Durango City Council approved an energy performance contract this week that will advance work on a package of nearly 30 energy, water and solar efficiency projects at city buildings.
The projects, which include installation of LED lighting, water fixtures and solar photovoltaic materials (such as solar panels), among other things, address the city’s sustainability goals of reducing Durango’s carbon footprint, increasing use of renewable energy and maintaining fiscal responsibility, Marty Pool, the city’s sustainability manager, said at Tuesday’s meeting.
Durango’s Carnegie Hall building will be a “flagship” example of 21st Century heating and cooling systems after energy performance contract projects are completed, he said.
Durango Carnegie Hall is slated for an HVAC upgrade, improved water conservation through low-flow aerators and shower heads on sinks and showers, and LED lighting upgrades, according to city documents.
Pool said Carnegie Hall will undergo “beneficial electrification,” switching it over to an all-electric building, and in the meantime, installing a new heating and cooling system.
“That building right now is really, frankly speaking, a hodgepodge of different heating and cooling,” he said.
Low-flow water aerators and LED lighting is planned for Durango City Hall, the Durango Police Department substation on Wilson Gulch Drive, and the recycling and transit centers. And solar panels are planned for the Durango Community Recreation Center, Chapman Hill and the city’s water treatment plant, according to city documents.
What’s more, the energy performance contract will save the city more than half a million dollars in expenses and staff time compared to if the city independently pursued the same projects.
The energy performance contract is with McKinstry, which will perform the contracted work on 26 projects in multiple city buildings simultaneously with no upfront costs to the city. Pool said a major benefit of entering the contract is that it allows the projects to be paid back over time using guaranteed energy savings.
Pool described the payback period as “budget neutral” because the city’s payments for the projects are exactly offset by energy savings. After the projects are paid for in full, the city will fully realize energy savings every month.
“This is a way that we can get these projects done without having to cannibalize other pieces of the budget, so to speak,” he said.
The total cost of the contract is $3.9 million, 20% cheaper than it would have been if the city tackled the projects independently, according to city documents.
Additionally, the city was awarded a Department of Local Affairs grant to pay for 16% of energy performance contract costs up to $1 million. Pool said he expects the city will also be eligible for other rebates and financial incentives. For example, the federal Inflation Reduction Act offers 25% savings for certain solar projects that the city will likely qualify for, further reducing the total contract cost.
The passage of the Inflation Reduction Act, which provides more savings opportunities, was serendipitous, he said. The city has been exploring the energy performance contract for several years, and each year that passes without entering into the contract is another year of delayed energy savings.
“The IRA (Inflation Reduction Act) came out of left field in some ways,” he said. “The main reason for delay was around firming up the scope. The initial assessment of all the buildings was really broad in scope and included a lot of potential projects.”
Pool said other utility incentives exist for projects included in the energy performance contract, and so the total contract cost could be reduced not only by the DOLA grant but other opportunities.
Several city residents spoke Tuesday to express support for the contract, particularly in regard to addressing climate change.
Emelie Frojen, a member of San Juan Citizens Alliance’s energy and climate team, said she is proud of greenhouse gas emission reduction goals already set by the city and the easiest way to fight climate change is to upgrade city buildings to be more energy efficient.
“The energy performance contract is the most efficient way to update our buildings since it requires no upfront costs and can be done simultaneously and timely,” she said. “Not to mention, the city staff does not have the expertise or training to perform essential upgrades in-house or in a self-managed manner.”
She said the contract would save the city “a ton of money” and that the state of Colorado supports energy performance contracts with grant funding that otherwise would not be available.
“Climate change threatens Durango’s future, and one of the easiest, cheapest, most sustainable things we can do is to upgrade our buildings to be more energy efficient and install solar,” she said.
City Council voted 4-1 to adopt the contract. Councilor Olivier Bosmans voted against the contract. He said while he agrees with concerns about climate change, he doesn’t support paying 40% of projected savings to consultants.
“The EPC report in my opinion is a good guideline and the city could, should manage all small projects,” he said. “A plumber can change the water fixtures, an electrician can change the lighting and controls. We already did it in other areas.”