National Academies Press: OpenBook

Revolving Funds for Sustainability Projects at Airports (2019)

Chapter: Appendix F - Glossary

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Page 120
Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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Page 123
Page 124
Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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Page 124
Page 125
Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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Page 126
Suggested Citation:"Appendix F - Glossary." National Academies of Sciences, Engineering, and Medicine. 2019. Revolving Funds for Sustainability Projects at Airports. Washington, DC: The National Academies Press. doi: 10.17226/25567.
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120 Airport Improvement Program The Airport Improvement Program (AIP) is run by FAA under the U.S. DOT. Its broad objective is to help plan and develop a nationwide system of public-use airports that meets the current needs and the projected growth of civil aviation. AIP provides grants for a wide range of airport improvements including those that protect natural resources, which encompass energy efficiency and sustainability improvements. AIP grants are available nationally for all public-use airports in the National Plan of Integrated Airport Systems (NPIAS). Obtaining an AIP grant requires a grant application. AIP funding is typically available for projects in four categories: Primary Entitlement Fund- ing, Cargo Airport Entitlement Funding, Non-Primary Entitlement Funding, and Discretionary Funding (see Section 4.1.2). Emissions & Generation Resource Integrated Database “The Emissions & Generation Resource Integrated Database (eGRID) is a comprehensive source of data on the environmental characteristics of almost all electric power generated in the United States.” eGRID is issued by the EPA (U.S. Environmental Protection Agency n.d.). Endowment Model The endowment model refers to the funding mechanism for securing seed capital for a Green Revolving Fund (GRF). Under the endowment model, an amount of funding is dedicated for the express purpose of capitalizing a GRF. The benefit of this approach is that the fund is immediately able to finance new projects. The drawback is that a suitable source of funding must be identified, typically one that does not need to be repaid and is compatible with a GRF (see Section 3.2.1). Energy Conservation Measures Energy Conservation Measures (ECMs) are applied to a building to “improve energy effi- ciency and are life cycle cost-effective and involve energy conservation, cogeneration facilities, renewable energy sources, improvements in operations and maintenance, or retrofit activities” (U.S. Department of Energy 2013). A P P E N D I X F Glossary

Glossary 121 Fixed-Base Operator “The term Fixed Base Operator (FBO) is given to a commercial enterprise that has been granted the right by an airport authority to operate on that airport and provide aviation services, such as fuel, parking and hangar space, to the General Aviation (GA) community”(SKYbrary n.d.). Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) are accounting standards, conventions, and rules. They are what companies use to measure financial results. These results include net income, as well as how companies record assets and liabilities. In the United States, the Securities and Exchange Commission (SEC) has the authority to establish GAAP. However, the SEC has historically allowed the private sector to establish the guidance (U.S. Securities and Exchange Commission n.d.). Green Revolving Fund A green revolving fund (GRF) is an internal investment vehicle dedicated to financing energy efficiency, renewable energy, and other sustainability projects that generate cost savings. These savings are tracked and “revolved” back into the GRF, maintaining the funding stream for sus- tainability projects over time. GRFs are broadly defined by two criteria: (1) the fund must finance measures to reduce resource use (e.g., energy, water, or waste) or to reduce carbon emissions (e.g., by installing renewable energy technology); (2) the fund must revolve. Savings generated from operating cost reductions attributed to funded projects must be used to fully repay the initial loan or investment (see Section 1.1). Green Revolving Investment Software Tracking System There is an online platform designed to manage all aspects of an institution’s GRF. The Sus- tainable Endowments Institute operates existing online software. Note that two authors of this report work at the Sustainable Endowments Institute. There is only one GRF management tool profiled in this report, because it was the only known operational example of its type at the time of writing this report (see Appendix D2.2). GRF Charter The management of fund operations involves a broad array of duties. Official and publicly available GRF charters are suggested. This document should clearly explain how the fund oper- ates. Charters are often developed from a written proposal used as a forum for discussion during the funding design stage and may use much of the same language (see example included within Appendix E). International Performance Measurement and Verification Protocol One of the most widely recognized M&V documents is the International Performance Mea- surement and Verification Protocol (IPMVP). Efficiency Valuation Organization (EVO), a non- profit corporation, assembles and oversees an IPMVP Committee of industry volunteers to

122 Revolving Funds for Sustainability Projects at Airports develop and maintain the IPMVP. EVO publishes the documents. IPMVP provides guidance on developing and implementing M&V plans for energy and water savings projects. It provides a framework and guidance for developing specific M&V plans and describes considerations to be taken into account when developing an M&V plan (see Appendix D1.4). Measurement and Verification Measurement and verification (M&V) is the industry term for tracking and documenting savings and results of a GRF. M&V processes grew out of the energy efficiency and energy savings performance contracting industry and, as such, industry documentation and best practices are typically associated with energy savings projects. However, the principles of M&V can be applied to a variety of project types (see Appendix D). Passenger Facility Charges The Passenger Facility Charges (PFC) Program allows airports to collect a charge for enplaned passengers using the airport. Airports use this revenue to fund FAA-approved projects that enhance safety, security, or capacity; reduce noise; or increase air carrier competition. More than $2.2 billion in PFC revenues are collected by airport operators each year. PFC revenues are typically used on a “pay-as-you-go” basis, where PFC collections and interest earnings are spent directly on capital projects, and/or leveraged, that is, used to pay debt service on bonds or to repay other forms of debt (see Section 4.1.2). Savings Reclamation Model The savings reclamation model starts with a project (already identified and either being implemented or soon to be implemented) that will result in operational cost savings. The proj- ect owner then captures the resulting cost savings and uses those savings to capitalize the GRF (see Section 3.2.1). Split Incentive With utility conservation, split incentives refer to a situation in which the party that pays the resource bills (and thus realizes the benefits of efficiency upgrades) is not the owner of the building. With split incentives, the tenant that pays the bills does not want to invest in perma- nent improvements to a property it does not own, and the owner does not want to invest in improvements that only benefit the tenant. This same dynamic often pertains to airport-owned spaces that airline tenants operate. Split incentives create structural challenges to achieving the highest levels of energy efficiency (see Section 3.4.1). State and Regional Technical Reference Manuals Many states have implemented utility energy efficiency programs. To help standardize savings calculations across program participants, many of those states have developed documents that provide guidance on energy savings calculations (or the state participates in a regional effort). These documents are commonly referred to as Technical Reference Manuals (TRMs). Although not specifically related to the process of M&V, they do provide standardized methods for esti- mating energy savings from common energy efficiency measures. As a result, they provide an

Glossary 123 excellent reference for potential energy efficiency measures and potential examples of savings calculation methodologies. TRMs are typically focused on measures that have relatively straight- forward savings calculations and do not include “custom” measures (see Appendix D1.4). Uniform Methods Project The U.S. Department of Energy is currently developing a set of measurement and verification (M&V) protocols that will allow for consistent energy savings calculations for specific measures under the Uniform Methods Project (UMP) titled the Uniform Methods Project: Determining Energy Efficiency Program Savings. UMP provides specific savings calculation methodologies for common energy efficiency measures that are based on IPMVP recommendations. UMP pro- vides measure descriptions, savings calculation methodologies, M&V considerations including IPMVP options, data requirements for M&V, and alternatives for lower-cost M&V options (see Appendix D1.4).

Abbreviations and acronyms used without definitions in TRB publications: A4A Airlines for America AAAE American Association of Airport Executives AASHO American Association of State Highway Officials AASHTO American Association of State Highway and Transportation Officials ACI–NA Airports Council International–North America ACRP Airport Cooperative Research Program ADA Americans with Disabilities Act APTA American Public Transportation Association ASCE American Society of Civil Engineers ASME American Society of Mechanical Engineers ASTM American Society for Testing and Materials ATA American Trucking Associations CTAA Community Transportation Association of America CTBSSP Commercial Truck and Bus Safety Synthesis Program DHS Department of Homeland Security DOE Department of Energy EPA Environmental Protection Agency FAA Federal Aviation Administration FAST Fixing America’s Surface Transportation Act (2015) FHWA Federal Highway Administration FMCSA Federal Motor Carrier Safety Administration FRA Federal Railroad Administration FTA Federal Transit Administration HMCRP Hazardous Materials Cooperative Research Program IEEE Institute of Electrical and Electronics Engineers ISTEA Intermodal Surface Transportation Efficiency Act of 1991 ITE Institute of Transportation Engineers MAP-21 Moving Ahead for Progress in the 21st Century Act (2012) NASA National Aeronautics and Space Administration NASAO National Association of State Aviation Officials NCFRP National Cooperative Freight Research Program NCHRP National Cooperative Highway Research Program NHTSA National Highway Traffic Safety Administration NTSB National Transportation Safety Board PHMSA Pipeline and Hazardous Materials Safety Administration RITA Research and Innovative Technology Administration SAE Society of Automotive Engineers SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (2005) TCRP Transit Cooperative Research Program TDC Transit Development Corporation TEA-21 Transportation Equity Act for the 21st Century (1998) TRB Transportation Research Board TSA Transportation Security Administration U.S. DOT United States Department of Transportation

TRA N SPO RTATIO N RESEA RCH BO A RD 500 Fifth Street, N W W ashington, D C 20001 A D D RESS SERV ICE REQ U ESTED N O N -PR O FIT O R G . U .S. PO STA G E PA ID C O LU M B IA , M D PER M IT N O . 88 Revolving Funds for Sustainability Projects at A irports A CRP Research Report 205 TRB ISBN 978-0-309-48063-5 9 7 8 0 3 0 9 4 8 0 6 3 5 9 0 0 0 0

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Airports continually balance demands to improve infrastructure within the realities of available budgets. Green revolving funds (GRFs) offer an alternative approach for investing in projects that generate operational savings. These funds work by tracking verified cost reductions from implemented actions, and then transferring those savings to a reserve that provides capital for future qualified projects such as energy system upgrades.

A number of universities have managed GRFs for over a decade. Municipalities are starting to adopt them as well. ACRP Research Report 203: Revolving Funds for Sustainability Projects at Airports includes several non-airport-related case examples that have managed GRFs and two airport-related case examples. Airports require a modified GRF approach because of financial structures, Federal Aviation Administration (FAA) regulatory requirements, airline agreements, and the wide range of tenant roles.

This ACRP report provides guidance to determine whether this innovative funding approach is suitable for a particular airport and instructions on how to deploy it. Airports that have the ability and determination to launch a GRF will gain a robust method for advancing their sustainability goals.

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