Consideration and Approval of Contract:  An Energy Services Contract to NORESCO, LLC, in an amount not to exceed $188,000 and authorize the First Phase of Project Implementation.

1. Award an Energy Services Contract to NORESCO, LLC, in an amount not to exceed $188,000 and authorize the First Phase of Project Implementation; and
2. Authorize the City Manager to complete the necessary documents. 

On March 31, 2021, Procurement staff issued a solicitation for an Energy Services Contract ("ESCO") to begin an Investment Grade Audit to identify conservation measures and improvements that may be implemented to City facilities and other non-building opportunities. The ESCO will also develop an implementable plan for building electrification to transition the City from fossil fuels. The services identified in the ESCO will assist in the City’s commitment to carbon neutrality by 2030. The specific conservation measures will be determined through an Investment Grade Audit, which is a comprehensive energy audit, and will be followed by an energy, fuel, water, and wastewater performance based savings proposal through an Energy Efficiency Services Job Order Contract. 
 
The solicitation was open for six weeks, closing on May 19, 2021. Staff held a pre-bid meeting on April 15, 2021, to review the scope of the ESCO and answer questions of proposers. Five companies submitted proposals, which were reviewed by a committee made up of City staff, technical experts, and a representative from the Sustainability Commission. The two highest-ranking bidders were interviewed on July 7, 2021, and as a result of the interviews, NORESCO, LLC ("NORESCO") scored the highest review points.

The ESCO is a financial mechanism used to identify facility upgrades that may be paid for with energy savings without upfront capital. Upon completion of the Investment Grade Audit, NORESCO will submit a separate proposed Energy Efficiency Services Job Order Contract as Phase 2. This Energy Efficiency Services Job Order Contract will identify projects and updated equipment that would create energy savings, maintenance savings, and potential operational savings which are anticipated to be sufficient to cover 75 percent (75%) to 100 percent (100%) of all project and updated equipment costs.
 

Through the ESCO, NORESCO will conduct the Investment Grade Audit of City facilities and processes (e.g. water production and waste water treatment). The Investment Grade Audit will include the following technology categories:

1. Energy and water efficiency
2. Water meter replacements with automated metering infrastructure (AMI)
3. Fleet Conversion to Electric
4. Strategic Sourcing
5. Water and wastewater process improvements (preliminary assessment only)

There is a multi-phase approach:

• Phase 1: Conduct a detailed preliminary assessment of the energy and water efficiency, water meter replacements with automated metering infrastructure (AMI), fleet conversion to electric, strategic sourcing opportunities, and water and wastewater process improvements.
• Phase 2: The detailed development of a water and wastewater process improvements, under a separate potential Energy Efficiency Services Job Order Contract.

Sustainability staff has identified the following priority assessments for the Investment Grade Audit:

• City Hall Boiler Replacement
• Main Library Boiler Replacement
• Main Library Window Replacement
• Aquaplex Center Boiler Replacement

Upon completion of the Investment Grade Audit, NORESCO will submit a report and a proposed Energy Efficiency Services Job Order Contract that will identify projects and updated equipment for energy conservation measures. An Energy Efficiency Services Job Order Contract would come before City Council at a future date. While there is no upfront capital necessary to assess the energy conservation measures, the City will be required to pay NORESCO an amount not to exceed $188,000 for the Investment Grade Audit if there is no resulting Energy Efficiency Services Job Order Contract.

There is no financial impact for this item in FY 2021-2022.  The financial impact of this item will be re-evaluated during the FY 2022-2023 budget process. 

N/A

Priority Based Budget Key Community Priorities and Objectives
Regional Plan

On March 31, 2021, Procurement staff posted a formal Request for Proposals ("RFP") for an Energy Service Contract on the City's PlanetBids electronic bidding platform, and advertised on April 4 and April 11, 2021, in the Arizona Daily Sun. On May 21, 2021, when the RFP closed, the City had received five responses. An eight-person evaluation committee was formed consisting of five City staff and three non-City Staff professionals. Upon completion of the evaluation process, two contractors were short-listed for further discussions with the evaluation group. After discussions and evaluations scores were compiled and NORESCO was deemed most qualified to perform the work and staff is requesting approval of award.

Contractor                    Proposal Evaluation       Short List Discussion            Totals
Ameresco                     579                               -
McKinstry                     604                               -
Midstate                       602                               -
NORESCO                   618                               657                               1275
Schneider Electric         622                               606                               1228