Thanks to energy services performance contracting, government entities at all levels can use the best available tools to save energy — without having to spend any money up front on capital costs.

Under these performance-based contracts, qualified contractors design, construct and facilitate financing for energy-savings initiatives. The customer then uses the money it has saved through reduced energy usage to pay for the financing of the efficiency upgrade. The contractor guarantees that the improvements will generate the projected savings.

The customer is protected because the sum of its annual payments to the contractor — plus payments for utilities — cannot exceed the amount that the agency would have paid for utilities had it not undertaken the energy-savings improvements. After the contract term ends, the facility continues to reap the savings resulting from lower energy usage.

Two local government customers in Virginia and Kansas — each in its own way — provide examples of how to leverage the value of performance contracts.

Arlington County Courthouse, courtesy Arlington County, Va.

Virginia: Arlington County Justice Center

In Arlington, Va., the 639,354-square-foot Arlington County Justice Center — comprising the County Courthouse and Detention Center — implemented a project focused on reducing both energy and water use as part of Fresh AIRE (Arlington Initiative to Reduce Emissions). The initiative’s goal is to reduce Arlington County government’s greenhouse gas emissions by 10 percent from 2000 to 2012.

Key improvements included new high-efficiency lighting, water conservation measures, a chemical-free water treatment system, the recapturing of heat from building exhaust, energy management system upgrades, and improvements in the air-handling units.

County officials expect to reduce electricity consumption in the two buildings by 14 percent, reduce natural gas consumption by 35 percent, and reduce water consumption by 32 percent.

The Justice Center’s greenhouse gas reductions will be equivalent to the preservation of 14.1 acres of forest from deforestation, or the conservation of 4,713 barrels of oil per year.

The county’s energy services company, ConEdison Solutions of White Plains, N.Y., guarantees $428,000 in energy-related savings and $29,872 in non-energy-related savings annually.

The Arlington County Justice Center project began construction last December and will be completed by year-end.

Kansas: Pittsburg Memorial Auditorium and Convention Center

The 40,800-square-foot Memorial Auditorium and Convention Center in Pittsburg, Kan., accommodates nearly 1,600 people and hosts conventions, trade shows, and other public and private events.

Air conditioning for the city-owned venue was provided by several packaged rooftop units and multiple split-type systems feeding cooling coils and air handling units in the facility. These units were at or near the end of their expected lifespan. The rooftop units utilized direct expansion for cooling and natural gas for heating. In anticipation of increased space loads during events, the temperature in the space was being lowered to about 62 degrees Fahrenheit prior to the activity. The rest of the building is air conditioned by residential-style split air-conditioning systems, with cooling provided by direct expansion and heating by hot water.

The hot water is circulated to the air handlers by two horizontal circulation pumps. The multi-zoned air handlers serve several individual spaces in the building. Some condensing units were in poor condition and a few were no longer functioning. These aging units were replaced with new, higher-efficiency units.

Space temperatures were controlled by programmable thermostats, some of which had failed. As a result, some thermostats were being bypassed in favor of manually controlled air-conditioning units. The central equipment control panel, also aging, was replaced with a modern, direct-digital-control energy management system.

Incorporating performance contracting into its upgrade strategy, the City of Pittsburg has been working with its contractor (also ConEdison Solutions) to implement a range of measures that will maximize energy efficiency and operating efficiency, while minimizing costs. New energy-efficient equipment has lowered maintenance costs and allows the city to monitor and diagnose equipment remotely.

In the case of the convention center, however, the results of the program extend beyond energy savings to also enhance environmental conditions, reduce replacement costs, improve safety conditions, and boost occupant comfort and productivity.

Because this initiative addresses both energy savings as well as separate, long-term needs, the improvement program will be partially funded through savings derived from performance contracting and partially through other budgeted funds.

Conclusion

In one instance, a jurisdiction is using performance contracting for the sum total of its energy initiative. In another case, local government is tapping the strategy as part of a more sweeping infrastructure upgrade. No matter the approach, the public sector is becoming increasingly sophisticated at saving tax dollars and saving energy through the power of performance contracting. With payback guaranteed, the allure is irresistible. And the use of this strategy is certain to grow in years to come.