By Joshua Burnett
Nancy Ander
Deputy Director of the DGS Office of Sustainability
In 2017, the California Department of General Services (DGS) created the Office of Sustainability (OS), some of whose functions were previously housed within other DGS divisions. Consolidating the work under a single team and establishing dedicated resources and leadership emphasized the priority DGS places on addressing the increasing risks of climate change. The functions within OS were not just supported in the statute under Public Utilities Code 388 but also supported by a clear policy direction from DGS’ executive leadership to reduce carbon emissions in state facilities. Nancy Ander, Deputy Director of the DGS OS, explains why this work is so crucial: “We are taking the threat of global climate change very seriously and it is important that the state provide leadership with our own infrastructure to both mitigate climate change and implement adaptation measures to address physical risks. Energy efficiency remains the critical and most cost-efficient first step to reducing our energy use and our emissions.”
The OS supports state agencies in a portfolio of sustainability initiatives, providing leadership in both statewide sustainability policy as well as in specific operational programs. Recent operational focus areas have included renewable- clean energy generation (such as solar and wind power), energy retrofits in existing facilities, and implementation of electric vehicle charging infrastructure to support both our state fleet and workplace charging. On the policy side, the OS has established a policy for zero net energy (ZNE) buildings and is looking forward to developing a zero net carbon policy to support the statewide goal of carbon neutrality by 2045. Ander states, “Sustainability is a priority strategic direction at DGS and involves not just our office, but many other DGS divisions.”
THE ESCO PROCESS OUTLINED
Valerie Keisler
DGS Office of Sustainability Program Manager
One of the core functions of the OS is the Energy Service Company (ESCO) program, led by Program Manager Valerie Keisler. At any given time, the Office of Sustainability is managing between 12 and 20 open energy savings performance contracting (ESPC) projects from inception to completion. OS’ program is modeled after the U.S. Department of Ener- gy’s federal ESPC process and uses similar terminology, procedures, and a prequalified pool of ESCOs.
Keisler’s team identifies which ESCO projects to pursue by following a standard process, which begins with a preliminary audit. At this stage, the team identifies an ESCO through a competitive process, then performs a site audit and cost approximation. All efforts at this point are purely preliminary, and no financial obligations are made.
If an ESCO is approved to move to the next stage, the ESCO performs an investment grade audit (IGA). This is a robust, comprehensive effort to develop specific project energy efficiency measures (EEMs) and outline specific costs more fully. When an ESCO moves into the IGA phase, a financial obligation is incurred because of the thorough nature of the audit. Although a monetary commitment exists, it does not guarantee that the ESCO will move to approval: the IGA numbers need to align with the initial estimates developed during the preliminary audit. If deviations are proposed, the ESCO will provide a written justification.
Once an ESCO is approved, a formal kickoff meeting is held where the project director outlines his or her objectives, timeline, budget, and other critical specifications. This individual will manage the ESCO project from start to finish. After all the work has been completed, the OS team engages in a measurement and verification (M&V) process with the ESCO to verify the estimated savings, then closes out the project after a final site inspection. Since 2017, numerous successful projects in energy efficiency, renewables and electric vehicle infrastructure have led to increased budget and staffing, and the OS is now made up of 25 people, including engineers, project managers, and construction analysts.
EFFECTIVE COMMUNICATION IS CRUCIAL TO A SUCCESSFUL PROJECT
The OS oversees and supports energy retrofits in state-owned buildings, but this effort includes a very extensive team beyond OS. It is particularly critical to coordinate with
the facility management team from the outset. This can involve everyone from leadership at headquarters to the actual site team, including the building manager and building- engineer. The headquarters leadership will have the responsibility over project priorities and budgets, while the site team has the greatest insights into actual operational issues and needs. The OS team takes the lead in overseeing the ESCO team and developing potential solutions that are cost-effective and beneficial to the state over the project’s life cycle.
Because this can involve extensive coordination with the entire facility management team, effective internal communication is critical, not only for immediate project execution but also for long-term sustainability. “We make sure that we’re not doing a project in isolation and then handing it over to those responsible for operating and maintaining the building,” Ander says. “We bring in the building manager and the building engineer at the outset to help us identify critical building measures for integration into our ESCO’s scope.”
THE CALIFORNIA HIGHWAY PATROL WINS BIG WITH A SIMPLE PROJECT
One of the most memorable projects Ander and Keisler have overseen to date was a comprehensive LED lighting retrofit across multiple California Highway Patrol (CHP) Academy buildings, which was awarded to Enovity in 2015. The project’s scale was significant and involved renovating training rooms, cooking facilities, dormitory spaces, large storage areas, and service garages for fleet vehicles. Despite its broad scope, the DGS OS was able to meet project objectives within budget constraints. “One of the things we really liked about this project was that it was budget-neutral,” Keisler stated. “We leveraged our state financing program, GS $mart, and were able to accomplish it without any added out-of-pocket expenses from the client department. Although this isn’t always the case, when we can facilitate this, it means a lot to departments that don’t have extra cash.”
The project was completed in textbook fashion. It started and ended on time, and the ESCO process worked flawlessly. The cost savings were immediate, allowing the CHP Academy to reduce its annual energy use by nearly a million kilowatt-hours.
THE ELIHU HARRIS BUILDING RETROFIT
One of the most complicated projects the OS team is currently undertaking is a sophisticated, multi-system upgrade to the 24-story Elihu Harris Building. Project renovations include interior and exterior LED lighting and controls, air duct sealing, and a comprehensive building management system, for a total estimated savings of $717,000 annually. Willdan Group, Inc. was awarded the $9.8 million energy savings performance contract in January 2019, with construction expected to be completed in the third quarter of 2020. The OS team works hand-in-hand with Willdan, scheduling biweekly meetings to discuss projects and updates, and the project manager then passes construction updates through the building manager to each tenant. A rolling three-week “look ahead” schedule is continuously maintained, allowing tenants to plan for any potential work disruptions.
The project has high stakes for reasons beyond just energy conservation. “This project requires a high level of coordination because it’s a multi-tenant building, and all tenants are vital to California’s government operations,” said Keisler. “We don’t want to disrupt client operations.” These departments include the Franchise Tax Board, Department of Justice, Social Services, and the State Senate, among many others.
Despite high visibility and consistent pressure, the DGS OS has consistently made the grade. In just three and a half years, the office has transformed from a newly commissioned unit to a well-staffed, high-performing, results-driven team. With nine projects currently in either construction or M&V phase, DGS OS looks forward to many more complex, large-scale projects in years to come.
