Saanich's Civic Building Retrofits
The District of Saanich has taken some big steps towards becoming a model sustainable community. One of these steps was the comprehensive energy retrofit of civic facilities that the District planned and implemented between 2004 and 2007. The retrofit covered 500,000 square feet of floor space or 75% of the District’s total for civic buildings. Retrofitted buildings included:
- Two pools and an ice rink, facilities which are especially energy intensive
- Recreation centres
- Municipal hall office buildings
- Police and fire halls
The objectives of the retrofit were to minimize the long term energy costs of operating Saanich’s facilities, as well as reduce the greenhouse gas emissions generated by the District.
You can make a big capital investment in energy efficiency with the money you’ll save on operations and maintenance. - Brian Going, Manager of Facility Operations, District of Saanich
Getting the Project off the Ground
As early as the late 1990’s, staff in Facilities Operations within Saanich’s Engineering Department recognized the opportunity to save on energy costs and protect the environment through retrofitting their facilities. However, as Brian Going, Manager of Facility Operations notes, “It is tough to find capital funding internally for major retrofits”. After attending a conference on Energy Performance Contracting, District of Saanich staff began to consider using an Energy Services Company (ESCO) to perform the retrofit. ESCOs:
- Have experience conducting energy assessments and determining the savings potential of retrofits
- Manage retrofit construction processes and facilities commissioning
- Can provide guaranteed energy savings through performance contracts
With guaranteed energy savings, Saanich could finance their retrofits cost-effectively by paying back loans using these savings. Saanich’s Facilities Operations involved all District personnel with a stake in the retrofits early on in the decision making processes. Finance, purchasing, building managers, maintenance personnel and others were consulted on the retrofits.
As well, an Energy Services Manager with detailed knowledge of energy retrofitting and ESCO procurement was supplied by the Capital Regional District (CRD), with BC Hydro funding, to assist in the retrofit process.
Using an Energy Services Manager
Having the direct support of an Energy Services Manager (ESM) provided signficant benefits for Saanich. The ESM Services Manager had a mandate to work with CRD municipalities on energy efficiency projects. He assisted Saanich by:
- Developing criteria for candidate ESCOs
- Consulting in the hiring of Saanich’s ESCO
- Preparing official documentation and contracts during the energy retrofit process
Selecting an ESCO
Once they decided to move ahead with a comprehensive energy retrofit to District facilities, Saanich set out to find a suitable ESCO. Saanich staff prepared a detailed Request for Qualification that involved a multi-stage assessment and evaluation process
At the first stage, interested ESCOs provided extensive information on their organizational capacity, technical capabilities, financial estimates, and approach to client relations. Short listed candidates were invited to make a presentation, followed by an interview and reference checks. You will find links to these resources below.
Performing the Retrofits
Upon being retained, the ESCO conducted comprehensive energy assessments of civic facilities from which they developed detailed retrofit plans. The ESCO oversaw all construction and commissioning associated with the retrofits. District of Saanich staff assisted the ESCO in various stages of project management. This staff involvement built organizational capacity that will be valuable in any future retrofit projects. The retrofits began in 2005 and were completed by 2007.
Barriers – The Cost of Incentives
Applying for energy efficiency incentives offered by the federal government and utility companies required substantial time and effort, especially to ensure that facilities met program requirements.
Moreover, with potential net annual energy savings of $83,000, delays in undertaking the retrofits while incentive applications were processed meant lost opportunities for savings. These costs diluted the benefits of the incentives, and some staff felt that they should not have been pursued. However, as incentive programs offered by senior levels of government and utility companies are revised and offer more substantial benefits, these imputed costs may not be as significant for other local governments.
Breakthroughs – The Value of Collaboration
A major breakthrough came early in the project when decision makers, particularly those in the Finance Department, realized that Saanich could use the energy savings from facilities operations and maintenance budgets to service the debt required to finance the capital investment.
This buy-in was a crucial step in advancing the project and underlines the importance of involving Finance staff early on in project planning. Likewise, including building managers and key facilities maintenance staff in the retrofit process resulted in better-operating, higher-performance buildings.
Certain maintenance staff participated in a year-long facilities operation training program provided by the ESCO, to familiarize themselves with the new systems. “We have some very knowledgeable technical personnel working in maintenance. Now they can train other maintenance workers in the optimal operation of our buildings’ systems” says Brian Going.
Saanich’s energy retrofits cost a total of $857,000. Although the selected ESCO offered project financing, Saanich decided to borrow through BC’s Municipal Finance Authority, which provides attractive interest rates for local government borrowing. Energy savings were projected at $83,000 per year, resulting in a simple pay-back period of approximately 10 years.
However, energy prices, particularly those for natural gas rose rapidly during the retrofit process, so that the base energy cost on which the projections were made was no longer valid. In any event, had Saanich not undertaken the retrofits they would be paying far more for energy.
Under the Energy Performance contract that Saanich entered with the ESCO, they are guaranteed energy savings of $83,000 over the first 3 years and the ESCO is obligated to pay for any shortfall. “We opted for a 3-year guarantee period, as opposed to a 10-year guarantee period” says Brian Going, “You are going to pay more for the 10 years of insurance, and we were happy with the level of savings we would achieve, regardless of energy price”.
Saanich’s Facilities Operations group has continued to monitor the amounts of energy saved in retrofitted facilities. Monitoring these savings may provide justification for further investments in energy efficiency in the future. Saanich now understands the life-cycle value of energy retrofits and that projects with higher capital costs and longer pay-back periods still make economic sense. “Before this program, any retrofits with a simple pay back period of more than five years were not considered” says Brian Going, “Now we automatically consider projects with a 10 year pay back”.
An Improved Workplace
Apart from the cost savings, another program benefit has been the enhanced environment in Saanich’s retrofitted buildings. In particular, new lighting in civic buildings was a key energy saving measure that actually improved the quality of lighting for District staff and other building users. “We’ve found that with better, energy efficient lighting in our buildings people often don’t utilize all the lighting that is available”, says Going. “That further adds to our savings”.