To: Honorable Public Utilities Board Submitted by: /s/ Rebecca Irwin Interim AGM Customer Resources. From: Kelly Birdwell Approved by: /s/

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1 AGENDA ITEM NO.: 5.B.1 MEETING DATE: 10/20/2014 ADMINISTRATIVE REPORT NO.: To: Honorable Public Utilities Board Submitted by: /s/ Rebecca Irwin Interim AGM Customer Resources From: Kelly Birdwell Approved by: /s/ Utility Energy Analyst Glenn O. Steiger General Manager Subject: By Resolution, Authorize the General Manager to Award a Contract to Servco LLC dba Service Concepts for the Purchase and Distribution of Two LED Lamps to Every Residential Service Address for an Amount Not to Exceed $510,600 and Authorize the General Manager to Approve a Contingency Amount Not to Exceed $100,000 for Change Orders RECOMMENDATION By resolution, authorize the General Manager to award a contract to Servco LLC dba Service Concepts for the purchase and distribution of two light-emitting diode (LED) lamps to every residential service address for an amount not to exceed $510,600 and authorize the General Manager to approve a contingency amount not to exceed $100,000 for change orders. BACKGROUND Alameda Municipal Power (AMP) has a history of providing customers with new energyefficient lighting options, including a halogen lamp exchange at Earth Day in 2008, LED holiday light exchanges in 2011 and 2013, and an ongoing compact fluorescent light (CFL) program. Customers have responded positively to these offerings, as exhibited by the long lines of residents participating in participating in the 2013 holiday light exchange. Not only have these programs provided energy savings for AMP s customers, they ve also demonstrated the value of new lighting technologies. LEDs have recently hit a sweet spot in both technology and price point. Newer LEDs are made to look very similar to incandescent lamps and have a light output that nicely mimics the warm light that most associate with residential lighting. This, coupled with a price point of about $10 for a 10-Watt LED (60-Watt incandescent replacement), means that more energy-efficient lighting is within reach of AMP s residential customers. To encourage the transition and help reduce AMP s peak load, staff recommends distributing LED bulbs to every residential customer. The LED light bulb distribution project will be funded by the revenue from the short-term sale of AMP s renewable energy credits (RECs). A REC represents the environmental attributes associated with one mega-watt hour of eligible renewable generation. In 2012, AMP sold the

2 AGENDA ITEM NO.: 5.B.2 MEETING DATE: 10/20/2014 ADMINISTRATIVE REPORT NO.: RECs from the geothermal power plants and Ox Mountain Landfill-Gas-to-Energy facilities to the California Department of Water Resources. The term of the sale is from October 2012 through December 2016 and the sales revenue to AMP over the term of the agreement is estimated to be approximately $25 million. Revenue from the short term sale of RECs will be used for the benefit of utility ratepayers and to support AMP policies to reduce greenhouse gas emissions associated with ratepayer electric use. At the May 2014 meeting, the Public Utilities Board (Board) approved a resolution for a Renewable Energy Credits (REC) Sales Revenue Expenditures Plan and for three REC-funded projects recommended by staff (Resolution No. 5042). The three REC-funded projects approved by the Board were: Project 1: LED Streetlight Replacement Cobra Head and Shoe Box Project 2: Commercial Lighting Retrofit Rebate Program Project 3: LED Light Bulbs for Existing Alameda Residential Customers In May 2014, staff requested funding to provide one LED to every residential service address in Alameda. However, upon closer review of the energy savings potential, staff discovered that if two-thirds of Alameda homes switched two incandescent lamps for two LEDs, the impact to AMP s peak load would be significant. Residential lighting is a measurable component of AMP s evening, winter peak. As residents convert their 60-Watt incandescent lamps to 10-Watt LEDs, AMP will benefit from a flatter load curve. As this is when AMP is most often purchasing power from the market, the new overall power mix is expected to be cleaner and have more consistent pricing. Based on this new information, staff returned to the Public Utilities Board (Board) in September 2014, to request approval, for two LEDs per service address. The request was approved by the Board. DISCUSSION In August 2014, staff issued a Request for Proposals (RFP) for the purchase and distribution of LED lamps to Alameda residential customers. The RFP was sent to multiple bidders and posted on the AMP website. The intent is for the Program Administrator (PA) to source the LEDs and distribute the LEDs to every residential service address. The PA will implement and manage the program and any required subcontractors on behalf of AMP. This program will deliver, via the United States Postal Service, two 10-Watt, 800 lumen (60- Watt replacement), Energy Star-labeled A-lamp LEDs to every AMP residential customer. The LEDs will be packaged in a box that is customized to include AMP s logo and information about the program, including the source of the funding for the LED distribution, helpful tips about how to select which lamps to replace with the LED, the Lighting Facts label, and warranty and contact information. The PA will manage warranty and lamp issues and maintain a web and phone presence for customer inquiries. AMP will design the product packaging and marketing materials to ensure consistent communications that are aligned with AMP s branding. The PA will handle logistics to ensure the project remains on time, with delivery prior to March 1, The PA will also manage post-delivery support, such as warranty and product breakage issues. AMP staff will have

3 AGENDA ITEM NO.: 5.B.3 MEETING DATE: 10/20/2014 ADMINISTRATIVE REPORT NO.: overall management of the program and day-to-day oversight to ensure compliance with the scope of work and a high level of customer satisfaction. Residential customers will be encouraged to replace 60-Watt incandescent lamps with LEDs in frequently used locations, such as an exterior lamp that is on all night. In doing so, they will realize approximately 200kW of savings per lamp per year. Customers who replace a 13- to 15- Watt CFL with this 10-Watt LED will still save electricity and will also benefit from the superior light quality of an LED compared to a CFL. An LED s lifetime is 25,000 hours, which is four times longer than a CFL and 25 times longer than an incandescent lamp. Residential electricity use represents approximately 5 percent of city-wide GHG emissions, or a quarter of the total GHG associated with electricity. Encouraging residential customers to use LEDs will help Alameda realize a reduction in greenhouse gases, which is in line with the goals of the city s Local Action Plan for Climate Protection. Responses to the RFP were evaluated first by price, and then ability to meet all program requirements. Service Concepts meets all requirements at the lowest price among six bids. FINANCIAL IMPACT Funding for the LED Light Bulbs for Existing Alameda Residential Customers project will come from the sales AMP s RECs. LINKS TO BOARD POLICY AND OBJECTIVES Strategy 5: Strategy 6: Strategy 10: Continue to add value to the community through the General Fund Transfer and other means. Implement energy efficiency, renewable power, and customer service programs to increase customer satisfaction. Manage short-term and long-term power supply reliability and cost, while maintaining a loading order of efficiency and demand response, renewable energy resources, and clean and efficient fossil generation. EXHIBITS A. Resolution B. Service Concepts, LLC Agreement

4 CITY OF ALAMEDA ALAMEDA MUNICIPAL POWER RESOLUTION NO. AUTHORIZE THE GENERAL MANAGER TO AWARD A CONTRACT TO SERVCO LLC DBA SERVICE CONCEPTS FOR THE PURCHASE AND DISTRIBUTION OF TWO LED LAMPS TO EACH RESIDENTIAL SERVICE ADDRESS FOR AN AMOUNT NOT TO EXCEED $510,600 AND AUTHORIZE THE GENERAL MANAGER TO APPROVE A CONTINGENCY AMOUNT NOT TO EXCEED $100,000 FOR CHANGE ORDERS WHEREAS, the City of Alameda s Public Utilities Board (Board) approved a Renewable Energy Credits (REC) Sales Revenue Expenditures Plan, and three REC-funded projects for 2015 per Resolution No. 5042, the following is a list of the projects: and; Project 1: LED Streetlight Replacement Cobra Head and Shoe Box Project 2: Commercial Lighting Retrofit Rebate Program Project 3: LED Light Bulbs for Existing Alameda Residential Customers WHEREAS, a Request for Proposal (RFP) PS was issued to obtain bids from qualified vendors for a LED Light Bulbs for Existing Alameda Residential Customers project; and WHEREAS, Alameda Municipal Power received six bids bid on September 8, 2014 and Servco LLC dba Service Concepts submitted the lowest bid of $510,600; and WHEREAS, staff has carefully evaluated all proposals and found Servco LLC dba Service Concepts s proposal to be complete, responsive and acceptable; and WHEREAS, this project bid was $510,600 which, including a contingency amount of $100,000, is below the $800,000 approved budget. The project will deliver two 10-Watt, 800-lumen (60-Watt replacement), Energy Star-labeled A-lamp LEDs to AMP residential customers. The LEDs will be packaged in a box that is customized to include AMP s logo and information about the program, including the source of the funding for the LED promotion, helpful tips about how to select which lamps to replace with the LED, the Lighting Facts label, and warranty and contact information. Service Concepts will manage warranty and lamp issues and maintain a web and phone presence for customer inquiries; and NOW, THEREFORE, BE IT RESOLVED that the Public Utilities Board of the City of Alameda hereby authorizes the General Manager to enter into a Professional Services Agreement with Servco LLC dba Service Concepts for the purchase and distribution of two LED lamps to each residential service address for an amount not to exceed $510,600 and authorize the general manager to approve a contingency amount not to exceed $100,000 for change orders; and authorizes the General Manger to sign said contract. Approved as to Form /s/ By: Andrico Q. Penick Assistant City Attorney AGENDA ITEM NO.:5B MEETING DATE: 10/20/2014 EXHIBIT A Page 1 of 1

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