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Item 05 2024-00680 Suspend Competitive Bidding Energy Reinvestment Program for Energy Saving Retrofits at Department of Utilities Facilities (Two-Thirds Vote Required)

Sacramento City Council
April 2, 2024

Document
Item 05 2024-00680 Suspend Competitive Bidding Energy Reinvestment Program for Energy Saving Retrofits at Department of Utilities Facilities (Two-Thirds Vote Required)
Meeting
April 2, 2024
Body
Sacramento City Council
Pages
14
Original file
1.7 MB
Text extracted from the city's file for reading and search. Open the original on sacramento.granicus.com. That file is the official record.

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00680 4/2/2024 Consent Item 5.

Suspend Competitive Bidding: Energy Reinvestment Program for Energy Saving Retrofits at Department of Utilities Facilities (Two-Thirds Vote Required) File ID: 2024-00680
Location: Citywide
Recommendation: Pass a Motion: 1) suspending competitive bidding in the best interest of the City for lighting efficiency and electrification retrofit projects at City-owned, Department of Utilities (DOU) facilities; 2) authorizing the City Manager or City Manager’s designee to enroll City-owned DOU facilities in the Sacramento Municipal Utility District (SMUD) Complete Energy Solutions (CES) program administered by TRC Companies, Inc. for lighting efficiency and electrification retrofit projects; and 3) directing the City Manager or City Manager’s designee to return to City Council for agreements with one or more of the CES program vendors identified in Exhibit A when a lighting efficiency or electrification retrofit project or contract exceeds the City Manager’s authority in accordance with City Code Chapter 3.60.

Contact: Adam Lau, Project Manager (916) 201-1954 [email protected]; Paul Barnes, Supervising Engineer, (916) 808-1442, [email protected]; Sherill Huun, Engineering & Water Resources Division Manager, (916) 808-1455, [email protected]; Pravani Vandeyar, Director, (916) 808-3765, [email protected]; Department of Utilities Presenter: None.

Attachments:
1-Description/Analysis
2-Exhibit A - List of Program Contractors
3-Exhibit B - List of DOU facilities audited with CES program 4-Exhibit C - Sample CES Energy Efficiency Contract
Description/Analysis
Issue Detail: Staff seeks City Council approval to proceed with cost-saving energy retrofits to City- owned DOU facilities as committed to by the City’s 2040 General Plan and the Climate Action and Adaptation Plan, both adopted by City Council on February 27, 2024. This report would authorize staff to proceed in partnership with the Sacramento Municipal Utility District (SMUD) and their

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File ID: 2024-00680 4/2/2024 Consent Item 5.
contractors for efficient project delivery.

SMUD entered into an agreement with TRC Companies, Inc. (TRC) on March 2, 2020, to administer the Complete Energy Solutions (CES) program and act as the program representative on SMUD’s behalf (Agreement Number 4500120070). As the administrator, TRC and its sub-consultant, Brighton Energy, conduct building audits and provides energy efficiency and electrification proposals that identify proposed equipment specifications, anticipated energy savings, project costs, and rebates.

To be eligible for the proposed project cost and rebates, work must be completed by participating program contractors that have met program requirements. A list of current program contractors can be found in Exhibit A. Participating contractors are required to provide specified program equipment and meet the total project cost identified in the TRC proposal. The City has previously used the CES program to perform LED lighting retrofits on community centers, libraries, and most recently the Combined Water Treatment Plant (CWTP) completed in 2024.

Following the success of the CWTP LED lighting retrofit work, staff has chosen the City water treatment plants, select reservoirs, and sump stations with 24-hour operations as the next group of priority facilities to retrofit. No-obligation building audits were initiated on five Utilities-owned stations.

A list of the facilities can be found in Exhibit B. City staff accompanied a CES program representative to perform the audits starting in July of 2023. The final audit proposals on these five City facilities were received by staff in December of 2023. The site-specific proposals included LED lighting retrofits for all five facilities. The proposal for one of the audited treatment plants is attached in Exhibit C as a sample. The proposals provide customers with the ability to pick and choose one or a combination of the proposed efficiency and electrification options. While not included in the proposals received, proposals for a facility could also include options for electrification of hot water heaters and installation of electric vehicle supply equipment (EVSE) in addition to the lighting and HVAC components.

The recommended authorization will allow the City to participate in SMUD’s turnkey CES program for lighting efficiency and electrification retrofits on City-owned DOU facilities, as funding allows, for the duration of the SMUD/TRC contract, currently set to expire in March of 2025. By participating in the program, the City can use a CES program contractor to construct LED retrofits, electric replacements of HVAC systems and hot water heaters, and electric vehicle charging at a competitive project cost.

Additional financial incentives are available through the program to reduce costs, including additional program rebates and guaranteed project costs. Suspending competitive bidding allows the City to contract with SMUD’s program installers, gaining guaranteed program pricing to complete improvements at a lower cost. Construction contracts with approved vendors for each phase will be included in future City Council reports requesting City Council approval when required by City Code Chapter 3.60.

Policy Considerations: The recommendation in this report is in accordance with City Code Section

3.60.170(D), which states that the restrictions and provisions of City Code requiring the award of

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File ID: 2024-00680 4/2/2024 Consent Item 5.
contracts by competitive bidding shall not apply when, upon two-thirds vote of the City Council, it is determined that it is in the best interest of the City to suspend competitive bidding for any contract.

The proposed process is outlined in the City administrative policy for procurement of public contracts (AP-4002):
· The City’s standard competitive bidding process requires bidding and contract award to a single contractor based on price alone, provided the contractor meets the minimum qualifications specified to perform the work. The City has no leeway to distinguish between bidders that meet minimal qualifications and more qualified bidders that exceed the minimum qualifications.
· Using the proposed alternative process will allow the City to evaluate and retain the most qualified contractor based on a combination of experience, past performance, safety, customer/public care, communication, coordination, quality assurance, and other relevant factors. This process can provide the best value to DOU’s ratepayers. The proposed process is outlined in the City administrative policy for procurement of public contracts (AP-4002).

Economic Impacts: None.

Environmental Considerations: The action is exempt from review under CEQA pursuant to CEQA Guidelines section 15301. The action involves the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, or mechanical equipment, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The exemption covers interior or exterior alterations involving such things as interior partitions, plumbing, and electrical conveyances; and similar facilities; restoration or rehabilitation of deteriorated or damaged structures, facilities, or mechanical equipment to meet current standards of public health and safety, unless it is determined that the damage was substantial and resulted from an environmental hazard such as earthquake, landslide, or flood. The project qualifies for a Categorical Exemption under Article 19 of CEQA Guidelines Section 15301, existing facilities. No environmental review is necessary.

Sustainability: As part of the City’s 2040 General Plan and the Climate Action and Adaptation Plan (CAAP), the City is committed to fostering improved energy efficiency and supporting sustainability in government operations and community activities. Energy efficiency audits and retrofits are implementation actions in the CAAP. Lighting retrofits will replace current lighting with higher-quality LED lighting and controls that save energy, reduce maintenance costs, and provide enhanced lighting quality. Electrification retrofits to replace gas-fired HVAC equipment will also support the City’s goal of reducing municipal energy use is a key strategy to reduce the City’s municipal greenhouse gas (GHG) emissions.

This recommendation implements City Council-adopted goals for energy efficiency.

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File ID: 2024-00680 4/2/2024 Consent Item 5.

The 2040 General Plan Policy Goal ERC-9 calls for the City to improve energy efficiency of City facilities to achieve carbon neutrality by 2045 by reducing greenhouse gas emissions from internal operations. Retrofits to existing facilities are the primary strategy to meet energy reduction targets for existing City buildings.

The proposed project is consistent with the 2040 General Plan as it improves infrastructure reliability, which will ensure continued safe operation and maintenance of the existing facility.

Commission/Committee Action: Not applicable.

Rationale for Recommendation: The recommended action will suspend competitive bidding to allow for the City Manager or the City Manager’s designee to enter into future contracts with SMUD’s CES program contractors for lighting efficiency and electrification retrofits in DOU-owned buildings, plants, and facilities. Replacing lights with LED lamps and new LED fixtures will reduce electricity costs and the City’s greenhouse gas emissions. The lighting retrofits of the five utilities facilities that have been audited this year are estimated to reduce the City’s energy consumption by 1.8 million kilowatt-hours per year. Newer LED fixtures also have a longer lifespan with lower maintenance costs, reducing the workload burden on DOU operations and maintenance staff. Replacing natural gas-powered hot water heaters and HVAC systems with all electric options will further reduce the City’s greenhouse gas emissions.

Financial Considerations: The DOU Energy Management Program has a total budget of $1.2M to implement lighting efficiency and electrification CIP retrofits at DOU facilities through participation in the SMUD CES Program.

The recommendations in this report are expected to have a beneficial financial impact for the City.

Streamlining the contracting process for routine retrofit work relieves some administrative burden in the contracting process while the major energy savings (estimated 1.6 million kWh saved from lighting projects alone) will be a net financial benefit because of energy savings by improving efficiency at our facilities with the highest energy usage. In accordance with Prop 218, the projects at DOU facilities intended for participation in the CES program will not use general fund or Measure U resources.

Local Business Enterprise (LBE): Not applicable.

Background: The City has had success using the CES program in the past. In 2017, the City completed an investment-grade energy audit (IGA) of City community centers, clubhouses, and libraries with the Energy Efficiency Phase II Retrofit Project through the Energy Reinvestment Program (C13001900). The IGA was a detailed energy audit that evaluated the financial impact of

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File ID: 2024-00680 4/2/2024 Consent Item 5.
capital improvements and return on investing in energy conservation opportunities. After completion of the IGA, the City had an independent lighting audit and proposal performed through the SMUD CES program for Samuel C. Pannell Community Center (Pannell CC). The lighting measures recommended in the IGA for the community center had a total cost of $237,911 with a 13.5-year simple payback while the measures recommended by the SMUD CES program were completed with a total cost of $76,539 with a 4-year simple payback, providing a 68% cost savings for lighting retrofits. Because of the savings provided by the CES program at Pannell CC, staff pursued participation in the SMUD CES program and received approval from City Council on April 10, 2018, for lighting retrofits on up to 24 libraries and community centers (Motion 2018-0095). City staff were able to complete lighting retrofits at 22 of the identified locations, resulting in a 58% cost savings project-wide compared to the original IGA proposal. The 22 completed retrofits are estimated to have reduced the City’s emissions by 647 tons CO2 per year, which is equivalent to 137 cars taken off the road.

Most recently, the DOU Combined Water Treatment Plant was the subject of a major LED lighting upgrade in 2024 resulting in annual energy savings of 144,000 kilowatt-hours annually.

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Exhibit A - list of program contractors

Exhibit B
List of facilities audited with CES program
Water/Sewer/Drainage Facility  Name Area  (sq.ft.) Address SMUD Sustainable
Communities Sensitivity
Analysis Ranking
CES 4.0
Disadvantaged
Communities SB 535
Proposed Cost
to Retrofit
kWh Savings
Annually
Electricity Cost
Savings Annually
1 Water EAFWTP 1,447,063               7501 College Town Dr., Sacramento, CA 95819 Medium Yes 45,247.05 $        678,208.14 92,575.41$ 2 Sewer/Drainage Sump  2 78,844                    3530 Riverside Blvd., Sacramento, CA 95818 Medium Yes 6,981.43 $          286,262.35 39,074.81$ 3 Sewer/Drainage Pioneer  Reservoir 426,452                 2100 Front St., Sacramento, CA 95818 Medium Yes 7,206.31 $          43,824.09 5,981.99$ 4 Water SRWTP 1,767,665               301 Water St., Sacramento, CA 95811 Medium ‐high Yes 71,951.98 $        505,224.22 68,963.11$ 5 Water Florin  Reservoir 450,846                 6920 Power Inn Rd, Sacramento, CA 95828 Medium ‐high Yes 2,722.34 $          95,107.83 12,982.22$ SMUD Complete Energy Solutions Proposal City of Sacramento - Fairbairn WTP November 30, 2023 Prepared for: City of Sacramento - Fairbairn WTP 7501 College Town Dr Sacramento, CA 95819 This program is brought to you by SMUD and delivered by TRC and Brighton Energy.

Exhibit C - Sample CES Energy Efficiency Contract

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Paul Barnes 7501 College Town Dr Sacramento, CA 95819 Hello Paul Barnes, Welcome to the Complete Energy Solutions (CES) program. We know how important it is to manage the energy costs for your business. By participating in this program, you can complete comprehensive energy retrofits and upgrades to ensure long-term energy and carbon reduction savings. Our goal is to help you offset some of the up-front costs, so you can improve your energy systems without adding financial stress. assessment proposal, navigate the installation process, confirm upgrades are completed and ensure you receive your incentive in a timely manner. If financing is needed, I can provide options through the efficiency and gas-to-electric conversion projects with available financing options. advantage of other SMUD solutions. Sincerely, Chad Bender [email protected]

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Proposal Overview: Savings and Costs This overview section outlines all the available measures for your business. The following sections will provide more detail on each measure category. After you have reviewed, please initial below next to each work order you approve. Your proposed energy efficiency measures Project Scope Electricity Saved (annual kWh) Simple Payback (yrs) Monthly Savings ($) Annual Savings ($) 5 Year Savings ($) Lighting 678,208.14 0.49 $7,714.62 $92,575.41 $462,877.06 Total 678,208.14 $7,714.62 $92,575.41 $462,877.06 Project Impact Project Scope Change to Monthly Energy Costs ($) Change to Annual Energy Costs ($) Lighting $-7,714.62 $-92,575.41 Total $-7,714.62 $-92,575.41 The energy efficiency, electric vehicle, and Go-Electric measures described in the Report represent an estimate of expected energy savings and/or bill impacts. Complete Energy Solutions does not guarantee a specific level of cost savings from the implementation of the proposed energy efficiency measures.

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Project impact Environmental benefits By implementing the energy efficiency measures outlined in this proposal, your first year project impact will be: Proposal Overview Project Costs Summary Project Scope Material Cost ($) Labor Cost ($) SMUD Incentive ($) Customer Cost ($) Lighting $46,971.95 $72,878.00$74,602.90 $45,247.05 Total $46,971.95 $72,878.00$74,602.90 $45,247.05 Initial to approve work order(s): Lighting ___________________

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Lighting Project Scope Existing Equipment Recommended Upgrade: Location AHO Existing Fixture Quantity Existing Wattage Existing Fixture Description Proposed Fixture Quantity Proposed Fixture Description Proposed Wattage kWH Saved Various Locations 8760 451 56 Fluorescent 48", (2) T8 lamps, BF normal451 24W TLED C TYPE 4000K (2 LAMP + DRIVER) 24 140,330.99 Various Locations 8760 57 112 Fluorescent, 48" (4) T8 lamps, BF normal57 48W TLED C TYPE 4000K (4 LAMP + DRIVER) 48 35,471.69 Flouride 8760 1 98 Fluorescent, 96" (2) T8 lamps, BF<0.851 24W TLED C TYPE 4000K (2 LAMP + DRIVER) 24 719.54 Two Locations 8760 29 84 Fluorescent 48", (3) T8 lamps, BF normal29 36W TLED C TYPE 4000K (3 LAMP + DRIVER) 36 13,535.25 Old silos 8760 2 185 Fluorescent, (6) 46", T5 lamp, BF normal2 150W ELHB UFO HIGH BAY MW 5000K 277V - LEDONE 150 680.65 Dewatering building 8760 11 62 Fluorescent, (2) 46", T5 lamp, BF normal11 24W TLED C TYPE 4000K (2 LAMP + DRIVER) 24 4,064.47 Dewatering building 8760 12 123 Fluorescent, (4) 46", T5 lamp, BF normal12 48W TLED C TYPE 4000K (4 LAMP + DRIVER) 48 8,751.24 Machine shop 8760 9 473 Fluorescent (8) 46" 54W T5 /HO lamp 9 200W GDHB UFO HIGH BAY 5000k 480V - LEDONE 200 23,890.89

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Existing Equipment Recommended Upgrade: Location AHO Existing Fixture Quantity Existing Wattage Existing Fixture Description Proposed Fixture Quantity Proposed Fixture Description Proposed Wattage kWH Saved Various Locations 8760 43 290 Mercury vapor, (1) 250W lamp43 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 79,441.81 Various Locations 8760 63 60 Incandescent 60W63 6W A19 2700K 6 33,079.69 Line Building 8760 2 355 High Pressure Sodium, (1) 310W lamp2 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 4,959.04 Hi service lift 8760 16 295 High Pressure Sodium, (1) 250W lamp16 63W CORN LAMP E39 BASE - LEDONE 63 36,094.00 Two Locations 8760 18 414 High Pressure Sodium, (1) 360W lamp18 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 54,957.79 Two Locations 8760 18 42 CFL, 42W, screw base18 16W A21 5000K 16 4,550.64 Two Locations 8760 5 17 CFL, 17W, screw base5 6W A19 2700K 6 534.80 EAF 8760 13 26 CFL, 18W, pin base13 6W A19 2700K W/ LAMP HOLDER REPL (1) 6 2,528.14 Exterior 4380 4 33 CFL, 26W, quad, mag ballast4 12W PL HRZ P&P 4000K 12 367.92 Intake Bridge (Ext) 4380 13 33 CFL, 26W, quad, mag ballast13 12W PL HRZ P&P 4000K 12 1,195.74 Two Locations (Ext) 4380 11 17 CFL, 17W, screw base11 6W A19 2700K 6 529.98

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Existing Equipment Recommended Upgrade: Location AHO Existing Fixture Quantity Existing Wattage Existing Fixture Description Proposed Fixture Quantity Proposed Fixture Description Proposed Wattage kWH Saved Three Locations (Ext) 4380 40 50 Halogen, 50W MR16 40 15W PAR38 5000K 15 6,132.00 Exterior 4380 5 295 High Pressure Sodium, (1) 250W lamp5 63W CORN LAMP E39 BASE - LEDONE 63 5,080.80 Two Locations (Ext) 4380 11 464 High Pressure Sodium, (1) 400W lamp11 150W AREA LIGHT 5000K 480V - FALKOR 150 15,128.52 South Power Center (Ext) 4380 1 355 High Pressure Sodium, (1) 310W lamp1 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 1,116.90 Dewatering tower (Ext) 4380 7 355 High Pressure Sodium, (1) 310W lamp7 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 7,818.30 EAF (Ext) 4380 16 414 High Pressure Sodium, (1) 360W lamp16 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 22,005.12 Two Locations (Ext) 4380 13 60 Incandescent 60W13 6W A19 2700K 6 3,074.76 Two Locations (Ext) 4380 29 374 Metal halide, (1) 350W lamp, prem. electronic ballast29 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 34,803.48 Exterior 4380 2 290 Mercury vapor, (1) 250W lamp2 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 1,664.40

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Existing Equipment Recommended Upgrade: Location AHO Existing Fixture Quantity Existing Wattage Existing Fixture Description Proposed Fixture Quantity Proposed Fixture Description Proposed Wattage kWH Saved RR 8760 3 17 CFL, 17W, screw base3 6W A19 2700K 6 320.88 Various Locations 8760 51 56 Fluorescent 48", (2) T8 lamps, BF normal51 24W TLED C TYPE 4000K (2 LAMP + DRIVER) 24 15,868.91 Three Offices 8760 35 112 Fluorescent, 48" (4) T8 lamps, BF normal35 48W TLED C TYPE 4000K (4 LAMP + DRIVER) 48 21,780.86 Offices 8760 24 26 CFL, 18W, pin base24 6W A19 2700K W/ LAMP HOLDER REPL (1) 6 4,667.33 Two Offices 8760 25 29 Fluorescent 48", (1) T8 lamp, BF normal25 12W TLED C TYPE 4000K (1 LAMP + DRIVER) - ESPEN 12 4,132.53 Two Offices 8760 39 84 Fluorescent 48", (3) T8 lamps, BF normal39 36W TLED C TYPE 4000K (3 LAMP + DRIVER) 36 18,202.58 Exterior 8760 6 355 High Pressure Sodium, (1) 310W lamp6 100W CORN LAMP E39 BASE MW MCCT - LEDONE 100 13,402.80 Offices 8760 1 58 U-Tube, (2) T8 lamps1 29W 2x4 FLAT PANEL MW MCCT - LEDONE 29 281.99 Offices 8760 6 60 Incandescent 60W6 6W A19 2700K 6 3,150.45 Offices 8760 1 66 Fluorescent, 24" (4) T8 lamps 1 48W TLED C TYPE 4000K (4 LAMP + DRIVER) 48 175.03

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Existing Equipment Recommended Upgrade: Location AHO Existing Fixture Quantity Existing Wattage Existing Fixture Description Proposed Fixture Quantity Proposed Fixture Description Proposed Wattage kWH Saved Exterior 8760 1 29 Fluorescent 48", (1) T8 lamp, BF normal1 12W TLED C TYPE 4000K (1 LAMP + DRIVER) - ESPEN 12 148.92 Electrical Offices 8760 21 56 Fluorescent 48", (2) T8 lamps, BF normal21 24W TLED C TYPE 4000K (2 LAMP + DRIVER) 24 6,534.26 Electrical Offices 8760 2 31 Fluorescent, 24" (2) T8 lamps 2 22W 2FT STRIP FIXTURE MCCT - LEDONE 22 175.02 Electrical Offices 8760 30 84 Fluorescent 48", (3) T8 lamps, BF normal30 36W TLED C TYPE 4000K (3 LAMP + DRIVER) 36 14,001.98 Electrical Offices 8760 16 33 CFL, 26W, quad, mag ballast16 12W PL HRZ P&P 4000K 12 3,267.13 Chlorine/Chem 8760 21 194 Metal halide, (1) 175W lamp, electronic ballast21 63W CORN LAMP E39 BASE - LEDONE 63 26,749.63 Chem area 8760 3 42 CFL, 42W, screw base3 16W A21 5000K 16 758.44 Chlorine/Chem 8760 10 30 CFL, 30W, screw base10 12W PL HRZ P&P 4000K 12 1,750.25 Monument Wall 8760 2 29 Fluorescent 48", (1) T8 lamp, BF normal2 12W TLED C TYPE 4000K (1 LAMP + DRIVER) - ESPEN 12 330.60 Miscellaneous Lift Fee 1 Miscellaneous Recycle Fee1

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Customer journey

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Customer participation agreement Paul Barnes 7501 College Town Dr Sacramento, CA 95819 By signing this Customer above) agrees to the following Terms and Conditions:Measures and Incentives: is attached to this Agreement. I agree that to the best of my knowledge the schedule of operations contained in the Report accurately describes the hours of operation at the facility listed above. I understand that the energy efficiency, electric vehicle, and Go-Electric measures described in the Report represent an estimate of expected energy savings and/or bill impacts, and that Complete Energy Solutions does not guarantee a specific level of cost savings from the implementation of the proposed Solutions is administering the Program provided in partnership with TRC Companies. Incentives for energy savings are calculated using the appropriate baseline to exceed California Title 20 and Title 24 standards. New products ordered, purchased, or installed prior to 4/1/20 or after 12/31/24 do not qualify for an incentive. Resale products, products leased, rebuilt, rented, received from warranty of insurance claims, exchanged, won as a prize, or new parts installed in existing products do not qualify for incentives. SMUD is not responsible for the economic and technical feasibility, operational capability, and reliability of the Project. Program Dates: To be eligible for incentives, all projects must be installed and completed before December 31, 2024. Funding of incentives is distributed on a first-come first-served basis. Project Commitment and Installation Completion Process: I understand that I must have a signed Site Access Agreement on file to confirm Program eligibility, as well as this signed Customer Participation Agreement to initiate installation. For each work order, I agree to have Complete Energy Solutions contact (aa walk-through inspection, review the scope of the Projects outlined in the Report, and schedule the Project installation at a time that is mutually agreeable to all parties. I understand that the total installed costs for the components of the Project are described in the attached listing of individual work orders. Costs for correcting electrical code violations are not included in the costs quoted above and are not covered by the Program. Any einstallation will be cause for the Contractor to stop work on the affected item(s) until such violations are corrected. I understand that the contractor walk-through may result in a Change Order due to specification or electrical code violations and that I will be notified and approve of any cost adjustments before additional work is completed. Contractors are responsible for all on-site permitting and being properly equipped to conduct work on Program projects.

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I will sign an agreement with each Contractor, which shall be solely between the Contractor and Customer, for the out-of-pocket portion of the Project costs. I understand that Complete Energy Solutions will provide an incentive, detailed in the work order listing, to offset the cost of the Project installations, and the incentive can be paid directly to the Contractors. I understand that I am responsible for paying the balance of the agreed-to contract price after incentive payment and that payment is due to the Contractor upon completion of the individual work order. By enrolling in the Program, I agree not to seek reimbursement from any other energy efficiency program for the same measures incentivized under other programs. I understand that I am responsible for reimbursing the Program should I receive other incentive payments for the same measures. At the completion of the Project, I agree to sign the Customer The value of incentives and direct installations is taxable, excluding energy efficiency related items. Program will report incentives and direct installations greater than $600 to the IRS unless you are exempt. Please consult your tax advisor concerning the taxability of incentives. The Customer, not the Program, is responsible for any taxes imposed as a result of your receipt of incentives from this Program. Form 1099 will be issued for the Customer, regardless of who the payee is, because the Customer receives the benefits of the incentives. For projects involving added load to a customer site, a SMUD Infrastructure Capacity Evaluation (ICE) must be submitted and returned to analyze the available existing transformer capacity. The CES team will help to fill out the form and submit it to SMUD. Additional load may require a Rule 16 application which requires a deposit, payable to SMUD, along with other associated infrastructure costs or fees. If a customer moves forward on a project in which the added load may exceed the existing infrastructure capacity, the CES team will work to identify all added costs or liabilities associated before the project commences. I hereby authorize SMUD to share my business contact information with the Business Environmental Resource Center (BERC) of Sacramento County, for the purpose of qualifying my business for BERC program, following completion of project. This authorization will remain valid until revoked by me in writing. I may revoke this authorization at any time by providing written notice to SMUD. I hereby indemnify and forever hold SMUD harmless from any and which I or my heirs may have resulting from SMUD sharing my business contact information with BERC. Customers receiving the SMUD Business Electricity Reports may see a change in the energy efficiency recommendations in future reports due to TRC Companies updating your business profile. Updating your business profile helps SMUD provide more relevant information in future reports.

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Customer approval I have read and understood the Terms and Conditions of this Agreement. I certify that the information I have provided is true and correct. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date set forth below. I agree to assign my incentive to the Contractor. I understand that whether I assign the incentive to the Contractor or not, I remain the beneficiary of the incentive(s) and may receive a Form 1099 for which I am responsible. Check this box if you do not agree to release the Project name, photos and other relevant Project information to SMUD Complete Energy Solutions, TRC (implementor), and their agents for use in reports, case studies and other materials for this Program. As shown in the proposed items cost section, customer Out of Pocket Cost is $45,247.05. Customer SMUD Complete Energy Solutions Customer Representative: Paul Barnes Energy Advisor: Chad Bender City of Sacramento - Fairbairn WTP TRC Companies 7501 College Town Dr 10680 White Rock Road, Suite 100 Sacramento, CA 95819 Rancho Cordova, CA 95670 Phone: 916-430-0969 Phone: (530) 613-5256 Email: [email protected] Email: [email protected] _______________________________ _______________________________ _______________________________ _______________________________ Date

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