Energy performance contracting a win-win Saving on school utility bills pays for the upgrades, and teaches everyone a lesson
Release Date: 7/12/2004
Gordon Jaremko The Edmonton Journal Monday, July 12, 2004 CREDIT: Rick Macwilliam, the Journal Dale Lechelt with metal halide lights that replaced flourescent lamps in the gym. EDMONTON -- It pays to go green. "We walk the talk," says engineer Dale Lechelt in Sherwood Park. As facility services director for Elk Island Public Schools, he takes energy conservation to the bank at a rate of $55,901.33 a month. Under an energy performance contract, the money is a 24-per-cent reduction of utility bills which is guaranteed by the business in the school district's conservation P3 or public-private partnership with the Edmonton office of Ameresco Canada. The company pays the difference if energy savings fall below the $670,816 owed annually to the Bank of Montreal on a $5.6-million, 10-year mortgage taken out to buy and install conservation technology. "There is virtually no risk -- the company believes in its products," Lechelt said in an interview. "We've done a lot of this," said Ameresco western vice-president Doug Wall. "We're pretty sure." The federal government is a believer too. Natural Resources Canada contributed a $250,000 grant to the school board from an incentive fund titled the Energy Innovations Initiative. Energy performance contracting is new in Alberta. But Wall said the approach has proven itself in Ontario and the United States, where Ameresco's private parent company runs a for-profit conservation network from a headquarters in the Boston suburb of Framingham. The system has a track record. Energy service company pledges of conservation savings are accepted as loan security for conservation projects. "We take the risk and manage it," Wall said. Part of establishing the track record has been to pay up if an annual energy savings falls short of the projection. "Occasionally it drops below and we have to cut a cheque," Wall said. But the system works more often than it fails. He recites examples such as an annual saving 14-per-cent greater than Ameresco's pledge by a P3 with the rural Parkland school district west of Edmonton. The company makes its money in the same way as a construction general contractor. The firm plans projects, hires subcontractors to do the work and charges markups on their fees. The approach works as a business proposition because conservation involves investments in systems that generate large, lasting reductions in costs reliably enough to obtain bank financing. Rather than just make cutbacks, energy performance contractors build improvements. "We weren't just turning off the lights," Lechelt said. "We weren't sacrificing the environment for the sake of business. We weren't sacrificing the classroom for the sake of saving energy." The effort centred on lighting, heating, ventilation, water use and sewage in the Elk Island district's 44 schools in suburban Sherwood Park and Fort Saskatchewan, and rural Strathcona, Lamont and Minburn counties. Notable improvements in the schools' environment as well as savings were achieved by installing better lighting, Lechelt said. A new generation of thinner, brighter fluorescent tubes pared down power consumption, reduced maintenance expenses by cutting the number of fixtures, and eliminated the hum and flicker of older equipment. Metal halide lights, which mimic the sun's glow and are catching on in grocery and department stores, replaced less efficient and far less pleasant fluorescent fixtures in gymnasiums. New exit signs were installed, using the bright but low-cost LED or light emitting diode technology also being adopted for road uses such as traffic lights and vehicle tail lights. Elk Island went into building automation, installing computer control systems that ensure power-and-water consuming appliances only run at full capacity during the hours when the schools are in use. New seals were put around windows and doors. The program generates an intangible but significant bonus for the Elk Island's 890 classroom teachers, said communications director Tanya Orr. The teachers' mandate includes instilling environmental awareness into their 16,200 pupils. "This (energy performance) ties into the curriculum to say we are walking the talk here. We as a school division are doing our part." Ameresco makes a specialty of energy performance contracting with educational systems under a plan trademarked as its Better Schools Partnership, and the company hopes to spread it out across Alberta. Elk Island is the province's fifth-largest school district. Ameresco aims to break into the big league by landing contracts with the four top divisions, the public and Catholic systems in Edmonton and Calgary. Alberta's aging school buildings have built up a backlog of $3 billion-worth of maintenance and renewal needs, the firm says in a new research paper being circulated among local boards. School boards could cut their energy costs by about $24 million per year, the company estimates. The message is being heard, said Brian Fedor, managing director of facilities services for Edmonton Public Schools. Preliminary discussions have been held with Ameresco. Studies are underway of potential energy savings in more than 200 schools of varying ages and conditions in the Edmonton public system. "There is probably some potential," Fedor said. Ameresco will have to compete with rival specialty firms for an energy performance contract if the company persuades the Edmonton system to try one, he added. gjaremko@thejournal.canwest.com © The Edmonton
