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Funding & Implementation I Financial Analysis
<br />Financial Analysis
<br />A financial analysis was conducted to determine the true cost of decarbonization. This analysis reviewed the like -for -like costs to continue replacing equipment and fleet with the current gas version and compared it to the cost to electrify and
<br />decarbonize operations, mechanical equipment and fleet. All costs within this report are turnkey and include final design, engineering, procurement, construction management, and commissioning costs. The financial impact of the project to the
<br />City was calculated from 2024 through 2040. The like -for -like project costs were derived from a combination of the City's CIP budget and detailed cost estimating of turnkey like -for -like equipment replacement as the comparison scenario.
<br />If the City were to continue replacing fleet and mechanical systems with like -for -like gas replacements, the total cost to the City through 2040 would be approximately $2711 with no grants or anticipated utility cost savings. If the City were to
<br />electrify all fleet, mechanical equipment and operations, the cost would be approximately $51.1M including the recommendations of EV charging, load reduction measures, and renewable energy. Decarbonization would allow for the City to
<br />capture $711 in utility and fleet operational savings over the term, secure $3-13M in grants, incentives and stimulus funding, and help to mitigate the impacts of climate change on the community.
<br />Total Net Cost of Decarbonization =
<br />Total Construction Costs - Total Like -for -Like Construction Costs -[Total Project Savings + Total Grants]
<br />The Summary Table to the right shows the
<br />net costs of decarbonization as $4.4M to
<br />$14.411 depending on the level of grants that
<br />the City is able to secure. The co -benefit
<br />and avoided costs are not included in this
<br />number and would provide an additional
<br />$10.6M in benefits to the City through 2040
<br />for a total potential net savings of $6.2M
<br />over the business -as -usual or"like-for-
<br />like" replacement scenario. This number
<br />is calculated by taking the gross cost to
<br />decarbonize and subtracting out what the
<br />City would be spending anyways and the
<br />project savings and grants/stimulus.
<br />Summary Table
<br />Total Construction Costs -$Sim
<br />Total Like -for -Like Construction Costs (-$27M)
<br />(costs that the City would continue to pay)
<br />Lifecycle Utility Cost Savings ($7M)
<br />(Utility, Fleet, Solar)
<br />Total Grants ($3M-13M)
<br />It is recommended that the City do a more in depth financial analysis for each phase to produce a complete and
<br />final amortization schedule either internally or with a selected lender. The annual financial model to the right shows
<br />annual estimated costs, savings, capital allocation and a summary each year from 2024-2040.
<br />Notes:
<br />Total Construction Costs: Total turnkey construction costs needed for budgetary purposes. Costs do not include incentives or grants. The
<br />Inflation Reduction Act will potentially offset 30-40 % of the cost of renewables and fleet.
<br />Total Like -for -Like Construction Costs: The turnkey "business as usual" costs for replacing existing fossil fuel equipment with similar fossil
<br />fuel equipment. Costs were derived from a combination of the City's CIP budget and detailed cost estimating of equipment replacement as the
<br />comparison scenario.
<br />Turnkey Costs: Include design, engineering, construction management, project management, and commissioning.
<br />Annual Financial Model
<br />Annual
<br />Annual
<br />Annual
<br />Annual
<br />Total
<br />Total
<br />Solar IRA
<br />Electrification
<br />Efficiency
<br />Solar
<br />Fleet
<br />Like -for -Like
<br />Total
<br />Year
<br />Construction
<br />Direct Pay
<br />Utility Cost
<br />Utility Cost
<br />Utility Cost
<br />Utility Cost
<br />Construction
<br />Net Cost of
<br />Costs
<br />(30%)
<br />Total Grants
<br />Savings
<br />Savings
<br />Savings
<br />Savings
<br />Costs
<br />Decarbonization
<br />2024
<br />$23,979,948
<br />$0
<br />MOW=
<br />($82,000)
<br />$44,000
<br />$335,000
<br />$33,000
<br />$10,185,000
<br />$5,465,000
<br />2025
<br />$629,972
<br />$2,692,000
<br />$100,000
<br />($82,000)
<br />$44,000
<br />$335,000
<br />$36,000
<br />$599,000
<br />($3,094,000)
<br />2026
<br />$244,741
<br />$0
<br />00,000
<br />($82,000)
<br />$44,000
<br />$335,000
<br />$40,000
<br />$201,000
<br />($393,000)
<br />2027
<br />$661,949
<br />$0
<br />$100,000
<br />($82,000)
<br />$44,000
<br />$335,000
<br />$51,000
<br />$622,000
<br />($408,000)
<br />2028
<br />$538,469
<br />$0
<br />$100,000
<br />($82,000)
<br />$44,000
<br />$335,000
<br />$76A00
<br />$469,000
<br />($404,000)
<br />2029
<br />$255,583
<br />$0
<br />TBD
<br />($82,000)
<br />$44,000
<br />$335,000
<br />$81,000
<br />$213,000
<br />($335,000)
<br />2030
<br />$8,796,674
<br />$0
<br />TBD
<br />($157,000)
<br />$44,000
<br />$335,000
<br />$130,000
<br />$4,253,000
<br />$4,191,000
<br />2031
<br />$1,126,108
<br />$0
<br />TBD
<br />($157,000)
<br />$44,000
<br />$335,000
<br />$160,000
<br />$843,000
<br />($99A00)
<br />2032
<br />'', $638,869
<br />$0
<br />TBD
<br />($157,000)
<br />$44,000
<br />$335,000
<br />$186,000
<br />$478,000
<br />($247,00D)
<br />2033
<br />$5,449,661
<br />$0
<br />TBD
<br />($190,000)
<br />$44,000
<br />$335,000
<br />$192,000
<br />$2,654,000
<br />$2,415,000
<br />2034
<br />$537,051
<br />$0
<br />TBD
<br />($190,000)
<br />$44,000
<br />$335,000
<br />$204,000
<br />$402,000
<br />($258,000)
<br />2035
<br />$3,440,025
<br />$0
<br />TBD
<br />M90,000)
<br />$44,0D0
<br />$335,000
<br />$219,000
<br />$2,574,000
<br />$458,000
<br />2036
<br />$775,290
<br />$0
<br />TBD
<br />($190,000)
<br />$44,000
<br />$335,000
<br />$224,000
<br />$580,000
<br />($218,000)
<br />2037
<br />$783,153
<br />$0
<br />TBD
<br />($190A00)
<br />$44,000
<br />$335,000
<br />$234,000
<br />$586,000
<br />($226A00)
<br />2038
<br />$297,040
<br />$0
<br />TBD
<br />M90,000)
<br />$44,0D0
<br />$335,000
<br />$237,000
<br />$222,000
<br />($351,000)
<br />2039
<br />$1,923,560
<br />$0
<br />TBD
<br />($190,000)
<br />$44,000
<br />$335,000
<br />$246,000
<br />$1,439,000
<br />$50,000
<br />2040
<br />$847,035
<br />$0
<br />TBD
<br />($190,000)
<br />$44,000
<br />$335,000
<br />$245,000
<br />$693,00D
<br />($280,000)
<br />CITY OF LOUISVILLE I FINAL REPORT V3 1 INTERNAL DECARBONIZATION PLAN 126
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