Municipals in New York Rely On Energy Saving Performance Contracts to Improve the Infrastructure that Impacts People Most

Cities, towns and counties in New York faced with end of life equipment and aging buildings can upgrade the infrastructure that delivers comfort, fresh air, safety, and quality of life to employees and taxpayers despite having no capital do so.

It doesn’t even take a miracle, just a little known piece of legislation called an energy performance contract.

The New York Energy Law, enacted in 1997, includes Article 9 section 103 which provides a funding mechanism to pay for public energy optimization projects with guaranteed energy savings. The savings are used to pay for the investment over a period not to exceed the lesser of 20 years or the payback period of the project. If the guaranteed savings are not achieved, the energy systems optimization company who designed and implemented the project must reimburse the municipality for the difference between the guaranteed and actual cost savings.

But not all energy systems optimization companies are equal.

Municipal leaders should choose an energy systems optimization company to innovate bundled energy projects that achieve modernization of infrastructures, budget reduction, efficiency, and sustainability goals without the need for upfront capital. They should look for a firm with low overhead, one with a streamlined design-build process who will customize a project  to meet the unique needs, even phasing it out if necessary. Leaders should make sure that the company they hire doesn’t have an exclusive agreement to use certain products, whether or not they are right for the job.

Perhaps most importantly, leaders should hire a firm that focuses their work on how it will impact people. It is imperative to balance human comfort, safety, and quality of life while maximizing efficiency and financial impacts. For instance, if the plan calls for new LED lights in an office space, the energy experts should talk to the actual users of the space to get a thorough understanding of their issues before designing and installing the new lighting layout. Or when adding new HVAC equipment with controls, the company would think about when the facility is used and the temperature needed to keep employees happy and productive.

Greg Royer, an industry veteran, said the legislation provides municipalities with various options to improve their infrastructure.

The list is endless, Royer said.

“Cities, towns and counties throughout New York have been able to take advantage of New York Energy Performance Contracting legislation to replace end of life equipment or undertake capital improvements projects that they couldn’t otherwise afford,” Royer said. “Common upgrades include new HVAC equipment, interior and exterior lighting, building automation controls, the weatherization and insulation of windows and doors, and even street lighting systems.”

Some of the benefits to using the New York Energy Performance Contracting legislation include:

  • Maintains existing tax base and debt limit
  • Generates positive cash flow every year for the term of the project
  • Reduces maintenance costs and expensive emergency repairs
  • Improves occupant comfort
  • Encourages others to follow efficiency example

“Using the New York Energy Performance Contracting legislation is a sure way to to make a community better and more user friendly,” Royer said. “Residents are happier to have bright street lights and workers are more productive when they are warm in the winter and cool in the summer. And this is all possible without raising taxes.”


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