EagleTribune.com, North Andover, MA

March 28, 2013

Spending to save money in Methuen

Firm asks for $3.5M for green measures, promises savings

By Douglas Moser
dmoser@eagletribune.com

---- — METHUEN — Several councilors are cautious about a $3.5 million contract to replace old boilers and implement other energy saving measures following a pitch for the work last week.

Ameresco, a Framingham environmental services company, said they guarantee energy savings, adding that energy savings would pay for the up-front borrowing required to do the work. Under a new state law, the work could be done all at once with a company like Ameresco subcontracting work and managing multiple smaller projects as a larger whole.

Councilors, who would have to approve any contract and borrowing for the project, said they liked the idea of energy efficiency and the infrastructure upgrades, but wanted to see a contract first and to review how energy spending in the city has changed over the last few years.

“I understand we want to do the energy savings, but I want to see how Tom Kelley (city auditor) says it will affect us,” said Councilor Jennifer Kannan.

Officials from Ameresco and from energy consulting company Peregrine Energy Group detailed what improvements would be made and how the work would be paid for. They told councilors and School Committee members many times that borrowing would be paid for using savings from reduced energy spending and would not impact the tax rate.

“I’d like to see the contract first,” said Counselor Jamie Atkinson, who is in favor of the improvements.

If Methuen decided to hire Ameresco, the city would come up with $3.5 million for a list of several dozen improvements to school and city buildings. About 60 percent of it would be work on school buildings.

One of the major expenses would be replacing the dehumidifying system in the ice rink and installing a “low-e” ceiling that absorbs ambient heat. School officials have said those improvements, and reductions in operating costs, could allow the School Department to keep the rink open for renting all year.

Other projects include replacing boilers in the Quinn administrative building and one of the fire stations, replacing lighting in the grammar schools and multiple city buildings, installing new energy-management systems in the Searles building and the grammar schools, and weatherizing the grammar schools and four city buildings.

The change in state law allows a municipality to bid all that work as one project to energy services company, which would contract the projects out and have them done concurrently. Ameresco gets paid a portion of the contract when each project is completed.

Ameresco officials said the company guarantees that the city will save a given amount of energy, not dollars, and the reduction in use can be used to pay for any borrowing the city does.

“The guarantee Ameresco provides is that energy saved will meet or exceed savings projections year on year,” said Steve Weisman, vice president of Peregrine Energy Group. “The actual energy saved is verified and reconciled by Ameresco annually against the guarantee.”

Superintendent Judith Scannell and community development Director William Buckley advocated for the projects.

“The work that’s proposed it’s not real glamorous work. It’s boilers and energy management systems,” Buckley said. “It’s not a lot of stuff people touch and feel on a daily basis, but can have a big impact on the operations of these buildings.”

Scannell said the improvements to the ice rink will also reduce maintenance costs on the old dehumidifying system and produce more revenue.

“The Ameresco projects are a win-win situation for schools and the city,” she said.

Ameresco already has conducted a thorough energy audit for the city, which is where it came up with its list of improvements. If the city decides to contract with Ameresco, the cost of the audit is rolled into the project. If the city chooses not to contract with them, it will owe the company $40,000 for the audit.

Other communities locally have used or considered Ameresco.

The North Andover Finance Committee in January recommended $4.05 million in energy-saving measures in town-owned buildings, though they did not endorse Ameresco for the work. Two members of the committee wanted the town to seek competitive bids from different energy services companies.

Last year, officials backed a Town Meeting article that called for borrowing $4.3 million, repaid over 14 years, to pay for an energy-conservation project. The Finance Committee, though, opposed the article and voters at the June 12 Town Meeting rejected it.

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