It seems about time to put a value on energy efficiency, monetizing the difference it makes. Well, that is what’s happening in a Seattle pilot program with the Bullitt Center, which bills itself as the most energy efficient building in the world.
Seattle City Light, the city’s electric utility, is preparing a contract to purchase the metered electricity from the Bullitt Center’s efficiency — or the energy the building would have consumed had it been built to the city’s prevailing energy code.
The first-of-its-kind pilot uses a financing structure similar to a power purchase agreement for solar or traditional forms of electricity.
To measure it, Portland, Ore.-based Energy RM has developed a DeltaMeter to measure energy savings from the highly efficient Bullitt Center. The DeltaMeter monitors and compares energy use of the Bullitt Center to what the building would have consumed had it been built to Seattle’s prevailing energy code.
If successful, the pilot could help incentivize a dramatic boost in efficiency from commercial buildings. In 2014, commercial and residential buildings accounted for 41 percent of total U.S. consumption, according to the U.S. Energy Industry Association.
This approach could put “efficiency on a level playing field with investments with other energy supplies,” said Jeanne Clinton, California Public Utilities Commission special advisor for energy efficiency. The model “offers tremendous opportunities as one of several approaches that could be used to try to double our pace of [energy] savings.”
Developers in April completed the baseline metric which will be used to compare the Bullitt Center’s efficiency performance against buildings built to Seattle’s current energy code. Equilibrium Capital Group co-developed the financing structure; a 20-year power purchase agreement for the Bullitt Center to purchase efficiency savings from Seattle City Light.
Along with the baseline, the key to the approach is the DeltaMeter, which will use the baseline to measure and sell the energy savings from efficiency installed in the Bullitt Center back to Seattle City Light in a 20-year power purchase agreement. The utility, in turn, sells the energy savings back to tenants, based on their energy consumption.
“Effectively, what the utility is doing is supplying the building’s existing energy requirements with efficiency instead of with the electrons that are used to generate the nuclear power plant 100 miles away,” said Bill Campbell, a principal at Equilibrium Capital.
From a utility’s perspective, this transaction is no different from if the building put a solar panel on the roof and the utility bought the energy from the solar panel, then sold the energy back to the building, Campbell said. Equilibrium Capital co-developed the financing structure for the contract between Seattle City Light and the Bullitt Center.
The pilot will run for roughly three years, after which Seattle City Light and the Bullitt Center, with the option to continue, depending on the pilot’s performance, said Craig Smith, director of the conservation resources division for the utility.
With the baseline model set on the Bullitt Center’s energy use, Seattle City Light is set to start the billing and measurement components of the pilot this month, Smith said.
When the three-year pilot ends, the utility and Bullitt Center owners will have the option to continue for the contract’s 20-year term, or modify or terminate the agreement, Smith said.
“We already know the building is operating very efficiently,” Smith said.
“How well the business arrangement works, what kind of things we have to prove out (in) operation of the DeltaMeter, the whole construct of billing combined with a power purchase agreement and have those things work together effectively in a way that’s scalable, those things take some time to work through when you want to look at how do we replicate and scale,” Smith said.
On its website, the Bullitt Center is described as the greenest commercial building in the world. The building features windows that maximize daylight, shades that help regulate interior temperatures and low-flow, composting toilets. On the rooftop of the “zero net energy” building is a 575-panel solar array.
Meanwhile, in California, some utility customers have questioned the accuracy of smart meters that measure use and efficiency that’ve been installed in recent years.
Clinton of the CPUC said most customer pushback in the state has not come from owners and occupants of commercial buildings. For his part, Campbell said that smart meters give a more accurate read of energy consumption, in some cases leading to higher and more accurate bills.
Seattle City Light’s innovative efficiency pilot got underway just as Congress approved on April 21 a long-simmering bill to boost efficiency of commercial and residential and federal buildings, according to the New York Times.
The measure, sponsored by Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio), would strengthen national efficiency building codes, kickstart private sector investment in building efficiency improvements and require the federal government to boost efficiency in federal buildings, among other provisions.