Energy Efficiency for Institutions and Governments
Additionally, as MUSH organizations are often local governments or other public service entities, they are more likely than decision-makers in other sectors to have goals beyond mere financial gain, such as jobs creation or environmental protection. As a result, they are poised to create high-quality jobs that benefit local communities and pursue deeper retrofits, rather than cherry-picking the upgrades that are most profitable.
While there are several barriers to energy efficiency that may deter cities from pursuing improvements, such as the upfront cost or lack of political will, none of these is insurmountable—a range of different financing options exist to make funding for energy efficiency in MUSH both feasible and sustainable. Governments may be able to pay for energy efficiency retrofits through bonding, particularly when it comes to larger projects. Another method is to employ an energy services company, or ESCO, to do the work with a guaranteed level of cost savings and pay for the project over time with those savings. This mitigates the issue of up-front cost, and ties the ESCO’s compensation to its performance. While the ESCO contract process can itself pose difficulties, MUSH groups can employ a consultant called an owner’s agent to negotiate on their behalf, even working the agent’s fees into the overall funding package. Because ESCOs are still for-profit companies with an incentive to pursue retrofits that have short payback times, however, it is advisable that municipalities employ them only when necessary and manage the project themselves if possible.
In addition to improving efficiency and generating substantial savings, pursuing energy efficiency in the MUSH sector provides the opportunity for significant high-road job creation that can benefit low-income communities. Because MUSH groups are generally striving to act in the public’s interest, they are uniquely situated to provide for high-quality, green jobs on their energy efficiency projects across a range of different occupations and building trades. An essential component of high-roads job creation in this sector is the Community Workforce Agreement (CWA), which can be used to establish strong wage, safety and training standards to enforce job quality. In order to ensure access to these jobs for low-income communities, municipalities can give preference to minority and women-owned firms, or enact targeted or local-hire ordinances that instruct firms to employ workers from specific groups. High-road jobs created through these means must also create pathways to career advancement, often through registered joint apprenticeship programs. With a range of tools for financing and high-road job creation within reach, energy efficiency in the MUSH sector has the potential to bring about large-scale benefits so long as groups have the will to pursue it.
Jobs Idea #6 Retrofitting Institutions, James Irwin, Satya Rhodes-Conway, Sarah White, and Joel Rogers, Center on Wisconsin Strategy, January 1st, 2012. Read more.
Energy Savings Performance Contracting, U.S. Department of Energy, May 23rd, 2011. Read more.
Making M.U.S.H. Energy Efficient: Energy Efficiency in the Governmental and Institutional Sector, James Irwin, Satya Rhodes-Conway, Sarah L. White, Joel Rogers, COWS, January 1st, 2011. Read more.
Community Workforce Agreements: The Pathway to Coalitions Between Labor and Community, Emerald Cities Planning Committee of the Building and Construction Trades Department (AFL-CIO) , March 26th, 2010. Read more.
A Short Guide to Setting Up a City-Scale Retrofit Program, Stacy Ho and Satya Rhodes-Conway, Green For All & COWS, June 1st, 2009. Read more.
Local Technical Assistance Toolkit: Lead by Example, American Council for an Energy-Efficient Economy. Read more.
The City of Ann Arbor has been financing energy projects for almost two decades through the City’s Municipal Energy Fund, which was founded in 1998 as a self-sustaining source for energy-efficiency upgrades to city facilities. Using the City’s bonding authority as an initial funding source, the fund re-invests savings from energy efficiency measures into new programs.
The City of Portland’s Clean Energy Works Program, while focused on facilitating energy efficiency in the city’s residential sector, nevertheless sets a strong example for high-road jobs creation using the same means available to other sectors. The City created a Community Workforce Agreement that set local hire, targeted hire, wage floor and educational requirements to expand opportunities for low-income communities through the program.
In 2009, the City of Los Angeles created its Green Retrofit and Workforce Program to retrofit all city buildings that meet certain age and size prerequisites using project labor agreements, local hire provisions, apprenticeship programs and green training programs. The program also aims to promote economic development in low-income communities by supporting small and disadvantaged green businesses.
In 2008, the City of Reno contracted with energy services company Amaresco to conduct an audit of energy use at city facilities as part of the City’s Energy Efficiency & Renewable Energy Initiative. Amaresco implemented a series of upgrades and retrofits to buildings, using local labor, vendors and subcontractors. The full Initiative yielded the city $1,587,038 in savings in FY 2014.
Learn more about strategies to improve energy efficiency in the public sector in COWS' Creating Jobs, Reducing Waste and Saving Money in Government Buildings.