Westminster City Council
SUBJECT
Title
Selection of Consultant to Perform an Investment Grade Audit of City Facilities for Possible Energy Conservation, Efficiency, Generation, and Other Energy-Related Projects.
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From: Jake Ngo, Public Works Director
Requested by: Administration
Prepared by: Veronica Johnson, Management Analyst
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RECOMMENDED ACTION
Recommendation
Approve the selection of Veregy Pacific, LLC to perform an Investment Grade Audit (IGA) and develop a comprehensive program of energy conservation and efficiency improvements for City facilities and operations.
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BACKGROUND
The City of Westminster is committed to identifying opportunities to reduce energy consumption, improve the efficiency and reliability of its facilities and equipment, reduce operating costs, and advance its sustainability and greenhouse gas reduction objectives.
City facilities and infrastructure contain a variety of energy-consuming systems, including heating, ventilation and air conditioning (HVAC), lighting, controls, building components, water heating, pumps, motors, and other electrical and mechanical equipment. As these systems age, opportunities may exist to improve energy performance while reducing long-term operating and maintenance costs.
The City issued a Request for Qualifications (RFQ) on April 1, 2026, seeking qualified energy services companies to conduct a preliminary audit and a subsequent investment-grade audit for City facilities, and energy conservation and efficiency consulting services. The RFQ requested that proposers demonstrate experience with municipal facilities, energy audits, energy conservation measures, project development, financial analysis, and implementation of energy efficiency projects.
The City received five proposals by the submission deadline of May 7, 2026. A review panel consisting of City staff evaluated the proposals based on the criteria identified in the RFQ, including:
• Qualifications and experience of the firm;
• Experience performing Investment Grade Audits;
• Experience with municipal and public-sector facilities;
• Qualifications and experience of the proposed project team;
• Technical approach and methodology;
• Understanding of the City's objectives;
• Ability to identify, quantify, and prioritize energy conservation measures;
• Approach to measurement and verification of energy savings;
• Project schedule and availability;
• Cost and overall value to the City; and
• References and demonstrated past performance.
Staff interviewed the five firms. Veregy Pacific, LLC (Veregy) was determined to provide the best qualified based on its qualifications, technical approach, relevant experience, and proposed project team. Veregy has over 35 years of experience implementing performance-based energy infrastructure projects across the country, working with public entities, including municipalities, counties, and water/wastewater agencies throughout California. Veregy is NAESCO (National Association of Energy Service Companies) accredited and listed on the U.S. Department of Energy’s Qualified List of Energy Service Companies. NAESCO is the U.S. trade and accreditation organization for energy efficiency and infrastructure groups.
Veregy has already completed a preliminary audit at no cost to the City and is ready to conduct the IGA. An IGA provides a detailed technical and financial evaluation of potential energy conservation measures with the goal of identifying potential energy efficiency projects that would generate both environmental benefits and long-term cost-savings to the City. An IGA is intended to provide sufficient engineering analysis, cost estimates, savings calculations, and financial information to support decisions regarding implementation and potential project financing.
Following the completion of the IGA, Veregy will develop a prioritized portfolio of recommended improvements based on technical feasibility, anticipated energy savings, cost effectiveness, operational benefits, equipment condition, available funding, and implementation considerations.
Potential measures may include, but are not limited to:
• HVAC controls and building automation improvements;
• LED lighting retrofits;
• Occupancy and daylight controls;
• High-efficiency motors and variable-frequency drives;
• Energy management systems;
• Solar photovoltaic systems;
• Battery energy storage, where appropriate;
• Water pumping efficiency;
• Energy-efficient equipment replacements;
• Electrical system improvements; and
• Other measures identified through the audit process.
The final recommendations will be evaluated based on expected energy and cost savings, capital requirements, useful life, maintenance impacts, implementation complexity, and other relevant factors. Veregy is proposing to conduct the IGA at no cost to the City.
Completion of the IGA will provide the City with a comprehensive understanding of its energy consumption and opportunities to improve facility efficiency. Potential benefits include:
• Reduced electricity and natural gas consumption;
• Lower utility and operating costs;
• Reduced greenhouse gas emissions;
• Improved facility comfort and operational performance;
• Improved reliability of building systems;
• Reduced maintenance costs;
• Replacement of aging or inefficient equipment;
• Identification of utility rebates and other incentives;
• Identification of potential renewable energy opportunities;
• Improved long-term capital planning; and
• A prioritized, financially supported roadmap for future energy projects.
California Senate Bill 706 (Public Contract Code 22185 et seq., SB 706), grants local agencies expanded authority to use the Progressive Design-Build (PDB) project delivery method for public works projects. Effective January 1, 2024, this legislation enables cities, counties, and special districts to bypass traditional low-bid requirements in favor of qualifications-based selections. In a traditional public works setup ("design-bid-build"), an agency hires an architect/engineer to design a project and then opens a separate competitive bidding process to hire the lowest-cost contractor to build it.
Under the PDB process authorized by SB 706:
• A local agency hires a single design-build entity at the very earliest stages of a project.
• The consultant is selected through a qualifications-based selection, meaning experience and capability are prioritized over just the lowest price.
• The agency and the consultant collaborate "progressively" to finalize the design, project costs, and a Guaranteed Maximum Price (GMP) before construction begins.
Should the City choose to move forward with any projects identified in the IGA, staff will return to the Mayor and City Council with a Progressive Design-Build Agreement with Veregy for the design and construction of the identified energy efficient projects. Upon approval, the consultant will prepare construction documents for the selected improvements and assist in securing external funding sources, including grants, rebates, and construction loans. These projects will be structured to require no upfront capital investment from the City; all associated costs will be offset through resulting energy and operational savings. Veregy will serve as the general contractor and will oversee the execution and delivery of the approved energy-efficiency upgrades.
FISCAL IMPACT
There is no upfront cost to the City for the IGA. Veregy will perform the IGA and identify potential energy conservation and efficiency improvements without requiring an initial financial commitment from the City.
Should the City decide to proceed with any of the energy conservation and efficiency projects identified through the IGA, staff will return to the Mayor and City Council for consideration and approval of a separate Progressive Design-Build Agreement. Any costs associated with the design, construction, equipment, or implementation of recommended projects will be presented to the Mayor and City Council for approval at that time.
LEGAL REVIEW
The City Attorney’s Office has reviewed as to form.
CONCLUSION
Selecting a qualified consultant to perform an IGA will provide the City with the technical and financial information necessary to make informed decisions regarding energy conservation and efficiency improvements.
The proposed work will identify and prioritize energy conservation measures, quantify anticipated savings and project costs, evaluate available incentives and funding opportunities, and provide the City with a comprehensive roadmap for potential implementation.
The IGA will also provide the City with information necessary to evaluate whether energy efficiency projects may be suitable for implementation through traditional capital funding, grants, utility incentives, financing, energy performance contracting, or other project delivery mechanisms.
ATTACHMENTS
1. Veregy Pacific, LLC’s Proposal.
REVIEWED BY
Erin Backs, Finance Director
City Attorney’s Office
Christine Cordon, City Manager