Connecticut’s “Lead by Example” (LBE) program announced Wednesday that a municipality, a state agency, and a state facility are the first three organizations to take advantage of a new and innovative financing approach designed to achieve significant savings through energy-efficiency projects. The City of Bristol, the Connecticut Department of Corrections, and the Connecticut Valley Hospital have all taken a key step forward to begin energy efficiency projects designed to reduce energy costs for the state and municipalities, upgrade facilities, create jobs, and drive investment in Connecticut’s economy.
The three will be using a Performance Contracting process that enables state agencies and municipalities to perform energy efficiency upgrades on their buildings with no up-front costs. The initial costs of the efficiency upgrades are typically financed by a third party and then paid for through guaranteed savings on future energy bills. The Department of Energy and Environmental Protection (DEEP) and the Department of Administrative Services (DAS) have developed a standardized program that enables agencies and towns to more easily enter into these performance contracts. The program includes pre-approved contractors, on-call advisors, standardized contract templates, and targeted financial assistance, which will help ensure that state agencies and municipalities see positive results from this program.
“With towns and state agencies beginning to use the innovative Performance Contracting approach we are achieving an important milestone in Governor Malloy’s broad energy agenda for the state,” said Daniel C. Esty, Commissioner of the Department of Energy and Environmental Protection. “Performance contracting offers an attractive, low-cost approach to bringing down energy costs, and we look forward to supporting many more state agencies and municipalities that choose to take advantage of this tool.”
“The Department of Corrections is pleased to be among the first participants in the state’s new energy efficiency performance contracting program,” said Leo Arnone, Commissioner of the Connecticut Department of Corrections. “This program will allow us to save a tremendous amount of money through energy efficiency upgrades at our facilities, which can then be spent on much more urgent needs.”
“The City of Bristol is eager to save money through this exciting performance contracting initiative,” said Bristol Mayor Art Ward. “We’ve been looking for the right way to go forward with these upgrades, and we’ve finally found it. My special thanks to the Mayor’s Task Force on Energy Consumption for their work on this ambitious project.”
The energy savings performance contracting program is a collaborative effort across state government, involving the Offices of Attorney General George Jepsen and State Treasurer Denise Nappier, the Clean Energy Finance and Investment Authority (CEFIA), the Departments of Administrative Services (DAS), Energy and Environmental Protection (DEEP), and Construction Services (DCS), and the Office of Policy and Management (OPM). This initiative will be further supported by a public/private partnership with local non-profits such as the Tremaine Foundation, the Common Sense Fund, and the Hampshire Foundation, who will create awareness of the performance contracting opportunities among municipalities.
Lead By Example
Established in the milestone energy legislation Public Act 11-80, DEEP and DAS jointly administer the LBE program. In addition to its performance contracting program, LBE has allocated more than $10 million to 44 different energy efficiency projects across state government, with an average payback period of less than six years. LBE is also in the process of installing energy monitoring systems at up to 100 of the state’s largest energy consuming buildings, which will reduce energy usage through targeted recommendations for low- and no-cost efficiency measures. Interested parties can find out more about the LBE, including the performance contracting program, at www.ct.gov/deep/leadbyexample.
The State of Connecticut currently spends more than $200 million a year on energy (electricity and heat), and municipal governments across the state spend in excess of $200 million on energy costs as well. Energy efficiency represents an enormous opportunity to reduce the amount of money spent on energy and save taxpayer dollars in the process. The major obstacle to most energy efficiency upgrades is the upfront investment required, particularly at a financially difficult time for the state and most municipalities. One solution is to engage in energy savings performance contracting, which enables the implementation of efficiency upgrades without the upfront costs. This program was developed by LBE to provide support mechanisms including:
· A pre-qualified set of energy service companies, on contract with DAS, that will perform upgrades that meet stringent qualification criteria
· A program manager (based out of DEEP) who will be an on-call resource for state agencies and municipalities
· A financial advisor (based out of CEFIA) who will provide guidance to municipalities and ensure that municipalities are getting the best deal possible for financing their projects
· A set of contractual documents that offer a thoroughly-vetted, Connecticut-based template for energy savings performance contract projects
· Targeted technical assistance for municipalities and state agencies through the Connecticut Energy Efficiency Fund.