2014 2:00:00 PM

Monday, March 24, 2014 2:00 PM
City Council Chambers, Legislative Bldg, 745 Fourth St., Sparks

General Business: 6.4

Title: Consideration and possible approval of the Financial Grade Operational Audit for the Truckee Meadows Water Reclamation Facility by Ameresco, Inc.

Petitioner/Presenter: Neil C. Krutz, P.E. – Deputy City Manager for Community Services/Michael Drinkwater P.E. – TMWRF Plant Manager

Recommendation: Staff recommends Council accept the Financial Grade Operational Audit

Financial Impact: There is no impact to the General Fund.

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief: City staff is asking the City Council to accept the Financial Grade Operational Audit performed for the Truckee Meadows Water Reclamation Facility by Ameresco, Inc.

Background: TMWRF is jointly owned by the Cities of Reno and Sparks. Staff believes potential opportunities for reduction in electrical consumption and chemical use exist and that possible long term benefits will accrue to both Cities if savings in electrical power costs and chemical usage are identified and captured through the Energy Services (ESCo) process. The Financial Grade Operational Audit was developed and prepared by Ameresco, Inc. in accordance with City of Reno RFP 1425. The audit analyzed energy, water, chemical usage, and operating cost savings measures and developed a performance project. The audit included the estimated savings to be accrued, the costs to implement the project, and the internal controls used to ensure that project performance is achieved. The Financial Grade Operational Audit was conducted from August 2012 through June 2013.

Truckee Meadows Water Reclamation Facility was originally constructed in 1966. Many major modifications have been made since then in order to incorporate the growth of the Reno- Sparks area. TMWRF is responsible for processing the wastewater for residents and businesses in the Reno- Sparks area, the Sun Valley General Improvement District, and parts of unincorporated Washoe County, approximately 335,000 residents. The TMWRF wastewater treatment process uses a significant amount of energy and chemicals in processing approximately 28 million gallons of wastewater a day (MGD). All wastewater has to be treated so that final product effluent is clean enough to reenter the Truckee River. Upgrades to the plant are necessary to maintain efficient and effective operations.

Additionally, TMWRF has a goal to be as energy and operational efficient as is feasible. TMWRF is currently reliant on NV Energy to provide energy. On average, TMWRF uses approximately 2.5 MW (megawatts) of electricity per day with a peak energy usage of approximately 3.5 MW, at an average cost of $7,800 a day. This represents approximately 20% of TMWRF’s annual operations and maintenance budget. Due to rising energy prices and an increase in flows and loads at the plant, electricity costs will increase for the TMWRF plant. By improving efficiencies, TMWRF will consequently lower energy, chemical and operating costs for the plant.

To accomplish these goals, the Reno and Sparks City Councils selected Ameresco, Inc., an energy service company focused on providing clean and sustainable energy, to perform a Financial Grade Operational Audit through RFP 1425. Ameresco has extensive experience in retrofitting and improving wastewater treatment facilities and has particular expertise in Nevada performing over $130 million in projects. The Financial Grade Operational Audit performed by Ameresco identified $24,911,589.00 of improvements to maintain the integrity of the plant and lower energy, chemical, and operational costs. The Audit also provides a plan for a path to net-zero energy. In order to achieve these goals, TMWRF is looking to retrofit the facility with a variety of different arrangements and making the plant 45% energy independent. As a result, the plant would save $1,122,887 a year in energy, chemical and operational costs guaranteed through a performance contract.

The following Energy Conservation Measures (ECM) are recommended by Ameresco. The guaranteed cost for each ECM, along with a brief description of the work is given in the attached Table 1. Table 2 shows the guaranteed savings for each ECM proposed in the project. Nutrient Recovery- ECM 2 is focused on minimizing the load of phosphorus. Phosphorus is currently removed by chemical precipitation, which accounted for $480,000 in chemical costs for TMWRF’s fiscal year. ECM 2 focuses on implementing the process of recovering phosphorus through struvite (Magnesium Ammonium Phosphate) precipitation, developed by a company called Ostara. Benefits of implementing this process are a reduction in methanol use, a reduction in alum use, a reduction in O&M costs for pipe scaling control, and a minimization of scaling problems. All phosphorus produced through the process is suitable as a fertilizer and will be sold to Ostara through a Byproduct Removal agreement, which is attached.

The cost savings are guaranteed through the Ameresco agreement. Biogas Cogeneration- ECM 4A provides for a new 850 kW cogeneration system that uses biogas captured and produced in the anaerobic digesters to generate power for the plant. The existing infrastructure would be upgraded to better produce and capture digester gas and waste heat. Along with revitalizing the cogeneration process and renovating the collection of biogas, ECM 4 includes the rehabilitation of the methane phase digesters, allowing them to operate at full capacity. The system will be designed to add a second 850 kW cogeneration engine at a later time. After the first cogeneration engine is operational and other ECMs are implemented, the total amount of biogas generated will be evaluated to determine if there is sufficient biogas for a second engine. The system is also being designed so that biogas generation could be enhanced by incorporating FOG, (Fats, Oils, and Grease). The existing FOG market was evaluated and it was determined that it was not financially feasible to include at this time.

Digester Domes Rehabilitation – ECM 4B provides for the rehabilitation of the two nonfunctional digester domes at the TMWRF plant. The plant requires three digestion tanks and domes to be functional in order to process the wastewater. Currently only three domes are functional out of the five domes at the facility. By repairing the two nonfunctional domes, redundancy is created within the plant. This redundancy allows for operations at the facility to continue even in the event that another dome fails.

Solids Dewatering- ECM 6 and 9 Dewatering the sludge allows for the maximum amount of water to be reclaimed and for more efficient disposal of the sludge. ECM 6 provides for the complete renovation of the solids dewatering system. ECM 6 provides for a simpler dewatering process, a minimization in maintenance, and increase the lifespan of the dewatering facilities. Operational savings would come from reduced energy usage made possible by newer technologies and replaced equipment, reduced maintenance, a reduction in the use of polymer, and higher cake solids resulting in reduced cake-hauling costs. In addition, ECM 9 focuses on the short term dewatering improvements. ECM 9 provides for the repair of the dewatering electrical control panel, sludge hoppers where dewatered sludge is stored, installation of a new dewatering polymer system, upgrades to the heating, ventilation, air conditioning, and air purge systems, and modifications to alum and centrate piping. These improvements provided for in ECM 9 concentrate on the short-term upgrades which can be made to the dewatering system before the complete renovations provided for in ECM 6. ECMs 6 and 9 have been designed to be compatible and to prevent redundancy and rework.

Lighting System Retrofit- ECM 7 provides for a retrofit of the lighting system. The majority of the interior lighting system was last upgraded in 2007. ECM 7 recommends upgrading 1,558 lighting fixtures with more efficient lighting technologies. ECM 7 also provides for the installation of lighting controls.

MyEnergy Pro- ECM 10 provides for the installation of MyEnergy Pro. MyEnergy Pro is a real-time internet based program that provides near real-time energy monitoring and an interactive interface to assist the facility managers in monitoring and managing energy use throughout the plant and educate the community on energy and water conservation measures being taken.

KEY PROJECT BENEFITS:

•Operational Permit Compliance Benefits: Ostara nutrient recovery system will stabilize phosphorous limit compliance for river discharge per Truckee River Operating Agreement and Nevada Division of Environmental Protection regulations. It will also recover approximately 7% of the ammonia from the centrate, reducing the loading to the nitrification towers.

•Air Quality Permit Compliance: Cogeneration system is highly encouraged by Washoe County Regional Air Quality Department and US EPA.

•Digester lid repairs are needed to meet current air quality standards.

•Path to Energy independence: Plant will be nearly 50% net energy and provide renewable energy to NV Energy portfolio standard.

•Local Jobs and Economic Support: Local equipment distributors, local subcontractors, and 75% local labor.

•Leverage Capital Expenditures: Use reserves to fund additional CIP projects beyond the approved 5 year CIP to yield lower operating costs.

•Lower Operating Costs: Reduce annual operating costs by at least $1.12 million/year. Per NRS 332.360, PacificWest Energy Solutions of Reno, NV, was selected as the Third Party Consultant to review the project proposal on behalf of the cities.

The findings are summarized in the Executive Summary as “After a thorough review and consideration of all project documentation and discussions, PacificWest has determined that the current project savings analysis, energy assumptions, and anticipated scope of work feasibility appear to be reasonable and sound. The investment grade operation audit analysis developed and provided by Ameresco has been deemed thorough and sufficient for TMWRF's purposes of accuracy and feasibility with regard to the overall project implementation.” The retrofits and upgrades proposed for TMWRF will not only help maintain the plant but also ensure quality production accompanied with savings in both energy and money. By making these upgrades, TMWRF advances its goals towards net zero energy and improves the treatment process of wastewater and the final product.

Analysis: The Financial Grade Operational Audit is the product of the first phase of the Ameresco project. Accepting the audit does not bind the cities to any further action.

Alternatives: Council could direct staff to provide other alternative.

Recommended Motion: I move to accept the Financial Grade Operational Audit for the Truckee Meadows Water Reclamation Facility.

Attached Files:

1.10.14 - Financial Grade Operational Audit for TMWRF (Excludes Appendices) - AMERESCO - FINAL.pdf

Ameresco - final.pdf

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