City Council - Government Operations Committee Hearing on Docket #1223

I'm going to dabble in with this device that we have here. It's LaRock, over here? For the record, my name is Ruti Louijeune at-large City Councilor and I am the Vice Chair of the Boston City Council Committee on Government Operations. And I will be conducting today's hearing in the chair's absence. Today is August 4th, 2026. The exact time is 10 a.m. In accordance with Chapter 2 of the Acts of 2025, modifying certain requirements of the open meeting law and relieving public bodies of certain requirements including the requirement that public bodies conduct its meeting in a public place that is open and physically accessible to the public. The City Council will be conducting this hearing virtually via Zoom. This hearing is being recorded. It is also being live streamed at boston.gov forward slash city-council-tv and broadcast on Xfinity channel 8, RCN channel 82 Fios, Channel 964.

Brain comments may be sent to the committee email at ccc.go at boston.gov and will be made a part of the record and available to all counselors. Public testimony will be taken at the end of this hearing Individuals will be called on in the order in which they signed up and we'll have two minutes to testify. If you wish to sign up for public testimony and have not done so, please email our central staff liaison Megan Cavanaugh at m-e-g-h-a-n dot k-a v a n a g h at boston.gov for the zoom link and your name will be added to the list Today's hearing is on docket number 1223, messaging Ildor for your approval and ordinance authorizing the city of Boston acting through its environment department to amend the distributed energy resource revenue revolving fund The current language for the revolving fund is limited in its use and the change proposed will allow for proper usage of the fund while maintaining its original purpose.

The amended language will allow the fund to properly capture revenues and expenditures, ensuring an enhanced and seamless financial process City Energy Activities. These amendments will properly capture demand response revenue and allow for the further development of the city's Demand Response Program, increasing energy savings and reduce the city is greenhouse gas emissions Produced by the emissions not addressed through the city's distributed energy resources. This matter is sponsored by Mayor Michelle Wu and was referred to the committee on June 24th, 2026. Today I am joined by my colleagues in order of arrival President, Breadon, Councilor Murphy. And as of now that's all I would like to I would Like to now introduce today's panelists testifying on behalf of the administration We have Oliver Salas-Garcia, Commissioner of the Environment Department and Chris Kramer, Director of the Municipal Energy Unit, Environment Department.

I will now turn it over to you, the two of you for your presentation.

Thank you so much, Councilor. My name is Oliver Sellers-Garcia. As stated I'm Commissioner of the Environment Department and Chris Kramer is the Director of the Municipal Energy Unit which is part of the environment department and I thank you for scheduling this hearing. And frankly, if I may be recap that is part of the submission Pretty much covers it all. So what we'll do is just keep it very simple and we're available to answer questions, but what I would like to say from the start is that this In our view, essentially an administrative matter just doing some tweaks and updates to a named revolving fund that was recently reauthorized as part of the budget process. So Chris if you can move to the next slide

Just very quickly, I am giving my introduction right now and then Chris is going to go over the existing fund and the proposed tweaks. And so then I will just ask for the next slide. Just a little bit of a framing of where this fund sits in terms of the City's efforts. The Municipal Energy Unit is the team inside of the Environment Department that actually works across the whole city and schools to manage energy usage from procurement to new energy projects and a big part of what we do is Continually look at ways to take advantage of programs or changes in technology that can save energy costs. and also can create some revenue that we reinvest into further energy savings.

So this is something we've done in a variety of different ways over the years, and as part of our housekeeping We see a need to make a few tweaks to this revolving fund, and that is what this is all about. So I'll turn it over to Chris who can walk through the fund and the proposed changes.

Yeah, thanks. Thanks Oliver and like Oliver said my name is Chris Kramer I'm the Director of the Municipal Energy Unit or rather as I was introduced thank you Councilor just some quick definitions so demand response is A program that or kind of a series of actions that reduces electricity use during Times when there's a lot of stress on the electric grid. Really how this plays out is turning down air conditioning, dimming nonessential lighting for example Some other definitions are renewable energy certificate. You may have heard of a REC before, and that's just a certified kind of unit of electricity generated by a clean resource. and a distributed energy resource is any kind of decentralized, think of anything that's not a big power plant. Anything that's generating electricity close to where it is used

and I should include in there batteries are considered a distributed energy resource. So the fund that was reauthorized for fiscal year 2027, 30396E This is a current kind of fund overview. The purpose originally as conceived in the early 2010s and many more. buildings and generators. We have two city-owned solar arrays that at the time were generating some revenue from energy certificate sales, and what we call combined heat and power plants or units in schools. So the expenditures matched the revenues as is required with with revolving funds.

Essentially, we use those funds to offset greenhouse gas emissions and to monitor maintain and operate existing city-owned solar arrays and combined heat and power units The proposed changes are frankly minor and aimed at expanding the participation of city buildings in demand response programs so that we're not only constrained to schools and school combined heat power units specifically, and city-owned solar arrays. So what are the proposed amendments? Specifically, expand the revenue source or potential sources of revenue to include all city buildings not just Boston Public School. Combined Heat and Power Units. The expenditures in addition to the ones that already exist in the ordinance, we would add this first one which is to specify that funds can be used for measures that expand the city's enrollment in demand response programs.

And that is really, the request here is just to allow us Put revenue from all of our demand response activities into this fund. And with that, we'll open it up for questions.

If I may, I'll just mention that. That was great, Chris. Thank you. If I May, I will just mention one thing which is demand response is a state enabled program and so when we say that we get revenue from it the way it works at a simple level is on a really hot day they'll send uh we'll receive a message saying hey if you can and it's safe use a little less power and if we're able to do that At the end of the year, we have all of that sort of like really important saving calculated into a payment that the city receives. So as Chris says, we just want to be able to do that at more buildings than the schools and That revenue can go right back into getting other buildings ready to do the same thing over and over again. Thank you.

Unmute yourself, Madam Chair. Thank thank you. Thank you for that presentation and for those very clear explanations. I just wanted to have one clarifying question when talking about demand response. We are talking only about City-owned properties. We're not talking about sort of like residents, we're only talking about administrators why this is in the realm of sort of administrative work because it's all just about the city internally.

That's exactly right.

Perfect. Wonderful. Okay, I'm now going to turn it over to my colleagues for questions. We've also been joined by Councillor Flynn. We're gonna start with Council President Breadon and then we'll go to Councillor Murphy and Councillor Flynn with any questions.

Thank you. I'm a big fan of renewable energy and And I think this is great that we're expanding our number of buildings that are eligible to capture this benefit. So, I'm wondering just in general how many SREC renewable energy credits do we get generated annually at this point in time? This is more of a sort Thank you for setting the level just to get a better understanding of how much we're talking about.

Yeah, I can take that. Well actually is that okay Oliver? Without getting too into the details, the short answer is we're not generating any. And that's because the arrays while the panels are still functioning some of the other inverter equipment that we are exploring kind We would like to fix are currently not functioning. So we're not generating any renewable energy certificates or earning any revenue from the sales of those certificates.

And will this change allow you to upgrade your equipment so that you can't capture those ASRACs? Because that's a lot of money.

Yeah, so SRECs are generated for the first 10 years and they're very valuable but they're generated for a first ten years of the equipment life. And so actually because the panels were installed in early 2010s they're not even eligible to generate They generate RECs, which are much less lucrative when you sell them. But anyway, yes these funds could help us And then in terms of peak

Do we have battery storage, like even small scale battery storage units that were capturing some of that energy that we're generating from our solar arrays?

Not currently. What I will say, President if I may is that this is exactly what we intend to do being able to figure out the best ways to deploy batteries so that they can be used both for the program but also for overall energy savings and I I will say we have our fingers crossed with a state grant that we are hoping to hear back from soon to deploy batteries.

Yeah. Okay, and how does this intersect with the Renew Boston Fund? Is this... You know, the Rennew Boston Fund is money for doing renewable energy etc.

Yeah, so I would say the Renew Boston Trust is... The way we think of it is not just in terms of like a trust account but the overall program of reinvesting savings and revenue into for their projects. So this is certainly a part of it, some of the bigger work that you've seen, Lighting and City Hall, or other projects like that are funded by through the capital plan. And so to that extent this is You know, this is not that. This is revenue that it is sort of self-sustaining for the demand response program but it all works together so that you know, for example we could have a larger energy project that is funded through the capital plan also be providing the necessary equipment to curtail Energy Use on a Hot Day, which would then create revenue for this.

So it's all connected to the extent that it's in the same facilities.

Okay and in terms of our energy use and hot days I find that You know, our current IC systems, HVAC is a blunt instrument. Is there ways to invest in more Energy Efficient, HVAC systems going forward. Like I know we have a challenge with our older school buildings because they're red brick and after a few days they get very hot but um Is there a plan, like a pathway forward to invest in those sort of infrastructures using this money that we're able to capture from this programme?

Absolutely. I think, I wouldn't say that the revenue and many more. I think that is what will determine our ability to continue mapping out the energy efficiency projects that happen elsewhere in the city, but it is a good point The overall efficiency of buildings plays a big part in what we're ultimately trying to do on these days where demand response is called upon. One thing I will note, just in case there's anyone else with some curiosity of what it looks like on those hot days. It is never done in conflict with the use of the building and in fact One of the reasons that it works quite well for buildings such as ours is that the reason So important to reduce the demand is that everyone in sort of the Boston area is at home cooling off after a day of work.

and that's not when our buildings are being used. So, commercial buildings and buildings like ours are part of this program because what we can do is do things that don't have any impact on the building occupant with sort of air conditioning and lighting and therefore just sort of balance out what's happening in buildings that don't have people on them with ones that do.

Okay, thank you. Thank you, those are my questions. Thank You Madam Chair

Thank you, Council President. We are now moving on to Councilor Murphy. You have the floor if you have questions.

Thank you. And thank you to the panelists for your thorough explanation. I'm happy to support this, and it seems to be the right thing Expand Revenue. The one question I do have, and you mentioned that it will mean that we can do more than just our BPS buildings but as you probably know many concerns and calls we get especially in June near the end of the school year is when our classrooms can be anywhere you know 90, 95 degrees. Will any of this expanded revenue or if you could just speak to if this will have any impact on helping support that? Before next summer or if we have any really hot September days.

Oh, absolutely. The intention is actually to be able to take advantage of what we can do well in some buildings and use that revenue to improve buildings that need some more help. So it's certainly not where we want to move beyond BPS buildings only so that we can capture the benefits from other buildings and apply them in part to BPS building. So, that's precisely what it's meant to do. That's a great question. Appreciate it.

Awesome, awesome. I'm looking forward to supporting this. So I don't have any other questions but thank you.

Thank you the Chair recognizes Councilor Flynn for questions.

Thank you. Thank you to the administration team that is here for your presentation. I do apologize for being a few minutes late. Um, I want to know Can you just describe how this plan will support? I think Councilor Murphy referenced it, but how this Plan will support students in public schools with Buildings that are old with challenging HVAC systems. What can we offer to ensure that they have a healthy environment to do their studies and to learn, and also for the teachers to teach?

Thank you, Councilor. That's a great question and while we opened this hearing mentioning that the tweaks to this revolving fund are sort of I'm glad that you are asking the question of what this all adds up to, which is that This program demand response is a key ingredient in all of the different things that we can do to make our school buildings more comfortable and more efficient. and what I will highlight is that, what the demand response program does is that it really takes advantage of just smart use of building management in order to reward property owners such as ourselves with a bit of revenue that we, through this fund are proposing to be able to deploy into other buildings. So an example is that we would look for ways

Through this fund, maybe install a battery storage system and an upgrade of building automation system in the school. and so forth. So what we're trying to do is it would, for example sort of keep not only just reduce costs but it would actually be able to program a building so that it can be more agile in its changes Thank you for joining us today. So there's lots of different things that we can do in the overall effort to Manage Energy Usage, but that's one example that I think has a real clear benefit to what it's like to be in a school building.

And that compliments for example any sort of improvements HVAC, or other things like that because the whole system then becomes much more manageable and better for the building occupants.

Thank you all. Maybe just one more question basically as a follow-up When we have an older city building and we are upgrading the HVAC system, Tell me the logistics of the HVAC system that has to be replaced, that may not provide the necessary power or... Necessary Power, but also there may have been updated environmental regulations. Are those factors that you are thinking about or considering? I just wanna get an idea of how

Thank you for that question. I'll speak kind of at a general level because every building is unique but i think One of the things that we do when we partner with Boston Public Schools, you know, the capital team or with others is that we try to think of What are the energy upgrades that are going to do all the different things that we're looking to do. So I'd say sort of top on the list are use less energy and provide more comfort inside the building, and so I think the example that I would share is that we've, for example at the Otis School in East Boston, and we hope to do more schools like that.

What we're able to do is think about how to not just it might start with adding air conditioning but what ends up happening is actually a The addition of more comfortable heating as well, because heat pumps do heating and cooling. We end up with a sort of more Comfortable and quieter space because the equipment doesn't make as much noise In order to make that equipment work better, you need an air filtration system to keep everything circulating so that improves air quality. All of these things come with a cost but what is important is that We can do these things incrementally. And so when we look at sort of overall what we're looking to do, it's a combination There are several projects that do some of these things that I mentioned as well as where possible with use from this fund deploying the pieces that get the whole thing working.

Well, Oliver, I think you answered all my questions. Thank you very much.

Thank you. I just have a few questions, so the presentation estimates approximately $150,000 in annual revenue after the amendments is that total projected annual revenue or $150 thousand new revenue above the current baseline?

Chris, why don't you answer that one? I think I know the answer but you definitely do.

Yeah, it's $150,000 in additional new annual revenue above what we're currently making right now. So I think you would go from about 50,000 to 200,000 and that is again subject to the weather, right? And when we receive a demand response event calls from Eversource and from the regional grid operator.

Great, and that goes back into the revolving fund. That's right. Okay, and the slides describe the goal as a self-funding... The goal is to be a self funding demand response program. What is the gap right now between it being self funding? What will it take for it to be completely self funded?

Well, I'll take that one. I think the reason we characterize it as self-funding is because it can be as big as we have buildings, or as big that we can make the upgrades for. And so we calculate that I mean this year We believe we'll be able to add, I don't know maybe like half a dozen. A little bit more buildings and so the amount of revenue that we're projecting could do about the same. And so this really enables a sort of really steady increase in buildings over time, We think that it is wise to save capital dollars, for example, for projects such as the one that I was describing to Councilor Flynn's question and use this directly through the mechanism of the revolving fund to just enroll more and more buildings into this program.

So it is self-sustaining at a pretty and so on. So that's a really high rate of growth every year

Okay, thank you. The presentation also stated that completed efficiency projects avoid approximately half a million dollars per year in federal compliance costs. What are those costs that are being avoided? and how do you calculate the amounts?

Sure, this is something that I'm glad you asked because I think over the years we'll be We'll all be thinking more about it this way, but Berto applies to all large buildings in Boston including ours as the city. and one of the ways that we are sort of training ourselves, and everyone in the city frankly to think about like how energy investments actually have a return on investment is to think, well if we didn't do this could we potentially have to comply with Berto by paying alternative compliance payments or purchasing extra renewable energy? This is what commercial property owners around the city are actually doing right now and filing with the city. And so we do that calculation just to say like, hey this doesn't just have value in terms of reducing our energy cost today if we keep producing energy

That'll save us from potentially having to pay fees in the future. I will say it's like a little bit of a mind somersault here because we, the city are both subject to Berto and we enforce Berto. So I think it's sort of, we have to keep those two things separate. And the question that you raised is from the position of the city complying with Berto? So that's what that's all about.

Okay, understood. And what is the for Robin Flynn's current balance?

Chris do you know that? Under $10,000 I believe, yeah. I think the last time I checked, around $2,500, I think.

Okay and what do the expenditures out of the account look like?

So every year we tend historically, we have transferred funds to Boston Public Schools to operate and maintain just support in their operations and maintenance contract for the combined heat and power plants. Depending on our revenue every year, we tend to transfer most of the funds to BPS for that purpose.

Great. Thank you. Those are my questions. We've also been joined by Councillor Fitzgerald. Councillor FitzGerald if you have any questions, you may ask them now.

Thank you, Chair. I appreciate it. No, really just wanted to listen in and learn more about it. Appreciate the questions from my colleagues as well. And thank you guys for the work you do in trying to keep our buildings updated into code. So no questions from me, Councillor. Thank you.

Thank you. Do any of my other colleagues have a second round of questions that they would like to ask? I see Councilor Flynn shaking his head no, Councilor Breadon doesn't look like it. Okay time for me to check with central staff to see if there's anyone present for public testimony There is not. Thank you. Any final words you'd like to share? I'll just state that this was informative, thank you for really breaking it down because I had questions I'm really trying to understand what demand response meant and wanted to ensure that we're talking about internally and administratively just to the city of Boston. And so, that was really helpful. I like the idea of increased revenue into the revolving fund will allow you More of the expenditures to Boston Public Schools to help them with their overall heating issues. I want to thank my colleagues for their questions. It does look like the changes here are minimal,

over how the ordinance has existed in the past to address some of these administrative concerns. But if any of either... You know, my colleagues had any questions about the changes or if you know again Chris or Oliver wanted to comment on the changes Or give any closing remarks that would be helpful.

I will only say thank you for your time and thank you. They really help us paint a picture about how this extremely technical thing actually is all about making our buildings more comfortable and affordable. So I really appreciate it, and thank you for taking this up. Thank you.

Yeah, thank you for your time. This is my first hearing opportunity to speak in front of the Council so I'm glad to answer questions and participate.

Well, you did an excellent job Chris really appreciate it especially again on because this is so technical explaining sort of the technical terms It's really helpful. So since we do not have any public testimony and we've heard from closing remarks, this hearing on docket number 1223 is adjourned. Binging my fake gavel. Thanks everyone. Thank you. Thanks, everyone.