The program -- in partnership with the state's major utility companies -- will provide substantial energy and cost savings, reduce UC's greenhouse gas emissions, and help UC meet its sustainability goals. The partnership will provide an estimated $178 million to help fund energy efficiency projects for 2009-11, which are expected to reduce the university's annual utility costs by $36 million. Approval by the full board is expected Thursday.
"These efforts will significantly aid the University of California in improving its triple bottom line of minimizing energy consumption, reducing operating costs and preserving the environment," said Katherine N. Lapp, UC's executive vice president for business operations.
UC faces significant challenges as it seeks to meet dramatically increasing utility costs, maintain its facilities and implement its sustainability policy goals. As a system, UC's campuses report a combined purchased utilities deficit of $40 million.
"With energy costs expected to rise 8 percent annually over the next several years, this deficit is expected to increase. Improving the university's energy efficiency offers a significant opportunity to reduce energy usage and costs as well as greenhouse gas emissions," said Mike Bocchicchio, the UC system's associate vice president for facilities administration.
In late 2008, UC completed a Strategic Energy Plan for nine of its 10 campuses and four medical centers. (The facilities at the Merced campus and the new UCLA Medical Center were recently constructed consistent with prevailing university energy efficiency standards.) The plan identified opportunities for increasing energy efficiency across the system and prioritized the full array of projects and energy-efficiency initiatives available.
UC then shared a portfolio of potential projects with California electric utility companies to determine eligibility for their incentive programs. UC has been the beneficiary of prior, customized incentive grants distributed under the auspices of Statewide Energy Partnership programs since 2004.
Program benefits
• Cost savings: UC's purchased utility costs totaled $372 million in fiscal year 2007-08. The program is expected to reduce the university's annual utility cost by $36 million (in 2008 dollars).
• Energy savings: The program will save the UC system an estimated 187 million kilowatt-hours in electricity use -- 11 percent of the university's total systemwide use -- and 10.8 million therms in natural gas use, or 8 percent of total systemwide use.
• These savings are the equivalent of UC Berkeley's entire annual electricity consumption and the equivalent of all natural gas used at the UC Davis Medical Center's Sacramento campus. It is comparable to the electricity yearly used in 17,000 homes and the annual heating needs in 18,000 residences, according to PG&E figures.
• The savings will result from a campus- and medical center-selected project portfolio using parameters set by the Strategic Energy Plan. The portfolio includes 900 projects for 2009-11. Typical projects cover heating, ventilation and air-conditioning (HVAC) and control upgrades, motor replacements, variable speed drive installations, lighting system upgrades and replacements, and monitoring-based building recommissioning. Individual project costs range from $3,000 to $1.4 million, with an average cost of $275,000.
• Improved sustainability: The program will greatly advance UC's efforts to meet its sustainable practices policy goals to reduce energy consumption to 10 percent below 2000 levels by 2014 and greenhouse gas emissions from purchased utilities by more than 100,000 metric tons per year.
• Renewing facilities: Given the extremely limited funding available for capital renewal and deferred maintenance, the portfolio of energy projects includes, where possible, projects that will address both energy efficiency and capital renewal and deferred maintenance needs.
The utility companies partnering with UC include: Pacific Gas and Electric Co. (PG&E), San Diego Gas and Electric Co. (SDG&E), Southern California Edison, Southern California Gas Co., and the Los Angeles Department of Water and Power.
Total project costs for 2009-11 are estimated at $247.4 million, of which $61.4 million will be covered by utility incentive payments and $186 million by the university (including approximately $8 million from campus and auxiliary sources). The $178 million in external financing, through 15-year revenue bonds, will be made available to campuses to finance their energy projects.
For more information about sustainability programs at the University of California:
www.universityofcalifornia.edu/sustainability
For a copy of the UC Policy on Sustainable Practices: www.universityofcalifornia.edu/sustainability/documents/policy_sustain_prac.pdf
For a copy of UC's annual sustainability report for 2008: www.universityofcalifornia.edu/news/article/19451