Energy-Saving Contract Proposed to Help Pay for Capital Projects

When the Town Council meets Feb. 13, members will consider $3.5 million in projects in town-owned buildings. The projects are not part of the proposed capital plan but rather the outcome of a townwide energy audit done in 2011. And the anticipated cost to the town is $0.

Ameresco, a national energy efficiency company, spent months in Farmington’s 42 buildings, studying windows, radiators, utility bills and systems and came up with a list of possible projects to cut the town’s energy costs. The list was whittled down together with the Green Efforts Committee, made up of Board of Education and Town Council members, residents with relevant expertise and three Farmington High School students.

“The Green Efforts Committee all worked together to come up with projects to create energy efficiencies throughout the town that would be able to pay for themselves,” explained council member and committee leader CJ Thomas during a presentation of the plan. “These Farmington High School students have been involved in green committees throughout school… through this they can see that green is a good thing for the environment and also as a financial resource.”

The idea was to pair projects that would quickly pay for themselves in energy savings with expensive capital projects that have repeatedly been added to and pushed off the town’s capital plan. Adding them into the performance contract would allow the projects, like replacing boilers at Farmington High School, to get done and paid for without costing the town, members explained.

Developer Ron Janeczko, an energy star builder, served on the committee for the Board of Education but when his term ended, the Town Council appointed him to the committee as a resident.

Energy performance contracts may be fairly new to Connecticut but they’ve been used for decades by larger institutions and colleges, Janeczko said.

It’s a little like looking for the energy star sticker when buying a washing machine, he said – you look at the cost of the machine and at how much you’ll save on energy costs.

“You identify in your town what’s the least efficient of all your equipment and see what new measures you can bring in and also how much you will save,” he said. “We’ll put in new equipment and the energy costs are going to come down. Those savings are what you want to fund the cost of the equipment."

A key aspect to the deal is the guarantee. Under what Town Manager Kathy Eagen called “a very strong contract," Ameresco would implement the changes, install all the new equipment and spend five years checking the equipment and making sure the promised savings are realized. If not, Ameresco can either adjust the equipment so the town gets the promised savings or pay the difference.

The town would pay Ameresco for a service contract during the first five years, to continue measuring and verifying the savings. At the same time, the company will be instructing town employees on how to operate each system for optimal savings. As soon as the town is confident of the outcome, it will have the option of canceling the contract. It can also extend it.

The town would initially pay for the projects through a 16-year tax-exempt lease purchase. Energy savings of $230,000 in the first year would be used to make the first lease payment. Excess savings beyond the cost of the contract is expected to be just $600, an Ameresco spokesman said.

Projects

Several large capital projects could be crossed off the town’s Capital Improvement Plan, including the $800,000 heating, ventilation and cooling system at Town Hall that repeatedly broke down over the past year, and the Farmington High School boilers, $600,000.

The committee proposed five projects at Town Hall, 52 in school buildings and 37 at other town buildings, including a new air-handling unit at the Police Department.

Improvements to townwide lighting systems and controls, replacement of steam traps at Farmington High School, Noah Wallace and Union Schools and automated building controls throughout town are highlights of the plan.

According to the committee presentation, the plan offers vast energy savings, too. If implemented as proposed, Ameresco estimates 881,529 kWh in electricity savings, 75,174 therms of natural gas saving and 12,758 gallons of fuel oil would be saved.

“Some systems are very old, inefficient and have been struggling along,” Janeczko said. “This is a great way to make these corrections with energy efficiency paying the bill.”

Timeline

The committee will seek approval from the Town Council and Board of Education in February. If approved, the town would then secure financing and begin the project. Construction would end in spring of 2013.