Town approves energy project

By Jason Harris - Staff Writer
Colchester - posted Mon., Jan. 28, 2013

On Jan. 23, at a meeting held at Bacon Academy, Colchester residents authorized the town to seek up to $3.5 million to finance the Energy Performance Contract, which will save the town money in the long-term. Approximately 60 residents attended the 90-minute meeting, and two of them voted against the contract.

The projected savings from this project is about $285,000 annually, said Public Works Director James Paggioli. The project involves identifying where improvements to town and school buildings should be made and how much savings those improvements can bring to the town. These savings will pay for the project over 12 years, and after that the money will be retained by the town.

The town is planning on spending a portion of the money already being spent on energy such as electricity, water, heating and oil to install more efficient systems and reduce the amount of energy the town consumes, Paggioli said. With less energy consumed, the town can take those savings and purchase more energy-efficient equipment, which can save enough money to pay for itself over a period of time.

The town spends about $1.5 million on total energy expenses annually, according to the audited figures from the 2010–11 fiscal year that Paggioli showed during his slide presentation. That total was made up of the five energy sources the town utilizes: $1.2 million for electricity, $239,153 for heating oil, $76,231 for water, $19,847 O&M/phone lines and $14,410 for propane.

Improvements would take less than a year to implement, Paggioli said. Total energy use would be reduced by 18 percent, he said.

The town hired Celtic Energy, Inc. of Glastonbury through a $69,867 grant to help them hire an energy services company, Paggioli said. Honeywell, the energy services company the town hired in December 2011, determines what expense reductions the town can obtain and the cost to upgrade the equipment necessary to achieve those savings. The savings from these improvements are guaranteed by Honeywell. If the reductions don’t occur, Honeywell would pay the town the difference between the estimated savings and the actual cost, Paggioli said.

The next step for the town is to issue a proposal to companies for a lease-purchase agreement. Maggie Cosgrove, the town’s chief financial officer, said that the town goes out to bid to a lease company, bank or other financial institution, which would put out the money up front and the town would pay it back on a payment plan. There would be no lease payments until the next fiscal year, she said.

“The financial institution would pay Honeywell, and the town would begin to make lease payments once all the work was complete and the town is receiving savings,” Cosgrove said.

First Selectman Gregg Schuster said he is happy the town passed the project. He likes that Colchester can save money and be environmentally friendly at the same time. “I’m very proud of the town for moving forward,” Schuster said. “It’s an important project.”

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