Energy Performance Contract Produces Cost Savings of Nearly $1 Million at Military & Veterans Affairs

Contact: Maura Campbell 517-373-9280

Agency: Licensing and Regulatory Affairs

OCTOBER 21, 2003 -Governor Jennifer M. Granholm and Michigan Department of Labor & Economic Growth Director David C. Hollister announced today that the DLEG Energy Office has assisted the Department of Military & Veterans Affairs (DMVA) with reducing its energy bills by $956,862 to date from energy upgrades.

The energy upgrades were financed and installed from an innovative, but proven, approach called energy performance contracting. The Energy Office provided assistance in the contracting and monitoring process.

"Recently I called on state agencies to find ways to save money, and results like these are encouraging examples for our state departments to follow," Granholm said. "The success at the DMVA should be held up as a model of cost savings for the taxpayers."

DMVA contracted with Honeywell, Inc. in 1998 to provide energy efficiency upgrades and services at eight of their facilities, including several armories, through an energy performance contract.  Dollars that would otherwise have gone to pay utility bills were invested in the DMVA project to generate energy cost savings during the first three years of a 10-year contract. Efficiency improvements included an upgrade to the heating, ventilation, air conditioning and lighting systems along with the new temperature controls and building envelope improvements. 

"The project is performing to our satisfaction," says Brian Bushnell, facility management specialist with DMVA.  "The Grand Rapids Veterans facility energy bills have almost tracked identical for the past 4 years indicating to me, that things we did under the energy performance contract have changed consumption for the better."

The State of Michigan has implemented energy performance contracts for several of its departments including Corrections, Community Health and Management & Budget. 

"The State of Michigan has implemented nine energy performance contracts since 1991," said Hollister.  "Over the term of these contracts, the state expects to save more than $21.2 million in energy costs."

Contracts are funded through tax-exempt lease purchasing or bonds with the ESCo agreeing to pay the difference to their client if monitored savings do not add up to the guaranteed savings for the monitoring period.  The State of Michigan procures energy performance contracts through the Michigan Department of Management & Budget (DMB), Acquisition Services.    

For additional information, please contact Jeff White, MI Department of Management and Budget at 269-373-0305 or WhiteJ1@michigan.govor Tom Krupiarz, State Energy Office, MI Department of Consumer & Industry Services at 517-241-6184 or takrupi@michigan.gov

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