Fairfax County Chair’s Private Sector Energy Task Force

Supporting Information

For

Recommendations

To the

Board of Supervisors

Plugging Into the Future

“What’s the use of curing cancer if we destroy the planet?”J. Craig Venter

June 28, 2012

Index

Background...... …………………………………………………………………1

Summary...... 2

Buildings...... 2

New v Existing Buildings...... 3

Transportation...... 3

Section 1: Commercial and Residential Buildings...... 5

New v Existing Buildings...... 5

County Government Activity, Including the School System...... 6

Technology...... 7

Building Operation...... 8

District Energy...... 8

Integration of Technologies for 21st Century Buildings...... 9

Education and Human Behavior...... 11

Conservation v Sustainable Energy...... 13

Gas and Electric Utilities, Telecoms...... 14

Market Demand, Financial Incentives, and Return on Investment...... 14

Energy Aligned Lease...... 15

Challenge Grants...... 15

Business Improvement Districts (BIDs)...... 16

Other Existing Programs...... 16

Section 2: Transportation...... 19

Land Use Patterns...... 19

Fairfax County Projected Growth...... 20

Bicycles...... 22

County Residents Will Make Their Choices Based on Cost and Convenience...... 22

Highway and Transit Development...... 22

Telecommuting...... 23

Congestion Related Realities...... 23

Vehicle Technology...... 24

Renewable Transportation Fuel...... 25

Conclusion and Proposed Transportation Action...... 25

Recommendations...... 26

Consider Incentives...... 27

Innovation...... 27

Section 3: Goals...... 28

Background

The County’s quest for energy efficiency evolved from its programs to reduce emissions from County facilities and vehicles, and evolved into energy efficiency initiatives aimed at cutting government costs. For example, the County school system since 2005 has increased building space by 815,000 sq. ft., enrolled an additional 10,880 students, while holding its energy consumption flat through a 6% improvement in energy efficiency. The County and its school system have saved nearly $40 million in energy costs from these initiatives.

In 2007, Fairfax County led the creation of the nationwide “Cool Counties” initiative, in which localities adopted a goal of reducing energy consumption per capita by 2% per annum – cumulatively a 49% reduction by 2040.

With a population of more than 1 million inhabitants, County government approaches new initiatives by seeking advice from the County’s business and civic leadership. In January 2011, the County Chair formed a Private Sector Energy Task Force (ETF) charged with:

“Identifying opportunities to develop a transformational vision, supported by achievable strategies that will define the steps our community can take to position itself as a leader in the area of energy efficiency, sustainability, and “green” technology”.

ETF members first sought to educate themselves with briefings from nationally-recognized experts and discussion during meetings held at roughly monthly intervals from February 2011 through June 2012. This report is based upon the fact finding to date, supports the recommendations made to the Board of Supervisors,and recommends the direction for continuing work bythe County’s proposed Public/Private sector Partnership (EP3).

Notes on each meeting and the presentations received can be seen on the Fairfax ETF web site

The report is presented in three sections:

1)Commercial and residential buildings, together with their energy sources

2)Transportation

3)Goals

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Summary

Goals

The County already has set several very challenging goals for improved energy efficiency, but there appears to be no realistic plans in place to meet these goals.

In 2006, Fairfax County produced 12 tons of CO2 per capita. With the Cool Counties 2% per annum goal in place (49% reduction by 2040), a zero emissions goal for Tysons by 2030 and the establishment of individual goals for individual localities within the County, it would seem entirely feasible to see the County’s CO2 emissionsreduced from 12 tons to around 3 tons per capita by 2040. To achieve this, however, will require:

a)Creation of practical plans that can be implemented to meet these goals over the next 30 years;

b)Sustained public will to meet the goals.

The City of Chicago is one of a number of cities that has developed a sophisticated energy model for its downtown area in order to provide a tool to:

a)Assist in the evolution of practical plans;

b)Assess the impact against the plan of proposed changes, whether to policy or individual buildings.

A similar tool is needed by Fairfax County. Participation in the Department of Energy Challenge by the County could assist with the creation of the required model.

Buildings

Residential property accounted for 29.3% of Fairfax County energy consumption per capita in 2006; commercial property accounted for 29%[1]. Any plan to increase energy efficiency by reducing consumption per capita must focus on residential as well as commercial property.

TheBuilding Section makes recommendations for further work by the proposed Public/Private sector Partnership (EP3) and summarizes ETFfindings with respect to:

  • Commercial and residential buildings
  • County government, including the school system
  • Technology
  • Building operations
  • District energy
  • 21st century buildings
  • Human behavior and the role of educational programs
  • Conservation v sustainable energy
  • Gas and electric utilities, telecoms, etc.
  • Market demand, financial incentives, and return on investment

New v Existing Buildings

Fairfax County typically adds 2% of its building inventory each year. If the County continues to add new construction at the rate of 2% per annum, by 2040, more than 40% of the building inventory will have been constructed since 2010, i.e. in the era of energy efficient buildings. New construction offers the greatest potential for energy savings on a per unit basis, and should be given equal priority with programs to improve the energy efficiency of property built before 2010. Buildings constructed before 2000 probably have greater potential for energy savings in the short-term, as their heating and cooling systems may be nearing replacement, and their design predates energy efficiency concerns.

Programs designed to stimulate energy efficiency improvements in old structures will be different to programs required to stimulate energy efficiency in new construction. The guiding principles, however, remain common to both.

Transportation

Transportation accounted for 36%[2] of the energy consumed within Fairfax County in 2006. Reductions in this consumption will be predicated upon changes in:

  • Land use patterns;
  • Highway and transit developments;
  • Vehicle technology;
  • Use of renewable fuels to replace fossil fuels;
  • Some reduction in motorized trips.

Transportation is regional, and thus particularly sensitive to regional policies. However, in 2040, 77.5% of Fairfax County auto trips are expected to be internal to the County, and only 22.5% truly regional in nature[3]. Therefore, Fairfax County can have a major impact on transportation improvements to reduce energy consumption.

Between 2010 and 2040, a 34% increase in jobs, a 21% increase in population, and a 25% increase in households are projected for Fairfax County by the Metropolitan Washington Council of Governments (MWCOG).[4] The County is moving toward Transit Oriented Development (TOD) to accommodate much of this growth. County-wide, today nearly 5% of residents live within walking distance of Metrorail stops, including the Silver Line now under construction, or VRE railstops, i.e. live within one-half mile of a station, a figure expected to increase to 7.5%[5] by 2040.

Conventional rail transit is expensive to construct[6] and is only possible when right-of-way has been preserved. Over the next 10 to 20 years, most transit systems launched within the County or regionally likely will be road based. This will include Bus Rapid Transit (BRT), trolley, and conventional bus services. Consequently, most, if not all future transit within the County, will be affected by highway congestion[7] for significant portions of the rider’s journey.

Due to the need for transit to use highways and the need for most trips in the County to continue to use individual vehicles, a highway improvement program to eliminate, or at least drastically reduce congestion, provides the County with the largest opportunity for transportation energy reduction in the short and medium-term.

The economic, environmental and societal case for eliminating highway congestion in all but dense urban areas is compelling, as the cost of highway congestion is higher than the cost of the cure for households, as well as businesses and governments. Reducing highway energy consumption thus should be a rallying cry for pro and anti-highway interests.

Within Fairfax County, an estimated 38 gallons[8] of fuel per capita were wasted in 2004 due to highway congestion, according to regional data published by the Texas Transportation Institute (TTI), the nation’s leading authority on the subject, i.e. $133 per man, woman, and child; $532 a year for the average family of four with fuel costing $3.50 per gallon.

Police activity generates approximately 20% of current highway congestion. Best practices for highway policing and safety elsewhere should be studied and the information applied to regional roads. Germany is a good starting point.

Section 1

Commercial and Residential Buildings

Residential property accounted for 29.3% of Fairfax County energy consumption per capita in 2006; commercial property accounted for 29%[9]. Any plan to increase energy efficiency by reducing consumption per capita must focus on residential as well as commercial property.

New v Existing Buildings

Fairfax County typically adds 2% of its building inventory each year, so in any given year, 98% of the inventory already exists. The existing building inventory thus offers way and above the largest potential return in terms of energy savings, particularly in the near-term.

However, if the county adds new construction at the rate of 2% per annum, by 2040, more than 40% of the building inventory will have been constructed since 2010, i.e. in the era of energy efficient buildings. New construction offers the greatest potential for energy savings on a per unit basis, and should be given equal priority with programs to improve the energy efficiency of property built before 2010. Buildings constructed before 2000 probably have greater potential for energy savings in the short-term, as their heating and cooling systems may be nearing replacement, and their design predates energy efficiency concerns.

Programs designed to stimulate energy efficiency improvements in old structures will be different to programs required to stimulate energy efficiency in new construction,i.e. post 2012. The guiding principles – incentive plus education –however, remain common to both.

Source: Davis, Carter, Scott, Ltd.Based on 2% per annum new construction

For Tysons Corner, the Fairfax County plan requires that:

  • “Prior to 2013, all new buildings (in Tysons) shall achieve Leadership in Energy and Environmental Design (LEED) Basic Certification or equivalent.”[10]
  • “All buildings approved in 2013 or thereafter shall be certified to at least LEED Silver or equivalent.”
  • “The goal is for Tysons to become carbon neutral by 2030.” However, no plan to meet this challenging goal currently exists.

The building challenge in Virginia’s heavily-regulated, relatively low cost energy environment is to:

1)Demonstrate the cost effectiveness ofenvironmental and economic benefits of energy efficient technologies to both commercial property owners and homeowners.

2)Educate citizens and small business owners about the environmental and economic benefits of clean and efficient energy usage. Create energy “literacy” so that residents can clearly evaluate energy choices.

3)Expand and publicize the existing list of financial incentives for energy saving initiatives.

4)Identify, and ideally eliminate, procedural barriers to clean and efficient energy useat all levels of county, state, and possibly federal process.

5)Bring the public and private sectors together to generate action.

As a subset of the ETF, a Process Committeewas formed under the leadership of Art Walsh, Managing Shareholder, Walsh ColoucciLubeleyEmrich & Walsh, P.C.,to bring the development sector together with ETF members to seek guidance regarding the incentives that could be created and the procedural initiatives that the County could take to inspire building energy improvements.

County Government Activity, Including the School System

County properties and services account for 3% of Fairfax County’s total energy consumption.[11]

The County’s Facilities Management Department launched an energy initiatives nearly 10 years ago aimed at cutting emissions as well as government costs. The average 1% annual reduction achieved since 2001by County governmenthas resulted in a cost saving of $7million to date. The government Center’s lighting, heating and air conditioning retrofit project is saving almost 10%, or $100,000 a year. The County’s policy is to invest where there is a payback within a reasonable amount of time, so that the projects pay for themselves.

The County’s extensive school system is a key part of its energy efficiency program. Since 2005, school building space has increased by 815,000 sq. ft., 10,880 additional students have been enrolled, but total energy consumption has remained flat, and overall energy efficiency has been improved by 6%. Overall, the school system reports a savings of approximately $30 million in energy use from its initiatives.

In 2007, Fairfax County led the creation of the nationwide “Cool Counties”[12] initiative, in which localities adopt a goal of a 2% per annum reduction in energy consumption, and thus greenhouse gas production. Compounded annually, 2% is an extremely aggressive goal whose achievement would equate to a 49% reduction in energy consumption per capita by 2040, compared to the 2007 base year.

Today, the County is engaged in a broad array of energy efficiency projects, ranging from the recovery and use of methane gas from landfills, to LED parking lot lighting. More information can be found at

The County should continue to lead by example and should be encouraged to leverage this example with the private sector as well as state government.

Technology

Sustainable energy technology, such as solar cells, is approaching cost effectiveness in the Virginia environment, while savings from on-demandwater heating systems, water conservation, and new lighting systems can repay the investment in their installation in as little as 1.5 years.

Advanced Metering Infrastructure(AMI) is an enabling technology that is being used to better manage constrained generation and transmission grid resources, introduce new generation sources, including renewable and distributed energy supplies, and help customers manage their energy use. This technology also can be leveraged to promote efficient natural gas operations.

AMI currently is undergoing pilot programs in three areas of Virginia. There is a need to:

a)Support wide scale application of AMI, particularly in Fairfax County, with the State Corporation Commission (SCC).

b)Encourage the building industry to design for AMI.

c)Encourage smart metering applications for natural gas and water customers.

“Shaving the peak” (see Conservation v Sustainable Energy) provides the electric utilities with a major incentive to conserve energy, as it postpones the need for capital intensive new power stations. Large commercial customers also have an incentive to shave their peak load, as theirunit cost is keyed to peakdemand and can be quite high, even though Virginia’s overall energy charges are below the national average. Efficient building design and other alternatives, such as distributed generation and/or increased use of thermal energy, can reduce peak as well as overall consumption. Energy efficiency initiatives reduce the need for the construction of expensive new transmission and generation capacity, thus helping to maintain moderate electricity rates while offering key environmental benefits.

Use of Natural Gas (NG) generates less undesirable emissions than coal and converts 90% of the deliveredfuel into usable energy, as it is burned at application. The new Virginiagas distribution rates are designed to promote customer conservation. They closely align with the infrastructure costs incurred to serve the customer, rather than being based on volumetric usage. The cost of the NG commodity, which is the largest part of the customer bill, is a direct pass through cost to the consumer. Under this model, the utility is immunized from fluctuations in gas price and given an incentive to help its consumers conserve via a growing variety of high-efficiency appliances, including on demand hot water heaters, appliance rebates, programmable thermostats, and energy audits.

Leadership in Energy and Environmental Design (LEED) certification, Energy Star, and equivalent programs provide energy efficient standards for new as well as existing buildings. An existing building’s energy efficiency typically can be improved by 30% to 50%.

As the heating, ventilation, and air conditioning systems in existing buildings require replacement, typically at 10 to 20 year intervals, opportunities occur to install higher efficiency systemswith improved operating efficiency.

Over the last decade, LEED certificated buildings have grown in market demand, and now command higher rents that more than offset the investment in the LEED certification.

The technology to construct buildings that run entirely on sustainable energy, and thus have zero emissions, exists, but the application may be particularly challenging in Fairfax County due to cost and regulatory considerations (see 21st Century Buildings).

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Building Operation

Modern building systems have advanced technologically to increase performance and conserve energy. These systems go well beyond reduced lighting, heating, and cooling outside working hours. For example, pumps within the County headquarters building automatically and continuously adjust the flow of heating and cooling water to meet the temperature requirement at any point in time.

These sophisticated systems require qualified staff to maintain their efficiency. ETF members noted that:

  • For many buildings, better maintenance can reduce energy use by as much as 15%.
  • Companies that raise energy consumption to the top management level are saving through the focus placed upon all aspects of the companies’ energy use, including building system performance.

A few buildings now provide real-time displays, often in the entrance lobby, to show the building’s energy statusand demonstrate the company’s interest in energy conservation and sustainability (see Education and Human Behavior).

Actions should be considered by the EP3 to:

  • Stimulate top management interest in efficient building operation, as well as energy saving initiatives in all aspects of a company’s operation.
  • Provide information on the available software and systems for the real-time display of building performance.
  • Translate real-time display into universal units of energy efficiency that can be easily compared, by either using Source-based BTUs per square foot, or GHG emissions per square foot.

District Energy