Illinois Local Government Energy Conservation Act: A Tool for Municipalities to Modernize Infrastructures

Small municipalities in Illinois often face the challenge of aging infrastructure, with no budget to make improvements.

But there is a tool that they can use  to turn their aging infrastructure woes around, it’s called Energy Performance Contracting in Illinois.

With this tool, drafty windows and doors, aging  boilers and other HVAC equipment all can be replaced or repaired.  Advanced Building Automation systems can be installed to control and modernize their buildings and public spaces, making the community safer and their staff more comfortable and productive. Through an Energy Performance Contract, this can all be done without the need for capital or incurring debt.

Energy Performance Contracting in Illinois falls under the state Local Government Energy Conservation Act, and the official code is 50 ILCS 515.

This innovative financial agreement helps municipals design, install and fund energy systems optimization projects by using the energy savings to pay for the project costs over a set term, explained Orry Cummings, an account executive at an energy systems optimization firm.

“Energy Performance Contracting in Illinois allows municipalities to keep their debt ceiling intact, not raise taxes and yet still get the improvements they need to run their community efficiently,” Cummings said.

The program has completed over $144.6 million in upgrades with annual utility savings of over $17.2 million per year since its inception in 2005. Most of these efficiency projects were completed for large government entities.

Energy Performance Contracting in Illinois is the tool needed to help the vast number of small local government entities ignored by massive energy services companies (ESCOs). Traditional ESCOs have a track record of only deploying large scale projects that have a minimum project size requirement that is in excess of tens of millions of dollars.

By partnering with an energy systems optimization firm that has experience working with organizations of all sizes, from a small library to a large jail, and knows the ins and outs of performance contracting, small government entities will achieve efficiency solutions that fit their exact needs.

According to the State of Illinois Energy Performance Contracting website, agreements are typically ten years in length, implemented only by qualified energy contractors, adaptable to site specific needs and best suited for facilities that have the following characteristics:

  • Stable use of the facility for the next five to ten years
  • Minimal availability of funds for energy related capital improvements
  • Have accomplished minimal energy efficiency upgrades over the past ten years

From the process, municipals can expect the following:

  • Thorough assessment of how your facility uses energy and manages energy cost
  • Recommendation of all technically and economically viable energy conservation measures for inclusion in project scope
  • Ability to negotiate specific project scope, terms and conditions, etc. in the Energy Services Agreement
  • Annual savings in the range of 20 percent to 30 percent of the utility cost at your facility
  • Capital investment of one to two times the utility cost at your facility
  • The opportunity to utilize existing expenditures to “buy” the project

About the author: Orry Cummings is an account executive at SmartWatt with a degree in engineering from Worcester Polytechnic Institute.

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