DEPARTMENT
Water Enterprise
AGENDA NO.
13 MEETING DATE
June 25, 2024
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Project Manager: Julie Ortiz
Public Hearing to Approve a Commercial Equipment Rebate Program and Adopt Rules and Regulations
Summary of
Proposed
Commission Action:
Public Hearing to approve a Commercial Equipment Rebate Program and adopt Rules and Regulations to allow the San Francisco Public Utilities Commission to issue two types of water -saving commercial equipment rebates to pro mote water and energy conservation in its retail service area: ( 1) a Metered Wat er Savings Equipment Rebate that would provide up to $7 for every 748 gallons (100 cubic feet) of water saved over a 10- year required project lifespan up to 100 percent of documented equipment costs with a maximum cap of $750,000 dollars for each rebate based on metered water savings and (2) an Estimated Water Savings Equipment Rebate that provides up to $1 for every 100 cubic feet of water saved over a 10-year required project lifespan up to 50 percent of documented equipment cost s with a maximum cap of $750,000 based on water savings estimates.
Background: Since 20 12, as part of its water conservation program, the San Francisco Public Utilities Commission ( SFPUC) has provided commercial equipment reb ates to encourage retail customers with commercial, industrial, and i nstitutional (CII) facilities that have indoor, water-using commercial-grade equipment to choose the most water- and energy -efficient equipment. The SFPUC separately provides financial in centive programs for replacement of residential plumbing fixtures and appliances, commercial clothes was hers, and for replacement of irrigation equipment for large landscapes. For more information on all the SFP UC’s conservation assistance measures, see www.sfpuc.org/savewater.
The SFPUC reviewed other water utility CII programs and industry best management studies to develop its Comme rcial Equipment Rebate Program. Staff established two types of rebates, Meter ed Water Savings Equipment Rebates and Estima ted Water Savings Equipment Rebates . Staff set the Metered Water Savi ngs Project Rebate amount at $1 per 100 cubic feet of water sav ed over a 10-year equipment lifespan, providing up to 50% of equipment purchase costs based on verified, metered water savin gs. The Estimated Water Agreement: Public Hearing to Approve a Commercial Equipment Rebate Program and Adopt Rules and Regulations Commission Meeting Date: June 18, 2024
Savings Equipment Rebate was set at pre-established not -to-exceed amounts up to 50% of eq uipment costs for spe cific equipment , including cooling tower pH controllers, medical equipment s team sterilizers, ozone commercial laundry retrofits, dry vacuum pumps and connectionless food steamers . Estimated Water Savings Equipment rebates do not require water savings to be demonstrated by metered measurements. The SFPUC has issued nine rebates to date for a variety of commercial equipment, including dishwashing and ice machines in several hotels , university lab oratory steam sterilizers, an industrial linen cleaning system , a hospital refrigeration system, and dental office equipment. Rebates iss ued for Metered Water Savings Equipment ranged from $ 2,742 to $117,804 and rebates issued for Estimated Water Savings Equipment ranged from $1,000 to $32,400.
Collectively, these rebated projects reflect an estimated lifetime water savings of over 747-acre feet, or about 243,000,000 gallons.
Based on recommendations from a 2023 Pacific Institute evaluation of the SFPUC’s water efficiency program and to align with current programs offered by other large California water utilities, staff propose several updates to the SFPUC’s Commercial Equipment Rebate Program:
• Increase the Metered Water Savings Project Rebate amou nt from $1 to $7 per 100 cubic feet of water saved, and from 50% to up to 100% of qualifying equipment costs and set a
maximum cap of $750,000 per rebate.
• Allow Estimated Water Savings Equipment Rebates to include other types of equipment besides the type s noted in the second paragraph of this Background section and require applicants to provide water-savings estimates and justification.
• Decrease the required minimum project annual water savings from 200 ccf (150,000 gallons) to 100 ccf (75,000 gallons) per year for both Metered and Estim ated Water Savings
Equipment Rebates.
Description of
Action:
Staff recommends th e Commissi on approve the Commercial Equipment Rebate Pr ogram (Program) and adopt the attached Rules and Regulations to govern its administration.
The Program is intended to encourage commercial properties in the SFPUC’s retail se rvice area to install water - and en ergy-efficient equipment to achieve water sav ings. As provided under the proposed Program Rules and Regulations (attached), applic ants must meet all eligibility requirements, submit a complete and accurate application, provide proof of purchase and succes sfully complete pre and post equipment installation inspections to qualify to receive a rebate. The SFPUC pays rebates on a reim bursable basis and the amount of t he rebate would be limited to the actual, documented cost o f the equipment. Based on current funding availability (see Budget & Costs Agreement: Public Hearing to Approve a Commercial Equipment Rebate Program and Adopt Rules and Regulations Commission Meeting Date: June 18, 2024
below), the maximum rebate amount for Metered Water Savings Equipment Rebate will be $7 per hundred cubic feet over a 10- year project lifespan for up to 100% of the equipment purch ase costs for each qualifyi ng equipment project, not to exceed $750,000 for any project. The maximum amount for Estimated Water Savings Equipment Rebates will be $1 per hundred cubic feet of a 10 -year project lifespan for up to 50% of the equipment purcha se cost for each qualifying equipment project, not to exceed $750,000. If appro ved, SFPUC Water Conservation staff will administer the Program, in compliance with SFP UC accounting and City of San Francisco Controller’s Office guidelines. The SFPUC intends to promote the Program thr ough mul tiple means, including but not limited to, information on the SFPUC’s website (www.sfpuc.org/savewater) articles in the SFPUC’s p rinted and electronic newsletters to customers, social media posts, emails, and co-promotion through other City and commercial property and business organizations.
Budget & Costs: The Commercial Equipment Rebate Program will be funded through the Water Conservation operating budget. The specific account within the operating budget that funds conservation rebates has an ann ual budget of approximately $2.2 million for the current fiscal year and the same amount is anticipated for the next two years.
Schedule: If this action is approved by the Commission, the SFPUC Commercial Equipment Rebate Program and associated Rules and Regulations will become effective July 1 , 2024. The Water Conservation Section will update the Commercial Equipment Rebate Program application materials and implement an outreach plan, starting in Fiscal Y ear 2024-2025.
Environmental
Review:
This action does not constitute a “project” under the California Environmental Quality Act Guidelines section 15378(a) because there would be no physical change in the environment.
Attachment: 1. Commercial Equipment Rebate Pro gram Rules and Regulations
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Public Ut ilities Commiss ion (SFPUC) is committed to helping its customers achieve and maintain efficient water and energy us e, and a Commercial Equipment Rebate Program encourages the purch ase of water- and energy- efficient commercial equipment to support conservation efforts; and
WHEREAS, The Commercial Equipment Rebate Program includes two types of rebates:
a Metered Water Savings Equipment Rebate that provides a higher rebate amount fo r equipment that can be metered to verify water savings and an Estimated Water Savings Equipment Rebate that offers a l ower rebate amount for specific equipment, including but not limited to cooling tower pH controllers, medical equipment steam sterilizers , ozone commercial laundry retrofits, dry vacuum pumps and connectionless food steamers that may not be metered and water savings are estimated; and
WHEREAS, The attached Rules and Regulati ons to govern the Pr ogram would establish requirements for eligibility and payment of any rebate; and
WHEREAS, This action does not constit ute a “project” under t he California Environmental Quality Act Guidelines section 15378(a) because there would be no physical change in the environment; and
WHEREAS, On June 25, 2024, this Commission held a hearing to consider the proposed Rules and Regul ations for the Commercial Equipment Rebate Program, for which notice was posted on June 13, 2024, in conformance with Charter Section 4.104; now therefore, be it
RESOLVED, That this Commission hereby approves the Commercial Equipment Rebate Program and the amount of t he rebate under the Program for qualifying Metered Water Savings Equipment Rebates shall be $7 per hundred cubic feet of water saved over a 10-year lifespan up to 100% of the equipment cos ts with a not -to-exceed rebate cap of $750,000 per project and the amount of the rebate for Estimated Water Savings Equipment Rebates shall be $1 per hundred cubic feet of water saved over a 10-year lifespan up to 50% of equipment costs with a not exceed rebate cap of $750,000 per project; and be it
FURTHER RESOLVED, That this C ommission hereby adopts the attached Rules and Regulations for the Commercial Equipment Rebate Program, effective July 1, 2024.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of June 25, 2024.
Acting Commission Secretary, Public Utilities Commission
San Francisco Public Utilities Commission
Rules and Regulations Implementing the
Commercial Equipment Rebate Program
London N. Breed, Mayor
COMMISSIONERS
Timothy Paulson, President
Anthony Rivera, Vice President
Newsha K. Ajami
Kate H. Stacy
Adopted: June 25, 2024, by Commission Resolution No. [XXXXXX] Effective: July 1, 2024
City and County of San Francisco Public Utilities Commission Commercial Equipment Rebate i Adopted: June25, 2024]
Program Rules and Regulations Effective: July 1, 2024
THE COMMERCIAL EQUIPMENT REBATE PROGRAM
The purpose of the Commercial Equipment Rebate Program (Program) is to save water by encouraging non-residential properties in the San Francisco Public Utilities Commission (SFPUC) retail water service area to replace or retrofit inefficient commercial-grade indoor water-using equipment with more water- efficient indoor equipment. The rebate program is intended for commercial, industrial, and institutional buildings served by a SFPUC retail water service account.
AUTHORITY FOR AND PURPOSE OF THESE RULES AND REGULATIONS The SFPUC has adopted these Rules and Regulations, as may be amended, to provide rules for participation in the Program.
City and County of San Francisco Public Utilities Commission Commercial Equipment Rebate ii Adopted: June25, 2024]
Program Rules and Regulations Effective: July 1, 2024
TABLE OF CONTENTS
RULE 1.0 - DEFINITIONS ......................................................................................................................1 RULE 2.0 – GENERAL COMMERCIAL EQUIPMENT REBATE PROGRAM INFORMATION ...........................3 RULE 3.0 – COMMERCIAL EQUIPMENT REBATE PROGRAM REQUIREMENTS .........................................4 RULE 4.0 -- PARTICIPATION PROCESS…………………………………………………………………………………………………..5
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RULE 1.0 – DEFINITIONS
Unless otherwise expressly stated and defined in a separate Rule, the following terms in bold font shall, for the purpose of these Regulations, have the meaning indicated following the colon (:).
Applicant: Retail customer seeking Rebate funds from the SFPUC for a proposed indoor equipment retrofit or replacement of existing water using equipment, pursuant to the instructions and guidelines set forth in this application package.
Application: A complete set of required documents and information reported through the SFPUC’s water conservation online application portal.
Award: The decision by the SFPUC to provide Rebate funds, following the review and evaluation of a completed application project.
CII: Commercial, industrial, and institutional water customers Metered Water Savings Equipment Rebate: A site-specific project that requires metering, typically by an in-line meter, to verify water savings and calculate the rebate amount. These projects will be rebated at a rate of $7 per ccf of water saved over an estimated 10-year project lifespan, up to 100% of equipment costs, not to exceed the maximum rebate cap of $750,000 per rebate.
Estimated Water Savings Equipment Rebate: Installation of equipment that either has manufacturer-published water savings documentation or equipment where savings can be determined by qualified audits, engineering designs or reports, historic water use with existing equipment, and other project-specific information. These projects will be eligible for a rebate at a rate of $1 per ccf of water saved over an estimated 10-year project lifespan, up to 50% of equipment costs, not to exceed the maximum rebate cap of $750,000 per rebate.
Qualifying Equipment Project: Installation of commercial-grade water efficient equipment or fixture(s) in an existing CII building or facility that results in an increase of the efficiency of indoor water use and potable water savings of at least 100 ccf each year.
Non-potable Water: Water that may be beneficially used but does not meet the federal and state standards for use as drinking water.
One Hundred Cubic Feet (ccf): A measure of water expressed as one hundred cubic feet (ccf). One ccf is equivalent to 748 gallons of water.
Pre-Project Inspection: A required inspection by SFPUC staff to verify pre-project site information.
Post Project Inspection: A required inspection by SFPUC staff to verify installation of qualifying equipment project and meter information, if applicable.
Participant: An Applicant approved by the SFPUC for a Rebate under these Rules and Regulations.
Potable Water: Water that meets state and federal drinking water standards.
Process Water: Water that is used by industries and businesses to produce a product or affect a process.
Proof of Purchase : Documentation of qualifying equipment purchase typically consisting of itemized invoices, receipts, processed checks and/or completed bank fund transfer statements.
Equipment invoices must break out qualifying from non-qualifying project costs.
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Qualifying Equipment Cost : Includes the cost of newly purchased equipment to complete qualifying equipment project, as well as costs associated with purchase of a meter to measure project water savings. Qualifying equipment costs do not include tax, shipping, labor, surveys/audits, design, permit or installation costs.
Rebate: Funding provided based on the successful completion of a qualifying equipment project, demonstrating more than 100 ccf of water savings per year and compliance with all program terms and conditions.
Rebate Reservation: Provisional reservation of rebate funding made for projects with approved applications. Rebate reservations are valid for 6 months. Participants may request a 6-month extension prior to the rebate reservation end date.
Recycled Water: Water taken from a waste (effluent) stream and treated to a level suitable for further use, in accordance with CADPH and USEPA requirements based on specific uses. Recycled water is sometimes referred to as reclaimed water.
Retail Customer: Any commercial, industrial, or institutional customer who receives a water bill directly from SFPUC for their own water use, and not for resale.
Retail Service Area: All properties facilities within the City and County of San Francisco, and those outside the City boundaries that are served directly by SFPUC on a retail basis.
Retrofit: To furnish an existing CII water using facility with new water efficient equipment not available or considered at the time of construction/development. Retrofit is only applica ble to existing commercial-grade water using equipment.
W-9: A form issued by the U.S. Internal Revenue Service, officially called Request for Taxpayer Identification Number and Certification, a necessary submission by a Participant to receive a Rebate.
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RULE 2.0 – GENERAL COMMERCIAL EQUIPMENT REBATE PROGRAM INFORMATION The following information is applicable to all program sections:
2.1 PARTICIPATION GENERALLY
The SFPUC offers a Rebate for qualifying Metered Water Savings and Estimated Water Savings equipment projects. The Program is intended to encourage CII properties and businesses in San Francisco to implement indoor equipment retrofits to maximize the efficient use of potable water. The Program is not for single-family or multi-family homes.
2.2 CUSTOMER RESPONSIBILITY
The Customer is solely responsible for purchasing, operating, and maintaining any Qualifying Equipment Project for which the Customer is seeking a Rebate under this Program.
2.3 RULES AND REGULATIONS
Submission of an Application constitutes an Applicant’s acknowledgment and agreement that the Applicant shall comply with these Rules and Regulations as may be amended.
2.4 TERMINATION AND LIMITATION OF SFPUC LIABLITY
The SFPUC may, in its sole discretion and authority, reject an Applicant’s application to the Program if it does not meet all eligibility requirements or include all required documentation.
The SFPUC may, in its sole discretion and authority and without notice, terminate or alter the Commercial Equipment Rebate Program at any time.
Funding is limited and Rebates are available on a first come, first served basis until funds run out or the Program terminates.
The SFPUC makes no representation or guarantees that participation in the Program will result in lower water bills.
SFPUC shall bear no responsibility or liability for the cost, expense, operation, maintenance, or repair of a Participant’s Qualifying Equipment Project. SFPUC shall likewise bear no responsibility or liability for delay in accepting an Application, rejection of an Application, or termination of the Program.
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RULE 3.0 – COMMERCIAL EQUIPMENT REBATE PROGRAM PARTICIPATION REQUIREMENTS To receive a Commercial Equipment Rebate, an Applicant must meet the following eligibility criteria:
3.1 CUSTOMER ELIGIBILITY
To participate in the Program, the Customer must:
Receive a water bill directly from the SFPUC for the Customer’s own water use. Be located in an existing building at a site that receives water from a retail service account with the SFPUC.
Be classified as a commercial, industrial, or institutional (CII) entity.
3.2 COMMERCIAL EQUIPMENT REBATE PROGRAM ELIGIBILITY
To be eligible to be awarded a Rebate, the Qualifying Equipment Project must:
Be able to reduce onsite water use by a minimum of 100 ccf annually. Result in indoor water savings. Only indoor water savings are applicable to Commercial Equipment Rebate Program rebate calculation.
Be permanent and be operated for a minimum of 10 years. If retrofitted equipment is not operated for a minimum of 10 years, the Participant may be required to reimburse the SFPUC the entire Rebate amount received.
Meet all applicable local, state, and federal laws, regulations, and ordinances. Be completed within six months of the application submission date. An Applicant may request an extension of up to an additional six months before the conclusion of the initial Rebate Reservation.
The following projects are not eligible projects: Replacement of toilets, urinals, clothes washer, showerheads or faucet aerators, which are subject to the San Francisco Commercial Water Conservation Ordinance (Board of Supervisor File Number 090226, Enactment Number 0077-09, which amended Chapter 13 A of the San Francisco Building Code); projects eligible for another SFPUC rebate program, such as outdoor irrigation or landscaping equipment; or projects using recycled water.
3.3 REBATE ELIGIBILITY, AMOUNT, AND PAYMENT
(A) Rebate Eligibility
To receive a Rebate, a Participant must submit a Proof of Payment with itemized qualifying equipment costs. Receipts and/or invoices that do not include the itemized cost of qualifying equipment will be rejected.
The Applicant must submit a completed W-9 form to the City Controller by either emailing the form to [email protected] or mailing a hard copy to Supplier Management, 1 Dr. Carlton B Goodlett Place, Room 300, San Francisco, CA 94102.
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The Applicant must allow an onsite pre-project and post project inspections by SFPUC staff to verify installation of a Qualifying Equipment Project prior to the Rebate approval. For leased equipment, the Customer must submit a new signed lease agreement with a minimum term of nine years. The lease must identify all qualifying equipment cost attributes.
(B) Rebate Amount and Payment
The Rebate amount shall not exceed 100% of the project’s qualifying equipment cost (not including sales tax, shipping, and/or installation costs) and may not exceed the Program’s maximum rebate cap of $750,000.
Estimated Water Savings Equipment Rebates - The SFPUC will provide Estimated Water Savings Equipment Rebates based on $1.00 per ccf of water saved over the estimated equipment lifespan, up to 10 years, not to exceed 50% of the qualifying equipment costs or the Program’s maximum rebate cap of $750,000. The SFPUC does not require Estimated Water Savings Equipment Rebates to be metered, however, water savings and rebate amount will be based on calculated water savings over the Project’s lifespan and qualifying equipment costs. Applicants must indicate the estimated yearly water savings expected from use of the equipment and provide a description of the source and method for estimating savings. SFPUC staff will evaluate and determine if savings documentation is sufficient. Examples of sources of water-savings estimates include but are not limited to qualified audits, engineering designs or reports, historic water use with existing equipment, and other project-specific information. Estimated Water Savings Rebate equipment, includes but is not limited to:
Medical Equipment Steam Sterilizers
Commercial Laundry Retrofits
Water Efficient Ice Machines
Connectionless Food Steamers
Dry Vacuum Pumps
Cooling Tower pH Controllers
Other Indoor Water-Using Equipment
Metered Water Savings Equipment Rebates – Metered Water Savings Equipment Rebates will be calculated at $7.00 per ccf of water saved over the estimated equipment lifespan, up to 10 years, not to exceed 100% of the project’s qualifying equipment costs or the program’s maximum rebate cap of $750,000. These projects will establish water savings through metered results, typically 3 months pre-project and 3 months post project.
Metering duration may vary depending on the project attributes. The SFPUC endeavors to issue a rebate check within 12 weeks of final approval of a Qualifying Equipment Project.
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RULE 4.0 – PARTICIPATION PROCESS
Applicants must follow these steps to apply:
Read the application directions and program rules posted on the SFPUC’s web page for this program, (Commercial Equipment Rebate (sfpuc.org), before starting an online application. Register the facility’s water account with the SFPUC’s Water Conservation Application System. To register, the Water Service Account Number and the account service address zip code are needed. https://conservation.sfwater.org/Login.aspx?ReturnUrl=%2f
Submit a complete online application, including all required d supporting documentation that describes Qualifying Equipment Project equipment to be purchased and installed, water savings estimate, water savings estimate methodology, project timeline and cost. • Pre-Inspection of pre-project site conditions by SFPUC water conservation staff will be completed prior to purchase and installation of Qualifying Equipment Project equipment.
During the pre-inspection, SFPUC staff will verify the site’s existing equipment and collect information to determine if the project may be eligible for a Metered Water Savings or Estimated Water Savings Rebate.
• Upon successful completion of the inspection, SFPUC staff will contact the site and confirm that a Rebate Reservation has been made.
• A Rebate Reservation is made on a case-by-case basis and subject to availability of funds and does not guarantee that a Rebate will be issued.
• The Applicant will then purchase and install the equipment within 6 months of the date of Rebate Reservation, incorporating metering if a Metered Water Savings Equipment Rebate is being pursued.
• Upon completion of the equipment installation, the Applicant will contact SFPUC and send original Proof of Payment documentation for the Qualifying Equipment Project as well as send a completed W-9 to the City Controller.
• SFPUC staff will conduct a post inspection once the equipment has been installed.
• After the post-inspection is complete and upon receipt of all required documentation, the SFPUC will determine the final rebate amount and issue the Rebate.