City Energy Challenge

 

The City Energy Challenge was initiated by the City of Portland in 1991 to cut the annual energy bill in city-owned facilities by more than 10% over five years. The city worked to meet its target of reducing an $8.8 million energy bill by $1 million annually through efficiency and conservation measures. In June 1996, savings topped $1 million a year by providing free audits, providing technical and design assistance, arranging energy loans, publicizing success stories and educating city employees. A new goal -- $1.5 million in annual savings -- has been set for 2001.

Although program advocates knew that implementing the City Energy Challenge would ultimately save the city money, an initial investment was needed before any savings could be realized. Raising these funds proved to be a significant challenge as the Energy Challenge initiative was being designed at a time when police and fire services were facing budget cuts. An innovative approach, dubbed "One Percent for Energy," solved the problem. By assessing eight bureaus one percent of their energy bill the Energy Office raised $70,000 a year for the program without requiring direct support from the city's general fund. In return, contributing bureaus realized energy savings through Energy Challenge services that helped them become more energy efficient. Funding for specific infrastructural projects was financed in part through a piggy back loan of $777,000 that was attached to a scheduled debt sale.

The significant energy savings realized by the City Energy Challenge have also provided significant environmental benefits. Savings within the initiative are predominantly electric, with electric power in the region generated by coal-burning power plants and hydroelectric dams on northwest rivers. By reducing the demand for coal, extractive pit-mining activities and air emissions have been lessened, and a reduction in ash and other combustion residue have been realized. Additionally, curtailed demand for hydroelectric power means less pressure is being put on dwindling salmon habitat.

Program Highlights

Program Objectives

• An Annual Energy Use Report was created to track more than 830 utility and transportation fuel accounts, which totaled more than $8.8 million annually.
• Sufficient staff were hired to enable the City Energy Challenge program to succeed. This objective was achieved through the innovative "One Percent for Energy" initiative.
• Energy Challenge staff provide energy efficiency services and products:
 
• Each city bureau undergoes an energy audit to identify opportunities for increased efficiency and conservation.
• Energy Challenge staff assist bureaus in choosing quality energy products, in preparing bids and in selecting contractors.
• Energy Challenge staff provide access to energy- and environmental-related training.
• Each bureau receives the Annual Energy Use Report.
• Energy saving projects have been adequately funded through a low-interest (3.8%) loan of $777,000. This loan funds 46 projects saving $134,000 year.

• Engineering studies analyze facility energy use including heating, cooling, lighting, water heating, motor loads, and any special process functions. The studies specify cost-effective energy-efficiency measures, including their estimated cost and savings.
• City bureaus may finance energy upgrades through loans from the City's Office of Finance and Administration, through the Small Scale Energy Loan Program (SELP) from the Oregon Department of Energy, through capital improvement funds and through funding programs offered by Portland General Electric (PGE) and Pacific Power and Light (PP&L).
• Design assistance is provided by PGE's "Energy Smart Design" and PP&L's "Energy FinAnswer" programs.
• Lighting efficiency studies are made available through the Environmental Protection Agency's (EPA) "Green Lights" program.

• A creative "green power" purchase agreement negotiated between the City of Portland and Portland General Electric (PGE) in 1995 ensures that over the next five years a minimum of 5% of power supplied by PGE will be from wind power.
• These "green electrons" will provide about 2.25 million kilowatt hours (kwh) a year, and will result in net savings of $175,000 annually.
• By reducing demand for coal and hydroelectric power, the Green Power purchase will reduce carbon dioxide (CO2) emissions by more than 4,500 metric tons over five years, and will reduce the pressure on the Northwest's hydro system and endangered salmon runs.

• Utility dollars are traditionally exported from the local economy when utility bills are paid. The dollars from conserved energy, in contrast, can be spent locally. Through the $2.6 million in capital spent to install energy saving equipment, an estimated 100 jobs have been supported during the first three years of the program's operation.
• In the first three years, the program identified a total of $865,469 in potential annual energy savings throughout 70 city facilities. 
• Investments in energy efficiency during the first three years cost $2.6 million, but yielded an impressive internal rate of return averaging 25.7% for a simple payback in only 3.8 years.

Vital Statistics

Program Management/Partnerships: The City Energy Challenge is run by the City of Portland's Energy Office in partnership with eight city bureaus, the Department of Energy's "Smart Cities" program, the Oregon Department of Energy, Portland General Electric, Pacific Power and Light, and the Environmental Protection Agency's Green Lights Program.

Budget: Total capital costs for the life of the project are estimated at $5 million generating an annual savings of $1 million. Total payback period is estimated at 5 years.

Community Served: Residents and businesses in the Portland area who benefit from reduced costs for city services, cleaner air and healthier rivers.

Measures of Success:

More than $1 million in annual energy savings have been realized.

68,260 million BTUs (British thermal units) are saved every year.

Through the Green Power purchase program negotiated with PGE, for the next five years a minimum of 5% of power supplied by PGE will be from wind power.

Wind power's "green electrons" will deliver about 2.25 million kilowatt hours (kwh) a year, and will result in net savings of $175,000 annually.

By reducing demand for coal and hydroelectric power, the Green Power purchase will reduce carbon dioxide (CO2) emissions by more than 4,500 metric tons over five years through reduced demand for coal.

Energy savings from the program has reduced pressure on the Northwest's hydro system and endangered salmon runs.