Energy Savings Strategies for Transit Agencies (2013)

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8 Selecting and prioritizing actions to save energy is a challenge for transit agencies. These agencies must balance a number of considerations, including short-term and long-term cost impli- cations, impacts on operations, and—for all but the smallest agencies—achieving buy-in across multiple operating units. Strategic planning and dedicated management structures for energy and environmental issues can help. The following chapter discusses the ways that transit agencies can plan for energy savings, analyze and select strategies, and finance the investments required. STRATEGIC PLANNING FOR ENERGY SAVING STRATEGIES As sustainability becomes an increasing concern in the transit industry, more agencies are examining ways of organizing envi- ronmental and energy programs by creating new management structures or incorporating sustainability and energy concerns into existing ones. Some of the primary ways that agencies do this include internal policies, sustainability or energy plans, environmental management systems (EMS), and environmen- tal and sustainability management systems (ESMS). Internal Policy Development A number of agencies have created internal policy documents or plans related to sustainability, which generally incorporate a desire to improve energy efficiency or reduce energy use— over half of the survey respondents had developed or are developing an agency policy statement related to energy, and just under half have developed or are developing an energy or sustainability plan. Policy statements often include a general commitment to sustainability or to some element of sustain- ability such as resource conservation or improved energy efficiency. Sustainability plans take these statements one step further by outlining specific activities for the agency to pur- sue, with goals, performance measures, and accompanying performance targets. Such policies and plans have several benefits for the agency; they establish clear intentions related to energy and sustainability, lay out steps to achieve those intentions, and indicate some degree of internal agreement or support from decision makers. For example, the board of directors of Sound Transit, which serves King, Pierce, and Snohomish counties in Washington State, adopted a Sustain- ability Initiative in 2007. This initiative established focus areas to improve the sustainability of the agency. Building on the Initiative, Sound Transit’s 2011 Sustainability Plan defines a specific set of coordinated strategies in the cate- gories of ridership, conservation, and operating efficiency. These categories were selected to reflect the triple bottom line of sustainability: equity, environment, and economy. The plan set out long-term (20-year) targets for performance, relative to baseline performance in 2010. Specific energy-related per- formance measures are provided in Table 4. The plan includes a list of potential performance metrics, including percentage of construction contractors with energy or GHG reduction plans in place; energy use per depart- ment, facility, and mode; ENERGY STAR ratings for facili- ties; percentage of recycled materials used in construction projects; cost of recycled materials used for operations as a percentage of operations materials; and staff awareness of sustainability plan implementation. Sound Transit’s plan also delineates a management struc- ture and responsibilities for achieving these targets in an organized and cost-effective way as indicated in Table 5. The plan identifies distinct roles for the agency’s Chief Executive Officer (CEO), executive directors, sustainability manager, and other staff. LA Metro has an agency-wide Metro Sustainability Imple- mentation Plan that was adopted by its board. The agency also created an Energy Conservation and Management Plan (ECMP), released in 2011 (3). The ECMP examines energy use, available energy supply, and energy rates—both current and projected. It then presents opportunities for energy effi- ciency and the use of renewable energy as well as a possible energy management structure. By closely examining how LA Metro uses energy (for what; from what sources, including which utility companies; and at what prices), the plan pro- vides important baseline information to identify areas with potential for improvement. For example, Figure 4 shows that although 68% of the energy consumed in LA Metro build- ings comes from electricity, electricity represents 91% of the agency’s energy costs. This situation is a result of the high price of electricity relative to natural gas. Although the ECMP is based primarily on current data, it also recognizes that energy price volatility and technology development in the coming years may change the energy strategy. Environmental Management Systems Environmental Management Systems (EMS), sometimes referred to as Environmental and Sustainability Management chapter three PLANNING FOR ENERGY SAVINGS AT TRANSIT AGENCIES

9 Goal Targets (long-term) Performance Measures Save Energy All fleets deploy the most fuel-efficient, clean, and cost-effective vehicles that optimize the use of proven technology. 40% of GHG emissions are reduced (per vehicle-revenue-mile). Electricity use is carbon neutral. Energy use GHG emissions Percent electricity from renewable sources Criteria air pollutant emissions Protect Ecosystems One percent of indoor and outdoor water use is reduced (per vehicle-revenue-mile) on average per year. Total ecosystem functions are improved. Low impact development treats 100% of stormwater in new facilities. Water use Number of native plantings Use Less, Buy Green 100% of the waste stream is diverted from landfills. 100% of purchases are assessed for environmentally preferable products. Sound Transit is a “paperless office.” Waste to landfill Percent waste diverted to recycling/composting Number of pesticides/harmful toxics used Paper use Sound Transit Sustainability Plan (11) [Online]. Available: http://www.soundtransit.org/Documents/pdf/about/environment/SustainabilityPlan.pdf. TABLE 4 SOUND TRANSIT SUSTAINABILITY TARGETS TABLE 5 LEADERSHIP STRUCTURE FOR SOUND TRANSIT SUSTAINABILITY PLAN Position Role and Authority in Sustainability Plan Implementation CEO Initiating Sponsor: Ultimately ensures that Sustainability Initiative and Plan is implemented. Executive Director, Planning, Environment and Project Development Department Executive Sponsor: Takes overall responsibility, as delegated by CEO. Oversees plan implementation and integration. Champions and empowers the Sustainability Committee. Executive Leadership Team Director, Office of Environmental Affairs and Sustainability Sustaining Sponsors: Ensure staff are assigned responsibility and empowered to accomplish the Sustainability Plan. Address applicable sustainability priorities and initiatives in the three-year business plan and scorecard. Ensure departments meet annual sustainability targets. Sustainability Manager, Office of Environmental Affairs and Sustainability Single Point of Accountability: Oversees plan development, management, and implementation. Directs the work of the Sustainability Committee. Manages the Environmental and Sustainability Management System. Sustainability Steering Committee Staff, Office of Environmental Affairs and Sustainability Implementers: Advance the Sustainability Plan by making policy recommendations. Work with departments to ensure that near-term initiatives are addressed in three-year business plans and scorecards. Develop and approve the annual sustainability targets. Review and approve plans, procedures, and continual improvement actions related to the environment. CEO = chief executive officer. Sound Transit Sustainability Plan (11) [Online].Available: http://www.soundtransit.org/Documents/pdf/about/environment/SustainabilityPlan.pdf.

10 Systems (ESMS), are increasingly used at transit agencies as strategic frameworks for implementing sustainability and energy-saving practices. The International Organization for Standardization provides a standard set of processes with its ISO 14001 EMS, which is applicable to any organization. Fig- ure 5 summarizes the framework for creating an ISO 14001 EMS. As the figure shows, an EMS addresses all phases of the environmental management process, from goal setting to program implementation to evaluation. Since 2003, FTA has sponsored EMS training for transit agency leadership as conducted by the Center for Organiza- tional and Technological Advancement at Virginia Polytechnic Institute and State University. Organizations that have experi- enced EMS training and are certified by the International Orga- nization for Standardization 14001 standard can be audited by a third party in order to be designated as compliant (12). Implementing an EMS can help to organize sustainability initiatives internally and also to give these initiatives credibil- ity agency-wide by creating a formal structure for developing and deploying them. The training provided to transit agencies prompts each agency to identify a particular facility such as a maintenance yard or administration building as a pilot case FIGURE 4 LA Metro facility energy expenditures (left) and energy consumption (right). Energy Conservation and Management Plan (3). FIGURE 5 “Basic Elements of an EMS” (12). [Online]. Available: http://www.cota.vt.edu/ems/what_ is_ems/basic_elements.html [accessed Mar. 7, 2012].

11 of an energy audit and help pay for energy efficiency retrofits generally has few drawbacks for a transit agency. Absent any special funding opportunities, identifying a transit agency’s best strategies to save energy requires some research and analysis. Making informed decisions about energy-saving opportunities requires understanding the energy savings that are likely to result, the costs to implement the strategy, and the co-benefits of the strategy. Most methods for sav- ing energy involve some type of upfront investment that the agency will recoup over time. The upfront cost and the vol- ume of energy savings determine how short or long the pay- back period will be. (Specific examples of payback periods for various strategies appear in chapter four.) Ideally, transit agencies could conduct a comparison of multiple strategies to determine investment priorities. Evaluating Energy Savings For some strategies, evaluating energy savings is relatively straightforward. For example, more efficient lights or appli- ances that cost the same as conventional equipment but require less energy to operate will produce predictable sav- ings. For other strategies, estimation of energy savings is more complex. For example, the impact of improved vehicle maintenance on vehicle fuel economy may depend on the operator’s driving habits, the age of the vehicle, and the traf- fic conditions and topography of the route. Agencies can look to published literature and the experience of other agencies or conduct their own pilot studies to develop estimates of energy savings for such strategies. Figure 6 shows the proportion of survey respondents implementing each type of strategy that have information about the impacts of those strategies. Half of respondents with power generation or vehicle technology strategies have evalu- ated their impacts in some way. Power generation strategies are generally implemented for the sole purpose of reducing the use of grid-based energy, and evaluating renewable power strategies is fairly straightforward, since energy saved is the same as energy generated. To evaluate the energy impacts of to test and practice the management structure. Agencies then designate “environmental significant aspects” of the facility to manage, such as electricity use, fuel consumption, idling, or recycling. For these aspects, the EMS helps to set objec- tives, targets, an evaluation process, and designates responsi- bility for tasks. The structure also sets up documentation and evaluation systems to help agencies improve their EMS (13). Of the agencies responding to the survey, two-fifths have or are establishing an EMS. Several agencies mentioned the importance of the FTA’s training program in improving man- agement of environmental systems. For example, the South- eastern Pennsylvania Transportation Authority (SEPTA) found that its EMS process was key to obtaining buy-in from other departments and to moving projects forward to save energy and reduce the agency’s environmental impact. SEPTA’s EMS has created a forum where projects can be vetted, and has helped to engage agency staff in developing solutions to energy and environment-related problems. Using the analytical process developed through EMS training, agency staff has been able to make a business case for projects that might otherwise have been ignored. Utah Transit Authority (UTA) reports that achieving EMS certification has helped to open doors for the agency to other sustainability-related groups. The agency now participates in the Utah Clean Cities Coalition, reports to The Climate Regis- try, and has signed on to APTA’s Sustainability Commitment. Participation in these groups allows the agency to keep up to date on new developments that can help to improve its energy performance. Other agencies that have taken EMS training include the Washington Metropolitan Area Transit Author- ity (WMATA), Massachusetts Bay Transportation Authority, Miami–Dade Transit, and city of Asheville Transit (13). EVALUATING AND SELECTING STRATEGIES In some cases, transit agencies pursue isolated opportunities for energy savings that clearly fit agency goals. For example, taking advantage of a state rebate program to cover the cost 21 13 16 9 10 7 6 3 3 0 5 10 15 20 25 Number of agencies using a strategy who have information on its impacts FIGURE 6 Respondents with information about impacts by strategy category.

12 Payback Periods Payback periods are defined as the amount of time it takes for money saved from reduced energy use to completely offset the upfront investment required to implement an energy-saving technology or strategy. Payback periods can be estimated prior to an investment based on an understanding of expected sav- ings; however, actual payback periods vary depending on the performance of the project and fluctuations in energy prices. Life-Cycle Cost Analysis Life-cycle analysis examines the net costs to the agency over the expected lifetime of an investment. For a bus technology, these costs include procurement, fuel use, maintenance, any related infrastructure upgrades, and perhaps decommission- ing and disposal costs at the end of the vehicle’s life. A new bus technology may also generate some new revenue or cost savings, such as savings on maintenance or grant funding to support clean bus technologies. Life-cycle costs are typi- cally calculated on an average annual basis and sometimes compare costs across competing investments that may have different lifespans. Cost-Effectiveness A cost-effectiveness analysis compares the net cost of an investment with the impact of the investment on energy sav- ings (or another goal). For example, strategies can be com- pared in terms of their total cost per BTU of energy saved. For agencies with specific goals to reduce energy consump- tion, a cost-effectiveness metric can help to prioritize invest- ments to meet those goals. There are many different ways to structure analyses of costs. It is important that such an analyses be tailored to the specific purpose and financial and environmental goals of the agency and provide a consistent means to evaluate all com- peting strategies. The San Mateo Transit Authority (SamTrans) calculated the NPV of the cost and savings streams of multiple potential GHG reduction strategies from 2010 to 2020. Many of these are also strategies designed to reduce energy consumption. Strategies that have positive NPVs are presented in Figure 7. These strategies would generate net cost savings for the agency by 2020. Co-Benefits of Strategies The primary benefit of reducing energy consumption for a transit agency is derived from the reduction in funds spent on energy in the form of fuel or electricity. However, agencies and the traveling public may realize other benefits from strat- egies to save energy. A few of these benefits are listed here. vehicle technologies an agency can use fuel records or esti- mates of vehicle fuel efficiency. To evaluate strategies asso- ciated with energy used in buildings, agencies can rely on metered electricity records or industry estimates the energy consumption of individual technologies. Other types of strate- gies have been evaluated less frequently, probably because of the challenges of doing so and their relatively small impacts. A number of strategies can contribute minor improvements to vehicle fuel efficiency, including driver training and anti- idling (vehicle maintenance and operations strategies) and stop spacing and off-board fare payment (service design strat- egies); however, tracking the impacts of such strategies can be difficult. Some other types of strategies reduce an agency’s energy use only indirectly (for more information on the dis- tinction between direct and indirect energy use see “Strate- gies to Reduce Indirect Energy Use in Facilities”) and as such their specific energy impacts may be of lesser interest. These include recycling construction waste and sourcing materials locally (see chapter four, Construction Materials) and pro- moting teleworking (see chapter four, Employee Commute Programs). Before evaluating the impact of specific strategies agen- cies can identify assets that are using energy inefficiently, as these are likely to be the most likely to yield the most savings. Comprehensive energy audits for facilities provide informa- tion about the energy intensity (expressed as energy use per square foot) of facilities. Comparing the energy intensity of various facilities highlights facilities that may be using more energy than necessary. An example of this type of evaluation is provided in this chapter (see “Internal Policy Develop- ment”); LA Metro’s evaluation of the energy intensity of all of its buildings revealed a considerable difference between different buildings with similar functions. Although evaluating the energy savings from various strategies is important for strategic planning purposes, there remains a knowledge gap concerning the impacts of many strategies. Inadequate resources to conduct comprehensive evaluations is almost certainly a factor. Evaluating Costs There are a variety of closely related techniques for evaluating the costs of energy-saving investments. These include cost- benefit analysis, return on investment, sustainable return on investment, and life-cycle analysis. Many of these techniques make use of net present value (NPV), which allows for com- parisons of streams of costs and savings over multiple years. Some of the costs and benefits that might be evaluated for any strategy include costs of purchasing equipment, maintenance costs over the equipment lifetime (including labor), savings from reduced energy use, and available grants or incentive programs. This synthesis does not contain a comprehensive explanation of cost evaluation techniques, but does offer a summary of key concepts.

13 Energy Savings as a Co-Benefit Some strategies undertaken primarily to improve service or reduce costs can generate energy savings as a co-benefit. For example, an agency may improve travel times on its routes by respacing stops and giving buses priority at traffic signals in order to improve customers’ experience. These changes will likely also save energy for the agency, because they will reduce the amount of fuel spent idling in traffic and at bus stops. Comparing Strategies Ideally, energy-saving transit agencies would compare multi- ple energy-saving strategies in terms of costs, energy savings, and co-benefits in order to select strategies for implementa- tion. At present only a few transit agencies have conducted this kind of analysis. There are a variety of metrics that can be used to compare strategies, such as total energy saved, pay- back period, dollars per unit of energy saved, and energy sav- ings per vehicle-revenue-mile. Again, agencies should select metrics that align with their own financial and environmental goals and decision-making processes. Bay Area Rapid Transit (BART) in San Francisco com- pared a series of possible retrofits with existing rail cars. Figure 8 shows the results of this analysis. BART’s results demonstrate the different possible rankings of strategies depending on the metric used. For example, ultracapacitors for regenerative braking energy storage would save the most energy for the agency; however, the payback period for this Air Quality Improvements Improvements in fuel economy will typically reduce tailpipe emissions that can affect local or regional air quality and consequently public health. In particular, alternative fuels such as CNG, liquefied petroleum gas (LPG or propane), and some biofuels burn cleaner than traditional diesel and emit fewer nitrogen oxides (NOx) and particulate matter. Hybrid vehicles of any kind will also reduce emissions through reduced fuel use. GHG Emissions Reduction Most energy used by transit agencies is derived from fossil fuels, which is consumed in vehicles, generators, and gas- fired boilers and furnaces, as well as in power plants supply- ing electricity to buildings and trains. Activities that reduce an agency’s use of energy generally also reduce its GHG emis- sions. Several agencies with sustainability plans that target energy use also have goals to reduce agency GHG emissions. Improvement in Public Image Transit agencies can enhance their public image by making energy-saving strategies visible to the public. Transit agen- cies already offer “green” transportation, since a highly occu- pied transit vehicle is a more energy efficient way to travel than a single-occupancy vehicle. Strategies to make transit agencies more energy efficient and environmentally friendly can be effective marketing tools to attract new customers. $216,651 $196,085 $39,612 $24,799 $16,739 $7,730 $7,328 $5,342 $929 $125 $49 $0 $50,000 $100,000 $150,000 $200,000 $250,000 Enhance Recycling (50% Diversion) Reduce Dead-Head Miles (8% reduction) Building retrocommissioning Occupancy Sensors Lighting Control Efficient Non Revenue Vehicle Future Desktop Computer Management Efficient Non Revenue Vehicle Past Energy Efficient lighting Employer Outreach Compressed WW Employer Outreach TDM Programs Solar Thermal Installation FIGURE 7 SamTrans’ identified strategies with a positive annualized net present value. TDM = Transportation Demand Management; WW = work week. [Draft Sustainable Return on Investment (SROI) Analysis for SamTrans: An Assessment of Building and Transportation Strategies (14)].

14 strategy is considerably longer than that for other strategies owing in part to the large upfront investment required (15). BART’s comparison of strategies highlights the tradeoff between smaller initial cost outlays and smaller eventual savings on one hand and larger initial cost outlays and larger savings on the other hand. LA Metro performed a cost-effectiveness study of strate- gies to reduce GHG emissions, many of which would also save energy. This analysis looked at the cost per metric ton of carbon dioxide equivalent (MTCO2e) reduced over a range of options and organized them by both cost-effectiveness and total possible reduction in emissions (see Table 6). Some strategies that would generate cost savings for the agency reduce relatively small amounts of energy use, such as the Red Line Tunnel Lighting Retrofit. Strategies that would save large amounts of energy can generate cost savings on a life-cycle basis (such as on-board railcar energy storage) or require large net cost outlays (such as wayside energy stor- age substations). FINANCING ENERGY SAVINGS Many strategies that will ultimately reduce a transit agency’s energy use and save money have significant upfront costs. Given the limited budgets at many transit agencies, it is often critical to find creative ways of financing these improve- ments. Available funding sources include federal grants, as part of the 2009 stimulus program, as well as the continuing Transportation Investments Generating Economic Recovery (TIGER) and Transit Investments for Greenhouse Gas and Energy Reduction (TIGGER) programs, state and regional incentives programs, financing agreements with utilities, and partnerships with the private sector. Agencies can also make use of their own capital and operating funds to implement strategies. Federal Grant Programs In recent years, several federal programs have helped agen- cies deploy energy-saving technologies by covering all or FIGURE 8 Savings and costs for retrofitted BART cars. Source: BASE Energy, Inc., Energy Efficiency Assessment of Bay Area Rapid Transit (BART) Train Cars (15).

15 buildings. FTA also allocates funds to transit agencies through the Federal Clean Fuels Grant Program. Grants under this program have helped transit agencies to purchase new hybrid and electric buses or to retrofit existing buses with new technologies. State Funds and Incentives Some states provide funding or incentive programs to assist public agencies and even individuals and private businesses in making energy efficiency improvements. For example, the Connecticut Energy Efficiency Fund, through small charges on utility bills, provides a variety of rebate opportunities for residents, businesses, and municipalities who purchase energy-efficient lighting, appliances, or other equipment (19). Similarly, the California Energy Commission provides a variety of rebates and loan programs that transit agencies can access to pay for upgrades and retrofits. Some agen- cies have also received grant money from state environmen- tal agencies. For example, SEPTA received partial funding for its Wayside Energy Storage System (WESS) through the Pennsylvania Department of Environmental Protection (see chapter five, Southeastern Pennsylvania Transportation Authority). most of the costs of technology purchase and installation. Five of the agencies surveyed specifically mentioned using one or more of these grant programs. The American Recovery and Reinvestment Act of 2009 (ARRA) provided funding for a wide variety of transpor- tation projects covering all modes. FTA alone awarded 1,072 grants for more than $8.78 billion (17). Similarly, the U.S.DOT has provided more than $2.5 billion in discretion- ary grants under multiple funding rounds of the TIGER pro- gram (18). Several transit agencies surveyed or covered in the literature review used ARRA or TIGER funds for energy- savings initiatives. Another federal discretionary grant program—the TIGGER program—has more specifically targeted energy use in transit agencies. TIGGER has provided funding to transit agencies, state departments of transportation, and tribal governments for capital investments that help to reduce energy consump- tion or GHG emissions. TIGGER grants ($225 million over three funding rounds to date) have funded projects such as renewable energy installations, fuel cells, vehicle purchases and retrofits, technology upgrades to increase efficiency or allow for energy storage, and improvements to heating, ventilation, and air conditioning (HVAC) systems at agency GHG Benefit Cost Savings/Cost Neutral Moderate Cost ($300– $600 per ton) High Cost (>$1,000 per ton) Large GHG Benefit (>10,000 MTCO2e/year) Ridesharing/transit programs for employers Transit-oriented development Vanpool subsidy On-board railcar energy storage Expand rail and bus rapid transit systems Wayside energy storage substations Moderate GHG Benefit (1,000–10,000 MTCO2e/year) 45-foot composite buses Facility lighting efficiency Metro employee transit subsidy Bicycle paths along transit corridors Gasoline–electric hybrid buses Small GHG Benefit (<1,000 MTCO2e/year) Red Line Tunnel lighting retrofit Hybrid non-revenue cars Recycled water for bus washing Low water sanitary fixtures Solar panels Bike-to-transit commuter incentives Hybrid non-revenue light trucks Greenhouse Gas Emissions Cost Effectiveness Study (16, p. 2). TABLE 6 LA METRO SUMMARY OF STRATEGY COST-EFFECTIVENESS AND MAXIMUM ANNUAL EMISSION REDUCTION

16 BARRIERS TO STRATEGY IMPLEMENTATION Transit agencies confront a variety of challenges to implement- ing energy-saving strategies. Analyzing, selecting, and imple- menting strategies requires staff time and sometimes support from consultants. The upfront costs of strategies can also be prohibitively high. The latter was cited most frequently as a barrier to implementation by respondents to the survey, as shown in Table 7. The length of time that it takes to realize benefits can also be a challenge, because benefit streams affect the payback period for the investment. Other challenges men- tioned by survey respondents included the difficulty of measur- ing actual energy savings after implementation and the limited control over the energy performance of leased buildings. Agencies need staff resources to identify, research, and implement innovations. A separate study conducted in 2005 on service and management innovations at transit agencies provided some results that are also relevant to energy-saving innovations. This study included a survey of transit agencies focusing on their experiences with innovative practices. After initial cost and operating cost, internal leadership was the next most important factor for transit agencies when considering innovations. Agency staff probably provided the internal leadership referenced, as only 2% of respondents cited a sug- gestion from their board as the primary reason for change. Lack of personnel was the next most important concern (20). Upfront Investment Costs As explained previously, financing energy savings involves upfront investment costs. Some strategies have low upfront costs and quick payback periods. These include changing to more efficient light bulbs or implementing anti-idling policies. Such strategies are likely to be easy to justify to an agency’s management. Other strategies with significant benefits can cost millions of dollars to implement and take significant resources in terms of staff time to deploy. For example, BART identified the cost of using ultracapacitors of regenerative braking energy storage as $94.7 million dollars (15). Agencies Financing Agreements with Utilities and Third Party Energy Companies Utility companies increasingly offer programs to help transit agencies finance energy efficiency improvements by using energy savings to pay off an initial investment cost. With this model the utility, or a third party energy service company, provides the initial investment on behalf of the agency. The agency then pays back the money owed using the amount that they save on their energy bills. The agency’s energy bill does not decrease until the energy efficiency upgrade has been paid off. This type of arrangement is known as energy perfor- mance contracting or the Energy Service Company (ESCO) model. Some states have specific authorizing legislation or state sanctioned programs that allow for public agencies to engage in this type of contract. For example, the Pennsyl- vania Guaranteed Energy Savings Act allows for an agency to enter into an agreement with an ESCO, which provides technical expertise and performs energy efficiency upgrades, and a third-party lender, that provides upfront capital costs. The lender and the ESCO are paid back through the energy saved, and the ESCO guarantees the level of energy savings per year over a period of ten to 15 years. Maryland has a similar program, and NYMTA has financed projects through a similar agreement with the New York Power Authority. Some transit agencies have similar partnerships with renew- able energy developers. For example, a renewable energy developer might construct and own a renewable energy instal- lation on property owned by a transit agency. The transit agency then purchases the electricity generated by the developer. This model allows developers to initiate new projects with guaran- teed demand from creditworthy, public sector entities, while the transit agencies are able to purchase renewable energy without shouldering the upfront installation costs. BART used this approach to install a 2.5 MW system on district property (Fred Schultz, BART, personal communication, 2012). Use of Agency Funds Agencies can also pay for strategies to save energy using their own capital and operating funds. Forty percent of sur- vey respondents who provided information about how they finance energy savings use capital funds for at least some of their energy-saving projects or programs. However, sev- eral noted that agency funds were only used for relatively inexpensive upgrades with short payback periods. Financing more expensive projects with an agency’s own funding is most likely only a viable option for larger agencies. A final option for funding energy efficiency projects is for an agency to set up a revolving loan fund. Using this approach, seed money is invested in one or more energy- saving projects that generate cost savings over time. The money saved through these projects then goes back into the fund and can be used to finance a new set of projects. What challenges has your agency experienced with implementing energy saving strategies? Please check all that apply. Response Count Upfront costs required to implement strategies 35 Time required to realize benefits from strategies 26 Lack of internal expertise or staff time available 21 Lack of decision-maker/stakeholder support 10 Unsure of strategy effectiveness 13 No challenges 3 Other (please specify) 6 TABLE 7 CHALLENGES IMPLEMENTING ENERGY SAVING STRATEGIES

17 agencies analyzing multiple strategies have used support from consultants to evaluate their options. Almost half of survey respondents cited a lack of internal expertise or available staff time as a barrier to implementing energy-saving strategies. Achieving Buy-in from Stakeholders Achieving buy-in from decision makers and stakeholders is key to moving forward any new practice at a transit agency; however, less than one-quarter of survey respondents cited a lack of stakeholder support as a barrier to implementing energy-saving strategies. Although in the 2005 study referenced previously (21) only 2% of transit agencies mentioned their board as the primary reason for a change, support from the board is still important to the extent that boards have authority over budgeting and other decision making. Boards at some transit agencies play an active role in defining energy and environmental policies. For example, LA Metro’s board has enacted a Green Construc- tion Policy and a Renewable Energy Policy (22). The Board of 9 Town Transit in Connecticut helped to spur the purchase of hybrid buses for that agency (see chapter five, 9 Town Transit). with large budgets are more likely to implement such strate- gies, with smaller agencies finding such upfront investment costs prohibitive. As mentioned earlier, agencies typically rely on grant funding and other outside sources to finance upfront costs. However, it is important to recognize that opportunities such as discretionary federal grant programs are very competitive. The interest in these opportunities has far exceeded the funds available. For example, for the first round of TIGGER grants, the FTA received more than $2 billion worth of applications for $100 million in funding (21). Staff Time and Expertise Implementing a new policy, procuring a new technology, applying for a new funding source, and measuring benefits from a strategy all require staff time and resources. Appli- cations for grant funding can be time consuming, and may ultimately be unsuccessful. Thoroughly evaluating strategies either before or after their implementation requires research, data collection, and analytical expertise spanning many dif- ferent service areas within a transit agency. Many transit