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City to spend $1M on energy efficiency


(12/28/2008)

by Sarah Squires

The city of Winona is poised to invest over $1 million in projects to make city operations more energy efficient, to be paid back with utility savings over the next 11 years.

If all goes as planned and estimated, the city will reduce its carbon emissions by over two million pounds annually, a 14 percent reduction. And the projects are estimated to reduce the city’s electricity consumption by 11.5 percent alongside an over 20 percent reduction in natural gas usage.

City officials met last week to unveil plans to the public, with Mayor Jerry Miller saying he’d like to get some input on the plans before the council votes on the projects next month.

The list of projects includes:

• adding a methane gas capture system at the wastewater treatment plant to clean and generate power from the methane produced at the plant. Cost: $1.15 million, defrayed by a $330,000 grant. Annual utility savings estimated at $66,323.

• adding LED traffic signals. Cost: $131,063. Annual utility savings estimated at $20,988.

• adding a website and other energy awareness education projects. Cost: $9,876.

• adding LEDs to parking lot lighting. Cost: $70,778. Annual utility savings estimated at $1,715.

• adding lighting improvements to city buildings. Cost: $167,988. Annual utility savings estimated at $18,221.

• water conservation measures. Cost: $33,647. Annual utility savings estimated at $5,073.

• adding Direct Digital Controls to turn down heating and cooling systems in areas of city buildings when they aren’t in use. Cost: $146,447. Annual utility savings estimated at $10,613.

• adding vending machine controls to turn down machines when buildings are unoccupied. Cost: $6,978. Annual utility savings estimated at $1,344.

• re-commisssioning of HVAC and other systems. Cost: $30,046. Annual utility savings estimated at $6,119.

McKinstry Company, a consulting and engineering firm that has been working with the city on the projects, has guaranteed those maximum prices and energy savings. For its work, the firm will collect 18 percent of the total price tag before grants are subtracted ($1.7 million), for a cost of just over $300,000.

If the cost of the project goes up, the firm will be responsible for the difference, and “If those [savings] aren’t happening, we write a check,” said McKinstry representative Greg Ackerson.

The city originally looked at bonding for the projects, but interest rates looked high. Now, it is planning to use money from the sewer fund for the methane gas capture system, and borrow from that fund for the rest of the projects. Each year, the city would pay back about $56,000 to that fund. If energy prices stay the same, it would save an additional $66,000 each year to go into the general fund.

If energy costs rise four percent annually, city officials have said the city will save about $1 million in energy costs over the next ten years.

A local citizen, Ken Chupita, who attended last week’s meeting, questioned the projects as not being financially sound. He said that during the next 10 or 15 years as the projected savings pay for the projects, the technology will become outdated. He said that the payback model was simple-minded. “If the city were a business, only one of the projects would go through,” he said. “It just doesn’t make economic sense because technology is always going to increase.”

Ackerson said that there was no crystal ball that the city could look into to find a better way to save energy and money. “There’s a cost of action, and there’s a cost of inaction,” he said. He said that the firm had analyzed lots of different projects but chose the ones that would provide the best savings over time.

Ackerson said that once the council approves the list of projects, the firm will begin working with local contractors, and the “guaranteed maximum prices” associated with each project will likely fall. More accurate numbers will follow in February or early March, he said.

 

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