power plant, an affordable solar energy residential community, an affordable
solar financing program, large-scale solar energy projects (to power most municipal facilities, schools,
and a stadium), a power purchase agreement (PPA) with US Topco Energy, Inc., and other renewable
energy research and implementation projects. These efforts are linked to the community’s overall
economic strategy which aims to position Lancaster at the epicenter of the new energy economy.
OPTION 5. CARBON NEUTRAL ECO-DISTRICT BY 2025
Description/Scope
Under this option, Hermosa Beach would identify a smaller geographic footprint within its current GHG
emissions inventory boundary, such as its downtown core, to create an innovation hub for
demonstrating a practical pathway to carbon neutrality at a smaller scale. This approach would allow
the City to test new innovations at a concentrated scale and in such a way that would be both visible
and replicable. This approach could build off national and global trends in district-scale energy and
carbon reduction, including the national “EcoDistricts” (www.ecodistricts.org) movement or 2030
district projects (http://2030districts.org/). Such approaches recognize smaller-scale implementation as
a key leverage point for social mobilization and grassroots action on a range of sustainability topics, as
well as deployment of district-scale and distributed energy. For the purposes of analysis, the Downtown
District is used to describe a potential district-scale approach for carbon neutrality for Hermosa Beach.
The target date for achieving carbon neutrality in the eco-district would be 2025 – 5 years ahead of the
community carbon neutrality target.
A GHG emissions inventory has not been completed for the Downtown District. However, the
Downtown District does contain a majority of the community’s retail outlets, and a large proportion of
its hotel and office uses. Total GHG emissions for the entire commercial/industrial sector were
estimated at 19,923 MT CO2e in 2005, and 19,643 MT CO2e in 2007. Portions of the community’s
overall transportation, solid waste, and residential emissions must also be accounted for in the
Downtown District.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 19
Groundwork and Pathway to Neutrality
The Hermosa Beach Downtown District encompasses approximately 18.5 acres of commercially zoned
land straddling Pier Avenue between The Strand and Valley Boulevard, and along Hermosa Avenue
between 8th and 15th Streets. This area includes most of the City’s retail outlets as well as hotel and
office uses. In total, the Downtown District includes 561,849 square feet of retail, with 307,599 of this in
the Downtown Core. The 342 outlets in the Downtown District generate over $761,000 in sales tax
annually.
Based on building square footages and typical energy use patterns, the District’s energy footprint is
estimated at 14,000 MWh per year (electricity), 360,000 therms per year (natural gas), and 23 to 29
million gallons per year (water). This represents approximately 14% of the total energy use within the
community and 9% of natural gas use. Assuming a blended capacity factor of about 30%, the “power
plant size” (or equivalent clean energy generating capacity) that would be required to supply this
amount of energy would be between 2-4 MW. The lower end of this range represents the plant size for
carbon neutral electricity generation. The higher end of this range adds in Hermosa Beach’s natural gas
use to estimate a carbon neutral power plant size.
In many cases examples of zero energy or climate neutral districts arise from major new development or
re-development projects – and even these projects are finding true climate neutrality (including
transportation) difficult. According to Climate Neutral Urban Districts – a European initiative
spearheaded by the City of Stockholm – one of the biggest challenges of transforming cities or districts
into climate neutral areas is how to effectively address existing urban areas. Factors that must be
considered include:
Planning and zoning laws and rules
Institutional capacities
Energy efficiency potential in existing buildings
Renewable energy efficiency in existing buildings
Other site-level opportunities for community solar projects and district heating/cooling
(available parcels, ownership)
Opportunities activities such as co-generation
Just as it is the case of communities or municipal operations, there is no single path to reaching climate
neutrality at a district level. With Hermosa Beach’s desire to encourage further revitalization of
Downtown, there is an opportunity to creative incentives (financial, permitting, recognition) for
developers to contribute toward a carbon-neutral goal. Specific elements of a district approach to
carbon neutrality might include deep energy efficiency and re-commissioning in buildings, building-scale
renewable energy generation, district energy projects, behavior change programs, and
local/regional/national offset projects. Additionally, development impact fees could help fund
infrastructure improvements necessary to support a carbon neutral district (e.g., microgrid, greywater
systems, and electric vehicle charging).
Due to the compact scale of Downtown, there are unique opportunities for Hermosa Beach to include
the transportation sector in a carbon neutral Downtown District. An aggressive scenario to achieve
Downtown carbon neutrality transportation might be to transform it into a car-free zone. Other ways
that Hermosa Beach could provide innovation and leadership in this arena would be to improve the
pedestrian, bicyclist, and transit user experience and infrastructure in the district, establish creative new
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 20
approaches for parking and travel demand management, and expand opportunities for alternative fuel
vehicles.
Because the Downtown District also features events and activities that draw large crowds, Hermosa
Beach may also consider these activities as part of the eco-district’s carbon neutrality goals (or under
the municipal operations option). For example, the City could purchase carbon offsets to offset the
estimated emissions from these activities, possibly though a surcharge or voluntary program for
participants. Other approaches might include enhanced alternative transportation options to reduce
vehicle miles traveled for participants or additional renewable energy generation (e.g., installation of
solar photovoltaic on the parking garage).
Benchmarks
While there are many district-scale projects underway in the U.S., there are still no examples of true
“climate neutral” projects. Even in Europe just a handful of carbon neutral or deep carbon reduction
districts have emerged:
FortZED, Fort Collins Colorado: Encompassing downtown Fort Collins and the campus of
Colorado State University, this area is striving to become one of the world’s largest net zero
energy districts that encompasses an existing downtown. With 7,000 customer accounts in the
downtown area (residential and commercial), FortZED is being realized with a mix of strategies
including energy efficiency, behavior change, distributed local renewable energy and peak
demand response resources, and collaboration on regional utility-scale renewable energy
projects. The project is also an integral component of the City’s climate action plan.
Copenhagen, Denmark City Center Adelgade Project: Delivers chilled seawater to downtown
district; district cooling reduces carbon emissions by nearly 70 percent compared to
conventional air conditioning. Geothermal heat delivers heat directly into a district heating
system, and a waste-to-energy plant will provide electricity and heating to 150,000 households.
Malmo, Sweden: The City of Vastra Hammen in Malmo has established itself as the first carbon
neutral neighborhood in Europe. Home to 4,000 people, the district uses an aquifer thermal
energy storage system to store water during the summer and pump it with wind energy to heat
homes in winter.
Portland, Oregon South Waterfront District Energy: While not specifically focused on carbon
neutrality, this project is exploring the feasibility of deep carbon reductions in this downtown
area of Portland by exploring the following:
o Natural gas boilers and electric hillers with waste heat recovery
o Natural gas co-generation
o Biomass/biogas co- or tri-generation
o Anaerobic digestion
o Sewer heat recovery
Dockside Green, Victoria, BC: This 15-acre district, 1.3 million square foot mixed-use community
in downtown Victoria is carbon neutral due to high building energy performance along with a
biomass gasification plant that converts waste wood into heating gas for hot water and heat,
with peak period support from natural gas boilers.
Carbon Neutral Urban Districts in Europe Project: Led by the City of Stockholm, Sweden, this
collaboration of a dozen urban carbon neutral districts around Europe (UK, Germany, Sweden,
Italy, Spain, Netherlands, Austria, Greece, and Poland) is working to leverage resources,
technologies, and lessons learned.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 21
Austin Positive Impact on Climate and Community Program (PICC): This partnership between the
City of Austin, Texas and local event organizers such as the Austin City Limits Music Festival, is
working to offer carbon offsets to reduce the impact of the community’s large events and
festivals and also support local community projects and organizations. Currently 50% of funds
raised through the festival will support a local trail project and 50% will be used to purchase
carbon offsets through the Texas Climate and Carbon Exchange. Vendors at the festival will
designate specialty items for sale to support PICC.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 22
Appendix B: Cost Benefit Analysis Methodology
Community-Wide Carbon Neutrality
ELECTRICITY: 50% EFFICIENCY
Data Sources: Electricity costs per kWh for residential ($0.17), commercial/industrial ($0.16)
and municipal ($0.16); Community GHG Inventory with breakdown of electric energy
consumption for residential, commercial and municipal sectors
Assumptions: 10-year payback on efficiency improvements
Calculations:
50% Efficiency
Electricity Usage (2007) kWh
Est. Current
Energy Cost
per Year
kWh
Reduction
per Year $ Savings Per Year
Efficiency First Cost
(assuming 10 year
Payback)
Residential 49,976,195 $ 8,495,953 24,988,098 $ 4,247,977 $ 42,479,765
Commercial/Industrial 49,836,145 $ 8,139,904 24,918,073 $ 4,069,952 $ 40,699,518
Municipal 1,717,582 $ 270,780 858,791 $ 135,390 $ 1,353,902
Total 101,529,922 $ 16,906,637 50,764,961 $ 8,453,319 $ 84,533,186
ELECTRICITY: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency data inputs (see above); Energy Information Administration (EIA) Levelized
cost of installed solar ($0.12/kWh)
Assumptions: 25% of average electricity consumption across residential and commercial sectors
Calculations:
kWh Reduction
per Year $ Savings Per Year
25% Distributed
Renewables Cost
12,494,049 $ 2,123,988 $ 1,481,794
12,459,036 $ 2,034,976 $ 1,477,642
429,396 $ 67,695 $ 50,926
25,382,481 $ 4,226,659 $ 3,010,362
ELECTRICITY: 25% UTILITY-PROVIDED RENEWABLE ENERGY
Data Sources: Efficiency data inputs and 25% Renewable data input(see above); Green Rate
premium ($0.0677/kWh)
Assumptions: 25% of average electricity consumption across residential and commercial
sectors; 15 year cost assumes program continuation past current January 1, 2019 deadline; all
kWh reductions are credited to the utility
Calculations:
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 23
25% Offsets
25% Shared Renewables Cost
(per Year)
25% Shared Renewables Cost
(15 Year)
$ 845,847 $ 12,687,706.51
$ 843,477 $ 12,652,151.31
$ 29,070 $ 436,051.13
$ 1,718,394 $ 25,775,909
ELECTRICITY: TOTAL
Calculations:
Total Cost/Benefit
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated Annual
Cost Savings
$ 43,961,560 $ 6,371,965 $ 845,847.10 $ 5,526,118
$ 42,177,160 $ 6,104,928 $ 843,476.75 $ 5,261,451
$ 1,404,829 $ 203,085 $ 29,070.08 $ 174,015
$ 87,543,549 $ 12,679,978 $ 1,718,394 $ 10,961,584
NATURAL GAS: 50% EFFICIENCY
Data Sources: Natural gas costs per Therm for residential ($0.50), commercial/industrial ($0.50)
and municipal ($0.79); Community GHG Inventory with breakdown of natural gas energy
consumption for residential, commercial and municipal sectors
Assumptions: 10-year payback on efficiency improvements
Calculations
50% Efficiency
Natural Gas
Usage (2007) Therms MTCO2e
Est. Current
Energy Cost
per Year
Therm
Reduction
per Year
$ Savings Per
Year
Efficiency First Cost
(assuming 10 year
Payback)
Residential 3,305,627 17,585 $ 1,652,814 1,652,814 $ 826,407 $ 8,264,067.50
Commercial
/Industrial 858,647 4,568 $ 429,324 429,324 $ 214,662 $ 2,146,617.50
Municipal 11,977 64 $ 9,515 5,989 $ 4,758 $ 47,575.00
Total 4,176,251 $ 2,091,652 2,088,126 $ 1,045,826 $ 10,458,260
NATURAL GAS: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency data inputs (see above); Energy Information Administration (EIA) Levelized
cost of installed solar ($0.12/kWh)
Assumptions: 25% of average natural gas consumption across residential and commercial sectors
Calculations:
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 24
25% Distributed Renewables
Therm Reduction
per Year $ Savings Per Year
25% Distributed
Renewables Cost
826,407 $ 413,203 $ 98,012
214,662 $ 107,331 $ 25,459
2,994 $ 2,379 $ 355
1,044,063 $ 522,913 $ 123,826
NATURAL GAS: 25% UTILITY-PROVIDED RENEWABLE ENERGY
Data Sources: Efficiency data inputs and 25% Renewable data input(see above); Green Rate
premium ($0.0677/kWh)
Assumptions: 25% of average natural gas consumption across residential and commercial
sectors; 15 year cost assumes program continuation past current January 1, 2019 deadline; all
energy reductions accrue to the utility
Calculations:
25% Offsets
25% Offset Cost (per
Year)
25% Offset Cost (15
Year)
$ 65,944 $ 989,156.25
$ 17,130 $ 256,950.00
$ 240 $ 3,600.00
$ 83,314 $ 1,249,706
NATURAL GAS: TOTAL
Calculations:
Total Cost/Benefit
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated Annual
Cost Savings
$ 8,362,079 $ 1,239,610 $ 65,943.75 $ 1,173,666
$ 2,172,076 $ 321,993 $ 17,130.00 $ 304,863
$ 47,930 $ 7,136 $ 240.00 $ 6,896
$ 10,582,086 $ 1,568,739 $ 83,314 $ 1,485,425
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 25
TRANSPORTATION: 30% IMPROVEMENT
Data Sources: GHG Inventory results (2007-138,727,166 Vehicle Miles Traveled, 995 MT CO2e
produced within city limits); CA DOT reimbursement rate ($0.56/mile)
Assumptions: Aggressive 30% reduction in VMT; VMT reduction program implementation
($0.75/mile) to used to capitalize program7
Calculations:
30% Improvement
VMT MTCO2e
Est. Current
Transportation Cost per
Year
VMT
Reduction
per Year
$ Savings
(per Year)
30% Improvement
First Cost (assuming
15 year Payback)
138,727,166 995 $ 77,687,213 41,618,150 $ 23,306,164 $ 31,213,612
TRANSPORTATION: FUEL EFFICIENCY
Data Sources: Fuel Mile (VMT) Reduction inputs (see above); Community wide GHG Inventory
(18.61 MPG in 2005);
Assumptions: 5% overall reduction in VMT and fuel consumption due to annual replacement of
vehicles with more fuel-efficient models; fuel economy savings ($0.22/mile)
Calculations:
Adoption of Fuel Efficient Personal Vehicles
Fuel Mile Reduction through
Improved MPG and Efficient
Vehicles $ Savings Per Year
6,936,358 $ 1,517,328
TRANSPORTATION: FUEL OFFSETS
Data Sources: Fuel Efficiency and VMT Reduction inputs (See above); Cost of offsets ($15.00/
MTCO2e)
Assumptions: 65% offsets is remainder needed after 30% reduction in VMTs with additional 5%
from fuel efficiency
Calculations:
Balance (65%) Offsets
65% Offset Cost (year 1) 65% Offset Cost (15 Year)
$ 773,984 $ 11,609,763.75
7 Rocky Mountain Institute, Stepping Up: Benefits and Cost of Accelerating Fort Collins’ Energy and Climate Goals.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 26
TRANSPORTATION: TOTALS
Calculations:
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated
Annual Cost
Savings
$ 31,213,612 $ 24,823,492 $9,701 $ 24,813,791
WASTE: OFFSETS
Data Sources: Cost of offsets ($15.00/ MTCO2e), 2007 GHG Inventory for residential,
commercial, and municipal sectors (18,490 tons, 3,257 MT CO2e)
Assumptions: 100% offsets for waste contributions of residential, commercial and municipal
sectors; no waste actually reduced, benefits accrue to offset provider
Calculations:
100% Offsets
Tons MTCO2e
100% Offset Cost
(per Year)
100% Offset Cost
(15 Year)
18,490 3,257 $ 48,855 $ 732,825
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 27
Option 2. Carbon Neutral Municipal Operations by 2020
ELECTRICITY: 50% EFFICIENCY
Data Sources: Electricity costs per kWh for municipal ($0.16); Community GHG Inventory with
breakdown of electric energy consumption for municipal sector
Assumptions: 10-year payback on efficiency improvements
Calculations:
50% Efficiency
Electricity
Usage (2007) kWh
Est. Current
Energy Cost per
Year
kWh
Reduction
per Year
$ Savings Per
Year
Efficiency First Cost
(assuming 10 year
Payback)
Municipal 1,717,582 $ 270,780 858,791 $ 135,390 $ 1,353,902
ELECTRICITY: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency data inputs (see above); Energy Information Administration (EIA) Levelized
cost of installed solar ($0.12/kWh)
Assumptions: 25% of average electricity consumption in the municipal sector
Calculations:
25% Distributed Renewables
kWh Reduction
per Year $ Savings Per Year
25% Distributed
Renewables Cost
429,396 $ 67,695 $ 50,926
ELECTRICITY: 25% UTILITY-PROVIDED RENEWABLE ENERGY
Data Sources: Efficiency data inputs and 25% Renewable data input(see above); Green Rate
premium8 ($0.0677/kWh)
Assumptions: 25% of average electricity consumption in the municipal sector; 15 year cost
assumes program continuation past current January 1, 2019 deadline; all kWh reductions are
credited to the utility
Calculations:
25% Shared Renewables (Green Rate)
25% Shared Renewables Cost
(per Year)
25% Shared Renewables Cost
(15 Year)
$ 29,070 $ 436,051.13
8 GSE Solutions Report
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 28
ELECTRICITY: TOTAL
Calculations:
Total Cost/Benefit
Total First
Cost
Total
Annual
Savings
Total Offset & Green
Rate Cost
Estimated Annual
Cost Savings
$ - $ 48,855 $ (48,855)
NATURAL GAS: 50% EFFICIENCY
Data Sources: Electricity costs per Therm for municipal sector ($0.79); Community GHG
Inventory with breakdown of natural gas energy consumption for municipal sector
Assumptions: 10-year payback on efficiency improvements
Calculations
50% Efficiency
Natural Gas
Usage (2007) Therms MTCO2e
Est. Current
Energy Cost per
Year
Therm
Reduction per
Year $ Savings Per Year
Efficiency First Cost
(assuming 10 year
Payback)
Municipal 11,977 64 $ 9,515 5,989 $ 4,758 $ 47,575
NATURAL GAS: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency inputs (see above); Energy Information Administration (EIA) Levelized cost
of installed solar ($0.12/kWh)
Assumptions: 25% of average electricity consumption in the municipal sector
Calculations:
25% Distributed Renewables
Therm
Reduction per
Year $ Savings Per Year
25% Distributed
Renewables Cost
2,994 $ 2,379 $ 355
NATURAL GAS: 25% OFFSETS
Data Sources: Efficiency inputs and 25% Renewable inputs(see above); SCE Green Rate
premium1 ($15.00/MT CO2e)
Assumptions: 25% of average electricity consumption in the municipal sector; 15 year cost
assumes program continuation past current January 1, 2019 deadline; all energy reductions
accrue to the utility
Calculations:
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 29
25% Offsets
25% Offset Cost
(per Year)
25% Offset Cost
(15 Year)
$ 240 $ 3,600
NATURAL GAS: TOTAL
Calculations:
Total Cost/Benefit
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated Annual
Cost Savings
$ 47,930 $ 7,136 $ 240 $ 6,896
TRANSPORTATION: 30% IMPROVEMENT
Data Sources: Municipal GHG Inventory (2007), CA DOT reimbursement rate ($0.56/mile)
Assumptions: Aggressive 30% reduction in VMT; Estimated 1,212,767 VMT for City employee
commuting and fleet vehicles (820,954 VMT employee commutes; 391,813 fleet and contract
vehicles); VMT reduction program implementation ($0.75/mile) to used to capitalize program9
Calculations:
30% Improvement
VMT MTCO2e
Est. Current
Transportation Cost per
Year
VMT
Reduction
per Year
$ Savings
(per Year)
30% Improvement
First Cost (assuming
15 year Payback)
1,212,767 8,682 $ 1,673,619 $606,384 $ 339,575 $ 454,788
TRANSPORTATION: FUEL EFFICIENCY
Data Sources: Municipal GHG Inventory (2007)
Assumptions: 5% overall reduction in VMT and fuel consumption due to annual replacement of
vehicles more fuel-efficient models; fuel economy savings ($0.22/mile)
Calculations:
Adoption of Fuel Efficient Vehicles
Fuel Mile Reduction through
Improved MPG and Efficient
Vehicles $ Savings Per Year
60,638 $ 13,265
9 Rocky Mountain Institute, Stepping Up: Benefits and Cost of Accelerating Fort Collins’ Energy and Climate Goals.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 30
TRANSPORTATION: FUEL OFFSETS
Data Sources: Fuel Efficiency and VMT Reduction inputs (See above); Cost of offsets ($15.00/
MTCO2e)
Assumptions: 65% offsets is remainder needed after 30% reduction in VMTs with additional 5%
from fuel efficiency
Calculations:
Balance (50%) Offsets
50% Offset Cost (year 1) 50% Offset Cost (15 Year)
$ 84,650 $1,269,743
TRANSPORTATION: TOTALS
Calculations:
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated
Annual Cost
Savings
$ 454,788 $ 352,839 $ 84,650 $ 268,190
WASTE: OFFSETS
Data Sources: Cost of offsets ($15.00/ MTCO2e), 2007 Municipal GHG Inventory (660 tons, 169
MT CO2e)
Assumptions: 100% offsets for waste contributions of the municipal sector; no waste actually
reduced, benefits accrue to offset provider
Calculations:
100% Offsets
Tons MTCO2e 100% Offset Cost (per Year) 100% Offset Cost (15 Year)
660 169 $ 2,535 $ 38,025
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 31
Option 3. Carbon Neutral Emissions from Transportation Sector by 2030
TRANSPORTATION: 30% IMPROVEMENT
Data Sources: GHG Inventory results (2007-138,727,166 Vehicle Miles Traveled, 995 MT CO2e
produced within city limits); CA DOT reimbursement rate ($0.56/mile)
Assumptions: Aggressive 30% reduction in VMT; VMT reduction program implementation
($0.75/mile) to used to capitalize program10
Calculations:
30% Improvement
VMT MTCO2e
Est. Current
Transportation Cost per
Year
VMT
Reduction
per Year
$ Savings
(per Year)
30% Improvement
First Cost (assuming
15 year Payback)
138,727,166 995 $ 77,687,213 41,618,150 $ 23,306,164 $ 31,213,612
TRANSPORTATION: FUEL EFFICIENCY
Data Sources: Fuel Mile (VMT) Reduction inputs (see above); Community wide GHG Inventory
(18.61 MPG in 2005);
Assumptions: 5% overall reduction in VMT and fuel consumption due to annual replacement of
vehicles with more fuel-efficient models; fuel economy savings ($0.22/mile)
Calculations:
Adoption of Fuel Efficient Personal Vehicles
Fuel Mile Reduction through
Improved MPG and Efficient
Vehicles $ Savings Per Year
6,936,358 $ 1,517,328
TRANSPORTATION: FUEL OFFSETS
Data Sources: Fuel Efficiency and VMT Reduction inputs (See above); Cost of offsets ($15.00/
MTCO2e)
Assumptions: 65% offsets is remainder needed after 30% reduction in VMTs with additional 5%
from fuel efficiency
Calculations:
Balance (65%) Offsets
65% Offset Cost (year 1) 65% Offset Cost (15 Year)
$ 773,984 $ 11,609,763.75
10 Rocky Mountain Institute, Stepping Up: Benefits and Cost of Accelerating Fort Collins’ Energy and Climate Goals.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 32
TRANSPORTATION: TOTALS
Calculations:
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated
Annual Cost
Savings
$ 31,213,612 $ 24,823,492 $9,701 $ 24,813,791
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 33
Option 4. Carbon Neutral Electric Supply by 2025
ELECTRICITY: 50% EFFICIENCY
Data Sources: Electricity costs per kWh for residential ($0.17), commercial/industrial ($0.16)
and municipal ($0.16); Community GHG Inventory with breakdown of electric energy
consumption for residential, commercial and municipal sectors
Assumptions: 10-year payback on efficiency improvements
Calculations:
50% Efficiency
Electricity Usage (2007) kWh
Est. Current
Energy Cost
per Year
kWh
Reduction
per Year $ Savings Per Year
Efficiency First Cost
(assuming 10 year
Payback)
Residential
49,976,195 $ 8,495,953
24,988,098 $ 4,247,977 $ 42,479,765.75
Commercial/Industrial
49,836,145 $ 8,139,904
24,918,073 $ 4,069,952 $ 40,699,518.42
Municipal
1,717,582 $ 270,780
858,791 $ 135,390 $ 1,353,902.30
Total
101,529,922 $ 16,906,637
50,764,961 $ 8,453,319 $ 84,533,186
ELECTRICITY: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency data inputs (see above); Energy Information Administration (EIA) Levelized
cost of installed solar ($0.12/kWh)
Assumptions: 25% of average electricity consumption across residential and commercial sectors
Calculations:
kWh Reduction
per Year $ Savings Per Year
25% Distributed
Renewables Cost
12,494,049 $ 2,123,988 $ 1,481,794
12,459,036 $ 2,034,976 $ 1,477,642
429,396 $ 67,695 $ 50,926
25,382,481 $ 4,226,659 $ 3,010,362
ELECTRICITY: 25% UTILITY-PROVIDED RENEWABLE ENERGY
Data Sources: Efficiency data inputs and 25% Renewable data input(see above); Green Rate
premium ($0.0677/kWh)
Assumptions: 25% of average electricity consumption across residential and commercial
sectors; 15 year cost assumes program continuation past current January 1, 2019 deadline; all
kWh reductions are credited to the utility
Calculations:
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 34
25% Offsets
25% Shared Renewables Cost
(per Year)
25% Shared Renewables Cost
(15 Year)
$ 845,847 $ 12,687,706.51
$ 843,477 $ 12,652,151.31
$ 29,070 $ 436,051.13
$ 1,718,394 $ 25,775,909
ELECTRICITY: TOTAL
Calculations:
Total Cost/Benefit
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated Annual
Cost Savings
$ 43,961,560 $ 6,371,965 $ 845,847.10 $ 5,526,118
$ 42,177,160 $ 6,104,928 $ 843,476.75 $ 5,261,451
$ 1,404,829 $ 203,085 $ 29,070.08 $ 174,015
$ 87,543,549 $ 12,679,978 $ 1,718,394 $ 10,961,584
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 35
Option 5. Carbon Neutral Eco-District by 2025
ELECTRICITY: 50% EFFICIENCY
Data Sources: Electricity costs per kWh for the commercial/industrial sector($0.16);;
Community GHG Inventory with breakdown of electric energy consumption for commercial
sector
Assumptions: 10-year payback on efficiency improvements
Calculations:
50% Efficiency
Electricity Usage (2007) kWh
Est.
Current
Energy
Cost per
Year
kWh
Reduction
per Year $ Savings Per Year
Efficiency First
Cost (assuming 10
year Payback)
Commercial/Industrial 14,000,000 $ 2,286,667 7,000,000 $ 1,143,333 $ 11,433,333.33
ELECTRICITY: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency data inputs (see above); Energy Information Administration (EIA) Levelized
cost of installed solar ($0.12/kWh)
Assumptions: 25% of average electricity consumption in the commercial/industrial sector
Calculations:
25% Distributed Renewables
kWh Reduction
per Year $ Savings Per Year
25% Distributed
Renewables Cost
3,500,000 $ 571,667 $ 415,100
ELECTRICITY: 25% UTILITY-PROVIDED RENEWABLE ENERGY
Data Sources: Efficiency data inputs and 25% Renewable data input(see above); Green Rate
premium11 ($0.0677/kWh)
Assumptions: 25% of average electricity consumption in the commercial/industrial sector; 15
year cost assumes program continuation past current January 1, 2019 deadline; all kWh
reductions are credited to the utility
Calculations:
25% Shared Renewables (Green Rate)
25% Shared
Renewables Cost
(per Year)
25% Shared Renewables
Cost
(15 Year)
$ 234,500 $ 3,517,500
11 GSE Solutions Report
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 36
ELECTRICITY: TOTAL
Calculations:
Total Cost/Benefit
Total First Cost
Total
Annual
Savings
Total Offset &
Green Rate Cost
Estimated
Annual Cost
Savings
$ 11,848,433 $ 1,715,000 $ 234,500 $ 1,480,500
NATURAL GAS: 50% EFFICIENCY
Data Sources: Electricity costs per Therm for commercial/industrial ($0.50); Community GHG
Inventory with breakdown of natural gas energy consumption for commercial/industrial sector
Assumptions: 10-year payback on efficiency improvements
Calculations
50% Efficiency
Natural Gas Usage
(2007) Therms MTCO2e
Est. Current
Energy Cost
per Year
Therm
Reduction
per Year
$ Savings Per
Year
Efficiency First Cost
(assuming 10 year
Payback)
Commercial/Industrial
858,647
1,915 $ 429,324
429,324 $ 214,662 $ 2,146,617.50
NATURAL GAS: 25% DISTRIBUTED RENEWABLES
Data Sources: Efficiency data inputs (see above); Energy Information Administration (EIA) Levelized
cost of installed solar ($0.12/kWh)
Assumptions: 25% of average electricity consumption for commercial sector
Calculations:
25% Distributed Renewables
Therm
Reduction per
Year $ Savings Per Year
25% Distributed
Renewables Cost
214,662 $ 107,331 $ 25,459
NATURAL GAS: 25% UTILITY-PROVIDED RENEWABLE ENERGY
Data Sources: Efficiency data inputs and 25% Renewable data input(see above); Green Rate
premium1 ($0.0677/kWh)
Assumptions: 25% of average electricity consumption for commercial/industrial sector; 15 year
cost assumes program continuation past current January 1, 2019 deadline; all energy reductions
accrue to the utility
Calculations:
25% Offsets
25% Offset Cost (per
Year)
25% Offset Cost
(15 Year)
$ 7,182 $ 107,730
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 37
NATURAL GAS: TOTAL
Calculations:
Total Cost/Benefit
Total First Cost
Total
Annual
Savings
Total Offset &
Green Rate
Cost
Estimated
Annual Cost
Savings
$ 2,172,076 $ 321,993 $ 7,182 $314,811
TRANSPORTATION: 30% IMPROVEMENT
Data Sources: Municipal GHG Inventory (2007), CA DOT reimbursement rate ($0.56/mile)
Assumptions: 20% of all VMT are trips to/from Downtown District; 15 year simple cost savings
are used to capitalize program
Calculations:
30% Improvement
VMT MTCO2e
Est. Current
Transportation Cost per
Year
VMT
Reduction
per Year
$ Savings
(per Year)
30% Improvement
First Cost (assuming
15 year Payback)
27,745,433 199 $ 15,537,443 13,872,717 924,847.77 $ 517,915
TRANSPORTATION: FUEL EFFICIENCY
Data Sources: Community GHG Inventory (2007)
Assumptions: 20% of all VMT are trips to/from Downtown District; 20% overall reduction in VMT
and fuel consumption due to annual replacement of vehicles with more fuel-efficient models
Calculations:
Adoption of Fuel Efficient Vehicles
Fuel Mile Reduction through
Improved MPG and Efficient
Vehicles
Fuel Mile Reduction through
Improved MPG and Efficient
Vehicles (per year) $ Savings Per Year
5,549,087 369,939 $ 80,924
TRANSPORTATION: FUEL OFFSETS
Data Sources: Fuel Efficiency and VMT Reduction inputs (See above); Cost of offsets ($15.00/
MTCO2e)
Assumptions: 50% offsets is remainder needed after 30% reduction in VMTs with additional 20%
from fuel efficiency
Calculations:
Balance (50%) Offsets
50% Offset Cost (year 1) 50% Offset Cost (15 Year)
$ 1,493 $ 22,387
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 38
TRANSPORTATION: TOTALS
Calculations:
Total First Cost Total Annual
Savings
Total Offset &
Green Rate Cost
Estimated
Annual Cost
Savings
$ 7,768,721 $ 598,839 $ 1,493 $ 597,346
WASTE: OFFSETS
Data Sources: Cost of offsets ($15.00/ MTCO2e); 2007 GHG Inventory of the
commercial/industrial sectors (3,698 tons, 651 MT CO2e)
Assumptions: 20% of all community waste from the Downtown District; 100% offsets for waste
contributions
Calculations:
100% Offsets
Tons MTCO2e 100% Offset Cost (per Year)
100% Offset Cost (15 Year)/Total
Cost
3,698 651 $ 9,771 $ 146,565
City of Hermosa Beach, Economic Analysis of Carbon Neutrality 39
Null Alternative. Carbon Neutrality via 100% Offsets
OFFSET ONLY
Data Sources: Cost of offsets ($15.00/ MTCO2e), Community Wide GHG Inventory for residential,
commercial, and municipal sectors
Assumptions: 100% offsets for emissions; all energy reductions accrue to the utility
Calculations:
100% Offsets
MTCO2e 100% Offset Cost (per Year)
100% Offset Cost (15 Year)/ Total
Cost Benefit
134,253 $ 2,013,795 $ 30,206,925
Memorandum
To: Tom Bakaly, City Manager
From: Judy Dorsey and Shelby Sommer
CC: Kristi Morris, Shelli Margolin-Mayer, Pamela Townsend, Ken Robertson
Date: February 3, 2015
Re: Economic Benefits of Carbon Neutrality Follow-Up Response to City Council Questions
This memorandum provides a response to questions and comments raised during the November 5, 2014
Adjourned Regular Meeting of the Hermosa Beach City Council. Under Agenda Item 6: Municipal
Matters, consultant Judy Dorsey of Brendle Group presented the findings of a memorandum focused on
the potential economic benefits of carbon neutrality, including the potential of a “first-to achieve”
position. A summary of City Council questions and comments is provided below.
Explain the potential role of the City in implementing community carbon neutrality.
Present the costs and savings in a way that shows the direct investment needed by and benefits
to the City organization.
Further define and quantify the health and other indirect benefits of reduced emissions.
Expand the process to allow for greater exploration of the potential benefits of carbon neutrality
investment from a range of community stakeholders.
The remainder of this memorandum provides additional detail in response to each of these requests.
CITY ROLE IN COMMUNITY CARBON NEUTRALITY
The City of Hermosa Beach’s specific role in supporting the achievement of community-wide carbon
neutrality is somewhat flexible, and depends on the interests and level of risk, commitment, and
investment desired by its leaders. However, some potential roles for consideration include the
following:
Leadership by example: the City of Hermosa Beach has the opportunity to continue to provide
leadership by pushing to achieve carbon neutrality in its municipal operations ahead of the
entire community. This could be achieved through continued investments into renewable
energy sources, building retrofits, fleet upgrades, employee training and engagement, and
coordination with utility providers.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality City Council Follow-up Memo 2
Community Convener: in addition to leading by example in municipal operations, the City of
Hermosa Beach can play a major role in bringing together residents, businesses, organizations,
and investors to initiate and sustain conversations about how to reduce emissions in the private
sector.
Social Mobilization: the City of Hermosa Beach can also offer education and incentives to
encourage behavior change and investments among residents and businesses to climate
mitigation strategies to scale community-wide. This includes a communication and outreach
campaign as well as training seminars for contractors and suppliers
Cost Share and Program Funding: providing financial incentives to residents and businesses is
one way that the City of Hermosa can support and invest in community carbon neutrality. Other
investment opportunities might include pursing partnerships with outside investors on
infrastructure projects. In order to achieve carbon neutrality, it is likely that the City will also
need to invest in the purchase of carbon offsets, either through direct purchases by the
municipality or by initiating and leading a strategy for those costs to be shared in some way.
CITY INVESTMENT AND BENEFITS
In order to fully determine the level of investment necessary by the City of Hermosa Beach to achieve
carbon neutrality, more detailed economic modeling is needed, as is a more defined goal and pathway
for getting there. However, it is clear that regardless of the goal and pathway selected, the City of
Hermosa Beach cannot invest in and achieve community carbon neutrality alone. With an annual budget
of approximately $34 million, the City of Hermosa Beach cannot simply “purchase” neutrality, unless it
wants to achieve it through purchase of offsets. Instead, the investment would need to involve the City,
as well as its residents, businesses, and private investors.
In terms of who would pay for what, the City of Hermosa Beach is most likely to bear the responsibility
for a large portion of costs associated with any major public infrastructure projects to support carbon
neutrality (e.g., transportation or transit improvements, which might also be funded with regional, state,
or federal dollars). Likewise, the City of Hermosa Beach will likely be responsible for purchasing or
leading efforts to purchase carbon offsets. For both of these items, it would be necessary to determine if
there is any interest in the community for additional fees or taxes to support these types of public
investment.
Investments in energy efficiency and renewable energy would likely require a combination of publicly-
funded incentives and direct installations, plus investments from individual residents and businesses and
outside investors. Perhaps the largest opportunities for contributions from sponsors would be in these
two arenas – efficiency and renewables. This is because of the potential benefits associated with them
from high visibility and exposure across the community. A summary of some potential options for
financing the community’s carbon neutrality efforts are provided below.
Local Government Individuals & Businesses Others
Bonds
Tax increment financing
Consumer grants, loans, and
direct installs
Community Choice
Aggregation
Self-funded
Mortgage/Home equity
Traditional bank loans or
consumer lending
Energy efficiency loans
Property Accessed Clean
Energy (PACE) Programs
On-bill tariffs or financing
Sponsorships and donations
User fees and revenue
Regional, State and Federal
grants
Development exactions
City of Hermosa Beach, Economic Analysis of Carbon Neutrality City Council Follow-up Memo 3
Direct savings to the City of Hermosa Beach from achieving community carbon neutrality would most
likely come in the form of savings from reduced energy and fuel expenses among municipal facilities and
fleets. It is important to note that most of the direct savings from reductions in utility bills from
efficiency improvements and renewable energy generation would be realized by the bill payers
themselves. Those savings could result in additional disposable income, which could in turn indirectly
benefit the City’s sales tax revenue.
In terms of property taxes, high-performance and energy efficient buildings are shown to sell for more
than comparable non-efficient buildings, which could lead to increased property assessments and tax
revenue for the City. Other potential direct benefits might include reduced maintenance costs on roads
from reduced vehicle use and potentially reductions in waste expenses. Further benefits to the City of
Hermosa Beach from an investment in community carbon neutrality are described in the following
section.
OTHER BENEFITS: HEALTH SAVINGS, JOBS
In addition to direct savings from reduced energy and fuel expenses, other benefits resulting from
community carbon neutrality would likely include cost savings from reduced health care expenses and
the creation of jobs based on the implementation strategies selected.
Investments to reduce carbon emissions from the transportation sector are most likely to benefit the
health of Hermosa Beach residents. In particular, reductions in overall vehicle miles traveled by Hermosa
Beach motorists will likely mean shifts to other, more active modes of transportation, such as walking,
bicycling, or even walking to a transit stop. One study shows that there is an estimated $0.069 health
care cost associated for each vehicle mile traveled using a light gas vehicle.1 We apply this assumption to
the estimated reduction in Hermosa Beach’s vehicle miles traveled to estimate the total health care
costs savings each year.
Note that additional health benefits and cost savings are likely to emerge due beyond those associated
with vehicle miles traveled; however, the benefits of these strategies are likely to be realized across the
greater metropolitan region, not directly by Hermosa Beach residents. Our methodology presents an
estimate of the directly quantifiable potential health cost savings to households within the City due to
investments in community transportation infrastructure. In contrast, other studies show much greater
potential for savings from investments into transportation and clean energy. For example, research has
shown that it is possible to recoup an estimated 26 percent of transportation investments in vehicle
miles travel reductions and increased efficiency and fuel economy through avoided health care costs.2
Furthermore, the U.S. Environmental Protection Agency’s proposed Clean Power Plan states that these
climate and health benefits far outweigh the estimated annual costs of the plan” and the report goes on
1 Transportation Cost and Benefit Analysis II - Air Pollution Costs, Mar 16, 2011, Victoria Transport Policy Institute.
2 Tammy M. Thompson,Sebastian Rausch, Rebecca K. Saari & Noelle E. Selin, Nature Climate Change 4, 917–923
(2014) doi:10.1038/nclimate2342 Received 28 January 2014 Accepted 21 July 2014 Published online 24 August
2014.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality City Council Follow-up Memo 4
to estimate that “for every dollar invested through the Clean Power Plan, American families will see up
to $7 in health benefits.”3
To estimate the number of jobs that carbon neutrality could create for the City of Hermosa Beach, we
look to several different reports. First, per estimates from the California Clean Energy Commission,
demand-side management is estimated to create 1 job-year per $56,500 to $39,700 of direct investment
of utilities into energy efficiency project and programs.4 A more conservative estimate is identified by
Rocky Mountain Institute – approximately 6.3 FTE job-years created per $1 million investment in
efficiency measures.5 Our estimate of jobs created from investment into energy efficiency measures is
based on this value.
In terms of jobs created from investment into renewable energy, California Energy Commission’s 2012
analysis based on NREL’s JEDI Model, estimates that there are 11.19 job-years created per Megawatt
average (MWa) for solar photovoltaic residential systems less than one MW, and 8.25 job-years per
MWa for large commercial.
Similar to our methodology to estimate directly quantifiable health cost savings through reductions in
vehicle miles traveled, our methodology to estimate jobs created is based on direct investments into
energy efficiency improvements and renewable energy installation within the City of Hermosa Beach.
Our methodology does not include the potential jobs created from reductions in transportation or
waste-related emissions because of the wide variations in potential strategies to achieve those
necessary reductions (e.g., the number of jobs created to enhance transit service would be quite
different from the number of jobs created through a bicycle lane improvement project). For this reason,
our estimated number of jobs created is conservative, and wide ranges are likely depending on the
strategies selected to achieve neutrality, including the land use and transportation choices under
consideration through the Hermosa Beach General Plan Update process.
The table on the following page provides a summary of two different pathways to achieving community
carbon neutrality. Pathway A represents the “null alternative” wherein the City of Hermosa Beach
achieves neutrality simply through the purchase of carbon offsets. While this is not a recommended
pathway, it is helpful to bracket the full range of potential costs and savings with this scenario.
Pathway B includes strategies ranging from moderate to aggressive implementation of measures such as
energy efficiency improvements, distributed renewables, vehicle miles traveled reductions, adoption of
more efficient vehicles and purchases of offsets and Green Rate electricity. The range of estimated costs
and savings includes the potential pathway outlined in the October 30, 2014 memo from Brendle Group
to the City Council. This is just one illustrative range of options for the community to achieve neutrality
for high-level economic analysis purposes, and should not be interpreted as a recommendation.
Reductions achieved through offset and Green Rate purchases ranges from 20 percent to 50 percent in
the Pathway B scenarios.
3 U.S. EPA Fact Sheet: Why We Need a Cleaner, More Efficient Power Sector. http://www2.epa.gov/carbon-
pollution-standards/fact-sheet-clean-power-plan-benefits. Accessed February 2, 2015.
4 California Clean Energy Commission Preliminary Estimates of Job Creation (2012),
5 RMI, 2014. Stepping Up: Benefits and Cost of Accelerating Fort Collins' Energy and Climate Goals.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality City Council Follow-up Memo 5
Pathway A Pathway B
Pathway Summary
Purchase offsets for
100% of emissions (null
alternative for
illustration/bracketing).
Moderate to aggressive
implementation of
various strategies
(including the pathway
described in the
October 30 memo).
Target Year 2030 2030
Emissions Reduction Required (MT CO2e) 134,000 134,000
One-Time Community Investment to Achieve Goal6 n/a $103 – 155M
Community Offset and Green Rate Purchases $2 – 3M/yr7 $1 – 3M/yr
Community Cost Savings from Achieving Goal $0/yr $31 – 63M/yr
Additional Community Health Cost Savings8 $0/yr $1.9 – 4.8M/yr
Jobs Created (job-years) 0 800 – 1,000
Per Household Normalization
Total Cost per Household9 $200 - 300/yr $1,000 – 1,200/yr
General Cost Savings per Household10 $0/yr $2,500 – 6,500/yr
Additional Health Cost Savings per Household11 $0/yr $200 –500/yr
Total (Costs) Savings per Household ($200-300/yr) $1,700 – 5,800/yr
6 Estimated one-time investment is the estimated size of the program to be financed in partnership with the City of
Hermosa Beach, homeowners, business, contractors, developers, utilities, transportation agencies, federal/state
agencies, grants, and other organizations and foundations.
7 The total offset and Green Rate purchase costs depend on the mix of offsets, assumed at $15 per ton, and
electricity purchases under the Green Rate premium of $0.07 per kilowatt hour.
8 Note that the estimated health cost savings are calculated using estimated reductions in vehicle miles traveled –
a defensible estimate of all of the potential savings.
9 Note that the cost per household is estimated by dividing the total community costs by the total number of
households. As described in the City Investment and Benefits section, the proportion of investment by the City,
residents, businesses, and others has yet to be determined; yet it is unlikely that households will bear the full costs
of implementation.
10 Cost savings per household is estimated by dividing the total community savings by the total number of
households. It is unlikely that households will reap the full benefits of the total cost savings; these savings are also
likely to be shared by businesses and investors.
11 Health cost savings per household is estimated by dividing the total community health cost savings by the total
number of households. It is unlikely that households will reap the full benefits of the total health cost savings;
these savings are also likely to be shared by businesses and investors.
City of Hermosa Beach, Economic Analysis of Carbon Neutrality City Council Follow-up Memo 6
MORE INCLUSIVE AND ROBUST PROCESS
In order to facilitate a more inclusive process around the topic of community carbon neutrality, it is
proposed that economic analysis efforts be aligned with the current General Plan update process. Both
efforts are exploring options for reduced carbon emissions across the community, including land use
and transportation decisions that will have direct impacts on emissions. As a result, it will be most
effective to explore questions such as the pathway to community carbon neutrality, the potential direct
and indirect benefits, and who pays and who saves as part of the larger dialogue around the
community’s desired future via the General Plan update process. As well as being more inclusive and
aligning with the community’s desired future, advancing carbon neutrality also requires a more robust
techno-economic analysis in the next phase tied to increasing specificity on the strategies, tactics, and
near-term policies to achieve neutrality. While the results from Phase I are directionally correct, the
methodology was limited to an order of magnitude estimate based on available data and plans.
The following outline summarizes the proposed scope of work to expand the economic analysis process
to allow for greater exploration of the potential benefits of carbon neutrality investment from a range of
community stakeholders:
Task 1. Stakeholder Engagement
o Explore the topic of carbon neutrality with the General Plan Working Group, Technical
Advisory Committee, and a focus group of other local and regional climate experts and
carbon neutrality advocates.
Task 2. Tool Coordination and Strategy Evaluation
o Convert the existing analysis spreadsheets into a user-friendly tool, in coordination with
Raimi + Associates.
o Refine the land use and transportation analysis and update the modeling tool with the
latest GHG inventory documentation.
o Update the analysis to refine the costs and benefits analysis presented in November to
include additional stakeholder input and refine the presentation to include the range of
costs and benefits based under different pathways to accomplish neutrality.
Task 3. Carbon Neutrality Commitment
o Develop and presentation of a recommendation for a refined City carbon neutrality
target and scenarios for achieving neutrality.
Task 4. Budgeting and Action Plan
o Develop an action plan that identifies priority near-term strategies to achieve the
carbon neutrality target.
o Recommendation of draft policies, potential programs, and other longer-term
implementation strategies to be incorporated into the updated General Plan.
Guide to
Purchasing
Green Power
Renewable Electricity, Renewable
Energy Certificates, and On-Site
Renewable Generation
DOE/EE-0307
This guide can be downloaded from:
www1.eere.energy.gov/femp/technologies/renewable_purchasingpower.html
www.epa.gov/greenpower/
www.wri.org/publications
www.resource-solutions.org/publications.php
Office of Air (6202J)
EPA430-K-04-015
www.epa.gov/greenpower
March 2010
ISBN: 1-56973-577-8
Guide to Purchasing Green Power i
Table of Contents
Summary ........................................................................................................................................................1
Chapter 1: Introduction ....................................................................................................................................2
Chapter 2: Green Power Defined ......................................................................................................................4
Chapter 3: The Benefits and Costs of Green Power ............................................................................................5
The Benefits ..........................................................................................................................................................5
The Costs ..............................................................................................................................................................7
Chapter 4: Options for Purchasing Green Power ................................................................................................9
Renewable Electricity Products .............................................................................................................................9
Renewable Energy Certificates (RECs) ................................................................................................................10
On-site Renewable Generation ............................................................................................................................11
Chapter 5: Steps to Purchasing Green Power ...................................................................................................14
Setting Goals ......................................................................................................................................................14
Identifying Key Decision-Makers .......................................................................................................................14
Gathering Energy Data .......................................................................................................................................15
Choosing Green Power Options .........................................................................................................................15
Evaluating the Purchase .....................................................................................................................................16
Chapter 6: Procuring Renewable Electricity and Renewable Energy Certificates ..................................................18
Developing Criteria for Screening Suppliers and Products .................................................................................18
Collecting Product Information .........................................................................................................................20
Creating a Procurement Plan .............................................................................................................................20
Chapter 7: Planning an On-site Renewable Generation Project ..........................................................................24
Screening the Technologies ...............................................................................................................................24
Obtaining Resources and Assistance .................................................................................................................25
Creating a Project Plan ......................................................................................................................................25
Anticipating Possible Barriers ............................................................................................................................27
Installing and Operating an On-site Renewable Generation System .................................................................28
Chapter 8: Capturing the Benefits of the Purchase ............................................................................................29
The Environmental Benefits ...............................................................................................................................29
Internal Promotion .............................................................................................................................................30
External Promotion ............................................................................................................................................30
Chapter 9: Conclusion ...................................................................................................................................32
Chapter 10: Resources for Additional Information ............................................................................................33
Glossary .......................................................................................................................................................40
Appendix: Green Power Considerations for Federal Agencies ...........................................................................43
ii
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Guide to Purchasing Green Power 1
Summary
This Guide to Purchasing Green Power is intended for
organizations that are considering the merits of buy-
ing green power as well as those that have decided to
buy it and want help doing so. The guide was written
for a broad audience, including businesses, government agen-
cies, universities, and all organizations wanting to diversify
their energy supply and reduce the environmental impact of
their electricity use.
First published in 2004, the Guide to Purchasing Green Power
provides an overview of green power markets and describes
the necessary steps to buy green power. The 2010 version
represents the first major update to the guide and includes
new market information and terminology, case studies, an
updated additional resources section, and new resources for
Federal agencies to use when planning on-site renewable
projects or purchasing green power.
This section summarizes the guide to help readers find the
information they need.
Chapter 1 describes the concepts of renewable energy and
green power and discusses their differences from conven-
tional energy sources. This section also summarizes recent
changes in electricity markets and the current availability
and use of green power sources.
Chapter 2 defines green power.
Chapter 3 summarizes the benefits and costs of purchasing
green power.
Chapter 4 defines three options for purchasing green power
products: renewable electricity, renewable energy certificates,
and on-site renewable generation.
Chapter 5 outlines the general steps needed to prepare to
buy green power: setting goals, identifying the key decision-
makers, gathering energy data, choosing the specific green
power options available to the purchaser’s facilities, and
evaluating the purchase.
Chapter 6 discusses the steps to procure renewable electric-
ity or renewable energy certificates: developing screening
criteria, collecting product information, and drawing up a
procurement plan.
Chapter 7 describes the steps to establish an on-site green
power system: screening the technologies best suited to the
purchaser’s site, obtaining technical and financial resources
and assistance, creating a project plan, anticipating possible
barriers, and installing and operating the on-site generation
system.
Chapter 8 explores ways of taking advantage of promotional
opportunities after buying green power. This section cov-
ers promotion both inside and outside the organization and
options for quantifying the environmental benefits of the
purchase.
Chapters 9 and 10 of the guide conclude with a list of
resources offering more information about all aspects of
green power. Because electricity from renewable resources
is relatively new and may be generated in a variety of ways,
many institutions are working to facilitate the development
of green power markets. Several of these organizations’ pro-
grams—the U.S. Department of Energy’s Federal Energy
Management Program (FEMP), the U.S. Environmental
Protection Agency’s Green Power Partnership, the Green
Power Market Development Group of the World Resources
Institute (WRI), and the Green-e Energy Certification
Program administered by the Center for Resource
Solutions—worked together to write this purchasing guide.
The guide also includes a glossary of terms commonly used in
the green power field.
Finally, the appendix discusses considerations specific to
federal agencies that buy green power, particularly the pro-
curement regulations that cover the purchase of green power.
2 Introduction
Chapter 1
Introduction
Today, the energy sources used to create electricity dif-
fer in many ways, including in their environmental
impacts. In the United States, electricity is most often
generated using fossil or nuclear fuels—forms of
power generation that can have detrimental effects on human
health and the environment through air emissions and other
problems. Despite advances in pollution controls over the
last 30 years, this conventional power generation is still the
nation’s single largest source of industrial air pollution and is
a major contributor to greenhouse gas emissions.
Electricity markets now offer cleaner ways of producing
power, however, and give many consumers the ability to
choose how their power is generated. One of these choices is
power from renewable sources, or “green power.”
In some parts of the United States, consumers can buy green
power from the provider of their electricity. All consumers
can buy green power in the form of renewable energy cer-
tificates (RECs), which are available nationally regardless of
whether a customer’s local electricity provider offers a green
power product.
While no form of electric power generation is completely
benign, electricity generated from renewable resources such
as solar, wind, geothermal, small and low-impact hydropow-
er, and biomass has proved to be environmentally preferable
to electricity generated from conventional sources such as
coal, oil, natural gas, and nuclear. This Guide to Purchasing
Green Power focuses on electricity generated from renewable
resources, both delivered through the grid and generated on-
site. Although renewable energy can also be used for heating
needs or for transportation fuels, this guide does not address
those applications.
According to the U.S. Environmental Protection Agency
(EPA), on average, replacing each kilowatt-hour (kWh) of tra-
ditional power with renewable power avoids the emission of
more than one pound of carbon dioxide. Because of the sheer
quantities of electricity involved nationwide, consumers have
enormous influence to reduce environmental impacts from
conventional power generation. If the typical commercial
building switched to 100 percent renewable electricity, the
use of green power would have the equivalent environmental
impact of avoiding the carbon dioxide emissions of nearly 28
vehicles each year.
A wide range of organizations purchase green power,
including: federal, state, and local governments; universi-
ties; businesses; nonprofit organizations; and individual
consumers. By purchasing green power, these organizations
are helping the environment and meeting their own goals,
such as financial benefits, public relations benefits, and even
national security benefits. In 2008, renewable electricity gen-
eration in the United States (excluding hydropower) equaled
nearly 124 million megawatt-hours (124 billion kilowatt-
hours)—enough to meet the annual electricity needs of
nearly 12 million average U.S. homes.
Many states already require utilities to supply some of their
electricity from renewable sources. These state mandates
(known as “compliance” markets) require a percentage of
the utility’s power mix to come from renewable sources, so
that utility customers will “green” their power mix somewhat
without taking any conscious action. Voluntary purchases,
however, are still an important strategy for organizations that
want to buy most or all their power from renewable sources
or want to promote innovative development of green power.
Voluntary green power purchases have played an important
role in driving development of the market (see Figure 1) and
are expected to be an important part of the market for the
foreseeable future.
Chapter 1
Guide to Purchasing Green Power 3
Leading organizations are finding that using green power
is an effective part of a strategic energy management plan.
Successful energy management plans are based on a “portfo-
lio analysis” that considers options such as energy efficiency,
load management, power purchases, on-site generation, and
non-electric (thermal) energy needs. As with any investment
portfolio, the best mix of these options depends on the orga-
nization’s goals, the cost of various alternatives, and external
market conditions.
While voluntary purchases of green power are becoming
more common practice in today’s electricity markets, these
markets offer a wide range of choices. This guide is intended
for organizations that have decided to buy green power but
want help in figuring out how to do it, as well as for organi-
zations that are still considering the merits of buying green
power.
The Guide to Purchasing Green Power addresses the following
commonly asked questions:
• What is renewable energy and green power? (p. 4)
• What benefits will my green power purchase bring?
(p. 5)
• How do I make a business case for buying green power?
(p. 5)
• What is the cost of green power? (p. 6)
• What are the options for purchasing green power?
(p. 9)
• What is the importance of product certification and
verification? (p. 19)
• How should an organization choose a green power
product? (p. 15)
• What are the best ways of buying green power? (p. 18)
• What are the steps to installing on-site renewable gen-
eration? (p. 24)
• How do I communicate my green power purchase to
stakeholders? (p. 30)
0
5,000
10,000
15,000
20,000
25,000
2004 2005 2006 2007 2008millions of kWh annuallyVoluntary
Compliance (new renewables)
Figure 1. Comparison of voluntary and compliance markets for renewable energy, 2004-2008
Figure 1. Comparison of voluntary and compliance markets for renewable energy, 2004–2008
Note: “New” renewable resources generally refer to renewable facilities that began operation in 1997 or later.
Source: Bird, Lori, Claire Kreycik, and Barry Friedman. 2009. Green Power Marketing in the United States: A Status
Report (2008 Data). Golden, CO: National Renewable Energy Laboratory.
4 Green Power Defined
Chapter 2
Green Power Defined
T he term green power is used in a number of different
ways. In the broadest sense, green power refers to
environmentally preferable energy and energy tech-
nologies, both electric and thermal. This definition
of green power includes many types of power, from solar
photovoltaic systems to wind turbines to fuel cells for auto-
mobiles.
In this guide, green power refers specifically to electricity
generated from a subset of renewable resources, including
solar, wind, geothermal, biogas, biomass, and low-impact
hydroelectric sources. These electricity sources are derived
from natural resources that replenish themselves over short
periods of time, including the sun, wind, moving water,
organic plant and waste material (biomass), and the Earth’s
heat (geothermal).
Note that the terms green power, environmentally preferable,
clean power, and renewable energy may be used in slightly
different ways, which differ primarily according to the vary-
ing assessments of the environmental impacts of harnessing
specific resources and of the relative significance of each
impact. The exact definitions of these terms, while always
important, take on added significance when dealing with
state and federal government requirements or determining
eligibility for government and utility incentives. For more
discussion of how each of the organizations that collaborated
on this document defines green power, please refer to their
Web sites, listed in Chapter 10, Resources for Additional
Information.
Helping Consumers Identify
Green Power
To help consumers more easily identify green power products, the “Green-e Energy” certification program has coordinated
the development of market-based, consensus definitions for
environmentally preferable renewable electricity and renew-
able energy certificates (RECs). The Green-e Energy program,
administered by the nonprofit Center for Resource Solutions, certifies and verifies renewable energy products offered in
competitive electricity markets, sold in utility green pricing
programs, and sold in national markets for RECs. Further
details about Green-e Energy certification are available from
the Green-e Web site listed in Chapter 10.
Guide to Purchasing Green Power 5
Chapter 3
The Benefits and Costs of Green Power
The BenefitsGreen power can offer organizations a variety of
environmen tal, financial, stakeholder relations,
economic development, and national security
benefits. This Guide is designed to help buyers
navigate the costs, contracting challenges, and public rela-
tions risks.
Environmental
• Reduce environmental impacts. Conventional elec-
tricity generation is a significant source of greenhouse
gas emissions as well as the single largest industrial
source of air pollution in the U.S. The emissions from
conventional electricity generation contribute to a num-
ber of serious environmental problems, including acid
rain, fine particulate pollution, and climate change.
Green power generates less pollution than conventional
power and produces no net increase in greenhouse gas
emissions, helping protect human health and the envi-
ronment.
Financial
• Provide a hedge against risks posed by:
• Electricity price volatility. Purchasing electricity
generated by renewable energy sources may provide
the buyer protection against unstable or rising fossil
fuel prices, for example through long-term, fixed-
price supply contracts directly with developers or
generators. Organizations can also encourage stable
electricity prices by supporting new renewable
power resources on the local grid, thereby diver-
sifying the energy mix with resources that are not
subject to the rise and fall of fuel costs.
• Fuel supply disruptions. On-site renewable gen-
eration can reduce the risk of disruptions in fuel
supplies, like natural gas, resulting from transporta-
tion difficulties or international conflict.
• Additional environmental regulation. To address
global climate change and regional air quality
issues, federal and state regulations could effectively
increase the price of conventional electricity, making
green power financially more attractive.
Stakeholder Relations
• Meet organizational environmental objectives.
Reducing an organization’s environmental impact is
one of the main motivations for buying green power
and is often important to stakeholders. For example,
buying green power can help reduce greenhouse gas
emissions from electricity consumption. If an organi-
zation is interested in creating a third-party certified
environmental management system (e.g., ISO-14001
certification for environmental performance) or is
conducting an organization-wide inventory of its green-
house gas emissions, a program for reducing emissions
will be an important part of this certification process.
Price Stability of Green Power
Unlike power generated from fossil fuels, some green power
products are not subject to the impact of volatile fuel prices.
For this reason, companies like IBM and Advanced Micro
Devices (AMD) use green power to hedge against energy
cost variability.
In 2001, the energy managers at IBM’s Austin, Texas, facility
were able to lock in power rates by signing up for Austin
Energy’s GreenChoice® program. With GreenChoice, the normal fossil fuel charge on the customer’s bill is replaced by
a green power charge for the amount of green power that
the customer chooses to buy. Unlike the fossil fuel charge,
the green power charge is fixed until 2011. As it turned out,
Austin Energy’s fuel charge for conventional power spiked in 2001 and IBM saved $20,000 in its first year in the program.
When the fuel charge increased again in 2004, IBM saved
more than $60,000.
Similarly, AMD saw significant cost savings after its first
purchase of renewable energy in 2000 from Austin Energy.
Shortly after AMD’s purchase, natural gas prices soared and
became more costly than the fixed green power premium.
By 2001, AMD saved approximately $100,000 and, in response, doubled the company’s green power purchase for
the following year. In 2009, AMD purchased nearly 74 mil-
lion kilowatt-hours of green power annually, which supplies
100 percent of its Austin facility’s energy needs.
Chapter 3
6 The Benefits and Costs of Green Power
• Demonstrate civic leadership. Being among the
first in a community to purchase green power is a dem-
onstration of civic leadership. It makes a statement that
an organization is willing to act on its stated
environmental or social goals. These purchases also
demonstrate an organization’s responsiveness to its cus-
tomers, the majority of whom favor renewable energy.
See Chapter 10, Resources for Additional Information,
for details.
• Generate positive publicity. Buying green power
affords an opportunity for and builds on existing public
recognition and public relations activities. Companies
that are in the public eye need to be responsive to
the concerns of environmentally conscious custom-
ers, shareholders, regulators, and other constituents.
Programs promoting green power, such as EPA’s Green
Power Partnership or Green-e Marketplace, provide
assistance in reaching broad audiences to convey the
benefits of green power purchases.
• Improve employee morale. Progressive action and
leadership on environmental issues like renew-
able energy may improve employee morale, which
in turn can reduce employee turnover, attract new
employees, and improve productivity. In a survey of
464 organizations, sponsored by the National Wind
Coordinating Collaborative, improving employee
morale was cited as the third most important motiva-
tion for buying green power.
• Differentiate products or services. By purchasing
green power, a company may be able to differentiate
its products or services by, for example, offering them
as “made with certified renewable energy.” Purchasers
of green power can also join their power supplier to
market their products together. In addition, purchas-
ers of products certified by the Center for Resource
Solutions’ Green-e Marketplace program can display the
Green-e logo on their product packaging to indicate a
commitment to using 100 percent green power in the
manufacturing of the product. Many companies are also
finding that producing their products with green power
gives them an advantage in selling to their business
customers who are trying to “green” their supply chain.
Economic Development and National
Security
• Stimulate economies. Manufacturing, installing, and
operating renewable resources in the United States
requires a clean energy workforce. By purchasing green
power, an organization can help create new, domestic
jobs. These high-quality, often well-paying, jobs help
grow the local economy. Renewable power facilities can
also increase a local tax base and can provide income
for farmers and rural communities through landowner
lease payments. The renewable energy industry is an
important growth sector that can simultaneously boost
the nation’s economy while meeting the nation’s energy
challenges.
• Increase fuel diversity. Green power diversifies the
nation’s electricity portfolio—a good way to manage
risk—and, because renewable resources are indigenous,
Demonstrating Community
Leadership: City of Bellingham,
Washington
By a unanimous city council vote in mid-2006, Bellingham,
Washington, took a leadership role in promoting renew-able energy by choosing to purchase 100 percent green
power for all electricity used in city-owned facilities. From
September 2006 through Earth Day 2007, the city part-
nered with the local utility’s green power program and a
local nonprofit organization to conduct the “Bellingham Green Power Community Challenge.” The goal of the chal-
lenge was to increase green power purchasing among the
city’s residents and businesses to meet at least two percent
of the citywide electric load. Bellingham’s results have far
exceeded original challenge goals. To date, the green power annually purchased by more than 2,680 households, 125
businesses, and five large volume purchasers totals 82.8 mil-
lion kilowatt-hours of renewable energy certificates (RECs)
and represents approximately 12 percent of the community’s
total yearly electricity use. The community’s purchase resulted in EPA recognizing Bellingham as the first EPA Green Power
Community in Washington State.Green Power’s Role in Overall
Environmental Strategy
A recent survey of corporate participants in the Green-e
Marketplace program indicates that most companies view
their renewable energy purchases as part of a larger com-
mitment to environmental sustainability.
• 75 percent said support of renewable energy was part of
a multi-pronged corporate environmental strategy.
• 70 percent differentiate their company as an environmental
leader by supporting renewable energy.
• 45 percent of respondents indicated that developing an
environmentally friendly brand was very important.
A Web link to the full survey is provided in Chapter 10,
Resources for Additional Information.
Chapter 3
Guide to Purchasing Green Power 7
green power reduces the country’s dependence on
imported fuels.
• Reduce infrastructure vulnerability. The distributed
nature of renewable resources allows for the distrib-
uted generation of renewable energy, thus, reducing the
country’s reliance on a vulnerable, centralized electric-
ity infrastructure.
• Economies of Scale. Most renewable energy technolo-
gies are manufactured on assembly lines, where mass
production can reduce costs. By purchasing green
power, organizations can help build demand, which in
turn could lead to lower production costs and poten-
tially lower prices.
The Costs
Green power can be priced differently than standard power
sources. It has usually been more expensive than conven-
tional electricity sources, largely due to the relative newness
of renewable technologies and their gradual diffusion into
mainstream markets, compared with conventional electricity.
Chapter 6, Procuring Renewable Electricity and Renewable
Energy Certificates, suggests ways of minimizing these costs in
conjunction with a procurement plan. Nonetheless, the cost of
green power is continuing to fall as growing demand drives the
expansion of manufacturing facilities and reduces production
costs. Figure 2 illustrates the levelized costs of renewable and
fossil fuel technologies, showing that several green power tech-
nologies are now cost-competitive with conventional sources.
100
120
140
160
180
200
0
20
40
60
80
EnergyEfficiency Wind(onshore)
Biomass NaturalGas
Coal Nuclear Solar PVCurrent Levelized Costs ($/MWh)Geothermal
a
b
Figure 2. Levelized cost of new power generation technologies in 2008
a Represents estimated implied cost in 2012 for crystalline PV system
b Represents a leading thin film PV company's targeted implied cost of energy in 2012
Note: Costs have been levelized over the lifetime of the technology and include construction, fuel, and operation and maintenance
costs. The bars represent typical cost ranges at average capacity factors for each technology.
Source: Lazard. February 2009. Levelized Cost of Energy Analysis, Version 3.0.
<blog.cleanenergy.org/files/2009/04/lazard2009_levelizedcostofenergy.pdf> .
Chapter 3
8 The Benefits and Costs of Green Power
The actual price for green power depends on a number of
factors, including the availability and quality of the resource,
manufacturing capacity and world demand for the technol-
ogy, the availability of subsidies to encourage green power,
and the quantity purchased and terms of the contract.
Generally, the price of green power ranges from less than
that of the standard power mix, especially in competitive
markets and where state subsidies exist, up to one to four
cents more per kilowatt-hour. When the market price of
conventional electricity is high, purchasers of green power at
a fixed price may actually save money. Of course, when the
market price of conventional electricity drops, they will be
paying a premium. Since 2000, the average price premium
has dropped at an average annual rate of eight percent (see
Figure 3).
Contracting Challenges
Green power may also be more difficult than conventional
power for an organization to purchase, causing transaction
costs in addition to any price premiums. Although organiza-
tions that are buying green power for the first time might
need to invest extra effort, these costs fall significantly over
time as the electricity purchasers gain experience. Following
the information and strategies provided in this guidebook,
particularly Chapter 6, Procuring Renewable Electricity
and Renewable Energy Certificates, should help reduce the
contracting challenges faced by new purchasers of green
power. In addition, sample contract templates are publicly
available to help buyers avoid difficulties in signing a green
power contract (see Chapter 10, Resources for Additional
Information).
Public Relations Risk
Some stakeholders might regard the purchase of green
power as a token effort or “greenwashing.” Organizations
can improve the credibility of their green power purchase
by buying green power as part of a broader environmen-
tal management program and by working with third-party
organizations for independent auditing, certification,
endorsement, and minimum purchasing benchmarks.
0
0.5
1
1.5
2
2.5
3
3.5
4
2000 2001 2002 2003 2004 2005 2006 2007 2008Residential Premium (cents/kWh)Average
Median
Figure 3. Trends in utility green pricing premiums, 2000-2008
Figure 3. Trends in utility green pricing premiums, 2000–2008
Source: Bird, Lori, Claire Kreycik, and Barry Friedman. 2009. Green Power Marketing in the
United States: A Status Report (2008 Data). Golden, CO: National Renewable Energy Laboratory.
Guide to Purchasing Green Power 9
Chapter 4
Options for Purchasing Green Power
Green power can be procured several different
ways. The main distinction among the options is
the type of supplier and where the electricity gen-
eration equipment is located: on the electric grid
or at the facility. For electricity delivered over the power grid,
the status of utility restructuring in that state will determine
whether an organization is limited to buying green power
from its local distribution utility or whether it can choose
among competitive power suppliers. Even if the state has no
green power marketers or the utility does not offer a green
power option, an organization can buy renewable energy
certificates (RECs). For on-site green power, the resources
available at that site (e.g., solar, wind, biomass) are the main
factors determining a project’s feasibility.
The range of supply options in the market provides consid-
erable flexibility to green power buyers. Organizations are
able to consider factors such as price, specific green power
generation resource (e.g., wind versus solar), ease of procure-
ment, and the location and year of the generating facility
in their purchasing decisions. By considering these issues,
buyers may be able to choose a specific type of green power
product or mix and match green power products to meet
their desired goals.
Renewable Electricity Products
Customers in many states have the ability to purchase a
green power product directly from their electricity provider.
In regulated electricity markets, customers may be able to
buy a green pricing product from their local utility. Green
pricing is an optional service offered by regulated entities to
allow customers to support a greater level of utility invest-
ment in renewable energy by paying a premium on their
electric bill. In competitive electricity markets, customers can
switch electricity service providers if their current provider
does not offer a green pricing product. In this market, the
customer can purchase a green marketing product from a pro-
vider other than their local utility. Again, a green marketing
customer pays a small premium in exchange for electricity
generated from green power resources.
Most renewable electricity products (i.e., green pricing or
green marketing products) are one of three types:
• Fixed energy quantity block. A block is a quantity of
100 percent renewable electricity, often 100 kilowatt-
hours (kWh), offered for a fixed monthly price. The
price is often expressed as a price premium above the
price of conventional power. Customers usually may
sign up for as many blocks as they wish, with the
monthly cost of these products based on how many
blocks they buy. This type of product is available in
some competitive markets but is more often found in
regulated utility green-pricing programs.
• Percentage of monthly use. Customers may choose
green power to supply a fixed percentage of their
monthly electricity use. In practice, this usually
results in the purchase of blended green and conven-
tional power. This is typically priced as a premium
on a cents per kWh basis over the standard rate or as
a fixed charge per kWh. The monthly cost for these
products varies with use and the percentage of green
power chosen.
• Long-term fixed price contracts. Buying a portion of
the output of a renewable energy project in a long-term
contract can help a project developer secure financing,
while giving the end-user a stable electricity contract.
This model has been used with several government
and academic institutions. WRI’s Green Power Market
Development Group is exploring this model for com-
mercial users.
Some renewable electricity products require a fixed monthly
fee to support a given amount of renewable generation
capacity. Others require contributing to a green power fund
that finances renewable projects. These products can be an
effective way to assist the green power industry but do not,
however, result in a metered amount of renewable electricity
being generated, which is necessary to quantify the environ-
mental benefits of the green power purchase. For this reason,
these products are not discussed further in this guide.
Chapter 6, Procuring Renewable Electricity and Renewable
Chapter 4
10 Options for Purchasing Green Power
Energy Certificates, provides more details about implement-
ing a renewable electricity purchase.
Renewable Energy Certificates
Renewable energy certificates (RECs), also known as “green
tags,” “green certificates,” and “renewable energy credits,”
are tradable instruments that can be used to meet volun-
tary renewable energy targets as well as to meet compliance
requirements for renewable energy policies. A REC is a cer-
tificate that represents the generation of one megawatt-hour
(MWh) of electricity from an eligible source of renewable
energy. Each REC denotes the underlying generation energy
source, location of the generation, and year of generation
(a.k.a. “vintage”), environmental emissions, and other char-
acteristics associated with the generator. RECs represent a
claim to the environmental attributes associated with renew-
able energy generation, but purchasers should nevertheless
ensure that their contracts are explicit about which envi-
ronmental attributes are conveyed to them. Figure 4 (above)
illustrates the REC transaction path.
RECs may be sold “bundled”—paired by the electric service
provider with grid electricity delivered to the buyer—or
“unbundled” from electricity as a stand-alone product and
paired by the buyer with its grid electricity purchase. RECs
combined with plain grid electricity are functionally equiva-
lent to green power purchases from a local utility, no matter
where the REC may be sourced. Purchasers of RECs may
make claims about their purchase of green power similar to
purchasers of renewable electricity products.
Because RECs are not tied to the physical delivery of elec-
trons, they allow organizations to purchase green power from
ConventionalPower
GreenPower
ElectricitySupplier RECSupplier
ElectricityConsumer
POWER GRID
POWER
POWER
POWER
POWER
REC
REC
Figure 4. Renewable energy certificate (REC) transaction path in a voluntary green power market
Note: Figure 4 is not intended to represent a comprehensive view of all the possible ways a REC can be traded and used.
Chapter 4
Guide to Purchasing Green Power 11
suppliers other than their local electricity provider. RECs
help overcome a major barrier to renewable facility develop-
ment—the fact that the best renewable resources may not be
located close to population centers. The sale of RECs allows
these more remote facilities to benefit from support for green
power.
Unlike electricity, RECs do not need to be scheduled on a
transmission system, and they can be used at a different time
than the moment of generation. Certificate tracking systems
have been established in different states or regions to issue
and record the exchange of RECs, making REC markets even
more accessible.
Customers do not need to switch from their current elec-
tricity supplier to purchase RECs, and they can buy RECs
based on a fixed amount of electricity rather than on their
daily or monthly load profile. Because RECs are indepen-
dent of the customer’s electricity use, load profile, and the
delivery of electricity, they provide greater flexibility than
purchasing bundled RECs and electricity from a utility.
While RECs offer increased contracting convenience, they
do not provide the same protection against price volatility
as long-term contracts.
The price for voluntary RECs can be lower than the premi-
ums for renewable electricity products for several reasons: 1)
RECs have no geographic constraints and therefore can pro-
vide access to the least expensive renewable resources;
2) the supplier does not have to deliver the power to the REC
purchaser with the associated transmission and distribution
costs; 3) the supplier is not responsible for meeting the pur-
chaser’s electricity needs on a real-time basis.; and 4) REC
prices reflect greater competition because RECs are fungible
in a voluntary market. To the extent that electricity providers
are also sourcing their green power products from purchased
RECs, however, the premium that they would charge might
not differ greatly from the cost of the unbundled RECs that
organizations can buy.
An alternative way to buy RECs is through a subscription, or
“future RECs,” which involves an up-front purchase of RECs
to be generated in the future by a new or soon-to-be-built
renewable electricity facility. The advantage of this approach
is that it promotes new renewable facilities by providing
up-front financial assistance for their development and con-
struction. In return, the purchaser receives the RECs as they
are generated over an extended period of years. Nevertheless,
even though they are paying upfront for future RECs, buyers
cannot make environmental claims against those RECs until
they are generated. A risk of this approach is that the facility
might not be constructed or could be destroyed by a natural
disaster after construction, and buyers should investigate
what remedy the seller proposes in such an event. As with all
products, independent product certification and verification
of the claims made is an important aspect to consider.
For a company or institution with operations and offices in
multiple locations, purchasing RECs can consolidate the pro-
curement of green power thus eliminating the need to buy
green power for different facilities through multiple suppliers.
Chapter 6, Procuring Renewable Electricity and Renewable
Energy Certificates, provides more details about purchasing
RECs.
Business and organization purchases of different green power
product types is shown in Figure 5, but on-site renewable
generation is not included because equivalent data are not
available.
On-site Renewable
Generation
In addition to buying renewable electricity from a utility or
buying renewable energy certificates, organizations can
install renewable power generation at their facilities.
They can either buy the system outright or install a system
that is owned by another party and buy the electricity as it
is generated.
On-site renewable generation offers advantages such as
enhanced reliability, power quality, and protection against
Note: Nonresidential customers refer to business and institutional customers. Data for on-site renewable generation is not available.
Figure 5: Nonresidential Green Power Sales by Product Type, 2008 (Millions of kWh)
Green Pricing Green Marketing REC Markets Total
2,100 1,200 15,400 18,700
Figure 5. Nonresidential green power sales by product type, 2008 (millions of kWh)
Note: Nonresidential customers refer to business and institutional customers. Data for on-site renewable generation are not available.
Source: Bird, Lori, Claire Kreycik, and Barry Friedman. 2009. Green Power Marketing in the United States: A Status Report (2008
Data). Golden, CO: National Renewable Energy Laboratory.
Chapter 4
12 Options for Purchasing Green Power
price volatility, as well as a visible demonstration of envi-
ronmental commitment. It is important to note that selling
RECs from an on-site facility negates the system owner’s
claim to using a corresponding amount of renewable electric-
ity generated on site because the REC buyer is buying that
claim specifically and contractually. In order to claim the
zero greenhouse gas emissions from electricity generated
on-site, the RECs would need to be retired and not sold to a
third party. In many states, excess electricity generated with
on-site renewable generation may be sold back to the grid at
the same price at which power is bought, through a process
called net metering. This arrangement can improve the finan-
cial return for on-site renewable power systems, although net
metering is often limited to small installations. For example,
the state of California limits on-site generation systems to
1 megawatt (MW) (10 MW for up to three biogas digesters)
and the aggregated on-site systems’ capacity may not produce
more than 2.5 percent of a utility’s peak demand.
On-site renewable energy technologies for power generation
include photovoltaic panels, wind turbines, fuel cells, and
biomass combustion. Large facilities sited near a munici-
pal landfill or sewage treatment plant may be able to use
recovered methane gas for on-site electricity and/or heat
production. The following describes each of these options in
more detail:
• Solar. Solar systems can be configured to almost any
size from a few kilowatts up to several megawatts.
On-site photovoltaic (PV) systems may be situated on
schools, homes, community facilities, and commer-
cial buildings. They can be integrated into a building,
displacing other building material costs, such as for
roofing shingles or car park shading.
• Wind. Wind turbines vary in size. A typical small
unit provides 100 kilowatt (KW) or less, whereas
large turbines range from 500 kW to more than 3
MW. On-site applications are usually only possible in
nonurban areas, and often require zoning permits to
exceed 35-foot height restrictions (a tower for a 250 kW
turbine is 130 feet high with a blade sweep of 98 feet).
Such installations usually require approximately 1 acre
of land per turbine and wind speeds that average 15
mph at a 150-foot height. In addition, placing turbines
in urban areas is inadvisable because nearby buildings
may create wind turbulence that can disrupt the tur-
bines’ performance.
• Landfill and sewage methane gas. Methane gas
derived from landfills or sewage treatment plants can
be used to generate electricity. Methane gas also may
be generated using digesters that operate on manure or
agricultural wastes. The methane gas is then converted
to electricity using an internal combustion engine, gas
turbine (depending on the quality and quantity of the
gas), direct combustion boiler and steam turbine gen-
erator set, microturbine unit, or other power conversion
technologies. Most methane gas projects produce from
0.5 to 4 MW of electrical output.
• Biomass. Biomass is plant material burned in a boiler
to drive a steam turbine to produce electricity. This
system is good for producing combined heat and power
(CHP) at facilities with large thermal loads. Biomass
projects are best suited to locations with abundant bio-
mass resources (often using waste products from the
forest industry or agriculture).
• Fuel cells. Fuel cells are another way of producing
power. They emit essentially no air pollution and are
more efficient than other forms of generation, but they
cannot be considered a renewable resource unless they
operate on a renewably generated fuel, such as digester
gas or hydrogen derived from PV or wind power.
In this era of power reliability problems and national secu-
rity concerns, domestic, on-site renewable generation offers
important advantages over central-station and fossil-fueled
power plants. Moreover, on-site generation can be designed
to provide backup power for critical loads when power
from the grid is interrupted, as well as when the renewable
resource is not available. This ability to operate indepen-
dently of the power grid is a great advantage, particularly at
remote facilities. Because renewable generation technologies
can be modular and used on a small scale, the on-site gen-
On-site Generation: BMW
Manufacturing Company
Automaker BMW pipes methane gas 9.5 miles from a landfill
to serve the electric and thermal needs of its manufactur-
ing facility in Greer, South Carolina. Rather than invest in
new internal combustion engines to generate electricity, in 2003 BMW converted four turbines that previously ran on
purchased natural gas. In 2009, BMW replaced the original
four turbines with two new highly efficient turbines that will
increase the electrical output from 14 percent to almost 30
percent. By recovering the waste heat from the turbines, the 11-megawatt combined heat and power project satisfies
more than 60 percent of the facility’s thermal needs, as well
as nearly 20 percent of its electricity use. To date, the project
has saved the automaker an average of more than $5 million
each year in energy costs. The new turbines installed in 2009 should return an additional average annual cost savings of
up to $2 million. With the success of its landfill gas project,
the facility is exploring on-site wind and has completed a
study of the site’s wind speed and direction. For more on-
site examples, see Chapter 10, Resources for Additional Information.
Chapter 4
Guide to Purchasing Green Power 13
eration system can be designed to enhance the redundancy
and diversity of a facility’s energy supply.
On-site renewable generation typically has higher capital costs
and lower operating costs compared with installing fossil-
fueled generation. Although these costs can make the initial
investment in on-site generation more difficult to justify,
once that investment has been made, the annual budgets for
maintaining the system are much easier to justify (compared
with purchasing renewable electricity), which makes sustain-
ing a commitment to renewable power easier. Additionally,
there are new financing models for on-site generation being
developed to lower the upfront capital investment, such as the
solar power purchase agreement (SPPA).
An organization that installs its own generation capability
may have problems with the requirements for connecting
to the utility distribution system, commonly referred to as
interconnection. Interconnection rules designed for large
generators often are unnecessarily burdensome for small
generators. Increasingly, however, state interconnection rules
are being standardized and simplified for smaller genera-
tors. In addition, national standards have been issued by the
Federal Energy Regulatory Commission (FERC) that may
ease interconnection in special cases. Chapter 7, Planning an
On-site Renewable Generation Project, provides more details
about procuring an on-site renewable generation system.
Customers considering on-site generation should check with
their local utility or with the state utility commission about
interconnection rules. Chapter 10, Resources for Additional
Information, provides more sources of information about
utility interconnection.
14 Steps to Purchasing Green Power
Chapter 5
Steps to Purchasing Green Power
To buy green power, an organization first should deter-
mine what green power products will help fulfill its
electricity needs and decide how to procure those
products. Figure 6 illustrates the steps in this process.
The preliminary steps described in this section are the same
for all types of green power products. The final steps differ
for purchased green power products (renewable energy cer-
tificates [RECs] and utility-supplied) and on-site renewable
generation. These steps are explained in later chapters of
this guide.
Setting Goals
The first step in any type of green power purchase is to set
goals about what the objectives are for purchasing green
power, considering the following questions at a minimum:
• Why is the organization considering green power?
• What does the organization hope to get from it?
• What selection criteria are important to the
organization?
• Are independent certification and verification important
to the organization?
These questions are best considered as part of the organiza-
tion’s overall energy or environmental management process.
Such a process is an ongoing effort to improve the energy
and environmental performance of the organization, usually
driven by goals set by the organization’s top-level leaders.
The goals for a specific purchase of green power then flow
from, and are greatly informed by, these overall goals.
Identifying Key Decision-
Makers
The people in an organization who are interested in green
power may be high-level decision-makers as well as staff
from the purchasing, facilities/energy management, environ-
mental health and safety, legal, corporate relations, and/or
marketing departments. All of their interests and concerns
must be addressed early in the planning process. Experience
has demonstrated that not doing so often leads to disagree-
ments later in the process. Because buying green power is
ultimately a financial decision, it is very important to have
Capturing the Benefits (8)
Creating aProcurement Plan (6)Creating a
Project Plan (7)
Obtaining Resourcesand Assistance (7)
Screening the Technologies (7)
Collecting ProductInformation (6)
Developing
Screening Criteria (6)
Choosing Green Power Options (5)
Gathering Energy Data (5)
Identifying Key Decision-Makers (5)
Setting Goals (5)
RenewableElectricity On-site RenewableGeneration
RECs
AnticipatingPossible Barriers (7)
Installing and
Operating an On-siteRenewable System (7)
Evaluating the Purchase (5)
(Indicates Corresponding Chapter)
Re-assess Green
Power Purchase
Figure 6. Steps to a successful green power project
Chapter 5
Guide to Purchasing Green Power 15
the chief financial officer involved in and supportive of the
decision. In addition, other departments, such as market-
ing or environment, health, and safety, may also contribute
funds to help pay for green power.
Designating a contact person who can draw on expertise
from throughout the organization is an important step. The
departments chosen to participate will probably depend on
the type of products being considered. It also is important
to involve senior management in the planning and decision
process. In many cases, the greatest advocate of buying green
power is an executive such as a chief executive officer or
president. With this high-level support, buying and promot-
ing green power is much easier. Some organizations involve
their employees (or students, in the case of educational insti-
tutions) in selecting the green power products.
Gathering Energy Data
The organization considering green power should take an
inventory of its energy use, including electricity and ther-
mal. Its annual electricity use can be calculated from the
utility bills for each facility or business unit and for the
entire organization. These data will help: 1) compare the
organization’s energy performance against peer facilities’
energy performance and understand energy use patterns and
trends; 2) determine how much green power to buy; and,
3) evaluate the environmental impacts of the organization’s
electricity use. Monthly electricity consumption data are
the most important, while peak demand and interval-meter
data are useful if available. Each organization should study
its consumption data over the past year before specifying its
requirements in order to have a complete and accurate pic-
ture of energy use. Outside consultants or organizations can
help with these steps.
As mentioned earlier, green power can be considered part of
an energy portfolio that includes energy efficiency upgrades,
load management, and combined heat and power. The more
an organization’s energy requirements can be reduced, the
less green power it will need to buy to achieve a given objec-
tive, which in turn makes green power more affordable.
Some organizations have saved enough money from energy
efficiency upgrades to enable them to pay for their green
power purchases.
Many resources are available to help improve the energy
efficiency of buildings and equipment. A good starting point
is the ENERGY STAR Portfolio Manager, an online tool that
compares a building’s energy usage with that of similar
buildings. The ENERGY STAR Web site <www.energystar.
gov> offers simple energy-saving tips and a directory of ener-
gy services companies to provide additional assistance, such
as a facility energy audit.
Calculating an organization’s annual electricity use can deter-
mine the quantity of emissions associated with that use and
help estimate the emissions that could be prevented by buy-
ing green power. EPA offers an online tool to help estimate
emissions from an organization’s current conventional elec-
tricity use at <www.epa.gov/cleanenergy/powerprofiler.htm>.
Choosing Green Power
Options
The next step is finding the appropriate green power solu-
tions for the organization. Another goal of this step is
becoming familiar with the electricity markets in the organi-
zation’s area and the available green power technologies.
The first decision is whether to generate power on-site and/or
to purchase power or RECs from outside vendors. The main
differences between these options are the ease and cost of
implementation, the need for capital investment, the ability
to hedge risk, and the length of time over which one realizes
the benefits. On-site renewable generation typically requires
an up-front investment (as part of either a financed project or
a capital appropriation), but the reduction in the consump-
tion of conventional energy can last for as many as 30 years.
There are new financing models being developed to help
overcome the upfront financial barriers to on-site genera-
tion. These models are discussed in more detail in Chapter 7,
Planning an On-site Renewable Generation Project.
Renewable electricity purchases and RECs usually require no
up-front capital and are relatively easy to procure, but they
deliver benefits only for the term of the purchase contract.
An organization’s motivations for purchasing green power
will help decide which costs and benefits are most important
and thus which type of green power is most appropriate. For
example, an organization that wants to manage fuel price
risk might be more interested in buying fixed-price renew-
able electricity. An organization that finds the reliability of its
power supply to be most important might be more interested
in on-site renewable generation. These options can also be
combined. For instance, an organization might install on-site
generation to meet part of its electricity needs and purchase
RECs to match the remainder of its electricity use. Likewise,
organizations with facilities in multiple locations must deter-
mine whether to procure green power from one provider for
all sites, or whether to procure green power from multiple
providers based on unique options that might be available to
an individual site. Organizations with facilities in multiple
locations must also select the appropriate green power prod-
uct for each site.
The green power options available to an organization are
determined partly by the electricity market structure in the
Chapter 5
16 Steps to Purchasing Green Power
state in which the facility is located. Each state has different
rules governing power marketers, and the level of competi-
tion varies among the states. Large electricity purchasers
might be able to work with their local utility or electricity
provider to tailor a product to meet their needs.
For on-site renewable generation, the organization should
assess the renewable energy resources available at its facility,
including the quality of wind and solar resources, the avail-
ability of biomass fuel or landfill gas, and siting constraints
(such as space limitations or shading from neighboring
buildings). The cost of conventional power at the facility also
is important to consider. The organization should read over
its utility’s and state’s interconnection rules to make sure
there are no obvious provisions that would prohibit grid-
connected, on-site generation. The goal at this stage is to
eliminate any renewable options that are clearly not feasible
for the organization.
When considering green power options, it is useful to
consider the motivations of other green power purchas-
ers. A 2008 survey of corporations by the World Resources
Institute (WRI) and the Climate Group found that the top
criteria against which companies evaluate low-carbon tech-
nology projects include:
• Financial metrics. The return on investment (ROI) of
projects is of paramount importance.
• Marketing value. The ability of projects to improve
a company’s brand value or image is a key factor in
decision-making.
• Carbon dioxide (CO2) benefit. The extent to which
projects can help companies reach their emission
reduction goals is also a factor they considered.
The key conclusion from the WRI-Climate Group survey
is that low-carbon technology projects must be able to
compete financially with non-renewable related projects in
order to be funded.
It is also important to anticipate barriers to making a pur-
chase, so that the process can be structured to overcome
these barriers. The same WRI-Climate Group survey found
that the most common barriers to wider investment and
greater deployment of low-carbon technologies include:
• Cost of the technology.
• Insufficient financial performance.
• Availability of financing.
• Lack of staff capacity and knowledge.
• Inadequate baseline energy data against which to dem-
onstrate improved performance.
• Lack of a streamlined decision-making process.
Evaluating the Purchase
Once the green power purchase has been implemented, it is
important to collect information and evaluate how well the
purchase achieved the purchase’s preliminary goals. Areas of
evaluation could include:
• How well the procurement process worked.
• Whether the vendors delivered what was expected.
• Whether the green power purchase is providing protec-
tion against rising fossil fuel prices.
Using Energy Efficiency Savings
to Purchase Green Power:
University of Pennsylvania
The University of Pennsylvania is funding its sizeable wind
power purchase with savings achieved through energy con-servation. Over the past few years, the university reduced
peak electricity demand by 15 percent. This reduction enabled
the university to purchase nearly 193 million kilowatt-hours
of wind-generated renewable energy certificates (RECs), an
amount equivalent to 46 percent of its total campus electric-ity use. Penn’s long-term commitment to buying green power
helps support development of new wind generation facilities,
including a 12-turbine, 20-megawatt Pennsylvania wind farm.
Finding Green Power Suppliers
• Organizations with facilities in several states should use a
national locator such as EPA’s Green Power Locator <www.epa.gov/greenpower/pubs/gplocator.htm> or the Green-e
Energy “Find Renewable Energy” locator <www.green-e.org/
buy>. The latter is also useful for locating certified products.
• Many state governments, often the public utilities commission,
maintain a list of power marketers offering green power
products in the state, especially if state electricity markets
have been restructured.
• Smaller facilities (such as retail stores) may find it easier to
have a single point of contact compiling this information and
making it available across the entire organization. Larger
facilities (such as factories or research campuses) often have enough expertise to gather information and negotiate
contracts on their own.
• See Chapter 10 for more resources.
Chapter 5
Guide to Purchasing Green Power 17
• How well the organization promoted its green power
commitment.
• How well the organization educated employees about
the green power commitment.
• Whether the green power purchase is helping the orga-
nization meet its corporate or institutional goals related
to environmental improvement and sustainability.
Additional evaluation factors apply for on-site generation
systems, such as how much energy the system is producing
(both initially and over time), how the system operation and
maintenance costs compare to expected, and whether output
is being appropriately reported to tracking systems for the
issuance of RECs that the owner will use to substantiate its
renewable electricity use claims.
18 Procuring Renewable Electricity and Renewable Energy Certificates
Chapter 6
Procuring Renewable Electricity
and Renewable Energy Certificates
To select the green power supplier and the product, it
is helpful to develop specific criteria for judging the
alternatives. These criteria can be ranked, keeping in
mind the goals identified early in the process when
the project team was assembled.
Developing Criteria for
Screening Suppliers and
Products
The following criteria might be helpful when screening sup-
pliers and products:
• Reputation. A supplier’s reputation is influenced by
factors such as how well it honors its commitments,
how easy it is to work with, its list of clients, and how
well it is viewed by the industry. Assessing a supplier’s
reputation may require references and a perusal of the
energy industry’s literature. Environmental groups also
might have information about the supplier.
• Financial strength and credit. To research the finan-
cial health of a power supplier, look at its Web site and
perhaps its annual report, Securities and Exchange
Commission filings, and bond ratings.
• Location. If buying green power from a local supplier
is important, call the supplier and find out where its
renewable generation is located. Public utility com-
missions’ Web sites often have contact information for
registered retail suppliers.
• Product choice. Some suppliers offer several green
power products, varying in the amount of renewable
power and types of resources. If a supplier offers a
choice of green power products, this may enable the
organization to change the product it purchases in the
future without having to search for a new supplier and
negotiate a new contract.
• Environmental performance. Assessing a sup-
plier’s environmental performance can be useful.
Organizations should review the supplier’s annual
financial or environmental report, examine its other
electricity products, and review its other business
activities.
For renewable electricity products, consider the following
additional criteria:
• Price. When considering price, organizations should
make sure they are comparing apples to apples. Prices
might reflect different types of products, so it is essen-
tial that organizations understand how products under
consideration might differ. For example, renewable
electricity products might quote total price per kilowatt-
hour for electricity including the green attributes, which
can be compared to the standard electricity price, but
other products, such as renewable energy certificates
(RECs) and many utility green pricing products, quote
only the incremental cost of green power, which must
be added to standard electricity rates. Furthermore,
prices might be fixed or escalate over time, or can vary
according to a price index such as the wholesale price
of electricity. Finally, the purchase of some utility green
power products might offer an exemption from variable
fuel charges or environmental taxes, which should be
factored into the ultimate price.
• Percentage of renewable energy. For a particular green
power product, the resource mix can range from 1 to
100 percent renewable power. When buying certificates
or bundled products, an organization can still calculate
the percentage of its electricity use served by renewable
power.
• Percentage of new or incremental renewable sources.
Many experts argue that only new generation provides
incremental environmental benefits. “New” renew-
able resources generally refer to renewable facilities
that began operation in 1997 or later, which is when
the voluntary market for green power began to grow.
Besides the direct impact of purchases from new renew-
able sources, these purchases also help create the
demand necessary for constructing additional renew-
able resources.
Chapter 6
Guide to Purchasing Green Power 19
In states that have adopted a renewable portfolio stan-
dard (RPS), electricity providers are required to include
a minimum percentage of renewable electricity in
their standard product offering. Renewable electric-
ity products create additional environmental benefits
only if the power purchased is not already part of the
provider’s minimal RPS requirement. In other words,
an organization should purchase a renewable electricity
product that is not already being used to satisfy a RPS
mandate or goal imposed on a utility nor is the renew-
able electricity product included in the utility’s standard
electricity service.
• Renewable energy/resource mix. A renewable energy/
resource mix refers to the kinds of resources used in
the green power product. For example, is the product
generated from wind, biomass, solar, geothermal, or
hydro? Some resources have a greater environmental
impact than others. Wind, solar, and geothermal power
usually are the most environmentally preferable energy
sources. Each is renewable and nonpolluting, with
limited impact on the land or local habitats. Certain
environmental groups regard some types of hydropow-
er, biomass, and municipal solid waste as less desirable.
Hydropower dams may drastically alter river habitats
and fish populations; biomass facilities may emit sig-
nificant quantities of smog-forming pollutants; and
burning municipal solid waste may release heavy met-
als and other toxins into the environment. Municipal
solid waste may also include nonrenewable materials
derived from fossil fuels, such as tires and plastics,
which when burned release carbon dioxide into the air.
It also is important to check the environmental char-
acteristics of any nonrenewable generation resources,
as they will contribute to the overall environmental
impact of the power purchased.
Renewable energy resources also have different asso-
ciated costs. For instance, a green power product
generated from a resource that is scarce in one part of
the country will be more expensive than purchasing the
same resource-derived product from another part of the
country.
• Length of contract. Some buyers prefer a short-term
contract in case the market changes and better offers
come along. But an organization may be able to lock in
a lower price if it signs a multiyear contract. A longer-
term contract might also offer greater price stability as
well as provide better support to new renewable energy
projects. When determining the value of price stability,
be aware of “typical” market fluctuations in power pric-
es and how the price of renewable electricity can vary.
Finally, a contract may include options for renewal,
which can offer flexibility in the future. Before entering
into a long-term contract, however, buyers should take
into consideration potential policy changes (most nota-
bly, a carbon cap-and-trade program) that impact future
environmental claims for purchasing green power.
• Third-party certification and verification. A green
power product can be certified and verified by an
independent third party. Such certification can provide
credibility and confirmation of the product’s envi-
ronmental value. By purchasing a product that has
met specific environmental and consumer protection
guidelines adopted by the certifying organization, a
purchaser will be better positioned to address stake-
holder questions about purchase quality and credibility.
Visit <www.green-e.org> for more information about
certification and verification.
• Location of generation. In order to support the local
economy and to contribute local environmental ben-
efits, some organizations may prefer local or in-state
renewable generation. Some renewable electricity
products, however, use resources located out-of-state,
and renewable energy certificates may be based on gen-
eration located outside of the purchaser’s region. For
example, purchasing RECs from a state in which fossil
fuel comprises more of the electric generation mix may
provide greater environmental benefit than purchas-
ing RECs from a state in which renewable electricity
The Role of Product Certification
One of the major concerns with buying green power is ensuring that purchasers get what they pay for. It can be
difficult to substantiate claims made about the quantity and
characteristics of the product purchased. Also, it is important
to ensure that two organizations are not claiming to have
purchased the same green power, or are double-counting the same green power benefits. Moreover, purchasers may
be unable to ensure public acceptance of their purchase and
avoid criticism from external stakeholders without indepen-
dent information about the product. Third-party certification
addresses these concerns by setting standards for green power products in the following areas:
• Minimum levels of environmentally acceptable renewable
resources
• Overall environmental impact
• Ethical conduct for suppliers, including advertising claims
and regular reporting
Third-party certification usually also requires independent verification by an auditor to document that green power sell-
ers have generated or purchased enough renewable energy
to match their sales commitments. Visit <www.green-e.org>
for additional information about third-party certification and
verification.
Chapter 6
20 Procuring Renewable Electricity and Renewable Energy Certificates
generation is plentiful; RECs, therefore, do not neces-
sarily represent a uniform set of environmental impacts
or attributes. As a reporting convention, EPA allows
Climate Leader Partners to claim emission reductions
based on the regional average emissions rate for where
the REC was generated. Regional average emissions
rates can be found by visiting EPA’s Emissions and
Generation Resource Integrated Database (eGRID) at
<www.epa.gov/egrid>. Further guidance can be found
in Chapter 10, Resources for Additional Information.
• Specific generation facility. Some green power pro-
viders generate their power at a specific site, such as
a nearby wind farm, rather than offering green power
from a mix of different resources. These products, such
as the annual output of one particular wind turbine,
are sometimes preferred by customers because such
products offer a closer sense of connection between
a purchase and a specific environmentally beneficial
facility.
Collecting Product Information
A good place to start collecting information about specific
green power options is the many Internet sources listed in
this guide. Be sure to collect enough information to answer
the decision criteria listed earlier. For useful comparisons,
the information should be as consistent as possible among
suppliers and among products. A good way to find consistent
information is through an exploratory letter or a request for
information (RFI) addressed to specific suppliers.
In many states, competing electricity suppliers are required
to provide an electricity label—like a list of food ingredi-
ents—that provides information in a standard format and
makes product comparisons easier. This information is gen-
erally available from the state’s public utility commission.
Another source of public information is third-party certifiers,
such as Green-e Energy, which can provide information
about the products they have certified to meet minimum
environmental standards.
The next step is estimating the cost of green power for the
organization and calculating the cost/benefit ratio. For help
finding cost data, contact one of the organizations that spon-
sored this guidebook (listed in Chapter 10, Resources for
Additional Information).
Creating a Procurement Plan
A procurement plan documents the project team’s decisions
and addresses possible problems in buying green power. A
procurement plan can also help convince others in the orga-
nization that purchasing green power is a wise choice.
The main audience for the procurement plan is the managers
who need to support the purchase decision. Their support
should be secured as early in the process as possible. As soon
as the team can show the costs and benefits of purchasing
green power to the organization, they should present their
information to management. Expect managers to ask about
the products the organization would buy, their cost, and their
benefits. Also find out whether management might limit
a green power purchase or whether they would buy more
aggressively.
Besides providing the information that management needs
to make the decision, a procurement plan can also help
overcome resistance to green power within the organization.
Some organizations have outdated perceptions of the reli-
ability of renewable energy technologies, misunderstandings
about using a variable resource, or worries about the cost.
As part of the procurement process, the project team will
probably need to educate others about these topics and the
benefits of green power. The organizations that sponsored
this guidebook can provide helpful information to overcome
these misconceptions.
The scope and detail of the procurement plan will depend
on the organization’s needs and requirements, but it should
address the following:
Scope of Procurement
Specify the amount of power that will be purchased (as a
fixed quantity, a fixed amount of money, or a percentage of
total power use) and for which facilities. If this procurement
is a trial that may lead to additional purchases in the future,
spell out the criteria that will be used to judge the trial’s
success. Also discuss whatever is known at this point about
future procurement phases.
Expected Benefits
Keeping in mind the general benefits outlined earlier in this
guide, list the particular benefits hoped for by buying green
power for the organization. Wherever possible, these benefits
should be linked to the organization’s environmental goals.
Financial Considerations
The procurement plan should discuss cost. Cost has tradi-
tionally been the primary concern with green power, but
there are an increasing number of financing models for pur-
chasing green power that result in a cost benefit over the
long-run. Negotiating the right contract can have a big effect
on the financial costs and benefits of buying green power.
Chapter 6
Guide to Purchasing Green Power 21
Several strategies are available to help minimize and manage
the extra cost of green power:
• Seek a fixed-price contract. Because its cost of fuel
is predictable, renewable energy is often available at a
fixed price without any fuel-cost adjustments. Check
with the supplier, particularly if the organization is
considering a utility green-pricing program, to see
whether green power customers are exempted from
fuel-cost adjustments.
• Buy green power for only part of the organization’s
electricity use. Green power does not have to be
used for all electricity consumption. For example, the
organization might buy green power for just 5 or 10
percent of its electricity use. Buying 10 percent green
power may add less than 1 percent to the organization’s
electricity bill. Alternatively, some renewable electricity
products cost less because they contain less than 100
percent green power or offer lower-percentage options.
• Make a longer-term purchase. Consider the contract’s
length in conjunction with the quantity and cost of
power purchased. A short-term contract (typically less
than three years) might offer greater flexibility in the
future but also might cost more. But a longer contract
(e.g., 10+ years) can reduce the risk to the supplier,
allowing it to offer a lower price than under a shorter
contract. The right contract length is based on the par-
ticular situation and products available.
• Use a contract for difference. A contract for difference
(CFD) is a financial agreement that allows renewable
power suppliers and purchasers to lock in stable power
prices and revenues by agreeing to pay the difference
between the actual power price and an agreed-upon
benchmark or “strike” price. CFDs have tended to
be used most often for government and college and
university customers. Consult with your auditor to
understand any associated accounting issues. To learn
more about the CFD model, visit <www.epa.gov/
grnpower/events/mar31_webinar.htm>.
• Offset the cost with savings from energy efficiency.
Reducing the total amount of electricity purchased
helps make green power more affordable. When review-
ing green power providers, organizations may find that
some providers also offer energy efficiency services,
with the goal of no net increase in their customers’
power bills.
• Use savings from competitive choices. Competitive
choices of either green power or commodity electric-
ity can lead to savings on energy costs, which can be
used to buy green power. Or the extra cost of green
power can be limited to the amount of savings from
competition. Be aware that switching to less expensive
conventional power can also mean dirtier power, so
ask the electricity supplier for information about the
emissions from its product, and make sure those emis-
sions do not cancel out the benefits of the green power
bought with the savings.
• Specify a price cap or maximum total budget. Specify
the maximum price per kilowatt-hour or the total cost,
or simply place a cap on the renewable portion of the
purchase. A drawback of this approach is that suppliers
are likely to bid at or near the specified price cap. But if
the organization is interested mainly in other aspects of
green power, such as environmental benefits or hedge
value, this can be a good approach. Even if a price cap
is not the most important consideration, it is a good
idea to decide on the highest price the organization is
willing to pay for green power, as part of its internal
procurement planning.
Procurement Methods
Organizations can purchase green power in several different
ways, depending on the options available as well as the orga-
nization’s procurement rules. Generally, the greater the load
that the organization can bundle together in one purchase,
the more attractive it will be to a supplier.
The following explains typical ways to buy green power.
Federal agencies must work within the procurement rules
applicable to the federal government, which are explained
further in the Appendix.
Price Hedging With Renewables
Southern New Hampshire University (SNHU) has found an innovative financial arrangement to stabilize its energy
budget while also reducing its carbon emissions. The uni-
versity has entered into a 15-year renewable energy hedge
agreement with wind farm owner, Iberdrola Renewables.
The hedge is structured as a contract-for-differences financial swap under which the parties agreed to a strike price and
duration for the agreement. SNHU continues to buy power
from its current supplier, and Iberdrola Renewables continues
to sell into the local electricity spot market. The energy sales
are then analyzed. If the sales income received by Iberdrola Renewables is greater than the strike price, Iberdrola
Renewables pays SNHU the difference between the income
and strike price. If the income is less that the strike price, then
SNHU pays Iberdrola Renewables the difference. The hedge
has stabilized the cost of the 15-million kWh of electricity used by the university annually. If energy costs increase even
modestly over the 15 years, SNHU could save an average
of $1.2 million per year for both electricity and natural gas.
Chapter 6
22 Procuring Renewable Electricity and Renewable Energy Certificates
• Call several sellers. An organization can keep the
procurement process relatively simple by calling a few
green power providers—either REC marketers, utilities,
or other electricity providers that may be available to
them. An off-the-shelf product may meet its needs. If
the organization wants something different, it can ask
for an informal proposal. After a discussion, the orga-
nization may be ready to negotiate directly with one
of the suppliers about product definition, certification,
price, and terms. Or if the organization is planning a
large purchase, the suppliers might be willing to tailor
something to its needs.
• Negotiate with the utility. Buying power is simple,
though the choices are fewer, if the organization is
served by a single utility in a regulated market. If the
local utility offers green power, the organization can
collect information by visiting the utility’s Web site and
calling to discuss its interest. Perhaps the only issue is
the quantity the organization wants to buy, but it may
be able to negotiate a slight price break if it is making a
large purchase. If the utility does not offer green power
and the organization is a large, highly visible customer,
it may be able to encourage the utility to offer green
power by promising to buy a large amount. Likewise,
the organization may be able to persuade the utility to
seek third-party certification if its product is not cur-
rently certified.
• Request proposals. Large companies and public insti-
tutions, in particular, often issue a formal solicitation or
request for proposals (RFP). An RFP requires more time
and effort for preparation, evaluation, and negotiation,
but it might be more suitable for a large purchase and
when many green power options are available. With an
RFP, it is important to understand the organization’s
own objectives and communicate them clearly in the
solicitation. Third-party certification and verification
can be specified in the RFP evaluation criteria.
RFPs can be as simple as a letter sent to selected suppli-
ers, describing the organization’s objectives and asking
for a bid. RFPs can also be more formal, casting a wider
net through a broadly advertised solicitation. The latter
requires more effort to prepare and evaluate responses.
Government agencies must follow the procurement
rules governing their agency.
A two-step process is possible as well, in which the
organization first issues a request for information (RFI)
and, based on the responses, sends a more detailed RFP
to those suppliers that meet its general qualifications.
The RFI would be broadcast to a larger audience, not
only to find out who meets the organization’s qualifica-
tions, but also to gauge the amount of interest.
For large purchases, RFPs may be addressed to renew-
able power generators (wholesale) as well as retail
suppliers. Buying directly from generators might lower
the cost but probably will require longer-term purchase
commitment. Buyers will still need to work with a
retail supplier to integrate the wholesale contracts, so
active engagement with your preferred retail supplier
will be important. In addition, for RECs there have
been instances where market-setting purchasers using
the RFP process have yielded higher prices in the short
term due to the large purchase size. In this case, buy-
ers planning to make a large purchase may elect not to
issue a public RFP but rather contact specific suppliers
individually in the market.
EPA’s Green Power Partnership offers assistance to
partners putting together a green power purchase RFP,
and the Department of Energy’s (DOE’s) Federal Energy
Management Program (FEMP) provides the same ser-
vice for federal agencies. For RECs, the DOE Green
Power Network maintains an online listing of green
power RFPs that can be used as models at <apps3.eere.
energy.gov/greenpower/financial/>.
• Use an electronic auction. Electronic auction plat-
forms (also known as electronic procurement or
“e-procurement”) allow for real-time transparent bid-
ding and “reverse auctions” to drive bid prices lower
than might be achieved otherwise. Initially used in the
1990s by pools of buyers in retail markets that allowed
for direct access competition, these electronic auction
mechanisms are being tried with varying degrees of
success by utilities and large customers and can offer a
new forum for renewable energy transactions.
Online auctions can provide significant price transpar-
ency and control that the paper-based RFP process does
not always provide. With the reverse auction approach,
price quotes are delivered in real-time via a Web-based
Using an RFP versus an RFI
An RFI may be a productive way to engage suppliers about
innovative, new purchasing strategies. Suppliers might not want to respond to an RFP if the request is not “cookie cutter,”
as they know there would have to be significant negotiations
once the winner is selected that could require changes to
their costs while being locked into a pricing commitment.
To ensure broad participation and validate interest from the market about new purchasing ideas, an RFI can provide
important information to purchasers. Based on the results of
the RFI, you can either proceed directly to negotiating with a
particular vendor or refine your procurement goals in order
to issue a detailed RFP that will have a better chance of mul-tiple qualified bidders.
Chapter 6
Guide to Purchasing Green Power 23
platform, which results in dynamic bidding and helps
achieve rapid downward price pressure that is not nor-
mally achieved using conventional paper-based bidding
and procurement. Buyers (currently, utilities) can either
award contracts to the suppliers who bid the absolute
lowest price, or those that best meet the buyer’s spe-
cific, pre-established terms for quality, capacity, or other
value-adding capabilities.
Special Considerations for RECs
RECs can be bought from marketers or sometimes directly
from renewable energy generators. Several environmental
brokers are active in REC markets, offering another approach
to procurement that is increasingly being used by large pur-
chasers. Brokers do not own the certificates but rely on their
knowledge of the market to connect buyers and sellers for a
fee. They can help negotiate deals that take into account an
organization’s unique interests.
When buying RECs, organizations should make sure that
the RECs they buy have not been double-sold and claimed
by another party. For example, voluntary purchases of RECs
should not also be counted by utilities for compliance with
regulatory requirements such as renewable portfolio standards
(RPSs), and RECs used to comply with such requirements
should not be sold into voluntary markets. If they are dou-
ble-counted, the voluntary purchaser would not create any
benefits over and above what is already required by public
policy. Utilizing tracking systems and third-party certifiers
can help ensure that RECs are not claimed by more than one
party. To avoid potential double claims on environmental
benefits, contracts for RECs should be explicit about what
environmental characteristics are included with the sale.
Sometimes RECs are incorrectly referred to as carbon offsets,
but RECs and offsets are not the same. RECs are tradable
instruments, expressed in terms of a unit of electric genera-
tion (1 megawatt-hour [MWh]), that represents the source’s
resource type, facility location, direct emissions, and genera-
tion date, among other characteristics. Offsets are expressed
in tons of emission reduction and may come from a variety
of project types not related to power generation. In volun-
tary markets to date, some renewable energy projects have
qualified as sources for offsets; however, the associated
environmental attributes from a green power project that are
used to generate a REC cannot also be claimed for offset pur-
poses. See Chapter 10, Resources for Additional Information,
for details.
REC Tracking Systems
A tracking system is an electronic database that is used to
track the ownership of RECs or MWh of electricity, much like
an online bank account. A tracking system issues a uniquely numbered certificate for each MWh of electricity generated
by a generation facility registered in the system, tracks the
ownership of certificates as they are traded, and retires the
certificates once they are used or claims are made based on
their attributes or characteristics. Because each MWh has a unique identification number and can only be in one owner’s
account at any time, this reduces ownership disputes and the
potential for double counting.
A tracking system can be used to verify compliance with a
RPS, to help create environmental disclosure labels, and to
substantiate voluntary green power or environmental claims.
Tracking systems are not substitutes for product certification
and verification, as tracking systems only monitor wholesale transactions; individual retail green power customers do
not generally hold accounts in tracking systems unless they
make very large purchases. See Chapter 10, Resources for
Additional Information, for details.
Reducing the Cost of Green
Power: State of Connecticut
In late 2007, the state of Connecticut successfully used Web-
based reverse auctions to secure electric supply contracts
totaling 909 million kilowatt-hours between November
2007 and June 2009. The supply contracts include more than 22 percent electricity from green power sources, which
was a prerequisite of the state. The online auction allowed
Connecticut and the energy suppliers to participate in real-
time with full price visibility, which heightened competition
among suppliers and allowed the state to lock in the lowest price. Under these contracts for electric supply reported sav-
ings through December 2008 are $19.5 million, as compared
to the price that would have been paid for standard service.
24 Planning an On-site Renewable Generation Project
Chapter 7
Planning an On-site Renewable Generation
Project
Depending on the size of the system, on-site genera-
tion projects tend to take more steps than do other
green power purchases because they can require
more external coordination with the organization’s
utility, local governments, and contractors. For this reason,
it is helpful to enlist outside technical expertise and not
underestimate the length of time needed to get an on-site
project up and running. Due to the complexity of building
on-site renewable energy projects, organizations are increas-
ingly turning to power purchase agreements (PPAs). With
PPAs, a third-party project developer coordinates the build-
ing and maintenance of an organization’s on-site system. The
organization needs to purchase only the power output. The
following steps, along with the information listed in Chapter
10, Resources for Additional Information, can help. In the
end, the on-site renewable system—whether self-financed or
third-party financed—will generate power and other benefits
for many years to come.
Screening the Technologies
Based on work done in the first steps of the process of pur-
chasing green power (Chapter 5, Steps to Purchasing Green
Power), the organization should have a good idea of its
energy needs and the renewable resources available at its site.
The next step is to perform a screening analysis to find those
options best suited to the site. This screening should evaluate
the options being considered, comparing the cost-effective-
ness of the organization’s current energy situation with that
of a renewable power system. This screening should be based
on the financial assessment methods that the organization
would normally use for any capital investment, such as life-
cycle cost, rate of return, and net present value.
The analysis should account for state and federal financial
incentives, interconnection rules (e.g., insurance require-
ments or standby charges), and net metering laws that might
apply to the on-site generation facility. Each renewable tech-
nology has unique characteristics that make it more or less
appropriate for a given situation. The evaluation criteria need
to be defined in a way that objectively compare the various
technologies. The result of this screening will be a specific
technology that best meets the organization’s energy needs.
For on-site renewable power, bundling energy efficiency with
renewable power is a common practice. The organization’s
site-specific situation (e.g., whether the generation system is
connected to a grid, the facility’s load shape, the utility’s rate
structure) determines the appropriate efficiency measures to
include. At this point, it is a good idea to consider whether
energy efficiency projects should be implemented together
with the renewable generation technologies being considered.
An economic analysis must consider the approximate size of
the renewable power system that the organization hopes to
install. The size can be determined by the load to be served
by the system, the organization’s capital budget, or physical
constraints at the site (such as rooftop area for photovoltaic
[PV] systems or the rate of biomass fuel production). One
option is to install the system incrementally, purchasing what
the organization can afford now and adding more capac-
ity over time. The modular nature of PV technology makes
it especially suited to this approach, although wind can
also be installed in larger modules. A contractor or utility
representative can help choose the right size system, or the
organization can also use one of the software tools listed in
Chapter 10, Resources for Additional Information.
Most on-site systems will be grid-connected, so that when
the on-site renewable generation is less than the organiza-
tion’s electricity demand, remaining power needs can be met
by the utility grid. The economic analysis will be affected if
the organization wants to include energy storage (e.g., bat-
teries, capacitors, flywheels) or backup generation to provide
power when the utility grid is down. This is a separate deci-
sion, however, from the decision to install on-site generation.
If backup power is included, the additional cost of the back-
up system and electrical equipment for switching from utility
to backup power must be considered. The economic analysis
will also be affected by whether the renewable generation
will be part of a combined heat and power system (applicable
to systems involving fuel combustion, such as landfill gas
and biomass).
Chapter 7
Guide to Purchasing Green Power 25
Obtaining Resources and
Assistance
If the organization chooses to own and operate an on-site
power system, it has much to learn, but excellent informa-
tion resources are available. Before making a purchase, the
organization’s project team should study the technology
and understand its objectives and what questions to ask,
in order to be able to write a procurement specification. At
this point, the organization should seriously consider seek-
ing outside experts who can help with the technical and
financial aspects of a renewable power project. Technical
assistance may be available through the local utility, the
state energy office, energy service providers, energy service
companies, consultants, manufacturers, and equipment
vendors. In addition, the Department of Energy’s Federal
Energy Management Program (FEMP) offers technical assis-
tance to federal agencies.
The financial details are usually what make or break an on-
site project, so the project team should collect information
about incentives and financing options (including PPAs) that
could make the project more cost-effective. Some state pro-
grams might also require that only certified installers install
systems. Many states offer financial incentives specifically
for customers that install qualified renewable generation sys-
tems. These incentives may take the form of direct payments
(rebates), competitive solicitations, consumer financing, or
lower taxes (either sales or property tax exemptions). In addi-
tion, the federal government offers an investment tax credit
for solar and geothermal energy systems, among other incen-
tives for renewable energy. (For more information, visit the
Database of State Incentives for Renewable Energy at <www.
dsireusa.org>.) The state energy office, local utility, or renew-
able energy equipment vendor will also have information
about which incentive programs apply to its situation.
Utility rate impacts should also be investigated carefully.
The organization should check with the local utility to see
whether on-site generation would lower its demand charges
or generate electricity at a time of day when prices are higher.
Creating a Project Plan
Once the organization has decided on a specific generation
technology, it is time to conduct a detailed feasibility study.
This study will quantify all the costs and benefits of the
project to evaluate its cost-effectiveness. The study should be
based on inputs that are as specific as possible to the organi-
zation’s situation, such as quoted prices from vendors.
If the project appears feasible, the project team can then
decide on a plan to have the renewable power system
financed, built, and installed. Financing is a critical aspect
of the project, and it should account for any federal and state
incentives for which the organization’s system is eligible.
Make sure that the system is designed to meet the require-
ments of the applicable incentive programs.
In addition, some renewable resources, such as biomass,
will probably require air permits from the local air resources
control board. The project plan should account for the time
and expense of acquiring these permits. As with any other
type of facilities project, the team must secure the necessary
land-use and building permits and variances required for the
project. The team also will need to apply for interconnection
with the local electric utility (for grid-connected systems),
which can be a complex and time-consuming process.
Procurement Strategy
Purchases for on-site generation differ from power purchases.
In many cases, an organization may buy, own, and oper-
ate its own generation equipment. In some circumstances,
though, it can enter into a PPA to buy the electricity gener-
ated by a renewable energy system installed on its property
without actually owning the system. This approach may not
be widely available in states that allow electricity to be pur-
chased only from a qualified utility. Moreover, it is important
to consider how the choice of who owns the system will
affect the availability of tax credits and incentives (for
instance, non-taxable entities are not eligible for tax credits).
An organization can handle the procurement options for on-
site generation in the following ways:
• Act as the general contractor. If the organization
has design engineers on staff, they can draw up the
specifications and then solicit bids for equipment and
Using Incentives to Finance an
On-Site Generation System:
Sierra Nevada Brewing Company
The Sierra Nevada Brewing Company installed a 1.2-MW
DC fuel cell system at its brewery in Chico, California. The
fuel cell is powered by natural gas and supplemented by digester gas from the treatment of brewing wastewater; its
waste heat is harvested in the form of steam and used for the
brewing process as well as other heating needs. The 1.2 MW
of electricity, combined with 1.9 MW solar panels, supplies
about 90 percent of the brewery’s overall power require-ments. The capital cost of the fuel cell system was funded
by a $2.4-million incentive from the local utility (Pacific Gas
and Electric Company), $1 million in financial support from
the U.S. Department of Defense Climate Change Fuel Cell
Program, and a 30 percent federal investment tax credit. These incentives covered about two-thirds of the upfront
capital cost for the system.
Chapter 7
26 Planning an On-site Renewable Generation Project
installation. This arrangement works well if the organi-
zation wants to do some of the work in-house. Keep in
mind, however, that if the organization has no experi-
ence with renewable energy systems, it runs the risk of
ending up with a poorly performing system.
• Hire a qualified contractor for a turnkey system. An
organization probably will use a request for proposal
(RFP) to select an equipment manufacturer, a system
designer, or a system installer to help design the system
to its needs, to buy the materials, to arrange for instal-
lation, and to commission the system. There are some
companies (particularly in the PV industry) that are
vertically integrated, from manufacturing to design and
installation to operations and maintenance. Before hir-
ing a contractor, an organization should check with the
state government to see if contractors must be licensed
to install an on-site system.
• Hire an energy services company (ESCO). The ESCO
will be responsible for design, installation, mainte-
nance, and financing. This arrangement differs from
a turnkey project in that ESCOs typically work under
performance contracts, meaning that they are paid
according to how well the project is carried out. Usually
this is through energy savings, but success can also
be based on the amount of electricity generated or the
system’s reliability. ESCOs also often provide at least
part of the project financing, which can be very helpful
for organizations—such as government agencies—with
very limited capital budgets. Usually, ESCO projects
need to be large, or part of a larger contract, in order to
justify the transaction costs.
• Host an independently owned system via a PPA.
When considering on-site green power, some compa-
nies decide not to install solar PV systems because of
the high capital investment, maintenance costs, and
financial returns that fall short of company standards.
To overcome these barriers, an organization can host an
on-site generation system and agree to buy the power
without actually owning the equipment, with no up-
front cost. This approach is known as a power purchase
agreement (PPA), and it can greatly simplify the process
of installing on-site renewable power. Under a PPA, a
third party owns the renewable energy system and sells
the power to the site host under a long-term contract
(usually 10 to 20 years). The power payments from
the site host pays for the capital cost of the system.
A third-party project developer typically handles all
aspects of the project development including site assess-
ment, system configuration, procurement, installation,
and financing. The project developer is also typically
responsible for system operations and maintenance.
A PPA project usually involves two contracts: 1) a site
license or lease, and 2) a power purchase agreement.
The contractual arrangements are shown in Figure 7.
As with other types of green power purchases, organiza-
tions should make sure that the contract also defines the
ownership of the renewable energy certificates (RECs)
and therefore the rights to claim the use of renewable
Project
Developer
Manufacturer-Installer
Investor
Host
On-site solarPV system
10–20 year PPA
Sales andO&M revenue
Financing
ROI
Equipment, installation,warranties
Receives solar power
from on-site system
under long-term PPA
Provides space and access for solar PV array but does
not own system
No capital required
Receives income from sale
of electricity
Arranges financing
and system design and construction
Receives revenue from sale of
panels, inverters, O&M, etc.
Provides warranties for
equipment and performance
Receives ROI from electricity
sales, state and federal incentives
Provides capital and owns system for at least 5 years
Figure 7. Power purchase agreement (PPA) contractual relationships
Note: Nonresidential customers refer to business and institutional customers. Data for on-site renewable generation is not available.
Source: Hassett, Timothy C., and Karin L. Borgerson. 2009, Harnessing Nature’s Power: Deploying and Financing On-Site Renewable Energy. Washington, DC:
World Resources Institute.
Chapter 7
Guide to Purchasing Green Power 27
electricity. A host of an on-site system under a PPA wish-
ing to claim environmental benefits such as a reduction
of carbon emissions from the on-site system will need to
retire the RECs generated from the on-site system.
Choosing a Vendor
When choosing a vendor, obtaining more than one bid is
recommended, so the first step is to find several possible
vendors for a given project. The Web sites for the major trade
groups in this area—the Solar Energy Industries Association
and the American Wind Energy Association—offer infor-
mation about their members’ expertise and interests, and
Chapter 10, Resources for Additional Information, lists more
sources.
When choosing a vendor, the organization should obtain
comparative information from the companies it is consider-
ing, usually through either an RFP or an RFI as described in
Chapter 6, Procuring Renewable Electricity and Renewable
Energy Certificates. An RFP is appropriate if the organization
already has a detailed system design and simply wants a ven-
dor to implement that design. An RFI is better for comparing
vendors’ qualifications and experience and should be used to
select a vendor to design and implement the system. Because
the design of on-site renewable systems tends to be site spe-
cific and because design details are often resolved differently
by different vendors, the RFI approach often leads to the sys-
tem best tailored to the organization’s needs.
Some factors to consider when choosing a provider of on-site
generation include the following:
• Experience. The vendor’s experience and familiarity
with the type of system the organization is considering
is extremely important. Also determine the vendor’s
experience with interconnection issues (if the system
will be connected to the grid). A quick way to judge
a vendor’s experience is the length of time it has been
in business and the number of similar systems it has
installed.
• Performance history. It is very important to check
references from previous customers, preferably for sys-
tems similar to the one the organization is considering.
Another important factor is whether there are any judg-
ments or liens against the vendor, which would indicate
problems with previous projects.
• Licenses and certification. To be eligible for state
incentives, some states require that the system be
installed by a licensed contractor, whereas other states
certify installers that have received the relevant train-
ing. As with any other capital project, licenses and
certifications are an indicator of a contractor’s qualifi-
cations.
• Liability and professional insurance. If any problems
arise with the system during installation or opera-
tion, it is important that the contractor have adequate
insurance to protect the purchasing organization from
liability. The contractor should also be responsible for
any problems with interconnecting to the grid.
Anticipating Possible Barriers
When implementing a renewable generation project, the
organization must work with various entities to obtain
permits, connect to the utility system, and perform other
activities external to the facility. Some of these steps will
end up requiring more time, effort, or money than originally
anticipated and may pose barriers that must be overcome.
Generally these barriers fall into three categories: 1) techni-
cal, 2) financial, and 3) regulatory. Most technical barriers
pertain to the local utility’s electrical interconnection require-
ments. Other technical barriers are fuel availability and
storage; space limitations; power-quality impacts; fire, safety,
Procuring On-Site Generation
Through a Solar Power Purchase
Agreement: Staples & Kohl’s
To avoid the large upfront capital outlays required of an
on-site power generation system, many organizations have entered into solar power purchase agreements. Under these
agreements, an organization hosts a PV system and agrees
to purchase its output for a given period of time, while a
third-party developer owns, operates, and maintains the
system. Two companies that have been leaders in advanc-ing the solar services model are Staples and Kohl’s. As of
June 2009, Staples is hosting 24 active rooftop solar systems
on its stores, distribution centers, and offices throughout the
country and has more than 100 more systems under devel-
opment. The company’s fleet of hosted solar systems totals almost 4,000 kW and produces about 4 million kWh per
year. Staples has used solar power through a solar power
purchase agreement since 2005. The fixed price for power
in the agreements is competitive with local commercial rates
and acts to hedge against price volatility in retail electricity. Similar to Staples, Kohl’s entered into a solar power purchase
agreement for a 20-year term in 2007. The company’s near-
term goal is to have 100 activated solar locations on its
store rooftops. As of June 2009, Kohl’s has 67 solar power
systems activated in California, New Jersey, Wisconsin, and Connecticut, with another 10 in various stages of construc-
tion. The company estimates that, on average, a hosted solar
system provides roughly 40 percent of a store’s annual elec-
tricity needs. Kohl’s is currently the largest retail host of solar
electricity production in the world.
Chapter 7
28 Planning an On-site Renewable Generation Project
and zoning requirements; and operations and maintenance
issues. Financial barriers come as a result of changing eco-
nomic conditions, such as the availability of tax credits,
direct subsidies, or the climate for loans and project finance
opportunities. Regulatory barriers pertain mainly to the
required permits and approvals, such as air emissions per-
mits, utility standby charges, exit fees, and land-use permits.
Often the contractor for the project can be made respon-
sible for overcoming these barriers as they arise. If this
seems like a good option, the project team should explore
it with the contractor when writing the RFP and reviewing
the proposals.
Installing and Operating
an On-site Renewable
Generation System
Once the organization’s on-site generation system has been
designed, it is time to put the contracts in place and begin
construction. As with any capital project, it is important to
stay involved during the construction to resolve any prob-
lems that might arise.
When the construction has been completed, the project team
should monitor and verify the system’s energy performance.
Does everything work as planned? What is the system’s
actual energy production? If it is not as estimated, what can
be done to improve the system’s performance? Information
about system performance is useful in communicating the
benefits of the project to internal and external audiences.
Measurement and validation generally proceed in two steps.
The first is the post-construction evaluation (or commis-
sioning), in which a contractor’s work is inspected and the
system is tested to make sure that it meets regulatory and
design specifications. The second step is monitoring and ver-
ifying the system’s performance over a longer period, such as
the first year of operation (although continuous monitoring
is necessary to catch any performance problems that arise).
It is important to plan for this stage at the early phases of the
project, in order to design a useful data acquisition system.
Finally, all renewable power systems require periodic main-
tenance in order to perform as intended. The organization
must decide whether its staff has the expertise and time to
do this or whether it should contract with the equipment
vendor or a service company to maintain the system.
Guide to Purchasing Green Power 29
Chapter 8
Capturing the Benefits of the Purchase
A n organization should provide and seek recogni-
tion for its green power commitments in order to
sustain momentum and support for the renew-
able energy program. An organization should
consider various internal and external promotional and
marketing strategies to generate measurable, positive public-
ity and public relations benefits. To maximize the positive
publicity, the use of green power should be made part of the
organization’s comprehensive environmental management
efforts. Purchasers of renewable energy may make claims
about use of renewable energy by combining their renewable
energy certificates (RECs) with their own electricity usage or
through a utility green power purchase.
The Environmental Benefits
When an organization highlights its green power purchase,
it is important that it know the quantity of any emissions
avoided. These emissions can be greenhouse gases (GHGs)—
primarily carbon dioxide, as well as other pollutants that
affect the environment and human health, such as particulate
matter. A buyer of green power can calculate its reduction
of emissions using a tool provided by EPA’s Green Power
Partnership at <www.epa.gov/greenpower/pubs/calculator.
htm>.
Despite the estimates provided by these calculation tools,
organizations should be careful about claiming avoided emis-
sions because the ability to make emission reduction claims
vary according to the regulatory policies affecting the emis-
sions in question. Under voluntary programs, such as EPA’s
Climate Leaders program, it has become common practice to
use the zero emissions attributes of green power purchases to
reduce indirect or “Scope 2” emissions (from purchased elec-
tricity) as permitted by the program’s reporting guidelines.
Under a mandatory cap and trade program, these accounting
practices may change, so buyers of green power should check
with EPA or other authorities about any updated greenhouse
gas accounting rules prior to making new environmental
claims.
The concern about climate change has prompted many
organizations to complete a GHG emissions inventory. An
inventory is a detailed list of emissions by source and type of
greenhouse gas, usually expressed in metric tons of carbon
dioxide equivalent (MTCO2e).
An inventory serves many purposes, including:
• Identifying opportunities for reduction and managing
GHGs.
• Participating in public reporting and voluntary reduc-
tion initiatives.
• Participating in mandatory government-reporting pro-
grams.
• Trading in GHG emissions markets.
An inventory also allows organizations to record their emis-
sion information in an official registry with a government
agency. Several GHG registry programs have been established
to record GHG inventories, including The Climate Registry,
Wisconsin’s Voluntary Emissions Reduction Registry, the
U.S. Department of Energy’s l605b Voluntary Greenhouse
Gas Reporting program, the American Carbon Registry, and
the Regional Greenhouse Gas Registry. For more informa-
tion, see the GHG accounting standards developed by the
World Resources Institute (WRI)/World Business Council for
Sustainable Development (WBCSD) GHG Protocol Initiative
at <www.ghgprotocol.org>.
Renewable energy purchases and on-site generation may
earn building owners credit toward a variety of green build-
ing standards. For example, the U.S. Green Building Council
(USGBC) runs the Leadership in Energy and Environmental
Design (LEED) certification program, which recognizes
buildings that generate or purchase renewable energy for a
certain amount of their electricity use, awarding credit pro-
portional to generation and purchase amount. For purchased
renewable energy, LEED requires that renewables meet the
criteria of Green-e Energy.
Chapter 8
30 Capturing the Benefits of the Purchase
Internal Promotion
One of the benefits of buying green power is improving
employee morale. It is also important to maintain internal
support for purchasing green power. To achieve these goals,
companies and organizations often choose to promote their
purchase or installation internally using the following
methods:
• Include “energy news” in internal publications.
Internal publications, such as newsletters, are valuable
ways of communicating information to an organiza-
tion’s employees, stakeholders, and affiliates and also
helps support the organization’s mission, growth, and
development.
• Establish a staff adoption and recognition program.
Such a program encourages employees to buy green
power for their home electricity use through an organi-
zation-wide program. A staff adoption program should
create incentives, provide information, set milestones
for staff purchases over time, and recognize individual
achievements.
External Promotion
Strategic external public relations maximize the positive
publicity surrounding an organization’s purchase of green
power. In addition to the public relations benefits, the pur-
chase can motivate additional purchases by the general
public, the organization’s customers, and its affiliates, thereby
extending the impact of the initial purchase. To be effective,
organizations must be sure to substantiate any claims made,
per Federal Trade Commission and National Association of
Attorneys General marketing guidelines (see Chapter 10,
Resources for Additional Information).
• Construct a public relations plan. Construct a plan
to publicize to target audiences the organization’s pur-
chase or installation. The plan should include strategies
for using existing distribution channels such as e-mail,
Web sites, and direct mail to promote the organization
and its commitment to renewable energy. An orga-
nization can create special print materials and press
releases for distribution, and conduct e-mail campaigns
that distinguish it as an innovative leader. Retail com-
panies sometimes circulate special offers and coupons
and even host events—such as renewable energy
celebrations—at stores to attract new customers and
communicate the benefits of the organization’s green
power purchase.
• Use media contacts and press. An organization may
wish to write a press release describing its purchase
and circulate it to local and national media outlets. An
organization can also research and contact local envi-
ronmental writers and publications to encourage feature
stories about the organization and its commitment to
improve the environment.
• Train staff to promote the organization’s purchase.
Purchasers can instruct their staff about the details
of the organization’s purchase and the best ways to
highlight it to customers in daily sales interactions.
Organizations might also teach staff how to answer
general questions about renewable energy.
• Take advantage of all opportunities to promote the
purchase. Effective organizations use strategic business
engagements and speaking events as well as existing
interactions with the public to talk about the organi-
zation’s environmental commitment and promote its
purchase of green power. These opportunities might
include marketing the organization’s purchase on its
products and encouraging its suppliers and affiliates to
follow its lead and buy green power.
• Work with third-party organizations. Third-party
organizations can help provide credibility to green
power purchases that meet minimum purchasing
benchmarks. These organizations also offer publicity
channels that promote renewable energy and highlight
environmental commitment. All the organizations
sponsoring this guidebook help their partners and com-
panies publicize their achievements in buying green
power. Members of EPA’s Green Power Partnership and
Using Green Power for
Promotion and Branding
Lundberg Family Farms supports the use and implementation
of renewable energy through both on-site solar generation
and the purchase of wind-based RECs. In 2008, the family-
owned enterprise purchased 4.8 million kilowatt-hours (kWh) of renewable electricity, which accounts for 100 percent
of its annual electricity use. In addition to this purchase,
Lundberg installed two solar photovoltaic arrays on company
warehouses, which produce nearly 688,000 kWh annually.
To promote its commitment to renewable energy, Lundberg Family Farms is a member of both EPA’s Green Power
Partnership and Green-e Marketplace. Lundberg features
its purchase on product packaging and spreads the word
about green power through its public Web page, speaking
events, newsletters, and at industry trade shows. Multiple local broadcast stations have also featured stories about the
company’s green power activities.
Chapter 8
Guide to Purchasing Green Power 31
those who participate in Green-e Marketplace can also
use these programs’ respective logos in their promo-
tional activities.
• Create marketing partnerships with green power
suppliers. Offer retail customers the opportunity to
sign up for green power, and reward them with benefits
such as gift or discount cards, merchandise, or collater-
al products (e.g., T-shirts, hats) that tout the company’s
image as an environmental leader.
• Awards competitions. A number of entities recognize
leadership in the purchase of renewable energy, includ-
ing EPA’s Green Power Partnership and the Center for
Resource Solutions’ Green-e Energy program as part of
the annual Renewable Energy Markets conference. See
Chapter 10, Resources for Additional Information, for
more details about these awards.
32 Conclusion
Chapter 9
Conclusion
P urchasers of electricity can have a significant impact
on the way that power is produced, now and in
the future. Businesses, governments, and nonprofit
organizations have an unprecedented and increas-
ing range of options for buying green power. In those states
that have restructured their electricity markets, retail access
allows customers to choose their electricity supplier and, by
extension, how their electricity is produced. In regulated
markets, utility green-pricing programs enable customers to
support the addition of renewable energy to the grid without
leaving their current utility. Renewable energy certificates
and on-site renewable generation allow organizations every-
where to support green power. Organizations that act in their
own—and society’s—best interests can take advantage of the
strategies outlined in this guidebook to help move the United
States toward a more sustainable energy future.
Guide to Purchasing Green Power 33
Chapter 10
Resources for Additional Information
U.S. Department of Energy
The Department of Energy’s Office of Energy Efficiency and
Renewable Energy (EERE) works to strengthen the United
States’ energy security, environmental quality, and economic
vitality through public-private partnerships. It supports this
goal by enhancing energy efficiency and productivity and by
bringing clean, reliable, and affordable energy technologies to
the marketplace.
As a part of EERE, the Department of Energy’s Federal
Energy Management Program (FEMP) facilitates the fed-
eral government’s implementation of sound, cost-effective
energy management and investment practices to enhance
the nation’s energy security and environmental stewardship.
FEMP provides project transaction services, applied tech-
nology services, and decision support services. All of these
services are available to assist federal agencies with deploying
renewable technologies.
• Federal Energy Management Program:
<www1.eere.energy.gov/femp>
• Green Power Network:
<apps3.eere.energy.gov/greenpower/>
• FEMP Renewable Power Purchasing:
<www1.eere.energy.gov/femp/technologies/renewable_
purchasingpower.html>
U.S. Environmental Protection
Agency
The U.S. Environmental Protection Agency’s (EPA’s) Green
Power Partnership is a voluntary program that encourages
organizations to buy green power as a way to reduce the
environmental impacts associated with purchased electricity
use. The partnership has more than 1,200 partner organiza-
tions voluntarily purchasing billions of kilowatt-hours of
green power annually. Partners include a wide variety of
leading organizations such as Fortune 500 companies; small
and medium sized businesses; local, state, and federal gov-
ernments; and colleges and universities.
• Green Power Partnership:
<www.epa.gov/greenpower>
• Green Power Equivalency Calculator:
<www.epa.gov/greenpower/pubs/calculator.htm>
• Clean Energy:
<www.epa.gov/cleanenergy>
• Climate Leaders:
<www.epa.gov/climateleaders>
• Landfill Methane Outreach Program:
<www.epa.gov/lmop>
• eGRID Database:
<www.epa.gov/cleanenergy/egrid>
• Power Profiler:
<www.epa.gov/cleanenergy/powerprofiler.htm>
• Green Power Leadership Awards:
<www.epa.gov/greenpower/awards/index.htm>
• ENERGY STAR:
<www.energystar.gov>
World Resources Institute
World Resources Institute (WRI) is an environmental think
tank that goes beyond research to find practical ways to
protect the Earth and improve people’s lives. WRI’s mission
is to move human society to live in ways that protect the
Earth’s environment and its capacity to provide for the needs
and aspirations of current and future generations. Its work
is organized around four key programmatic goals: People &
Ecosystems, Governance, Climate Protection, and Markets
and Enterprise.
WRI has been engaging the private sector on climate policy
and low-carbon technology deployment for a decade. These
projects are designed to achieve two primary goals: 1) accel-
erate corporate deployment of renewable energy, and 2) build
a business constituency that is more informed on climate
Chapter 10
34 Resources for Additional Information
and energy policy. WRI’s business network is composed of
more than 70 large corporations that are engaged through
the Green Power Market Development Group (GPMDG),
along with its California and European affiliates, and the
U.S. Climate Business Group, with regional workgroups in
the Northeast, Midwest, and Southeast. This activity has
achieved several important milestones. For instance, GPMDG
partners have procured more than 1,000 MW of new,
cost-competitive renewable energy, while several GPMDG
members have made the list of top corporate users of solar
photovoltaics.
• World Resources Institute:
<www.wri.org>
Green-e Programs
The Green-e® certification programs are among the nation’s
leading voluntary certification and verification programs,
designed to help businesses and households compare and
select clean renewable energy and carbon offset options.
Renewable energy products that meet the Green-e Energy
standards and carbon offsets that meet Green-e Climate stan-
dards are identified by the Green-e logo. Renewable energy
products that meet the Green-e Energy standards and carbon
offsets that meet Green-e Climate standards are identified by
the Green-e logo, as shown below.
The Green-e Web site, <www.green-e.org>, and toll-free
number (888-63-GREEN) are widely used resources that
allow consumers to compare certified products in any region
and to select the superior green power option that meets
their needs.
Chapter 10
Guide to Purchasing Green Power 35
Additional Resources
The Additional Resources section is not intended to be an exhaus-
tive list of all resources on a certain subject, but rather an
introduction for learning more on a topic of interest.
Developing a strategic energy management plan:
ENERGY STAR’s Guidelines for Energy Management:
<www.energystar.gov/index.cfm?c=guidelines.guidelines_
index>
Electricity restructuring:
2002. May. A Primer on Electric Utilities, Deregulation, and
Restructuring of U.S. Electricity Markets. U.S. Department of
Energy. <eere.pnl.gov/femp/publications/Primer-Electric
UtilitiesDeregulationRestructuring.pdf>
Status of Electricity Restructuring by State Web Site. Energy
Information Administration. <www.eia.doe.gov/cneaf/
electricity/page/restructuring/restructure_elect.html>
Current state of green power markets:
Bird, Lori, Claire Kreycik, and Barry Friedman. 2009,
September. Green Power Marketing in the United States: A Status
Report (2008 Data). Golden, CO: National Renewable Energy
Laboratory. NREL/TP-6A2-46581. <www.nrel.gov/docs/
fy09osti/44094.pdf>
(Updates will be posted on the Green Power Network’s Web
site at <apps3.eere.energy.gov/greenpower/>).
Bird, Lori, David Hurlbut, Pearl Donohoo, Karlynn Cory, and
Claire Kreycik. 2009, March. An Examination of the Regional
Supply and Demand Balance for Renewable Electricity in the
United States through 2015. Golden, CO: National Renewable
Energy Laboratory. NREL/TP-6A2-45041. <www.nrel.gov/
docs/fy09osti/45041.pdf>
Lazard. 2009, February. Levelized Cost of Energy Analysis,
Version 3.0. <blog.cleanenergy.org/files/2009/04/lazard2009_
levelizedcostofenergy.pdf>
Motivations for purchasing green power:
Holt, E., R. Wiser, M. Fowlie, R. Mayer, and S. Innes. 2001,
January. Public Goods and Private Interests: Understanding
Non-Residential Demand for Green Power. Prepared for the
American Wind Energy Association and the National Wind
Coordinating Committee. <www.osti.gov/bridge/purl.cover.
jsp;jsessionid=445E0FC0F548B77F59233E8382997384?pu
rl=/776644-jFINOn/webviewable/>
The Green-e Marketplace survey of green power purchasing
motivations is available at:<www.resource-solutions.org/
publications>
Center for Resource Solutions/Natural Marketing Institute.
2008. Unlocking the Power of Renewable Energy Certification to
Build Credibility with Consumers.
<www.resource-solutions.org/pub_pdfs/NMI%20Case%20
Study%200609.pdf>
Economic development and job creation:
Environmental and Energy Study Institute (EESI). 2008,
October. Jobs from Renewable Energy and Energy Efficiency.
Washington, DC. <www.eesi.org/files/green_jobs_fact-
sheet_102208.pdf>
Kammen, Daniel M., Kamal Kapadia, and Matthias Fripp.
2006, January. Putting Renewables to Work: How Many Jobs
Can the Clean Energy Industry Generate? Berkeley, CA: UC
Berkeley. <rael.berkeley.edu/old-site/renewables.jobs.2006.
pdf>
Environmental Law and Policy Center. 2003. Job Jolt: The
Economic Impacts of Repowering the Midwest: The Clean Energy
Development Plan for the Heartland. <www.repowering
themidwest.org/reports/job-jolt>
Environmental benefits:
Serchuck, Adam. 2000, April. The Environmental Imperative for
Renewable Energy: An Update. College Park, MD: Renewable
Energy Policy Project (REPP), University of Maryland. <www.
repp.org/repp_pubs/articles/envImp/envImp.pdf>
Environmental claims guidance:
Federal Trade Commission. 1998. Guides for the Use of
Environmental Marketing Claims. <www.ftc.gov/bcp/grnrule/
guides980427.htm>
National Association of Attorneys General. 1999.
Environmental Marketing Guidelines for Electricity. <apps3.eere.
energy.gov/greenpower/buying/pdfs/naag_0100.pdf>
Renewable energy certificates (RECs):
EPA’s Green Power Partnership. 2008. Renewable Energy
Certificates. <www.epa.gov/greenpower/documents/gpp_
basics-recs.pdf>
Aga, Jaineel and Chris Lau. 2008. Bottom Line on Renewable
Energy Certificates. Washington, DC: World Resources
Institute. <www.wri.org/publication/bottom-line-renewable-
energy-certificates>
Hamrin, Jan, and Meredith Wingate. 2003, May. Regulator’s
Handbook on Tradable Renewable Certificates. San Francisco:
Center for Resource Solutions. <www.resource-solutions.org/
pub_pdfs/Regulators%20Handbook%20on%20TRCs.pdf>
American Bar Association, American Council on Renewable
Energy, and Environmental Markets Association. Master
Renewable Energy Certificate Purchase and Sale Agreement.
Chapter 10
36 Resources for Additional Information
<www.abanet.org/environ/committees/renewableenergy/
RECMasterContract.pdf>
Lieberman, Dan. 2004. Tradable Renewable Certificates and
Emissions Values: The CRS Perspective on Best Practices in
Marketing. San Francisco: Center for Resource Solutions. <www.
resource-solutions.org/pub_pdfs/TRCs_and_Emissions.pdf>
EPA’s Green Power Locator provides links to retail and
wholesale marketers of renewable energy certificates:
<www.epa.gov/greenpower/pubs/gplocator.htm>
The Green Power Network lists brokers, wholesale marketers,
and retail products: <www.eere.energy.gov/greenpower/mar-
kets/certificates.shtml>
Green-e lists certificate marketers and brokers that offer cer-
tified products: <www.green-e.org/base/re_products>
The World Resources Institute Green Power Market
Development Group, Guidelines for Writing a REC Request for
Proposal and Sample Contract for Renewable Energy Certificates.
<www.thegreenpowergroup.org/tools.cfm?loc=us>
Renewable energy tracking systems:
EPA’s Green Power Partnership page on REC tracking sys-
tems: <www.epa.gov/greenpower/gpmarket/tracking.htm>
Environmental Tracking Network of North America
(ETNNA): <www.etnna.org/>
Electric Reliability Council of Texas (ERCOT):
<www.texasrenewables.com/>
New England Power Pool/Generation Information System
(NEPOOL/GIS): <www.nepoolgis.com/>
PJM Generation Attribute Tracking System (GATS):
<www.pjm-eis.com/>
Western Renewable Energy Generation Information System
(WREGIS): <www.wregis.org/>
Midwest Renewable Energy Tracking System (M-RETS):
<www.mrets.net/>
APX’s North American Renewables Registry:
<narenewables.apx.com/>
Utility green-pricing programs:
The Green Power Network updates lists of top utility pro-
grams: <apps3.eere.energy.gov/greenpower/>
Bird, Lori, and Kaiser, M. 2006. Trends in Utility Green Pricing
Programs. National Renewable Energy Laboratory. <apps3.
eere.energy.gov/greenpower/pdfs/42287.pdf>
Bird, Lori, Claire Kreycik, and Barry Friedman. 2008,
October. Green Power Marketing in the United States: A Status
Report (11th Edition). Golden, CO: National Renewable Energy
Laboratory. NREL/TP-6A2-44094. <www.nrel.gov/docs/
fy09osti/44094.pdf>
U.S. Department of Energy, Energy Information
Administration. 2009, April. Green Pricing and Net Metering
Programs. <www.eia.doe.gov/cneaf/solar.renewables/page/
greenprice/green_pricing.html>
Holt, Edward, and Meredith Holt. 2004. Green Pricing
Resource Guide. 2nd ed. Washington, DC: American Wind
Energy Association. <www.awea.org/greenpower/greenPric-
ingResourceGuide040726.pdf>
Jenkins, J. 2006, September. Powerful Choices VI: A Survey
of Retail Green Power Programs in the Pacific Northwest.
Renewable Northwest Project, Portland, OR. <www.rnp.org/
Resources/PC6%20report_v2.pdf>
Lieberman, Dan. 2002, October. Green Pricing at Public
Utilities: A How-to Guide Based on Lessons Learned to Date.
Center for Resource Solutions and Public Renewables
Partnership. <www.resource-solutions.org/pubs_archive.php>
Green power product lists:
The Green Power Network maintains lists of products offered
in each state: <apps3.eere.energy.gov/greenpower/>
The EPA Green Power Partnership supports a Green Power
Locator: <www.epa.gov/greenpower/pubs/gplocator.htm>
Green-e maintains a list of certified products offered in each
state: <www.green-e.org/base/re_products?cust=b>
On-site renewable energy generation:
FEMP. 2002, May. Using Distributed Energy Resources: A How-
to Guide for Federal Facility Managers. Washington, DC: U.S.
Department of Energy, Federal Energy Management Program.
DOE/GO-102002-1520. <www1.eere.energy.gov/femp/
pdfs/31570.pdf>
U.S. Department of Energy. 2007. Small Wind Electric Systems:
A U.S. Consumer’s Guide. <www.windpoweringamerica.gov/
pdfs/small_wind/small_wind_guide.pdf>
Wind Powering America. <www.windpoweringamerica.gov/
index.asp> (See “Quick Links to States” for state-specific
information).
Massachusetts Renewable Energy Trust. 2009. The
Commercial Buyer’s Guide to Solar Electricity in Massachusetts.
<www.masstech.org/cleanenergy/cando/
SolarGuide-spreads.pdf>
Midwest Region Consumer’s Guide to Buying a Solar Electric
System. <www.state.mn.us/mn/externalDocs/Commerce/
Consumer_Guide_to_Solar_Systems_123002022801_
pvguide3.pdf>
Chapter 10
Guide to Purchasing Green Power 37
Hassett, Timothy C., and Karin L. Borgerson. 2009, March.
Harnessing Nature’s Power: Deploying and Financing On-Site
Renewable Energy. Washington, DC: World Resources
Institute. <www.wri.org/publication/harnessing-natures-
power>
Government incentives for renewable energy:
The Database of State Incentives for Renewable Energy
includes information about capital cost incentives and net-
metering laws at the state level, as well as information about
federal and utility incentives: <www.dsireusa.org>
The Clean Energy States Alliance is composed of “Clean
Energy Funds” or “State Funds,” a growing number of public
funds in the United States whose objective is building mar-
kets for renewable energy and clean energy resources. The
alliance collects and disseminates information and analysis,
conducts original research, and helps to coordinate activities
of the state funds: <www.cleanenergystates.org>
The American Wind Energy Association lists state incentives
for small wind installations: <www.awea.org/smallwind/
states.html>
Bolinger, Mark, Ryan Wiser, Karlynn Cory, and Ted James.
2009, March. PTC, ITC, or Cash Grant? An Analysis of the
Choice Facing Renewable Power Projects in the United States.
Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL-
1642E. <eetd.lbl.gov/ea/EMS/reports/lbnl-1642e.pdf>
Interconnection with the utility grid:
Standards Board of the Institute for Electrical and Electronics
Engineers, Inc. (IEEE). Standard 1547: “Standard for
Interconnecting Distributed Resources with Electric Power
Systems”: <grouper.ieee.org/groups/scc21/dr_shared>
This standard has several components:
• IEEE 1547.1 2005 Standard for Conformance Tests
Procedures for Equipment Interconnecting Distributed
Resources with Electric Power Systems
• IEEE 1547.2 Application Guide for IEEE 1547 Standard
for Interconnecting Distributed Resources with Electric
Power Systems
• IEEE 1547.3 2007 Guide For Monitoring, Information
Exchange, and Control of Distributed Resources
Interconnected with Electric Power Systems
• IEEE P1547.4 Draft Guide for Design, Operation, and
Integration of Distributed Resource Island Systems with
Electric Power Systems
The Federal Energy Regulatory Commission (FERC) has
issued standard procedures and a standard interconnection
agreement for the interconnection of generators to the power
grid. The rules differ depending on whether the generator is
larger or smaller than 20 megawatts: <www.ferc.gov/
industries/electric/indus-act/gi.asp>
The DSIRE database lists state interconnection rules:
<www.dsireusa.org/> (click on “Summary Tables” then
“Rules, Regulations, & Policies for Renewable Energy”).
California Rule 21: standards for interconnection of dis-
tributed energy resources: <www.energy.ca.gov/distgen/
interconnection/california_requirements.html>
Department of Energy (DOE) Office of Electricity Delivery
and Energy Reliability: <www.oe.energy.gov/renewable.htm>
DOE Federal Energy Management Program (FEMP),
Interconnection and Permitting Guide. <www1.eere.energy.
gov/femp/technologies/derchp_ipg.html>
Haynes, Rusty, and Chuck Whitaker. 2007. Connecting to the
Grid: A Guide to Distributed Generation Interconnection Issues.
Fifth Edition. Interstate Renewable Energy Council (IREC).
<www.irecusa.org/index.php?id=31>
Measurement and verification of renewable system
performance:
Webster, Lia, and James Bradford. 2008, April. M&V
Guidelines: Measurement and Verification for Federal Energy
Projects, Version 3.0. Washington, DC: Federal Energy
Management Program. <www1.eere.energy.gov/femp/pdfs/
mv_guidelines.pdf>
PVWATTS is a calculator to estimate the output from pho-
tovoltaic solar installations. The model calculates monthly
and annual energy production in kilowatt-hours and monthly
savings in dollars. <www.nrel.gov/rredc/pvwatts/>
PV systems:
American Solar Energy Society: <www.ases.org>
Solar Electric Power Association:
<www.solarelectricpower.org>
Solar Energy Industries Association: <www.seia.org>
North Carolina Solar Center: <www.ncsc.ncsu.edu>
California Energy Commission. 2000, April. Buying a
Photovoltaic Solar Electric System: A Consumer Guide. <www.
energy.ca.gov/reports/500-99-008.PDF>
California Energy Commission. 2001, June. A Guide to
Photovoltaic (PV) System Design and Installation. <www.energy.
ca.gov/reports/2001-09-04_500-01-020.PDF>
Bolinger, Mark. 2009, January. Financing Non-Residential
Photovoltaic Projects: Options and Implications. Berkeley, CA:
Lawrence Berkeley National Laboratory.
<eetd.lbl.gov/EA/EMP/reports/lbnl-1410e.pdf>
Chapter 10
38 Resources for Additional Information
Merry, Liz, and Elisa Wood. 2008, October. The Customer’s
Guide to Solar Power Purchase Agreements. The Rahus Institute.
<www.californiasolarcenter.org/sppa.html>
Cory, Karlynn, Jason Coughlin, and Charles Coggeshall.
2008, May. Solar Photovoltaic Financing: Deployment on
Public Property by State and Local Governments. Golden,
CO: National Renewable Energy Laboratory. NREL/
TP-670-43115. <www.solaramericacities.energy.gov/PDFs/
Solar_Photovoltaic_Financing_Deployment_on_Public_
Property_by_State_and_Local_Governments.pdf>
Renewable energy trade associations:
American Council on Renewable Energy:
<www.acore.org>
American Solar Energy Society:
<www.ases.org>
American Wind Energy Association:
<www.awea.org>
Biomass Coordinating Council:
<www.acore.org/committees/biomass_council>
Geothermal Energy Association:
<www.geo-energy.org>
Geothermal Resources Council:
<www.geothermal.org>
Interstate Renewable Energy Council:
<www.irecusa.org>
Low Impact Hydropower Institute:
<www.lowimpacthydro.org>
Midwest Renewable Energy Association:
<www.the-mrea.org>
National Hydropower Association:
<www.hydro.org>
National Wind Coordinating Collaborative:
<www.nationalwind.org>
Northeast Sustainable Energy Association:
<www.nesea.org>
Renewable Energy Markets Association:
<www.renewablemarketers.org>
Solar Electric Power Association:
<www.solarelectricpower.org>
Solar Energy Industries Association:
<www.seia.org>
Utility Wind Integration Group:
<www.uwig.org>
Windustry:
<www.windustry.com>
On-site renewable generation financial analysis tools:
Each of the many available tools offers different features,
which should be examined closely to determine whether they
are appropriate to the particular situation.
RETscreen International
Developer: Natural Resources Canadas CANMET Energy
Diversification Research Laboratory (CEDRL).
Assesses the economics of various renewable energy installa-
tions: <www.retscreen.net>
RETFinance
Developer: Energy Analysis Team at NREL
Simulates a 30-year nominal dollar cash flow for renew-
able projects, including earnings, debt payments, levelized
cost-of-electricity, after-tax internal rate of return, and debt
service coverage ratio (net operating income divided by total
debt service): <analysis.nrel.gov/retfinance>
Carbon Value Analysis Tool
Developer: World Resources Institute
A screening tool to help companies integrate the value of
carbon dioxide emissions reductions into energy-related
investment decisions: <www.wri.org/publication/carbon-
value-analysis-tool>
Clean Power Estimator
Developer: Clean Power Research
Offers a quick cost-benefit analysis for photovoltaics, solar
thermal, wind, and energy efficiency for both residential and
commercial buildings: <www.cleanpower.com/Home>
A version for California facilities is offered by the CEC:
<cec.cleanpowerestimator.com/cec.htm>
ProForm
Developer: Lawrence Berkeley National Laboratory
Allows an integrated environmental and financial prefeasibil-
ity analysis of on-site renewable energy and energy efficiency
projects: <poet.lbl.gov/Proform>
Federal Renewable Energy Screening Application (FRESA)
Developer: U.S. Department of Energy, Energy Efficiency and
Renewable Energy
Compares opportunities for renewables and conservation at
federal facilities: <analysis.nrel.gov/fresa/>
Hybrid Optimization Model for Electric Renewables
(HOMER)
Developer: NREL
Compares the cost-effectiveness of off-grid renewables with
grid extensions or stand-alone generators:
<www.nrel.gov/homer>
Chapter 10
Guide to Purchasing Green Power 39
Real Options Analysis Center
Developer: NREL
Provides online models for the valuation of renewable energy
research and development and the valuation of distributed
generation assets: <www.nrel.gov/realoptions>
PV Watts
Developer: NREL
Provides estimated system output and savings calculations
based customizable system specifications and in the field sys-
tem performance data. User inputs their system information
and selects a system in the general area of the user’s own site
to provide calculations. <www.nrel.gov/rredc/pvwatts/>
Greenhouse gas resources:
World Resources Institute/World Business Council for
Sustainable Development Greenhouse Gas Protocol:
<www.ghgprotocol.org>
U.S. Environmental Protection Agency’s Climate Leaders, a
voluntary government-industry partnership:
<www.epa.gov/climateleaders>
Guidance from Climate Leaders about treatment of RECs and
other green power purchases in greenhouse gas inventories:
<www.epa.gov/climateleaders/documents/
greenpower_guidance.pdf>
The Climate Registry:
<www.theclimateregistry.org>
Carbon Disclosure Project:
<www.cdproject.net>
U.S. Department of Energy’s voluntary GHG registry:
<www.eia.doe.gov/oiaf/1605/>
World Wildlife Fund’s (WWF) Climate Savers:
<www.worldwildlife.org/climate/climatesavers2.html>
World Resources Institute Carbon Value Analysis Tool:
<www.wri.org/publication/carbon-value-analysis-tool>
The California Energy Commission has summarized state
activities related to greenhouse gas inventories at
<www.climatechange.ca.gov/>
The Regional Greenhouse Gas Initiative:
<www.rggi.org/rggi>
EPA rulemaking
In response to the FY2008 Consolidated Appropriations
Act (H.R. 2764; Public Law 110161), EPA published
the Mandatory Reporting of Greenhouse Gases Rule in
September 2009. This rule requires reporting of greenhouse
gas (GHG) emissions from large sources and suppliers in the
United States, and is intended to collect accurate and timely
emissions data to inform future policy decisions.
<www.epa.gov/climatechange/emissions/ghgrulemaking.
html>
Metzger, Eliot. 2008. Bottom Line on Climate Policy
Terminology. Washington, DC: World Resources Institute.
<www.wri.org/publication/bottom-line-climate-policy-
terminology>
Heilmayr, Robert. 2008. Bottom Line on GHG Emissions
Registries. Washington, DC: World Resources Institute.
<www.wri.org/publication/bottom-line-ghg-emissions-
registries>
Carbon Offsets:
Climate Action Reserve
<www.climateactionreserve.org>
Green-e Climate Standard:
<www.green-e.org/docs/climate/G-e%20Climate%20
Standard%20V1-1.pdf>
Green-e Climate Protocol for Renewable Energy:
<www.green-e.org/docs/climate/Green-e_Climate_Protocol_
for_RE.pdf>
World Resources Institute Bottom Line on Climate Policy
Terminology:
<www.wri.org/publication/bottom-line-climate-policy-
terminology>
Voluntary Carbon Standard Registry:
<www.vcsregistry.com>
40 Glossary
This glossary defines some of the important terms used
in this guide. More definitions can be found at <www.
epa.gov/cleanenergy/energy-and-you/glossary.html>.
Annual consumption. The amount of electricity used by a
consumer in one year, typically measured in kilowatt-
hours (kWh). This information can be acquired from an
electricity bill or by contacting the energy provider.
Cap and trade. A policy for limiting the amount of pollu-
tion emitted. The cap is a limit on the total amount of
pollution that can be emitted (released) from all regu-
lated sources (e.g., power plants); the cap is set lower
than historical emissions in order to reduce emissions.
Trading is a system in which emission sources can buy
or sell allowances on the open market. Because the total
number of allowances is limited by the cap, emission
reductions are assured. For more information about cap
and trade programs, see the EPA’s cap and trade Web
page at <www.epa.gov/captrade/>.
Capped and uncapped markets. Power markets in the
United States that are either subject to carbon dioxide
emission caps (most notably the northeastern states) or
not, as of mid-2009. The treatment of avoided carbon
dioxide emissions due to renewable power purchases
differs depending on the type of carbon market in which
the purchaser is located.
Carbon dioxide. A gas created in the atmosphere from
burning fossil fuels. Burning fossil fuels releases car-
bon that has been stored underground for millions of
years that transforms during the combustion process
into carbon dioxide, the predominant gas contributing
to the greenhouse effect. Increases in the emissions of
carbon dioxide and other gases, such as methane, due to
the burning of fossil fuels and other human endeavors,
accelerate heat-trapping processes in the atmosphere,
gradually raising average temperatures worldwide.
Carbon dioxide is absorbed and released at nearly equal
rates by natural processes on the Earth, an equilibrium
that is disrupted when large amounts of carbon dioxide
are released into the atmosphere by human activities,
such as burning fossil fuels.
Combined heat and power (CHP). An electricity generation
technology, also known as cogeneration, that recovers
waste heat from the electric generation process to pro-
duce simultaneously other forms of useful energy, such
as usable heat or steam. On average, two-thirds of the
input energy used to make electricity is lost as waste
heat. In contrast, CHP systems are capable of converting
more than 70 percent of the fuel into usable energy.
Commodity electricity. Generic electricity not associated
with a particular power generation source.
Competitive markets. Allowing consumers to choose from
among several electricity suppliers. Until recently, most
consumers received generation, transmission, and dis-
tribution services from one local utility company. As a
regulated monopoly, the utility was given an exclusive
franchise to provide electricity to consumers in a par-
ticular community. Rates were set, and consumers had
little choice but to pay the rate for their area. In the late
1990s and early 2000s, however, several states restruc-
tured their electricity industry and now give consumers
a choice of competing suppliers.
Conventional power. Power produced from nonrenewable
fuels such as coal, oil, natural gas, and nuclear fuels.
These fuels are a finite resource that cannot be replen-
ished once they have been extracted and used.
Distributed generation. Small, modular, decentralized, grid-
connected, or off-grid energy systems located in or near
the place where energy is used.
Electricity supplier. As states restructure their electric-
ity markets, more and more customers will be able to
choose from a range of energy suppliers that market dif-
ferent types of power products, including green power
from renewable energy. Restructured local utilities offer
electricity products generated exclusively from renew-
able resources or, more frequently, electricity produced
from a combination of fossil and renewable resources.
In states without restructured electricity markets, local
utilities may offer green-pricing programs, in which cus-
tomers may elect to have their utility generate a portion
of their power from renewable sources.
Energy efficiency. When products or systems use less energy
to do the same or a better job than conventional prod-
ucts or systems can. Energy efficiency saves energy, saves
Glossary
Glossary
Guide to Purchasing Green Power 41
money on utility bills, and helps protect the environment
by reducing the amount of electricity (and associated
environmental impacts) that needs to be generated.
Fossil fuels. Coal, oil, and natural gas, the United States’
principal source of electricity, due largely to their low
cost. All three were formed many hundreds of millions
of years ago; hence the name fossil fuels. Because fos-
sil fuels are a finite resource and cannot be replenished
once they have been extracted and burned, they are not
considered renewable.
Global climate change. Long-term alteration in the Earth’s
climate, compared to what would be expected naturally,
due to human activities. For most of human history,
changes in the Earth’s climate resulted from natural
causes that took place over thousands of years. But
today, human activities are beginning to affect the cli-
mate in serious and immediate ways by rapidly adding
greenhouse gases to the atmosphere. These gases trap
heat close to the Earth that would otherwise escape into
space, intensifying a natural phenomenon called the
greenhouse effect. Over the next century, scientists proj-
ect that global temperatures will increase 2 to 6 degrees
Fahrenheit as a result of rising concentrations of green-
house gases. Scientists also believe that this rate of global
warming will be unprecedented compared with that of
the past 10,000 years. Global warming could result in
a rise in sea levels, changes in patterns of precipitation,
more variable weather, and many other consequences.
These changes threaten our health, agriculture, water
resources, forests, wildlife, and coastal areas. For more
information on the science and impacts of global climate
change, visit EPA’s Climate Change Web site at
<www.epa.gov/climatechange/>.
Green power. Electricity that is generated from renewable
energy sources. Green power is a term that implies a
lesser environmental impact than from conventional
electricity generation. The resources that qualify as green
power vary depending on the state or organization.
For more details, see Chapter 2, Green Power Defined.
Green power marketers. Energy suppliers operating in
states that permit retail competition in the electricity
markets. This term can also include utilities that offer
green power options under what are typically referred to
as green marketing products.
Green power products. Electricity generated exclusively
from renewable resources or from a combination of fossil
and renewable resources if they are differentiated from
the standard mix of generation resources.
Green pricing. An optional service offered by regulated
utilities to allow customers to support a greater level
of utility investment in renewable energy by paying a
premium on their electric bill. Usually green pricing is
offered in areas that do not allow retail competition.
Greenhouse effect. A natural process whereby greenhouse
gases allow incoming solar radiation to pass through the
Earth’s atmosphere, while preventing part of the outgo-
ing infrared radiation from the Earth’s surface and lower
atmosphere from escaping into outer space. This pro-
cess has kept the Earth’s temperature about 59 degrees
Fahrenheit warmer than it would otherwise be. Current
life on the Earth could not be sustained without the
natural greenhouse effect.
Greenhouse gases (GHGs). Gases in the Earth’s atmosphere
that produce the greenhouse effect. Changes in the con-
centration of certain greenhouse gases, due to human
activities such as the burning of fossil fuels, increase the
risk of global climate change. Greenhouse gases include
water vapor, carbon dioxide, methane, nitrous oxide,
halogenated fluorocarbons, ozone, perfluorinate carbons,
and hydrofluorocarbons.
Interval meter. An electricity meter that measures a facility’s
energy usage in short increments (typically 15 min-
utes). These meters are useful for determining electricity
demand patterns and participating in real-time pricing
programs.
Kilowatt-hour (kWh). The basic unit for measuring the
generation and consumption of electrical energy. A
megawatt-hour (MWh) of electricity is equal to 1,000
kilowatt-hours. A kilowatt and a megawatt are units of
generation capacity.
Low-impact hydropower. Hydroelectric power generated
with fewer environmental impacts than large-scale
hydropower, by meeting criteria such as minimum river
flows, water quality, fish passage, and watershed protec-
tion. These hydropower facilities often operate in a “run
of the river” mode, in which little or no water is stored
in a reservoir.
Net metering. A method of crediting customers for electric-
ity that they generate on-site. Customers generating their
own electricity offset what they would have purchased
from their utility. If they generate more than they use in
a billing period, their electric meter turns backward to
indicate their net excess generation. Depending on the
individual state or utility rules, the net excess generation
may be credited to their account (in many cases at the
retail price), carried over to a future billing period, or
ignored.
New renewable generation facilities. Facilities built in the
recent past or will be built to meet the growing market
demand for green power. Currently, new generation
must be from renewable energy generating facilities that
Glossary
42 Glossary
began operation on or after January 1, 1997, according to
the Green-e Energy certification standard and EPA Green
Power Partnership requirements.
Offsets. Expressed in tons of emissions reduction and may
come from a variety of project types not related to power
generation. In voluntary markets to date, renewable
energy projects have qualified as sources for offsets, rely-
ing on a rigorous review and criteria that assess whether
the emissions reductions are real, additional, measur-
able, permanent and verified. However, output from a
project that is used as a REC for energy purposes cannot
also be claimed for offset purposes, too.
On-site renewable generation. Electricity generated by
renewable resources using a system or device located at
the site where the power is used.
Peak demand. The maximum power consumption for a
facility, measured over a short time period such as 15
minutes or an hour.
Power marketer. An entity that buys and sells power gener-
ated by others. A green power marketer is an electricity
supplier that offers a green power product.
Power purchase agreement (PPA). A contract to purchase
power from a third-party project developer for a speci-
fied period and price. This type of contract can be used
to purchase power from on-site renewable generation
systems, avoiding large capital investments for the end-
user.
Registry. Usually refers to “climate registries,” which are
systems that set consistent and transparent standards
to calculate, verify, and publicly report greenhouse gas
emissions.
Renewable electricity. Power generated from renewable
resources and delivered through the power grid to end
users.
Renewable energy certificates (RECs). Tradable instru-
ments that can be used to meet voluntary renewable
energy targets as well as to meet compliance require-
ments for renewable energy policies. A REC is a
certificate that represents the generation of 1 megawatt-
hour (MWh) of electricity from an eligible source of
renewable energy. Each REC denotes the underlying
generation energy source, location of the generation,
and year of generation (a.k.a. “vintage”), environmental
emissions, and other characteristics associated with the
generator. RECs represent a claim to the environmental
attributes associated with renewable energy generation,
but purchasers should nevertheless ensure that their
contracts are explicit about which environmental attri-
butes are conveyed to them. RECs are also known as
“green tags,” “green certificates,” and “renewable energy
credits.”
Renewable energy resources. Resources that are continu-
ously replenished on the Earth, such as such as wind,
solar, geothermal, hydropower, and various forms of
biomass. Some definitions also include municipal solid
waste as a renewable resource.
Renewable portfolio standard (RPS). More recently called
a renewable electricity standard. A regulatory mandate or
target stating that a minimum percentage or amount of
each electricity supplier’s resource portfolio must come
from renewable energy.
Tracking system. An electronic database that is used to
track the ownership of RECs, much like an online bank
account. A tracking system issues a uniquely numbered
certificate for each MWh of electricity generated by a
generation facility registered in the system, tracks the
ownership of certificates as they are traded, and retires
the certificates once they are used or claims are made
based on their attributes or characteristics. Because each
MWh has a unique identification number and can only
be in one owner’s account at any time, a tracking system
reduces ownership disputes and the potential for double
counting.
Guide to Purchasing Green Power 43
Appendix
Green Power Considerations
for Federal Agencies
Purchasing green, or renewable1, power means making
a difference by changing the way we purchase basic
commodities. For the federal government—the largest
consumer of electricity in the United States with an
annual electricity bill of more than $4 billion—the ability to
make a difference is enormous. This appendix provides an
overview of considerations specific to federal agencies that
buy renewable power.
Section 203 of the Energy Policy Act of 2005 (EPAct 2005)
directs that federal agencies meet renewable energy con-
sumption goals, eventually reaching 7.5 percent of the
electric energy they consume. Executive Order 13423 further
directs agencies that at least half of their renewable energy
consumption must come from “new” renewable sources
(projects built after January 1, 1999) and, to the maximum
extent possible, renewable energy generation projects should
be implemented on agency property for agency use.2 The goal
of these requirements is to make the federal government a
leader in developing the market for renewable power.
As a result of these policies (and previous executive orders),
the federal government’s purchases of renewable power have
increased dramatically over the last decade (Figure A-1). In
fiscal year 2006, the latest year for which detailed data are
available, purchases of renewable energy, including renew-
1 The federal government uses the term “renewable” instead of “green” power because it more clearly defines the product being purchased. The term
“renewable” will be used in this appendix.
2 The Energy Independence and Security Act (EISA) of 2007 also directs that 30 percent of the hot water demand in new federal buildings (and major
renovations) be met with solar hot water equipment.
5.00%
6.00%
7.00%
8.00%
0.00%
1.00%
2.00%
3.00%
4.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008
On-Site Generation
Bonus, Federal or Indian LandDirect Purchases
Eligible Old Renewable Electricity New Renewable Electricity
Non-Electric RE
2.5%Goal Prior to 20073.0%Goal for 2007–2009
5.0%Goal for 2010–2012
7.5%
EO 13123 EPAct 2005EO 13423
Goal for 2013 forward
.15%.26%.53%
1.60%
2.78%
6.93%6.94%
7.30%
5.58%
Figure A-1. Renewable Power Purchases by Federal Agencies
Source: DOE/FEMP; Note: direct purchases during 2000–2006 include RECs; categories changed in FY07 due to a change in the
renewable reporting requirements.
Appendix
44 Green Power Considerations for Federal Agencies
able power, renewable electricity credits (RECs), and landfill
gas, comprised more than 80 percent of federal government
renewable energy use (with the remainder coming from on-
site generation, as identified in Table A-1).
Although the federal government is meeting its current goals,
many challenges remain in making sure that the govern-
ment’s power purchases are promoting the development of
new, high-quality renewable resources in the most cost-effec-
tive way. By reading this guidebook and taking advantage
of the technical support provided by the Department of
Energy’s (DOE) Federal Energy Management Program
(FEMP), energy managers are taking an important step in
helping the federal government achieve these goals. Federal
agencies that are interested in participating in procure-
ments run by the General Services Administration (GSA),
the Defense Energy Support Center (DESC), or the Western
Area Power Administration (Western) should read the sec-
tion “Procurement Approaches to Renewable Electricity and
RECs” in this appendix.
Table A-1. Federal Renewable Technologies and
Purchases, 2006
Source
Annual Energy
Contribution (GWh)
Biomass thermal 109
Green power purchases 2245
Ground-source heat pump 182
Photovoltaics 34
Solar thermal 11
Wind 19
Total 2600
Source: DOE/FEMP. Data FY2006. Purchases include RECs and renewable power
purchases.
Federal Definitions of
Renewable Energy
EPAct 2005 (sec. 203) defines “renewable energy” as electric
energy generated from solar, wind, biomass, landfill gas,
ocean (including tidal, wave, current, and thermal), geother-
mal, municipal solid waste, or new hydroelectric generation
capacity achieved from increased efficiency or additions of
new capacity at an existing hydroelectric project. Biomass
resources can only meet the renewable consumption goals if
they meet carefully defined criteria, which federal agencies
should ensure they are familiar with before proceeding with
a biomass-fueled renewable energy project. Federal agencies
can use the renewable resources listed above as defined in
EPAct 2005 to meet renewable power use goals.
FEMP provides guidance on renewable resource definitions
and other issues relating to Executive Order 13423 and
EPAct 2005’s renewable use goals on its Web site at <www1.
eere.energy.gov/femp/pdfs/epact05_fedrenewenergyguid.pdf>.
Note that FEMP guidance is subject to change.
Benefits from Federal
Renewable Power Purchases
Owing to the large volume of electricity consumed by the
federal government, agencies purchasing even a slightly
greater percentage of renewable power can have a large ben-
efit for the environment and the overall renewable power
market. In addition to the benefits discussed earlier in this
guidebook, renewable power purchases by federal agencies
provide benefits specific to federal customers.
Federal agencies accrue many direct benefits from purchas-
ing renewable energy, including:
• Compliance with federal goals. EPAct 2005, Executive
Order 13423, the Energy Independence and Security
Act of 2007 (EISA 2007), and Executive Order 13514
contain several energy management goals for federal
facilities, including: energy intensity reduction, green-
house gas reduction, green buildings, and the use of
renewable energy. Using renewable energy or installing
on-site generation systems might help an agency meet
all four of these goals (although the ability to count
renewable energy and RECs toward energy intensity
reduction is being gradually phased out between 2007
and 2012).
• Accomplishment of an agency’s organizational mis-
sion. Many in the federal government understand that
the government’s overall mission also includes a com-
mitment to environmental protection. Beyond that
general obligation, individual agencies, such as the EPA,
have the specific mission of protecting the environ-
ment. Purchasing renewable energy is one way to help
fulfill both goals.
• Demonstration of responsiveness and leadership.
The purchase of renewable energy represents a clear
demonstration of the agency’s responsiveness to its
citizens, the majority of whom, according to several
surveys, favor renewable energy. The federal govern-
ment has shown that it can be a leader in the area of
renewable energy.
Appendix
Guide to Purchasing Green Power 45
• Increased visibility. Presidential awards are given to
federal agency energy management teams that strive to
comply with federal requirements. Energy scorecards
for each federal agency are tallied to gauge the degree
of compliance. Federal agencies that become EPA Green
Power Partners are also eligible for awards through the
partnership program.
Federal renewable energy purchases also include societal
benefits, such as:
• National security. National security is one of the
principal responsibilities of the federal government. By
purchasing domestically produced renewable energy,
all federal agencies can contribute to the nation’s energy
security. Because of the special role of government facil-
ities in national security, the use of distributed, on-site
power generation resources at these facilities enhances
the country’s overall security.
• Market transformation. Given the size of the fed-
eral government’s energy consumption, purchases of
renewable power by federal agencies help stimulate
the overall renewable power market. Further, a strong
federal demand for renewable energy demonstrates that
switching to renewable energy is a national priority;
exemplifies renewable power’s societal and customer
benefits; facilitates the availability of renewable power
products, which can help lower their cost.
Regulations Governing
Renewable Power
Procurement
Best Value
The Federal Acquisition Regulation (FAR) has traditionally
focused on minimizing the government’s costs by strongly
favoring the procurement of the least expensive goods and
services, often leaving contracting officers little room to con-
sider value. Procurement reform during the 1990s, however,
more closely aligned federal acquisition procedures with the
commercial sector’s practices through a stated preference for
commercial products and the adoption of commercial busi-
ness practices.
In addition, the traditional focus on least cost procurement
has shifted to obtaining the best value (FAR Part 1.102[a]). In
determining best value, contracting officers can consider an
array of factors besides cost, such as environmental and energy
efficiency (FAR Part 8.405[c][3]). As formally defined in the
FAR (Part 2.101), best value means “the expected outcome of
an acquisition that, in the Government’s estimation, provides
the greatest overall benefit in response to the requirement.”
Commercial Items
In restructured or competitive electricity markets, the most
direct path to a renewable energy purchase is to make
use of the “commercial items” provisions in FAR Part 12.
Commercial items are broadly defined as goods and ser-
vices sold competitively in the commercial marketplace in
substantial quantities (FAR subpart 2.101). Since an active
competitive market reduces procurement risks, agencies are
strongly encouraged to favor the purchase of commercial
items, through both specific language to that effect and the
authorization to use less stringent acquisition procedures.
With large volumes being commercially traded in public
markets each day, electricity is undisputed as a standard
commercial item. But as a specific type of electricity, renew-
able energy’s status as a commercial item is slightly less
certain. Support for such a designation is aided by the ongo-
ing development of active renewable energy exchanges in
which commercial entities buy and sell renewable energy in
large quantities.
Sources of Federal Authority to
Purchase Renewable Power
Energy Policy Act of 2005
The Energy Policy Act of 2005 (EPAct 2005) provides the fundamental authority for federal agencies to buy renew-
able power.
Energy Independence and Security Act of 2007
The Energy Independence and Security Act of 2007 (EISA
2007) directs federal agencies to purchase solar thermal hot
water systems and makes it easier for agencies to finance renewable energy projects through energy savings perfor-
mance contracts.
Executive Order 13423
To comply with E.O. 13423, federal agencies must ensure that
at least half of all renewable energy required under EPAct
2005 comes from new renewable sources (developed after January 1, 1999). To the maximum extent possible, renewable
energy generation projects should be implemented on agency
property for agency use. Agencies can also purchase renew-
able energy to help meet E.O. 13423 requirements.
Executive Order 13514
Federal agencies are required to inventory and manage greenhouse gas (GHG) emissions to meet federal goals and
mitigate climate change. Renewable power is an important
component of GHG management.
Appendix
46 Green Power Considerations for Federal Agencies
Even in the absence of an active renewable energy market,
agencies may specify a requirement for electricity (the stan-
dard commercial item) generated from renewable resources
(a specification in addition to the standard commercial item).
In most cases, the favorable contracting procedures afforded
to commercial items would still be applicable. While the
boundary between what is and is not considered a commer-
cial item is often case specific, in general an agency should
be wary of specifying any requirement beyond what is cur-
rently commercially available.
In addition, certification efforts by state and nongovern-
mental organizations help to establish renewable energy as a
commercial item by establishing a brand name. Third-party
certification provides additional value to the federal govern-
ment through verification and annual audits to eliminate
double counting of renewable products. When buying renew-
able power and RECs for federal agencies, the GSA and DESC
routinely use the commercial item designation and require
third-party verification.
Utility Services
As a large purchaser of electricity, the federal government
has well developed methods for purchasing power, known
as utility services. FAR Part 41 governs these procurements,
typically from regulated utilities, which have been used by
agencies to purchase renewable power, RECs, and on-site
generation systems through a power purchase agreement
(PPA).
FAR and the Environment
FAR Part 23 seeks to minimize the environmental impacts of
federal purchases. Subpart 23.2 addresses energy and water
efficiency, as well as renewable energy. This subpart states,
“The Government’s policy is to acquire supplies and services
that promote energy and water efficiency, advance the use
of renewable energy products, and help foster markets for
emerging technologies.” Subpart 23.7 directs agencies to
contract for environmentally preferable and energy-efficient
products and services. “Environmentally preferable” is
defined by FAR subpart 2.101 as “products or services that
have a lesser or reduced effect on human health and the
environment when compared with competing products or
services that serve the same purpose. This comparison may
consider raw materials acquisition, production, manufactur-
ing, packaging, distribution, reuse, operation, maintenance,
or disposal of the product or service.”
Part 11 of the FAR, “Describing Agency Needs,” states that
environmental objectives, including the purchase of prod-
ucts and services that use renewable energy technologies,
must be considered when specifying requirements (FAR Part
l1.002[d]). Requirements for renewable energy should be
specific enough to limit the number of factors in competing
offers to be evaluated but general enough so as not to jeopar-
dize the product’s status as a “commercial item.” In general,
as the requirements become more specifically defined, the
importance of price relative to other considerations increases
(FAR Part 15.101).
Innovative Purchase Opportunities
Even though the procurement of renewable power has
become common enough that it is generally not “innovative,”
in some situations the methods outlined above do not apply,
and innovative methods are needed to implement a purchase.
The Federal Acquisition Streamlining Act of 1994 and the
Federal Acquisition Reform Act of 1996 encourage contract-
ing officers to take initiative and pursue opportunities that
they believe to be in the best interests of the government
(FAR l.102[d]).
Procurement Approaches
to Renewable Electricity
and RECs
Restructured/Competitive Markets
In a restructured or competitive market, agencies must use
competitive acquisition procedures to “shop” for renewable
energy from a variety of providers. Since an agency will be
evaluating competing offers, normal solicitation procedures
must be followed. Federal agencies should follow one of two
solicitation approaches: 1) using designated contracting agen-
cies, such as the GSA, the DESC, or, in some cases, Western;
or 2) serving as the contracting agency themselves. Although
serving as the contracting agency offers more control and
flexibility, the designated contracting agencies have gained
significant expertise in the area of competitive electricity
power procurement, including renewables.
Fully Regulated Markets
Where retail competition is not available, federal agencies
may be able to buy renewable power through a green pric-
ing program offered by their local utility. If such a program
exists, agencies should find out the specific participation
procedures. If a GSA areawide contract (AWC) is already in
place with this utility, the agency should complete the util-
ity’s green-pricing contract, as well as the AWC Exhibit A
contract. A competitive solicitation is not required since it is
a utility service.
Appendix
Guide to Purchasing Green Power 47
RECs
Federal agencies can buy RECs throughout the country.
Since a variety of suppliers offer RECs, normal solicitation
procedures must be followed. GSA, DESC, and Western have
experience with REC procurement.
On-site Systems
Federal agencies are encouraged to procure renewable power
in the form of on-site renewable energy systems. EPAct
2005 provides a bonus to agencies toward federal renewable
energy goals by allowing agencies to double count renewable
energy if it is produced on-site and used at a federal facil-
ity, produced on federal lands and used at a federal facility,
or produced on Native American land and used at a federal
facility.
On-site systems can be procured through a variety of financ-
ing mechanisms, including energy savings performance
contracts (ESPCs), utility energy services contracts (UESCs),
and power purchase agreements (PPAs). ESPCs and UESCs
allow a third party to provide the capital financing for the
renewable system to be repaid over the life of the system (for
more information about ESPCs and UESCs, see the FEMP
financing page listed at the end of this appendix). Agencies
can also purchase on-site systems using appropriated funds
and standard contracting for commercial items.3 Before start-
ing a renewable power project, it is important to contact the
local utility regarding interconnection procedures, net meter-
ing, incentives, power purchase agreement (PPA) rules, tariff
provisions, and standby charges.
Federal agencies can also purchase renewable power pro-
duced by on-site renewable energy systems through PPAs,
as described in Chapter 7 of this guide. While these types
of power purchase contracts have become common outside
the federal government, the federal government has limited
experience with these procurement methods. PPA purchase
terms usually extend over 10 to 20 years, as shorter contract
terms make it harder for project developers to obtain financ-
ing. GSA and other agencies have executed power purchase
agreements with terms of 10 years or less, although this
shorter term makes the project riskier for the developer and
thus more expensive for the federal agency. Usually, federal
agencies purchase electricity as a utility service under FAR
Part 41, which limits contracts to 10 years. A contract term
longer than 10 years may be possible if Western acts as the
procurement agent for facilities in the Western service ter-
ritory, or if the procurement is done under DoD’s 2922A
30-year authority. The DESC renewables team has experience
with entering into PPAs for on-site renewable systems and
is a good resource for federal agencies looking to make this
type of purchase.
Some of the factors that need to be considered in a
PPA include the type of land use agreement, National
Environmental Policy Act (NEPA) review, default and
recourse for the agency, and utility incentive payments. As
with other on-site systems, it is important to coordinate with
the local utility on issues such as interconnection require-
ments, net metering rules, and potential standby/tariff
changes. In addition, it is important that the PPA contract
ensures that the ownership of RECs produced by the system
is clearly articulated. In most of the federal PPA projects
completed to date, the project developer has sold the RECs
to the local utility to help the utility meet its solar require-
ment. Selling valuable RECs allows the project developer to
reduce the PPA price. If the agency does not retain the RECs,
it needs to purchase “replacement” RECs in order for the on-
site system to count toward renewable consumption goals
(this is known as a “REC swap”). In addition, if the agency
does not retain the RECs, it will not be able to claim the
carbon reductions in its comprehensive greenhouse gas emis-
sions inventory. On-site systems whose RECs are swapped
are still eligible for the double bonus toward federal renew-
able purchasing goals, as long as the swap is done according
to FEMP’s guidance on this subject.
Using GSA, DESC, or Western
GSA Power Procurement Services
GSA has assisted many federal agencies in the procurement
of renewable power, and its ability to aggregate renewable
requirements for many agencies might result in lower prices.
GSA’s support to its federal customers for energy-related prod-
ucts is provided by the GSA Energy Division at <www.gsa.
gov/energy>. Through this division, GSA provides areawide
contracts (AWC) for the procurement of utilities and aggregate
purchasing of natural gas and electricity. GSA customizes its
aggregate electric and natural gas procurements to meet the
financial and physical supply requirements of its federal and
non-federal agency clients. In addition, GSA has federal sup-
ply schedules for energy services, which federal agencies can
use to help assess and manage their procurement of renew-
able power and renewable energy generation systems. Visit
<www.gsa.gov/energyservices> for more information.
DESC Power Procurement Services
Under the DESC Electricity and Renewables Program, com-
petitive solicitations are issued for electricity, RECs, and
on-site renewable power projects. DESC is involved in retail
electricity purchases in states that have approved and imple-
mented deregulation/restructuring. RECs can be purchased
3 The GSA supply schedule includes some renewable energy systems.
Appendix
48 Green Power Considerations for Federal Agencies
nationwide. DESC recently expanded its offerings to include
competitive purchases for on-site renewable generation that
are financed, owned, operated, and maintained by a third
party.
Under its Electricity and Renewables Program, DESC:
• Procures electricity for Department of Defense and fed-
eral civilian activities.
• Uses aggregation to attract market interest without cus-
tomer cross-subsidization.
• Acts as procurement agent for on-site PPA projects.
• Works with customers to develop requirements, iden-
tify risk preferences, and develop risk-mitigation plans.
• Tailors each solicitation to market conditions and cus-
tomer requirements.
• Conducts “best value” and “low-price technically
acceptable” acquisitions, depending on requirements
and customer preference.
• Contracts for Economic Load Response Services.
• Uses various pricing methods: fixed price, block and
index, and Locational Marginal Pricing.
• Has extensive experience procuring power for the fed-
eral government.
• Performs all contract administration functions.
DESC’s program uses commercial practices for its solicita-
tions and procurement strategy, which has been central to
successfully engaging the market. In addition, DESC’s pro-
gram is flexible enough to support unusual and/or “out of the
box” customer requests and requirements while complying
fully with applicable procurement regulations. DESC is also
involved in ESPC and UESC procurements on behalf of DoD
and federal civilian agencies.
Go to <www.desc.dla.mil> to view ongoing DESC solicita-
tions or to find contact information for DESC’s electricity and
renewables acquisition team.
Western Renewable Power Products
Regardless of location, federal agencies can purchase RECs
from Western. An agency pays for the renewable energy/
benefit at cost, plus a fee to cover the administrative cost of
acquiring the renewable resources from a supplier. For more
information about these programs, visit Western’s Web site at
<www.wapa.gov/powerm/pmtags.htm>.
For a federal agency that is a Western customer within the
Western territory, Western may be able to buy and deliver
renewable energy to the federal site. Agency costs include
renewable power generation, transmission (if needed), related
ancillary services, distribution (if needed), and program
administration. If the agency receives power from another
utility, the agency will need to obtain the cooperation of that
utility before arrangements can be made to deliver renewable
energy from Western.
If the federal agency has a physical site for a renewable ener-
gy project within the Western territory and would be willing
to host a third-party owned system, Western can purchase
the energy from that project on behalf of the agency under a
long-term contract.
Agency Procurement
If an agency does not deem it advantageous to request
assistance from GSA, DESC, or Western, it may contract
separately for renewable energy. In this case, the purchase
should meet the requirements of the FAR section the agency
has decided to use, such as FAR Part 12 or Part 41.
FEMP Assistance for On-site
Renewable Generation
Projects
On-site renewable generation projects face different issues
than do power purchases. To help federal agencies tap the
renewable resources that are available at their facilities,
FEMP offers several programs to assist with on-site genera-
tion projects.
Agency-Level Planning
FEMP offers technical assistance to help federal agencies
identify and prioritize energy projects across the entire agency
portfolio. This can be useful when the agency elects to devel-
op a long-term strategic vision that can be used to prioritize
energy management activities over a multi-year period.
Renewable Resource Screenings and
Assessments
To help agencies and facility managers assess their opportu-
nities for on-site renewable energy generation, FEMP offers
assistance with renewable resource screenings and assess-
ments. Screenings can be done on a large group of sites to
identify which of those sites have potential for cost-effective
renewable projects, or can be done to screen out sites with
little potential. Screenings can also be conducted on a single
Appendix
Guide to Purchasing Green Power 49
site or as part of an ESPC or UESC project. While screen-
ings are done at a broader level, assessments dig deeper to
analyze which specific renewable technologies would be best
for satisfying the energy needs at particular sites. Screenings
and assessments take into account such factors as the qual-
ity of renewable resources available, applicable incentives or
rebates, and other site-specific factors. To begin the screening
or assessment process, information about each site is needed
including site name, address, longitude and latitude, square
footage of individual buildings, and utility use and cost data
for each fuel.
Agencies can generally assess the quality of renewable
resources at their sites by using renewable resource maps.
Maps are available at <www.nrel.gov/gis/femp.html> for a
wide variety of renewable resources including solar, wind,
biomass, and geothermal. These maps indicate the degree
of availability of each resource at locations across the entire
United States. Some maps show where each renewable tech-
nology would be cost-effective for federal facilities under
varying assumptions including electricity and renewable sys-
tem prices.
Agencies can also find screening tools on the FEMP Web site.
By entering basic site information into these software tools,
agencies can obtain a general indication of which sites have
potential for cost-effective projects using a particular renew-
able technology.
Before initiating a project, renewable resources at a site must
be confirmed, especially for renewable resources that are
very site-specific, such as wind. Resource maps and screen-
ing tools are a good start, but it is important to consult an
expert for a professional evaluation before implementing
renewable energy projects.
Technical Assistance
FEMP can also help agencies implement renewable energy
projects. This technical assistance can include engaging
stakeholders, developing product specifications, sizing sys-
tems, reviewing plans and specifications, designing requests
for proposals, reviewing and evaluating proposals, choos-
ing the best financing and contract vehicles, and in some
cases evaluating the performance of installed systems. FEMP
allocates funding according to a “Call-for-Projects” process,
in which federal agencies apply through a merit-based selec-
tion process for FEMP-funded technical assistance on their
renewable energy projects, but agencies may also fund assis-
tance through interagency agreements.
Technical assistance funding is not for system purchases, but
FEMP does help some project teams acquire additional proj-
ect financing if needed. Agencies may participate in FEMP’s
alternative financing programs, through which the contractor
pays the up-front costs of an energy efficiency or renewable
energy project and is repaid over the term of the contract
from the agency’s guaranteed energy cost savings. FEMP
has helped agencies obtain financing for biomass fuels, geo-
thermal heat pumps, parabolic-trough solar collectors, and
photovoltaic systems through these financing programs.
Training
FEMP offers various training courses to help federal energy
managers become more proficient in energy management and
learn about alternative forms of financing for energy-saving
projects. For more information, visit FEMP’s training Web
site listed at the end of this appendix.
Utility-Scale Projects
FEMP encourages agencies to facilitate large renewable ener-
gy projects on federal lands. These utility-scale projects are
typically owned by third parties and can be developed under
Enhanced-Use Lease (EUL) arrangements, for agencies with
such authority. The projects offer the opportunity for large-
scale application of renewable energy technologies, but it is
very important to coordinate with the local utility regard-
ing interconnection, net metering, tariff changes, etc. before
moving forward with a utility-scale project.
Power generated from a utility-scale project can be used to
meet the load of the host federal site, or be sold by the local
utility to its non-federal customers.
Federal sites in western states should contact the Bureau of
Land Management (BLM) about opportunities to collaborate
on utility-scale renewable energy projects on federal lands.
FEMP and BLM have identified those federal lands with the
best potential for large renewable energy projects. The joint
study is available on FEMP’s Web site.
Key Elements of a Successful
Procurement or On-site
Installation
Based on several years of experience buying renewable power
and installing on-site renewable energy systems, certain les-
sons for federal agencies have emerged.
Stakeholder Involvement
Renewable power advocates must get agreement in advance
from internal stakeholders such as comptrollers, energy
managers, and key decision-makers. The stakeholders must
participate in the process and make reasoned, balanced
Appendix
50 Green Power Considerations for Federal Agencies
decisions. It is important to be honest and clear about the
project’s renewable sources and benefits. A cross-functional
team with representatives from across the organization will
result in the best project.
Cost Control
Federal energy management directives specifically allow the
savings from energy efficiency to be used to pay for renew-
able energy. Projects that bundle renewable power purchases
with energy efficiency projects (possibly through an ESPC or
UESC) can result in a shorter payback period for the com-
bined project. Buying RECs is generally the least expensive
way to meet renewable energy requirements, but agencies
should consider making at least a small purchase of renew-
able power through their local utility, if they have a program.
Developing an Effective Solicitation
An agency’s electricity consumption data should be part of
any renewable power RFP and are required by GSA, DESC,
and Western for the procurement of on-site systems. The
purchasing agency should notify renewable power suppliers
of the RFP and conduct a pre-proposal meeting with pro-
spective suppliers if the procurement is not standard.
Load Aggregation
Combining several facilities into one acquisition can lead to
big purchases, but it is best to target these aggregation efforts
only to big users. Trying to aggregate many smaller users can
be difficult. It is best to keep the procurement simple.
Supplier Relations
Utility green pricing should be seen as a partnership in
which the utility and the federal purchaser work together to
construct a program that meets both their needs. Investor-
owned utilities are usually not able to launch their own
renewable power programs without public utility commission
approval. However, a large federal customer could help per-
suade a utility to develop a new program that would then be
made available to other customers. For all electricity suppli-
ers, federal agencies should consider requesting a customized
product, in order to take advantage of discounted pricing
that may be available for large volume purchases.
Capturing the Benefits of the
Purchase
After successfully completing a renewable power purchase, a
federal agency usually wants to publicize its efforts. In addi-
tion to the publicity messages available to other institutions,
federal agencies can spread the word that the agency is work-
ing to fulfill its part of the federal renewable energy goal.
Agencies with exemplary energy management programs are
eligible for FEMP awards, which enhance an agency’s image
both inside and outside the government. Especially with on-
site generation, however, it is important to be careful about
making claims when REC-swapping or selling is involved.
An agency cannot claim to be using power generated by on-
site solar, for example, if the RECs are sold or swapped for
some other type of RECs.
Federal agencies are required to report annually on their
progress toward meeting their energy management goals.
FEMP has published guidelines for counting renewable
power purchases and on-site renewable energy toward an
agency’s energy management goals at <www1.eere.energy.
gov/femp/regulations/facility_reporting.html>.
Information for Potential
Suppliers to the Federal
Government
All federal government procurements are made competitively
unless there is a compelling reason for a sole-source contract.
Renewable energy suppliers should contact the GSA (Ken
Shutika), DESC (John Nelson), or Western (Randy Manion)
to be placed on renewable procurement notification lists.
Contact information is listed at the end of this appendix.
Summary of Renewable
Power Opportunities for the
Federal Government
The benefits of renewable energy are enormous, and as the
nation’s largest purchaser of electricity, the federal govern-
ment can have a significant impact on the way that power
is produced now and in the future. Federal agencies already
have an unprecedented and growing range of options for
purchasing renewable energy, and EPAct 2005 directs fed-
eral agencies to increase their use of renewable energy. With
more emphasis on “best value” purchasing and the explicit
consideration of environmental characteristics, contracting
officers now have more options than ever for buying renew-
able energy. Using the strategies outlined in this guidebook,
federal agencies can meet their renewable energy goals and
help move the United States toward a more sustainable ener-
gy future.
Appendix
Guide to Purchasing Green Power 51
Federal Resources for
Renewable Power
Information
For federal agencies buying renewable power, assistance
is available from the following federal agencies and national
laboratories:
Green Power Network:
<apps3.eere.energy.gov/greenpower/>
FEMP Web sites:
Renewable energy: <www1.eere.energy.gov/femp/technolo-
gies/renewable_energy.html>
Renewable purchasing: <www1.eere.energy.gov/femp/tech-
nologies/renewable_purchasingpower.html>
Renewable power purchase agreements: <www1.eere.
energy.gov/femp/financing/power_purchase_agreements.html>
Financing: <www1.eere.energy.gov/femp/financing/
mechanisms.html>
Training: <www1.eere.energy.gov/femp/news/events.html>
Federal Renewable Energy Working
Group:
<www1.eere.energy.gov/femp/technologies/renewable_
workinggroup.html>
Federal Acquisition Regulation (FAR):
<www.acquisition.gov/far/>
For assistance with program resources:
Department of Energy, Federal Energy Management Program
Mark Reichhardt, Renewable Purchasing (202) 586-4788
mark.reichhardt@ee.doe.gov
Anne Sprunt Crawley, Technical Assistance (202) 586-1505
anne.crawley@ee.doe.gov
For assistance issuing solicitations:
General Services Administration
Ken Shutika (202) 260-9713
ken.shutika@gsa.gov
Defense Energy Support Center
John Nelson (703) 767-8523
john.nelson@dla.mil
Andrea Kincaid (703) 767-8669
andrea.kincaid@dla.mil
<https://www.desc.dla.mil/DCM/DCMPage.asp?pageid=589>
Western Area Power Administration
Renewable Resources for Federal Agencies Program
Randy Manion (720) 962-7423
manion@wapa.gov
For technical assistance, including market intelligence,
market rules, and the development of requirements and
statements of work, contact:
Lawrence Berkeley National Laboratory
Gerald Robinson (510) 486-5769
GTRobinson@lbl.gov
Rich Brown (510) 486-5896
REBrown@lbl.gov
National Renewable Energy Laboratory
Chandra Shah (303) 384-7557
chandra.shah@nrel.gov
Pacific Northwest National Laboratory
Mike Warwick (503) 417-7555
mike.warwick@pnl.gov
For more information or assistance in developing a plan
to enhance the security of federal facilities through the
use of renewable energy, contact:
National Renewable Energy Laboratory
Bob Westby (303) 384-7534
Robert.Westby@nrel.gov
Sandia National Laboratory, Defense Energy Support
Program
Dave Menicucci (505) 844-3077
dfmenic@sandia.gov
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Guide to Purchasing Green Power
Renewable Electricity, Renewable Energy
Certificates, and On-Site Renewable Generation
a collaboration of
March 2010
Plan Hermosa Carbon Neutral Goal
1
Carbon Neutral Goal
Sustainability + Carbon Neutral Planning In Hermosa Beach
Over the course of the last six years, the City of Hermosa Beach has commissioned and
considered a number of studies, plans, and reports regarding the topics of sustainability,
reducing greenhouse gas emissions, and carbon neutrality. These planning efforts include:
2010- Greenhouse Gas Emissions Inventory for Hermosa Beach (South Bay Cities Council
of Governments)
2011 - Hermosa Beach Sustainability Plan (City of Hermosa Beach)
2013 - Hermosa Beach Carbon Neutral Scoping Plan (UCLA)
2015 - Greenhouse Gas Emissions Inventory for Hermosa Beach (South Bay Cities Council
of Governments)
2015 - Hermosa Beach Economic Benefits of Carbon Neutrality (Brendle Group)
2015 – PLAN Hermosa + Carbon Neutral Planning Tool (Raimi +Associates, Brendle Group)
Strategic Growth Council Grant
In 2012 the City of Hermosa Beach was awarded a grant from the California Strategic Growth
Council to assist the City in updating the General Plan and integrate the Local Coastal Program
to serve as a comprehensive blueprint for sustainability and a low carbon future. This approach,
compared to a Climate Action Plan, offers the opportunity to integrate many of the land use
and transportation measures that put GHG reductions directly into action through the General
Plan.
Beyond strictly reducing greenhouse gas emissions, the Strategic Growth Council awarded
funding to planning and urban greening projects throughout the State that work toward some or
all of the following objectives:
• Improve air and water quality
• Promote public health
• Promote equity
• Increase housing affordability
• Increase infill and compact
development
• Revitalize urban and community
centers
• Protect natural resources and
agricultural lands
• Reduce automobile usage and fuel
consumption
• Improve infrastructure systems
• Promote water conservation
• Promote energy efficiency and
conservation
• Strengthen the economy
Note that the Hermosa Beach Grant Application identified a 25% reduction in greenhouse gas
emissions through this plan, among other objectives identified on the list above.
Plan Hermosa Carbon Neutral Goal
2
Integration + Coordination with Carbon Neutral Studies
The Economic Benefits of Carbon Neutrality Study completed in early 2015 was limited to
evaluating the financial cost/benefit considerations of achieving carbon neutrality (after
defining carbon neutrality in a number of ways) and not the community interest/political
feasibility of achieving carbon neutrality. Since the study was not charged with evaluating the
specific actions to achieve a carbon neutrality goal, City Staff and the consultant teams
(Brendle Group and Raimi + Associates) worked together to develop a Hermosa Beach specific
Carbon Planning Tool (Attachment 1).
The Carbon Planning Tool, a user-friendly excel-based scenario planning tool, was developed to
aide in the discussion of what actions and policies may be of interest to the community to
reduce greenhouse gas emissions so that those policies and actions could be incorporated
throughout PLAN Hermosa (Attachment 2 includes the draft PLAN Hermosa policies related to
reducing greenhouse gas emissions).
During the development of the Carbon Planning Tool, meetings were held with interested
stakeholders and the General Plan Community Working Group, and the tool was presented
during a Joint Planning Commission/City Council Study Session (May 11, 2015) to discuss both the
Land Use and Transportation Scenarios and the Carbon Planning Tool.
Over the course of the last three years there have been numerous direct and indirect discussions
about the topic of carbon neutrality. Some of the positive and negative feedback we’ve heard
through this process regarding carbon neutrality includes:
Some interest in aggressive pursuit of carbon neutral goals (2030)
Interest in balancing the protection of private property rights and environmental
leadership
Removal of key sustainability/ghg reduction phrases from the draft vision statement
o The fading dominance of the auto
o Environmental footprint is dramatically reduced
o Virtually all energy is carbon-free
o We take shared responsibility for catalyzing positive change
o Sustainability
o Oil drilling (please note that this was not included in the vision statement)
Interest in retaining personal choices for transportation not forcing alternatives
Somewhat split feedback on high levels of investment in transit, pedestrian, and bicycle
infrastructure
Limited interest in pursuing carbon neutrality for the sake of being first
Limited interest in utilizing, asking questions, or submitting the Carbon Planning Tool
Among all of the topics that the community expressed interest in through this planning process,
the topic of carbon neutrality generally fell somewhere in the middle of the list of priority,
particularly compared to topics like community facility enhancements, neighborhood character,
economic development, mobility and infrastructure improvements.
Plan Hermosa Carbon Neutral Goal
3
Policy Considerations for PLAN Hermosa
With the community input collected through this process in mind, the first draft of PLAN Hermosa
has attempted to take a balanced approach to including a carbon-neutral goal within the plan
that is leading-edge, but still achievable through a combination of state programs, technology
advancements, changes to building codes and standards, active transportation infrastructure,
incentive-based programs, and carbon offsets. A 2040 carbon neutral goal is still ahead of other
comparable communities that have set carbon neutral goals (see Attachment 3)
Accelerating the Carbon Neutrality Goal from 2040 to 2030 and eliminating the option for the
purchase of carbon offsets would:
• Create a bigger gap that would need to be reduced by local policy (as opposed to
state policy)
• Result in 10 less years of technology implementation that could reduce GHG emissions
• Require some of the hardest to achieve or least cost effective reductions be eliminated
locally rather than offset (i.e. remaining 5% of waste diversion)
• Require the City to find funding or pay a premium for being first-adopters of new
technologies rather than waiting for others to vet and refine (i.e. battery storage
technology, advance fuel vehicles)
• Result in many policies being re-written from encourage and incentivize language to
require or regulate
Implications on PLAN Hermosa Process
The City must conduct CEQA review before adopting a plan/policy to achieve carbon
neutrality. The Environmental Impact Report currently being prepared for PLAN Hermosa is
evaluating the potential effects on the environment of the proposed policies in the Draft PLAN
Hermosa, including Carbon Neutrality by 2040. In addition, the EIR is required by law to consider
project alternatives that could reduce or eliminate significant environmental impacts from the
project (in this case adoption of a new General Plan).. Though not analyzed at the same level of
detail as the proposed project, the EIR is analyzing the environmental impacts associated with a
goal to achieve carbon neutrality by 2030 instead of 2040.
Council action or direction revise the draft PLAN Hermosa to set a more aggressive carbon
neutral goal of 2030 and removal of the option to purchase any offsets to achieve that goal
would have the following implications on the process, timeline, and budget for PLAN Hermosa
by requiring staff and consultant time to:
• Revise PLAN Hermosa Vision Statement Goals, Policies, and Implementation Actions in
the Land Use, Mobility, Sustainability + Conservation, Parks + Open Space, Infrastructure
Elements and potentially the Land Use and Mobility Network Maps
• Re-run traffic models to incorporate more aggressive/more quickly implemented land
use and mobility measures
Plan Hermosa Carbon Neutral Goal
4
• Revise EIR project description, GHG emissions section, Transportation section, Land Use
Planning section, Alternatives section
• Recirculate the Draft of PLAN Hermosa for public review and comments
• In addition to consultant time required to process these changes, there is a potential loss
of grant funds, as these revisions would likely extend the PLAN Hermosa schedule beyond
the target approval date in August.
Without making these changes now, the Council will have the opportunity to consider and
approve a more aggressive 2030 goal as part of its review and approval of PLAN Hermosa.
Acceleration of Carbon Neutral Implementation
Beyond the implications to the PLAN Hermosa process, acceleration of a carbon neutral goal
would reduce the amount of time available to fully implement the necessary code changes
(net zero or renewable energy standards for new development) and key projects (like bike,
pedestrian, transit network implementation). Unless additional grant funding opportunities are
found and significant staff resources allocated across all City departments to implement these
code changes and projects, achieving a carbon neutral goal by 2030 exclusively through local
projects is likely to come at the expense of other goals and priorities established and supported
by the community.
Attachments
1. Carbon Planning Tool and User Guide
2. PLAN Hermosa Policies Addressing Greenhouse Gas Emissions
3. Carbon Neutral Goals of Comparable Jurisdictions
GHG Reduction Policies
Governance Element
4.4 Regional transportation and infrastructure decisions. Actively support regional
transportation and infrastructure projects and investment decisions that benefit the City
and the region.
6.4 Jobs-housing balance. Strive to improve the jobs-housing balance in the city by
actively pursuing employment uses that match the skill and educational levels of existing
and future residents.
Land Use + Design Element
Land Use Designations – The range and diversity of uses allowed within each land use
designation plays a role in the number of trips a use generates and the mode of
transportation chosen to make that trip. The more diversity in uses (between commercial,
office/professional, residential, etc) in a given area, combined with a safe transportation
network, results in shorter trips that can be made by driving, walking, biking, or transit.
1.1 Diverse and distributed land use pattern. Strive to maintain the fundamental pattern
of existing land uses, preserving residential neighborhoods, while providing for
enhancement and transformation of corridors and districts in order to improve
community activity and identity.
1.2 Focused infill potential. Proposals for new development should be directed toward
the City’s commercial areas with an emphasis on developing transit-supportive land use
mixes.
1.3 Access to daily activities. Strive to create sustainable development patterns such that
the majority of residents are within one-half mile walking distance to a variety of
neighborhood goods and services, such as supermarkets, restaurants, churches, cafes,
dry cleaners, laundry mats, farmers markets, banks, personal services, pharmacies and
similar uses.
1.4 Diverse commercial areas. Promote the development of diversified and unique
commercial districts with locally owned businesses and job- or revenue-generating uses.
4.2 Employment centers. Encourage the development and co-location of additional
office space and employment centers along corridors.
4.7 Access to transit. Support the location of transit stations and enhanced stops near the
intersection of Aviation Blvd and PCH, and adjacent to Gateway Commercial uses to
facilitate and take advantage of transit service, reduce vehicle trips and allow residents
without private vehicles to access services.
4.10 Pedestrian access. For all new development, encourage pedestrian access, and
create strong building entries that are primarily oriented to the street.
6.2 Streetscaping. Proactively beautify existing streetscapes with street trees, landscaping
and pedestrian-scaled lighting.
6.3 Green infrastructure network. Establish an interconnected green infrastructure
network throughout Hermosa Beach that serves as a network for active transportation,
recreation and scenic beauty and connects all areas of the city. In particular,
connections should be made between the beach, parks, the Downtown,
neighborhoods, and other destinations within the city. Consider the following
components when designing and implementing the green/open space network:
Preserved open space areas such as the beach and the Greenbelt,
Living streets with significant landscaping and pedestrian and bicycle amenities,
Community and neighborhood parks, and schools.
6.5 Provision of sidewalks. Encourage pedestrian friendly sidewalks on both sides of
streets in neighborhoods.
6.7 Pedestrian oriented design. Eliminate urban form conditions that reduce walkability
by discouraging surface parking and parking structures along walkways, long blank walls
along walkways, and garage-dominated building facades.
6.8 Balance pedestrian/vehicular circulation. Require vehicle parking design to consider
pedestrian circulation. Require the following of all new development along corridors:
Where parking lots front the street, the City will work with existing property owners to
add landscaping between the parking lot and the street.
Parking lots should be landscaped to create an attractive pedestrian environment
and reduce the impact of heat islands.
The number of curb cuts and other intrusions of vehicles across sidewalks should be
minimized.
When shared parking supply options are not available, encourage connections
between parking lots on adjacent sites.
Above-ground parking structures should be designed according to the same urban
design principles as other buildings.
Encourage the use of systems to increase parking lot efficiency, such as mechanical
lift systems or occupancy sensors.
9.1 Ocean-based energy resources. Encourage and support research and responsible
development of renewable ocean-based energy sources. Renewable energy sources
appropriate to Hermosa Beach shall be limited to wave, tidal, solar, and wind sources
that meet the region’s and state’s need for affordable sources of renewable energy.
13.3 Fresh food offerings. Encourage the continuation and expansion of fresh food
offerings including farmers’ markets, community gardens, and edible landscapes in
Hermosa Beach.
Mobility Element
1.1 Consider all modes. Require the planning, design, and construction of all new and
existing transportation projects to consider the needs of all modes of travel to create
safe, livable and inviting environments for all users of the system.
1.5 Require improvements. Require new development to provide or pay its share of
transportation and infrastructure improvements including any sidewalk improvements,
landscaping, bicycle infrastructure, traffic calming, and public realm improvements.
2.5 Require sustainable practices. Incorporate environmental sustainability practices into
designs and strategic management of road space and public right-of-ways, prioritizing
practices that can serve dual infrastructure purposes.
3.2 Invest in sidewalks. Prioritize investment in designated priority sidewalks to ensure a
complete network of sidewalks and pedestrian-friendly amenities that enhances
pedestrian safety, access opportunities and connectivity to destinations.
3.3 Active transportation. Require that all development or redevelopment projects
accommodate active transportation through providing on-site amenities, necessary
connections to existing and planned pedestrian and bicycle networks, and incorporate
people-oriented design practices.
3.4 Access opportunities. Provide enhanced mobility and access opportunities for local
transportation and transit services in areas of the City with sufficient density and intensity
of uses, mix of appropriate uses, and supportive bicycle and pedestrian network
connections that can reduce vehicle trips within the City’s busiest corridors.
3.5 Incentivize other modes. Incentivize local shuttle/trolley services, rideshare and car
share programs, and developing infrastructure that support low speed, low carbon (e.g.
electric) vehicles.
3.6 Complete bicycle network. Provide a complete bicycle network along all designated
roadways while creating connections to other modes of travel including walking and
transit.
4.1 Shared parking. Facilitate park-once and shared parking policies among private
developments that contribute to a shares parking supply and interconnect with
adjacent parking facilities.
4.4 Provision of subsidized parking. Ensure the provision of subsidized on-street residential
parking is limited to residences which cannot provide adequate parking on-site.
4.5 Sufficient bicycle parking. Require a sufficient supply of bicycle parking to be
provided in conjunction with new vehicle parking facilities by both public and private
developments.
4.6 Priority parking. Provide priority parking and charging stations to accommodate the
use of Electric Vehicles (EV’s), including smaller short-distance neighborhood electric
vehicles.
4.9 Encourage TDM strategies. Encourage use of transportation demand management
strategies and programs such as carpooling, ride hailing, and alternative transportation
modes as a way to reduce demand for additional parking supply.
5.1 Prioritize development of infrastructure. Prioritize the development of roadway and
parking infrastructure that encourages private electric and other low carbon vehicle
ownership and use throughout the city.
5.2 Local transit system. Develop a local transit system that facilitates efficient transport
of residents, hotel guests, and beachgoers between activity centers, and to Downtown
businesses and the beach.
5.3 Incentivize TDM strategies. Incentivize the use of Transportation Demand
Management (TDM) strategies as a cost effective method for maximizing existing
transportation infrastructure to accommodate mobility demands without significant
expansion to infrastructure.
5.5 Encourage smart growth. Encourage smart growth land use features in development
projects to ensure more compact, mixed, connected, and multimodal development
supports reduced trip generation, trip lengths, and greater ability to utilize alternative
modes.
6.1 Regional network. Work with government agencies and private sector companies to
develop a comprehensive, regionally integrated transportation network that connects
the community to surrounding cities.
6.3 Support programs. Facilitate greater local and regional mobility through programs for
shared equipment or transportation options such as car sharing and bike sharing.
6.6 Greater utilization. Consider exploring opportunities for greater utilization of the Beach
Cities transit system for improved mobility along major corridors and as a potential means
of improved regional transit connections.
Sustainability + Conservation Element
1.2 Highest return on investment. Prioritize the implementation of greenhouse gas
reduction projects that simultaneously reduce ongoing operational costs to the City.
1.4 Carbon offsets as needed. When necessary, purchase carbon offsets to achieve
municipal carbon neutral goal.
1.6 Demonstration and pilot projects. Utilize demonstration and pilot projects as a means
to evaluate the greenhouse gas reduction potential and cost effectiveness of projects.
2.1 State targets and goals. Reduce greenhouse gas emissions in alignment with state
targets and goals, and achieve carbon neutrality as a community no later than 2040.
2.2 Triple bottom line projects. Prioritize the implementation of greenhouse gas reduction
projects that simultaneously provide the greatest economic and health benefits to the
community.
2.3 Diversify GHG reduction strategies. Pursue a diverse mixture of greenhouse gas
reduction strategies across the transportation, energy, waste sectors, commensurate with
their share of the community’s greenhouse gas emissions.
2.4 Land use and transportation investments. Promote land use and transportation
investments that support greater transportation choice, greater local economic
opportunity, and reduced number and length of automobile trips.
2.5 Carbon offsets as needed. When necessary, purchase carbon offsets to achieve
community carbon neutral goal.
2.7 Discretionary projects. Require discretionary projects to substantially mitigate all
feasible greenhouse gas emissions, and offset the remainder of greenhouse gas
emissions produced to meet annual thresholds.
2.8 Ministerial projects. Encourage ministerial projects to directly offset potential
greenhouse gas emissions generated.
3.2 Mobile source reductions. Support land use and transportation strategies to reduce
vehicle miles traveled and emissions, including pollution from commercial and passenger
vehicles.
3.3 Fuel efficient fleets. Promote fuel efficiency and cleaner fuels for vehicles as well as
construction and maintenance equipment by requesting that City contractors provide
cleaner fleets.
3.4 Two-stroke engines. Discourage the use of equipment with two-stroke engines and
publicize the benefits and importance of alternative technologies.
3.5 Clean fuels. Support increased local access to cleaner fuels and cleaner energy by
encouraging fueling stations that provide cleaner fuels and energy to the community.
4.1 Renewable energy generation. Require, promote, and facilitate the installation of
renewable energy projects on homes and businesses.
4.2 Building energy disclosure. Require large buildings to report their energy and water
use on a regular basis.
4.3 Retrofit program. Provide an energy retrofit program to assist home and building
owners to make efficiency improvements.
4.4 Rental efficiency. Adopt a financing program to incentivize rental efficiency retrofits,
such as green leasing.
4.5 Municipal facilities. Continue to work toward achieving carbon-neutral municipal
facilities by 2020.
4.6 Sustainable building standards. Use sustainable building checklists to minimize or
eliminate waste and maximize recycling in building design, demolition, and construction
activities.
5.1 Recycled water facilities. Enhance the availability of recycled water supply and
distribution facilities are available throughout the City.
5.3 Water conservation programs. Update and improve water conservation and
efficiency programs, requirements, and incentives on a regular basis.
5.5 Greywater. Encourage the installation of greywater irrigation or disposal systems.
6.1 Franchise agreements. Ensure waste franchise agreements and program offerings
provide progressively higher rates of waste diversion.
6.2 Food waste collection. Ensure food waste collection is available and convenient for
all residents, businesses, and organizations.
6.3 Multi-family and commercial recycling. Require the provision of convenient recycling
options in multi-family residential and commercial uses.
6.6 Composting programs. Provide composting equipment at community facilities and
events and encourage home and commercial composting.
6.9 Building salvage. Maximize building salvage and deconstruction in remodeling or
building demolition projects.
Parks + Open Space Element
2.4 Low-maintenance design. Promote environmentally sustainable and low
maintenance design principles in the renovation, addition, or maintenance of parks and
recreation facilities.
3.6 Community gardens. Increase available space and necessary infrastructure to
incorporate community garden plots at parks.
4.2 Enhanced access points. Increase and enhance access to parks and open space,
particularly access points that promote physical activity such as pedestrian- and bike-
oriented access points.
4.3 Safe and efficient trail network. Develop a network of safe and efficient trails, streets,
and paths that connect residents, visitors, and neighboring communities to the beach,
parks, and activity centers.
6.4 Transit access. Coordinate with regional agencies and neighboring jurisdictions to
improve regional and local transit access to beach access points.
6.5 Bicycle and pedestrian access. Maximize bicycle and pedestrian access and safety
getting to and around the Coastal Zone through infrastructure and wayfinding
improvements.
6.12 Complete South Bay Bike Master Plan. Prioritize completion of proposed South Bay
Bike Master Plan improvements in the Coastal Zone that connect to other bike routes
and paths throughout the city and to the surrounding region.
8.10 Sustainable events. Improve sustainability and environmental protection associated
with special events.
10.1 Urban forest. Expand the urban forest and green spaces citywide on public and
private property.
10.2 Native landscapes. Require the planting of native, non-invasive, and drought-
tolerant landscaping and trees, and encourage the planting of edible landscapes and
fruit trees.
Infrastructure Element
1.5 New technologies. When feasible, utilize emerging technologies and funding
strategies that improve infrastructure efficiency, sustainability, and resiliency.
2.4 Sidewalk improvements. Consider innovative funding strategies, such as cost-
sharing, ADA accessibility grants, or sidewalk dedications, to improve the overall
condition, safety, and accessibility of sidewalks.
2.5 Active transportation dedications. Require new development and redevelopment
projects to provide land or infrastructure necessary to accommodate active
transportation, such as sidewalks, bike racks, and bus stops.
2.6 Traffic signal coordination. Maintain and operate the traffic signal system with
advanced technologies to manage traffic operations and maintain traffic signal
infrastructure.
3.2 Alternative water supplies. Pursue expansion of recycled water infrastructure and
other alternative water supplies to meet water demands of the community that
cannot be offset through conservation measures.
3.3 Recycled water infrastructure. Require the use of recycled water in areas currently
served by infrastructure, and encourage integration of recycled water into new
buildings which may be served by appropriate infrastructure in the future.
3.6 Water infrastructure. Support the development of water storage, recycling,
greywater treatment, and necessary transmission facilities.
6.4 Innovative and renewable technology. Encourage the exploration and
establishment of innovative and renewable utility service technologies.
6.5 Renewable energy facilities. Unless a renewable energy facility would cause an
unmitigatable impact to health or safety, allow them by right.
6.6 Community choice aggregation. Collaborate with nearby local and regional
agencies to develop a community choice aggregation system that provides greater
renewable energy choices to the community.
1
Summary of Leading City Climate Action Goals
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
International Communities
Aarhus
Denmark
(Pop. 242,914
City limits 100% by 2030 No mention of offsets
They have no set
amount of GHG to
reduce b/c they want
to be 0 MTCO2e by
2030. No baseline
year.
British Columbia1
Public sector (schools,
post-secondary,
government offices,
Crown operations,
hospitals)
100% Carbon neutrality in 2010 Offsets included, %
varies
Copenhagen
Denmark2 (pop:1.2
million)
City limits 20% reduction by 2015
100% reduction by 2025 Not mentioned.
Jönköping,
Sweden
(Pop. 126,331)
City limits3 40% from 1990 levels by 2020 No mention of offsets
Melbourne,
Australia
(Pop. 2009-10
98,162; 429,000
workers)
City limits
Zero net emissions by 2020;
relative to a 2002 base year
this is a reduction of 3.75
MTCO2e
Expects to reduce
emissions 35%
relative to BAU in
2020 and will offset
the remainder,
estimated at 5 million
tons4
Currently updating
their climate action
plan
Munich
Germany
(Pop. 1.4 million)
City limits
50% below 1990 levels by 2030
(10% every 5 years)
3.15 tons CO2e per capita by
2030
No mention.
Örebro, Sweden
(Pop.2010
135,000)
City limits, using a
partial consumption-
based method
(Energy use, transport,
air travel, and food)5
40% Per Capita below 2000
level by 2020
90% reduction by 2050
None mentioned
Long term goal set less
than one ton per
person, “ a level
where, if it were to be
applied
globally, it would not
endanger the climate”
1http://www2.gov.bc.ca/gov/topic.page?id=DF281B134D19469E98679E9A91CF043E&title=Carbon%20Neutral%20
Government
2 Source: Copenhagen CPH Climate Plan 2025
3 Values taken from Jönköping Sustainable Energy Action Plan submission to EU Covenant of Mayors
4 Melbourne expects to source its offsets from the National Emissions Trading Scheme
5 Climate Plan Summary for Örebro
2
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
York
England
(Pop. 2008
197,800)
City limits
80% reduction below 1990
levels by 2050
40% reduction below 1990
levels by 2020
No mention of offsets
in 2010-2013 CAP
Zurich,
Switzerland
(Pop. 2005
366,809)
Energy-related CO2
emissions within the
City limits6
1 ton CO2e per resident Per
capita primary energy
consumption goal “2000 Watt
Society”: 2,500 watts, of which
2,000 watts renewable energy
per person (equals 1
tCO2e/capita); 2050 (interim
targets in 2020, 2035)
No mention of using
offsets
“2000-Watt Society”
also used by other
Swiss cities, such as
Basel
United States Communities
Austin, TX and
Travis County
USA
(City Pop. 812,025;
County Pop.
1,030,588)
County limits, using
ICLEI’s 2012
Community Protocol)7
25% below 2007 levels by 2015
70% below 2007 levels by 2030
Not specified.8
Municipal utility
(Austin Energy)
considering divesting
in its share of coal
power plant
Bellingham, WA
USA
(Pop. 2012 81,360)
City limits, using ICLEI
CACP software9
2000 Base Year:
7% reduction by 2012
28% reduction (by 2020
None specified.
Mentioned offsets
may play a role post
2020.
Boulder, CO10 City limits 80% GHG reductions below
1990 levels by 2050
Burlington, VT
USA
(Pop. 2010 42,417)
City limits, using ICLEI
CACP software
20% reduction from 2007
baseline year by 2020.
80% reduction from 2007
baseline year. By 2050
No mention of
offsets, but new 2013
draft CAP update
mentions the use of
urban forestry to
sequester co2 as a
strategy
Updating CAP in 2013.
Have draft on their
website.
6 http://helpdesk.eumayors.eu/docs/seap/16_1348132236.pdf
7 Source: CDP-2012 Responses
8 Austin’s Climate Action report discusses local projects available for individual offsets (tree-planting and supporting
solar panels) funded and verified by Austin Energy
9 Source: City of Bellingham GHG Inventory and Climate Protection Action Plan
10 https://bouldercolorado.gov/climate/boulders-climate-commitment
3
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
Fort Collins, CO
USA
(Pop. 143,986)
City limits
*see notes section
80% from 2005 levels by 2050
(2,032,000 tons reduced by
2050)
20% from 2005 level by 2020
0.34% by 2020
They estimate offsets
will provide 7,000
tons of savings by
2020
No stated goal
involving offsets
Scope includes direct
emissions (natural gas,
transport), and indirect
(elec., landfill gas,
discarded recyclables,
and air travel).
Madison, WI
USA
(Pop. In 2010
240,000)
City limits 80% reduction below 2010 or
1990 levels by 2050 No mention of offsets
Oberlin, OH USA
(Pop. 2010 8,286)
City limits using ICLEI
CACP11
2007 Base Year:
50% reduction by 2015
75% reduction by 2030
>100% reduction by 2050
Not specified. In
order to achieve
carbon positive will
require Climate
Positive Credits.
Striving for local
carbon offset market
with a Greenhouse
Pilot.
Goal is to become a
“Climate Positive City”,
reducing GHGs below
zero, for which it lists
measures outside the
city limits related to
land use and food
Portland, OR
USA12 40% reduction by 2030; 80%
reduction by 2050 Update underway
Seattle, WA
USA13 City limits
Net zero by 2050; By 2030 -
Reduce emission from
passenger vehicle
transportation by 82%, VMT by
20% and emissions per mile
traveled by 75% from 2008
baseline; By 2030 reduce enegy
use in commercial buildings by
10% and residential buildings
by 20%, and GHG intensity of
all fuels by 25%
11 2013 Climate Action Plan
12 http://www.portlandoregon.gov/bps/49989?
13 http://www.seattle.gov/Documents/Departments/OSE/2013_CAP_20130612.pdf
4
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
California Communities
Berkeley14 City Limits
Reduce entire community’s
greenhouse gas emissions by
80% below 2000 levels by 2050
Davis15
28% below 1990 levels by
2020; Carbon neutrality by
2050
Combination of actions
at various levels and
carbon offsets. Similar
target set by the UC
system, City of
Berkeley, and Norway.
Lancaster16 Electric Supply Pursuing net zero power (100%
renewable energy) by 2020
2012 “Solar energy
capital of California” by
the California Clean
Energy Authority
Palo Alto17 City utilities/City
Limits
100% carbon neutral electric
resources (2013 – achieved)
By 2020, the City and
Community will reduce
emissions by 15% of 2005
levels, equal to 119,140 metric
tons of CO2, and bring the
community in line with State
emission reduction goals. (The
Plan is currently under revision
and these goals may be set
even higher.)
Near term (2013
through 2016)---the
City will purchase
short-term
renewable resources
and/or renewable
energy certificates
(RECs) to supplement
existing and
committed long-term
renewable and
hydroelectric
resources, which
account for 65% to
83% of the portfolio.
Longer term (beyond
2016)---long-term
renewable resources
will provide about a
50% RPS level within
the existing 0.5 ₵/kWh
annual RPS rate limit.
Since about 50% of the
electric supply
portfolio is already
sourced from carbon-
free hydroelectric
resources, the
additional cost of
achieving carbon
neutrality between
2017 and 2020 is very
small.
San Francisco18
Recent CAP goals
include zero waste,
50% sustainable trips
and 100% renewable
energy; also require
departmental Climate
Action Plans and GHS
reporting
14 http://www.ci.berkeley.ca.us/climate/
15 http://www.cooldavis.org/wp-content/uploads/2010_Davis_Climate_Action_Adaptation_Plan.pdf
16 http://www.forbes.com/sites/peterdetwiler/2014/05/13/can-a-city-get-to-net-zero-lancaster-california-mayor-
thinks-so/, http://www.cityoflancasterca.org/index.aspx?page=1499
17 http://www.cityofpaloalto.org/gov/depts/utl/residents/resources/pcm/carbon_neutral_portfolio.asp
18 http://www.sfenvironment.org/cas/goals
5
City
GHG inventory
boundary and
protocol (if known)
GHG Emission Reduction Goal
and Timeframe
% of Reduction
Expected to be
Achieved Through
Offsets Additional Notes
San Rafael19 City Limits
25% reduction of greenhouse
gas (GHG) by 2020
80% reduction by 2050 to meet
state targets.
Santa Cruz20 City Limits
30% reduction by 2020, 80%
reduction by 2050 (compared
to 1990 levels); require all new
buildings to be emissions
neutral by 2030
19 http://www.cityofsanrafael.org/citymgr-green-home/
20 http://www.cityofsantacruz.com/index.aspx?page=1544