Sonoma County, CA

Economic Assessment of Potential Efficiency Financing Program
In 2012, the Sonoma County Water Agency launched the Sonoma County Efficiency Financing (SCEF) program to finance energy and water-use efficiency retrofits for public and non-profit facilities. The SCEF program seeks to offer participating organizations substantial utility cost savings, including a contractual dollar savings guarantee to cover the full cost of all retrofit work. Under the SCEF Program, participating organizations contract with an Energy Service Company to complete energy and water conservation measures. Improvements can include street lighting, building lighting, system controls, water pumps, HVAC systems, boilers, chillers, and others. The program intends to use tax-exempt bonds to finance the projects.

In 2013, nine organizations underwent no-cost preliminary audits to assess potential projects. To date, no efficiency retrofit project contracts have been executed, primarily due to participants' hesitancy to move forward based on unfamiliarity with the program approach and competing funding mechanisms that offer grant (not just loan) funding, such as Proposition 39 - the California Clean Energy Jobs Act.

Can aggregating energy and water-use efficiency projects overcome the common obstacles to investments in efficiency retrofit projects?

The analysis performed by Applied Solutions Chief Economist, Jim Barrett, Ph.D, concludes that the ongoing impact of the energy investments would save $30 million (nearly twice the cost of performing and financing the upgrades) and create 214 jobs during the construction phase. This outcome should not be surprising given that the intent of the program is to design a financing and implementation model that produces positive net savings in every year of the project. If undertaken, the program would help local governments unlock efficiency investments, saving taxpayer money and creating local jobs while reducing pollution and water demands.