Energy projects pared down by city


(1/7/2009)

by Sarah Squires

The city of Winona signed off on about $1.27 million in projects to make city operations more energy efficient, paring down the list to cut out projects that wouldn’t pay for themselves in utility savings within 15 years.

The projects are expected to reduce the city’s carbon emissions by over two million pounds annually, a 14 percent reduction; They’ll reduce city electric consumption by an estimated 11.5 percent, with natural gas usage down 20 percent.

The most expensive project is a methane gas capture turbine which will capture and clean methane produced at the waste water treatment facility, then use it for fuel for the operations. The $1.15 million project will be defrayed by a $337,500 grant and is expected to pay for itself in utility savings within 15 years. Other projects include adding LED lighting to traffic signals and interior lighting for city buildings, water conservation fixtures and Direct Digital Controls to turn down the heating and cooling of city buildings when they aren’t in use.

Pulled from the list were two projects with less promising returns in energy savings. The first would have been a web site for citizens to view energy savings information related to the project, which would have cost about $10,000 and presented no utility savings. The second would have been adding LED lighting to parking lot light fixtures, which would have cost about $70,000.

Council member Tim Breza said that adding LEDs to the parking lot lighting would someday be more of a money saver, but that the new technology was still pretty expensive and thus would take over 16 years in utility savings to pay for itself. That project may still be completed after prices begin to come down.

The city will borrow from existing funds to pay for the projects, and will refund the approximate $1.27 million over the next 11 years. After that, utility savings estimated at $123,000 per year without a change in energy prices would continue to add up, proponents say.

While the list of projects has a lot of support at City Hall, council member Deb Salyards questioned the business sense of the project. What if there are unexpected maintenance costs, she asked, questioning what would happen to the funds that the city had borrowed from for the list of projects. She said that they seemed like good projects, but, “I’m not sure we should be doing all of them at the same time.” Salyards added that the city should pursue one of the projects so that it wouldn’t be “willing to buy ourselves into a hole,” that it might not be able to get out of for years to come. Some business people, she said, wouldn’t think of investing in projects with such a long return.

“My view here is that we’re saving $123,000 a year,” said City Manager Eric Sorensen, adding that he saw it in lean economic times as the equivalent of three city employees’ salaries. “I would think any prudent businessman would want to save money.”

Greg Ackerson, representative of McKinstry Company, the firm which has guided the city in finding projects which will pay for themselves in energy savings, said his company guarantees the savings. Rather than rely on a dollar amount expected to be saved, the company has charted out the kilowatt hours and units of energy currently used by the city, and guarantees the reduction in those units anticipated from the projects. If their estimates are off, the company writes the city a check for the difference.

And Sorensen said that there were a lot of projects that were examined that were removed from the list because they would take so long to pay for themselves in savings. He had hoped for solar panels for city buildings, but that was dropped after it was discovered that the panels wouldn’t pay for themselves for 130 years, said Sorensen. “We took out what didn’t work financially,” he said. “It’s basically a financial argument.”

The council approved the list of projects unanimously.

Arena on hold

The council also voted to request the state Legislature to allow it to hold off on spending a $250,000 state grant for preliminary designs and a feasibility study for an arts and sporting arena in downtown.

The city decided it would stop pursuing the idea because private investors and state dollars, which would have helped pay for the $40 million facility, are in short supply. It would like to continue to work on the project in the coming years, but would like to wait until the economy warms.

It’s unclear whether the state will allow the $250,000 to be used at a later date. It would take legislative action to take the money back for something else, although city leaders have said they hope state officials will show Winona some “good will” at its decision to wait on the project.

Council member Salyards voted against the measure.

 

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