Jun 23 - Portland Press Herald

Old furnaces will be replaced. Heating and lighting controls will be installed. Windows and doors will be weather-stripped.

Portland officials plan to retrofit all city and school buildings to increase energy efficiency, and they expect to pay for the improvements with significant future savings on heating and electricity costs.

Those costs are expected to top $8.3 million in the coming year, including about $3.2 million for heating.

Three years of city energy costs are being analyzed as officials develop a competitive request for energy-performance contract proposals.

City Manager Joseph Gray Jr. plans to ask energy companies for proposals by early August and start making the improvements in early 2009.

"From my perspective, this is the highest priority in the coming year," Gray said. "My hope is that by budget time next year, we have a better handle on our long-term energy costs and facility investment needs."

Both the Portland City Council and the Sustainable Portland Task Force have endorsed energy conservation efforts.

Exactly how much energy or money Portland would save with an energy performance contract is unclear.

A lot depends on the scope of improvements the city decides to make, said Chuck Porter, a special projects coordinator with Efficiency Maine, an arm of the Maine Public Utilities Commission.

Energy performance contracts have been around for about 30 years, but more municipalities are using them now as a way to gain control over rising energy and building maintenance costs, Porter said.

Bangor, Topsham and Biddeford are among the communities that have hired energy service companies to upgrade their facilities.

Biddeford hired Johnson Controls to do an energy audit last year and started $1.2 million in building upgrades this spring, said Brian Phinney, Biddeford's environmental code officer.

The work, ranging from new lighting in Biddeford City Hall to a new furnace at the Rotary Park Teen Center, is expected to save at least $123,000 per year in energy costs.

Because Biddeford's heating oil costs have jumped from $2.32 to $3.80 per gallon since last year, the city's savings likely will be even greater.

"You'd be surprised what savings you can find in normal operating practices," he said. "It's the responsible thing to do given rising energy costs, and it sets an example for other communities."

Under such a contract, Portland would hire an energy service company such as Johnson Controls, Siemens or Honeywell to study its energy use and the condition of its buildings.

The company would recommend and agree to do a broad range of building improvements, and guarantee a certain level of energy savings as a result, said Allen Paul, regional business manager for Siemens.

To pay for the improvements, the city would borrow money through the company or a third-party lender.

The city would repay the loan, including interest, with energy savings.

If the savings turn out to be less than the company promised, the company pays the difference on the loan agreement.

If the savings are more than promised, the city can use the additional money to reduce taxes or pay off the loan sooner.

In Biddeford's case, the city also sought competitive bids from lenders and got a 15-year loan from Citicorp with an interest rate of 3.72 percent, Phinney said.

Energy performance contracts typically range from five to 15 years. Municipal officials say they like the contracts because they can finance major capital improvements without budget increases.

Energy service companies like the contracts because they ensure a steady stream of work.

"And at the end of the program, the savings continue and the client continues to benefit," Paul said.

Despite efforts to increase efficiency, energy costs for most municipalities continue to rise.

The Portland School Department went through a similar energy audit in the late 1990s, said Douglas Sherwood, school facilities manager.

It replaced about 14,000 light fixtures, upgraded five oil burners, retrofitted the district's central kitchen and installed heating controls in every building.

As a result, the district's heating oil use dropped from 700,000 gallons in 2003 to 530,000 gallons in 2007. Still, the cost of the fuel increased from $543,000 to $1.14 million, Sherwood said.

"We're doing an excellent job conserving energy," he said. "The issue is that the cost keeps going up."

Fred Padula, an energy conservation advocate and retired history professor, said he hopes Portland's energy performance contract covers everything from weather-stripping to solar energy alternatives in order to ensure maximum energy efficiency.

He's also concerned about homeowners who cannot afford to make similar improvements. "Winter is coming and the public is not ready for this energy crisis," he said.

Efficiency Maine, which is funded by electricity customers, provides information, grants and other incentives to promote energy conservation, Porter said. Programs are available for homeowners, business owners and governmental agencies.

For instance, Efficiency Maine will pay Portland $75 to replace one gymnasium light with a high-efficiency fluorescent model, Porter said.

The city, in turn, will reduce the amount of electricity used by that one fixture by 50 percent.

"We're trying to provide incentives to encourage improvements that lead to real, long-term savings," he said.

To learn more about energy performance contracts and programs offered by Efficiency Maine, visit efficiencymaine.com or call (866) 376-2463.

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at:

kbouchard@pressherald.com

Originally published by By KELLEY BOUCHARD Staff Writer.

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