Energy committee recommends energy performance contract
By Annie Gentile - ReminderNews
Stafford - posted Tue., Feb. 26, 2013
Since forming in March of 2010, the all-volunteer Stafford Energy Advisory Committee has been working on several tasks that focus on ways to save energy for the town. One of its most significant efforts has involved interviewing several vendors that provide building audits to determine ways to save energy and lower costs in the school and town buildings.
About six months ago, the SEAC recommended the town hire Honeywell to provide investment-grade audits and upgrades for several buildings, as well as Celtic Energy to oversee and verify the upgrades to ensure that the promised energy savings have been met. The upgrades would be completed through an “Energy Performance Contract” (EPC), a typically 12- to 20-year agreement, depending on which recommended improvements the town elects to implement.
“The state has been encouraging towns to do this,” said Peter Kovaleski, P.E., an electrical engineer on the committee who has been heavily involved in the interviewing and vetting process. He said Connecticut has some of the highest energy costs in the country, and Gov. Dannel Malloy has been visiting towns and businesses to educate them about the energy-saving opportunities with EPCs and how they can benefit.
Recommended upgrades can include such activities as installing weather stripping and more economical lighting, making building envelope improvements to insulation, roofs, and windows, making heating system upgrades, installing computerized control systems for heating and cooling, and just about anything that positively impacts energy consumption or retention.
“We interviewed several companies before choosing Honeywell,” said Co-Chair Leonard Clark. “We picked Celtic to be in the oversee position because they’ve done this type of work all over the country as well as overseas, and they have people who know all the facets.”
“There was a lot of education involved, and every single town-owned facility had to be looked at and evaluated,” said Committee Chair Gary Fisher, adding that the reason for a separate company to verify the EPC contractor’s recommendations is to make sure that everything is measured and verified. “Celtic has the technical expertise to make sure Honeywell is doing things right,” he said.
“The majority of improvements would be in the school system,” said Kovaleski. “[The schools] have the biggest buildings and are the biggest energy users.”
Most important for residents to understand, Kovaleski said, is that the upgrades would be completely paid for through the savings the town gets from lowering its energy bills. The payments on any money borrowed would be less than the reduction in energy costs, so there would be no tax increase for residents.
In Stafford’s case, Honeywell has made a number of recommendations from which the town could select all or a portion to move forward with. Honeywell would then also make a written guarantee of the savings the improvements would generate. If the selected projects do not generate the savings that Honeywell guarantees, then Honeywell would be obligated to cut a check to the town for the difference. If the savings are more than projected, the town would get to keep the additional savings and would not be obligated to share those savings with the contractor.
“In a worst-case scenario, it’s a wash,” said Clark. However, he said, the obligation on the contractor’s part requires the contractor be conservative in their guarantee, and many towns have benefited from more savings than promised. He pointed to an EPC for the town of Naugatuck where the savings were expected to amount to about $600,000, and the town actually ended up with a savings of over $900,000.
Kovaleski said Stafford is one of the first towns in the state to take advantage of this opportunity and, he believes, the first in their region. The committee hopes that its efforts will encourage other area towns to do the same.
“It is an investment of time, but if you have people in your community willing to invest that time, it’s definitely worth the effort,” said Fisher.