To: BOARD OF SUPERVISORS
From: Executive Office
Meeting Date: July 29, 2025
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Department Contact: |
Sara Pierce |
Phone: |
707-463-4441 |
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Department Contact: |
Doug Anderson |
Phone: |
707-264-6054 |
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Item Type: Regular Agenda |
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Time Allocated for Item: 30 Minutes |
Agenda Title:
title
Discussion and Possible Action Including Direction to Staff Regarding Development of an Energy Saving Project Agreement with Ameresco Including 1) County’s Desire to Incur Additional Debt through Equipment Financing; 2) How to Prioritize Between Cost Saving Measures and Carbon Reduction Measures; and 3) on the Maximum Capital Contribution to the Project
(Sponsor: Executive Office)
End
Recommended Action/Motion:
recommendation
Discuss the development of an energy saving project Agreement with Ameresco and provide direction on 1) County’s desire to incur additional debt through equipment financing; 2) on how to prioritize between cost saving measures and carbon reduction measures; and 3) on the maximum capital contribution to the project.
End
Previous Board/Board Committee Actions:
During the August 3, 2021, Board of Supervisors General Meeting the Mendocino County Board of Supervisors signed Resolution No. 21-117 declaring its intent to reduce and eliminate the carbon footprint of buildings and operations of the County of Mendocino, with an initial investment of at least $2,000,000. Among the resolutions was direction to staff to leverage this investment with grants and low interest financing resources.
During the July 25, 2023, Board of Supervisors meeting the Board of Supervisors accepted the proposed Carbon Footprint Reduction Priority Plan and approved the priority projects identified for funding with the Carbon Reduction Funds in the amount of $1,000,000.
During the September 10, 2024, Board of Supervisors Meeting, the Board of Supervisors awarded the ESCO Request for Proposals to Ameresco and approved a Project Development Agreement (PDA) with Ameresco to complete Investment Grade Audits for the development of Energy Savings Projects at selected County facilities.
During the December 17, 2024 Board of Supervisors Meeting the Board of Supervisors expressed support for the Willits Library project and directed staff to proceed the Metal Roof option and include the solar component, while requesting additional information and options for the Battery Energy Storage System (BESS) component.
On April 22, 2025, The Board of Supervisors provided direction to proceed with the Willits Library project in phases beginning with the roof replacement as required by California Public Contract Code and to bring back the solar and battery options for future direction.
Summary of Request:
Independent of the Willits Library project, Ameresco completed an energy audit with findings that show new solar projects present the most attractive options for return on investments. While lighting projects generally provide positive energy savings, County staff have already made some progress in converting to LED lamps and using less lighting, reducing the net benefit to lighting retrofit projects. Similarly, heat pump conversions for heating, cooling and hot water would have significant carbon reduction benefits, however, the financial pay back is limited to non-existent at this time due to the low cost of natural gas compared to electricity for heating.
Prior to moving forward with detailed project development, County staff and Ameresco are seeking board direction on the possible use of equipment financing to leverage the current commitment of $1,000,000 in carbon reduction funding to develop a more comprehensive solar footprint at County facilities. Solar installations will provide energy that directly offsets the County’s utility cost for energy, providing actual savings that can be used to offset the project and financing costs, while also providing major carbon reduction benefits by reducing overall energy usage. Without such financing, the project scope will be limited to the carbon reduction funds from the PG&E Settlement currently available. Please provide parameters for County’s desire to incur debt through equipment financing for the project.
Please note: The County’s efforts to reduce carbon and increase consumption of clean energy, may allow the County to qualify for Clean Electricity Investment Tax Credits (ITCs). The ITCs were initially introduced as part of the 2022 Inflation Reduction Act and provided incentive paybacks for investments in clean energy technologies like solar, wind, geothermal, and battery storage. The parameters around ITCs have become more stringent with the passage of the Big Beautiful Bill. Ameresco is analyzing the impacts of the changes introduced and will have additional information over the next several months. The County’s ability to utilize the tax credits would allow for a larger project and potentially reduce the need for financing.
In order to meet the required findings of Government Code 4217.12 (GC 4217.12) the project has to show that the energy cost savings will offset the project cost. Solar measures provide the best payback time and cost savings for this purpose. Including non-energy saving measures, such as electrification measures, greatly impact the pay back and cost savings. While electrification measures, like converting conventional gas water heaters or gas fired HVAC units to heat pumps provide the greatest carbon reduction benefits, these measures also have significant upfront costs, and will have an impact on an overall project, potentially making the project ineligible under GC 4217.12. Please provide direction on the inclusion of electrification measures in the energy saving project.
The initial funding for the Carbon Reduction set-aside in 2021 from the PG&E Disaster Settlement funds was $2,000,000; to date approximately $420,000 has already been directed to Electric Vehicle (EV) charging and other projects leaving a maximum of $1,580,000 in carbon reduction funding. So far $1,000,000 of that has been approved as the capital contribution for these energy savings measures. Please provide direction on the maximum level of PG&E Disaster Settlement funding that can be directed to the project.
Alternative Action/Motion:
Provide direction to staff.
Strategic Plan Priority Designation: An Effective County Government
Supervisorial District: All
Vote Requirement: Majority
Supplemental Information Available Online At: N/A
Fiscal Details:
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source of funding: PG&E Settlement funds and potential equipment financing |
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current f/y cost: Not yet identified |
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budget clarification: N/A |
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annual recurring cost: Not yet identified |
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budgeted in current f/y (if no, please describe): No |
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revenue agreement: No |
AGREEMENT/RESOLUTION/ORDINANCE APPROVED BY COUNTY COUNSEL: N/A
CEO Liaison: Darcie Antle, CEO
CEO Review: Yes
CEO Comments:
FOR COB USE ONLY
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Executed By: Atlas Pearson, Senior Deputy Clerk |
Final Status: Direction Given to Staff |
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Date: July 29, 2025 |
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