Oct. 2, 2013
Kick-off of Major Energy Efficiency Project at CT Valley Hospital:
Efficiency Measures will Reduce Energy Use and Costs
First Project Launched Under “Lead by Example” Energy Efficiency Performance Contracting Program
The Department of Mental Health and Addiction Services has selected NORESCO to lead the implementation of an approximately $30 million energy make-over at Connecticut Valley Hospital (CVH), located in Middletown, – the first project selected under an innovative new program designed to reduce costs through energy efficiency at state and municipal buildings.
The comprehensive energy retrofits, to be paid for through future guaranteed energy savings, will bring much-needed and highly efficient energy systems and equipment to the CVH campus, which first opened its doors in 1868 and where operations are constantly challenged by aging infrastructure.
This is the first project out of the gate under Connecticut’s new standardized energy savings performance contracting program, that allows state agencies and municipalities to enter into performance contracting agreements with energy service companies. These contracts enable agencies and municipalities to upgrade facilities and reduce energy costs, while creating jobs and driving investment in Connecticut’s economy. The program has a number of support mechanisms – like pre-approved contractors, on-call advisors, standardized contract templates, and targeted financial assistance – which will help ensure a streamlined approach and successful projects.
An energy savings performance contract is a tool that state agencies and municipalities can use to perform energy efficiency upgrades on their buildings with no up-front costs. The costs of the efficiency upgrades are paid for through guaranteed savings on future energy bills.
The CVH project will include approximately $30 million in energy efficiency upgrades. The staff at the Department of Mental Health and Addiction Services at the hospital will work closely with the Department of Energy and Environmental Protection, the Office of Policy Management, and the Clean Energy Finance and Investment Authority to secure private financing to provide the limited amount of upfront capital needed for the project.
“This performance contracting project at Connecticut Valley Hospital showcases yet another innovative program the state is using to meet our objectives for Connecticut’s cheaper, cleaner, and more reliable energy future,” said Governor Dannel P. Malloy. “This program supports our push to be better stewards of taxpayer dollars and also moves us closer to the goal of leading the nation in energy efficiency.”
Malloy’s budget secretary Ben Barnes said, “The State’s new standardized performance contracting program is an excellent example of how we can leverage private capital to advance our energy agenda. Through these contracts, state and local governments will immediately realize tremendous savings from energy efficiency projects without having to spend scarce dollars and then wait for the payback period.
Department of Administrative Services Commissioner Don DeFronzo said, “We look forward to supporting this project and others through a truly collaborative effort among state agencies. Performance contracting offers an enormous opportunity for the state and its municipalities to modernize our building stock and save money while doing so.”
“We are delighted to be leading by example in reducing energy use and costs,” said Patricia Rehmer, Commissioner of the Department of Mental Health and Addiction Services. “This performance contracting project offers a means for us to realize much-needed infrastructure improvements that will significantly increase efficiency, reduce operating and maintenance costs, and improve the living environment for our patients. We look forward to working with NORESCO to achieve these savings and benefits.”
“The Lead By Example program and the Performance Contracting approach will help our state and local governments achieve huge savings in the cost of heating and lighting facilities,” said Daniel C. Esty, Commissioner of DEEP. “This is a real benefit to taxpayer and sets an example of the value and benefits of efficiency that will encourage residents and businesses in our state to take example of the many programs available to help them achieve similar gains.”
Energy savings performance contracting is a $4.1 billion annual market nationally, according to research by the Lawrence Berkeley National Laboratory. The performance contracting framework has been used successfully across the country for over three decades. In order to boost activity in Connecticut, the State has pre-qualified twelve energy services companies to implement projects under the new standardized program. NORESCO, one of the pre-qualified companies on state contract, was selected for the Connecticut Valley Hospital Project after reviewing proposals and interviewing a number of companies.
Background on Lead by Example
The Lead by Example (LBE) 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), Construction Services (DCS), and the Office of Policy and Management (OPM). This initiative is further supported by a public/private partnership with local non-profits such as the Tremaine Foundation, the Common Sense Fund, and the Hampshire Foundation, which help to create awareness of the performance contracting opportunities among municipalities.
In addition to its performance contracting program, LBE has allocated more than $10 million to 41 different energy efficiency projects across state government, with an average payback period of less than six years. Additional information can be found at www.ct.gov/deep/leadbyexample
Background on NORESCO
As one of the largest energy services companies in the U.S., NORESCO utilizes design-build, performance-based contracting vehicles and asset monetization solutions to deliver energy and maintenance savings and significant infrastructure upgrades to existing facilities. NORESCO has guaranteed more than $3 billion in energy and operating cost savings at more than 7,000 facilities throughout the U.S. and abroad. NORESCO also offers a full suite of consulting services to integrate sustainable design strategies into new construction and existing buildings. NORESCO is a part of UTC Climate, Controls & Security, a unit of Connecticut-based United Technologies, a leading provider to the aerospace and building systems industries worldwide.