Tony Lehmann is the Finance Director at the City of Huntington Woods

The Regional Energy Office provides cities with zero-interest loans to conduct energy efficiency and renewable energy projects.

These projects are designed to save cities money on their energy bills every year, but we recently discovered that these investments were helping cities in other ways as well—energy investments can actually improve a city’s bond rating.

We first heard this from Councilman Brian Hartwell from the City of Madison Heights. He mentioned that their participation in energy efficiency projects with the Regional Energy Office contributed to the city’s enhanced bond rating with Standard and Poor’s (S&P). The City’s latest S&P report specifically states that “the general fund balance increased [due to] one-time revenues in the form of grants for energy upgrades.”

Why does this matter? Bonds are one of the main ways that cities raise revenue for capital projects, from roads to street lights to water and sewer systems. To get this funding, cities are required to establish a bond rating with a rating agency like S&P. The better the bond rating, the lower the interest rate that the city has to pay for bond financing.

We sat down with Tony Lehmann, finance director for the City of Huntington Woods, to talk about what Madison Heights’ recent S&P rating could mean for other member cities.

REO: Why do you think that bond agencies are looking at energy efficiency?

Lehmann: It’s emphatic, it’s measureable. They can see the results of it on the balance sheet. It also shows that we are moving forward. That’s what they’re concerned about. A bond is a multi-year thing, right? 15 years. 20 years. 25 years. Ok, so you’re fine today, but how about tomorrow? How about five years from now? Where are you going to be? What are you doing now to get yourself ready for five years from now?

Anyone would agree that energy management or helping commercial businesses or getting grant money in the door—that’s a big deal. That’s why dealing with the Regional Energy Office or other agencies like it that assist in doing that is a big deal.

REO: They’re really interested in your long-term prospects.

Lehmann: When S&P looks at this sort of thing they are concerned about the operation of the City in its totality. You can have all the money in the world and the management can be poor. S&P would take umbrage with that and will downgrade you because of that. When we’re talking about grant money or a city’s bond rating, the reality is that the more things you do, the more you can point to it in a comprehensive annual finance report.

In other words, including some of these forays into things like energy management, building management, helping commercial districts stay in the city—which obviously makes people want to operate businesses there—all of that has to do with that management piece.

REO: We heard from Madison Heights that S&P actually cited their energy efficiency work in their bond report. Do you think that other cities are going to have a similar experience? Does it surprise you at all?

Lehmann: It’s unremarkable to me that the bond rating would go up, not only because the fund balance is higher, but because when you are discussing this with Standard and Poor’s or other rating agencies, the first thing on the sheet is, “here are the initiatives we did this year…one of which is [an energy efficiency project].”

That’s why this is important: when you’re dealing with energy matters, with grant money, and with the initiatives that the city does, the rating agencies are very intrigued.

And, does it show up in our coffer? It does. In Huntington Woods I write this stuff in and I send this off to the rating agencies and there are sentences in the [comprehensive financial report] that directly point to the fact that well we’re doing this initiative at the library, we’re doing solar initiatives, we’re looking at other things that we’re doing and we’re involved with regional energy initiatives through the Regional Energy Office and so forth.

When they [S&P] get on the phone and talk to me about it, they may pick up on that and ask me a question about it. Are you working with other governmental agencies? What are the new initiatives that the City is doing? How does that pertain to the population being satisfied? How about the commercial district? And I’m ready with my answers. I say well, look on page 24 of the comprehensive annual financial report and there you will find what we’ve done this year.

REO: Would you say your involvement with the Regional Energy Office has helped with your bond rating?

Lehmann: Sure. One piece is the financial piece and the other piece is all the other stuff you are doing. Are you dealing with other organizations? Are you working with other governmental agencies? That kind of stuff shows that you’re managing things well.

That’s why this is important: when you’re dealing with energy matters, with grant money, and with the initiatives that the city does, the rating agencies are very intrigued. And that’s why the rating goes up. The rating goes up simply because you are not standing still. It shows that you’re moving forward. That’s what they’re concerned about.

What they don’t want to see happen is to have the city be an island. They don’t want to see everyone else looking at all of these different things going on and you as a city not doing anything.

Tony Lehmann has worked for the City of Huntington Woods for over 20 years. As the finance director, Mr. Lehmann was appointed by the city manager and is responsible for the general supervision of all City financial matters, including assisting in the preparation of the City budget. Mr. Lehmann serves on the Regional Energy Office’s Board of Directors.

SNRE student team meets with representatives of the City of Detroit and the DCAC

Many cities and towns throughout the United States and world have created Climate Action Plans to reduce current greenhouse gas emissions contributing to climate change and also take actions that will help the city adapt to the climate changes that are already in the pipeline. This includes the Climate Action Plans that Regional Energy Office members Ypsilanti, Southgate, and Hazel Park have completed and are in the process of implementing them.

However, despite its size and stature as a large American city, the city of Detroit has never completed a Climate Action Plan. But now that is changing. Kimberly Hill Knott, Senior Policy Manager at Detroiter’s Working for Environmental Justice, has taken the initiative to begin this process for the city. She sought guidance from many community environmental leaders to form the Detroit Climate Action Collaborative (DCAC). The Steering Committee is made up of representatives from:

• Detroiters Working for Environmental Justice
• WARM Training Center
• Michigan Dept. of Public Health
• University of Michigan School of Public Health
• Data Driven Detroit
• WSU Great Lake Environmental Law Center
• GLISA
• Community Benefits Coalition
• Buildings, Safety, Engineering, & Environmental Dept, City of Detroit

The goals of the DCAC are two- fold. They plan to develop both mitigation strategies (to reduce greenhouse gas emissions), and adaptation strategies (to prepare Detroit for the consequences of an already changing climate) for both city government and the broader Detroit community. In order to facilitate this, the Collaborative has formed a number of work groups to offer expert advice on the specific subtopics of a Climate Action Plan. These groups are meeting independently to come up with recommendations for the following areas:

• Energy
• Transportation
• Solid waste
• Water infrastructure
• Parks
• Public space
• Homes and neighborhoods
• Public health

An essential part to any Climate Action Plan is to set a greenhouse gas baseline for the geographic scope of the plan. Fortunately, the DCAC pitched this project to Masters students at the School of Natural Resources and Environment at the University of Michigan and co-advisors, Dr. Gregory Keolian and Dr. Rosina Bierbaum.  This group of students will be collecting information and creating a greenhouse gas baseline for both community and the City of Detroit’s operations. In addition, U of M’s Taubman College of Architecture & Urban Planning Masters Students conducted a climate change vulnerability analysis and did extensive background research on this issue, to assist the work groups as they develop recommendations.

The Detroit Climate Action Collaborative has been operating mainly with volunteer labor and organizations up till now, with the exception of a small grant from the University Research Corridor and the Erb Foundation. The full actualization of Detroit’s Climate Action plan will require extensive community engagement as well additional research and analysis. DCAC is currently exploring additional funding avenues to make this plan a reality. One next step in the short term is to hold several small focus groups to understand the concerns and perceptions of climate change in the city of Detroit. The Regional Energy Office is excited to play a small part in this process through the participation of WARM Training Center.

The project involved replacing 305-watt metal halide street lights with 60-watt LED lights on 74 streetlights along John R. Road between the Interstate 75 service drive and Woodward Heights. The new LEDs are estimated to use 94,276 kWh or 60 metric tons of carbon dioxide less than the existing lights each year. The resulting reduction in greenhouse gas emissions is equivalent to taking 12 cars off the road. To read more, click here. To learn about another LED street light project conducted by REO member, the City of Lincoln Park, click here.

Visitors to the City of Roseville City Hall, the Library and several other city buildings may notice new lighting fixtures on municipal buildings. These new lights are highly efficient, saving the city energy and money. Summer of 2012 Roseville replaced 180 High Intensity Discharge (HID) lights with high-efficiency LED lights. They were installed throughout the City, including City Hall, Fire Department Headquarters, Library, parking lots, Police and Court, DPW/Water Department, Parks and Recreation, and several others.

“The challenges of energy and sustainability do not adhere to municipal boundaries,” says Jennifer Young, energy programs coordinator for the Southeast Michigan Regional Energy Office. “By making municipal buildings more affordable and energy efficient, Roseville is setting an example for local governments across the region in modeling energy efficient policies and practices.”

Roseville City Manager Scott Adkins says the upgrades are important for “helping us change the way we treat our environment,” and also have a direct connection to finances. “Every energy efficient action we take translates into a dollar saved.”

The project involved replacing 305-watt metal halide street lights with 60-watt LED lights on 74 street lights along John R. Road between the Interstate 75 service drive and Woodward Heights. The new LEDs are estimated to use 94,276 kWh or 60 metric tons of carbon dioxide less than the existing lights each year. The resulting reduction in greenhouse gas emissions is equivalent to taking 12 cars off the road. Hazel Park lights up John R Road with LEDs

Lathrup Village made big upgrades to the lights in its city center, helping them save on their electricity bills.

As noted by a article, the City of Lathrup Village actively pursues and successfully receives funding for municipal, residential and commercial energy efficiency projects. Matt Baumgarten, who serves on SEMREO’s Board of Directors, states, “It’s written into our strategic plan to pursue opportunities not only for the city, but also for residents, to be an energy-efficient community.” Lathrup Village has shown a strong commitment to energy efficiency, and we’re delighted to work with them. The City’s participation in these opportunities is a demonstration of leading by example.

View the full article here.

Encourages sustainable design and provides a definition of a solar collector and discusses height requirements. To view the ordinance, click here.

A model wind ordinance funded in part by the Wisconsin based Focus on Energy program. Applicable to small (less than 100 kW and/or less than 170 feet tall) installations in urban environments. To view the ordinance, click here.

LED Lighting in downtown Holland, Michigan. Photo courtesy of Michigan Municipal League.

In 2011, the City of Holland and its utility, the Holland Board of Public Works, embarked on creating a Community Energy Plan, with a target year of 2050, with the following goals:

• Ensure economic competitiveness;
• Provide reliable and affordable energy; and,
• Protect the environment.

The energy plan is distinctive because of the level of cooperation and collaboration between the city government, the utility, and the community sustainability committee. Through a collaborative planning process, Holland has created a robust energy plan for the future that addresses the triple bottom line of sustainability while addressing the needs of multiple, varied constituencies.

The Community Energy Plan (CEP) was a collaborative project of the City of Holland and the Holland Board of Public Works. A team consisting of representatives from each entity managed the process. Members of the Mayor’s Energy Task Force and the Sustainability Committee played an advisory role. A consultant team, headed by Garforth International, LLC, was hired to develop baseline and alternative scenarios for energy production through 2050.

Holland is among those municipalities who operate their own utility, the Holland Board of Public Works, which generates power for the community and beyond. Currently, the main generator is the coal fired De-Young power plant, with a natural gas peaking plant. One major motivation for undertaking this planning process is that the coal fired plant is nearing the end of its useful life and a future capital planning decision must be made.

Under the baseline scenario, per capita greenhouse gas emissions would rise from the current level of 24 mt CO2e per resident to 36.7 mt by 2050. Garforth developed four different future scenarios that combine energy efficiency, distribution, and supply. The scenarios all have efficiency measures and focus on recommendations that have value to both the end users and the utility.

Out of the four scenarios evaluated, the Project Work Team chose Scenario B, which included the following elements:

• Energy retrofit of existing buildings
• Use of an Energy Performance Label for all structures
• Transportation efficiency from more efficient vehicles and a more walkable community.
• Refrigerator and AC replacement program
• Industrial Energy Management programs
• District Heating systems
• Construction of a 70 MW combined cycle gas turbine (CCGT) plant, integrated with district heating
• 10 MW from landfill gas
• 20 MW biomass generating block using advanced bio-gasification
• 24 MW solar photovoltaic
• 37 MW of wind power

While the City Council did not approve the CEP as a whole, it has approved many of the goals of the plan and creation of a number of task forces to begin implementing the different sections of the plan. Consultants have been selected to examine the feasibility of the home retrofit program as well as the construction of the new CCGT.

Holland’s Community Energy Plan is a powerful example of what can be accomplished when a municipality works collaboratively with its utility and the community to develop a plan that meets the goals of various constituencies. The approach the City took was appropriate to the need for long term planning for the utility and the community. Through careful planning, the City was able to develop and begin implementing a plan that will increase reliability and supply of energy for its growing industrial sector as well as reduce its carbon footprint and make the city a more vibrant and environmentally-conscious place to live.

Please join with the Regional Energy Office in celebrating at our first annual meeting on February 26.  We’ll begin our meeting with a review of our accomplishments, which include over $2.7 million won on behalf of southeast Michigan local governments for municipal energy efficiency and renewable energy projects, and a $30 million grant from the U.S. Department of Energy for a residential energy efficiency program.

We want to hear what’s important to your community and the future of energy policies and practices in southeast Michigan. We invite your participation in an organizational goal setting workshop designed to identify energy efficiency priorities. With your help, we’ll explore new models for energy practices and policies that address our 21st century challenges.

Please RSVP today for this free event on February 26^th.

Southeast Michigan Regional Energy Office
Annual Meeting
Tuesday, February 26th, 2013

2:30 pm – 3:00 pm
Registration

3:00 pm – 5:00 pm
Annual Meeting

5:00 pm – 7:00 pm
Afterglow party at Pegasus Tavernus

Hosted by the City of St. Clair Shores
Blossom Heath Inn [Map it!]
24800 Jefferson Avenue
St. Clair Shores, MI 48080

For more information please contact:
Jennifer Young, Energy Programs Coordinator
jennifer@regionalenergyoffice.org
866.402.1061 x712

SEMREO envisions that by 2050 Southeast Michigan is a model for the rest of the State and regions throughout the country in:

• Cities collaborating to lead their communities,
• Economic, environmental, and social sustainability,
• Promoting pride of place,
• Attracting and retaining residents and businesses,
• Sustainable energy practices and policies.

Our Mission: 

SEMREO unites cities around sustainable energy outcomes by:

• Empowering local governments to make informed energy decisions,
• Facilitating energy efficient practices through collaborations and partnerships,
• Fostering innovation in sustainability,
• Engaging, supporting and advocating for forward-thinking energy policies and practices,
• Providing expertise and resources for implementing energy efficient programs and green information.