The Stillwater City Council is considering a range of infrastructure updates valued at over $700,000 to the nine facilities it owns in an effort to reduce overall energy consumption and save money on a long-term basis. The part that seems almost too good to be true? All these improvements could be done without raising taxing or increasing the city’s budget.
A company called Ameresco, an energy efficiency and renewable energy solutions company, provided a preliminary energy assessment to the city council that was reviewed during its Jan. 7 regular meeting. The assessment found an estimated $700,000 to $1 million worth of improvements that would upgrade inefficient equipment, which would in turn increase efficiency and reduce future maintenance costs.
By making these improvements in 2020, Ameresco projects that energy costs the city is currently paying would reduce. Those savings in utility bills would then be applied to the cost of the infrastructure, such as new street lights, HVAC units and boilers.
Ameresco is so confident of its energy saving projections that it guarantees the entire cost of the project will fund itself through energy savings over the life of the new equipment and improvements. If the savings do not pay off the total cost plus the debt incurred, Ameresco said that it covers the difference.
Some of the facility improvements that were proposed by Ameresco include replacing fluorescent lighting with LEDs, adding lighting controls, installing mechanical insulation to pumps and piping, and making various improvements to building envelopes. The funding mechanism for cities to make energy efficiency project is outlined in Minnesota statute 471.345, and allows for a municipality to enter into a contract with a qualified provider for a 20-year term.
In one example Ameresco uses in its preliminary review, the city currently spends $200,000 per year to keep the street lights lit - $150 per year per streetlight. By converting to LED street lights, Ameresco projects energy saving along with brighter and safer illumination.
In addition to facility improvements, a capital planning tool was also proposed by Ameresco, which would assess the condition of existing facilities and plan out when equipment is reaching the end of its life cycle. Engineers hired by Ameresco would inspect each building and provide updates on the lifespan of each building’s energy systems, as well as assess the expected cost to replace equipment that is on the end of its life cycle.
City facilities manager Mick Greiner said that until he started working for the city about a year ago, there was no system in place to keep track of the age or expected life expectancy of the energy systems of its buildings. The lack of a system makes it difficult to make room in the city’s budget if any equipment were to break down.
“The system we have is circa 1997,” Greiner said during the city council meeting. “I’m lucky if I can get heat to all parts of the building on a daily basis.”
Ameresco has either completed, or is currently working on, similar energy saving projects for many cities, such as Chicago, Ill. as well as in Virginia, Apple Valley and Hutchinson, Minn. The company has 70 offices in North America and Europe, with one Minnesota-based office in Eden Prairie. It was founded in 2000 and earned $787.1 billion in revenue in 2018.
The decision on whether to move forward with the facility improvements and capital planning tool provided by Ameresco will be determined at a future council meeting where a public hearing will be held. If approved, Ameresco would move on to the project development phase, which includes a detailed investment grade audit and a presentation to the city council that includes the scope of the entire project as well as funding sources.
Contact Kevin Ott at email@example.com