Performance-Based Contracting from NORESCO Part of a Comprehensive Conservation Program


Just 10 miles outside of Boston, the Town of Reading traces its rich heritage back to 1644. But when it comes to being good stewards of resources, the town is focused on the future. Recently, skyrocketing energy, fuel and water expenses were a major drain on the town's resources, and funding to improve efficiency was limited. To address this problem, the Town of Reading and Reading Public Schools sought an energy services company (ESCO) partner to develop a project, identify funding, manage construction and guarantee results.

Working with state-certified NORESCO, a part of UTC Climate, Controls & Security, a unit of United Technologies Corp. (NYSE: UTX), the town identified opportunities for system upgrades, new equipment installation and numerous energy-efficiency initiatives at all of its municipal buildings, the police and fire station, senior center, library and schools. The $5.5 million in improvements have already yielded significant reductions in energy and water consumption across 15 municipal buildings, including eight schools, and over the long term will help protect the environment and provide savings to the municipality.

One of the largest U.S. energy services companies, NORESCO specializes in the development, design, construction, financing and operation of energy and environmental efficiency projects, performance contracting and central energy plants. NORESCO's plan for the Town of Reading included upgrading existing building systems, such as boilers and chillers, installing new systems for solar hot water, upgrading to energy-efficient lighting, adding state-of-the-art occupancy sensors in all buildings, implementing low-flow or low-flush devices and improving weatherization. The project also added a comprehensive web-based control system that allows the town to centrally manage building systems. This ensures trends are quickly identified and systems adjusted at the touch of a button for optimal performance.

"We've made it our mission to educate faculty and students about the importance of their environment and energy use," said Mary C. DeLai, director of finance and operations, Reading Public Schools. "We wanted to take what we already had in place, and modify behaviors and equipment without sacrificing health or comfort. The intention was to become as efficient as possible so that we may conserve energy and expenditures while contributing to the protection of our environment."

John Kauppinen, senior account executive, NORESCO, said, "The Massachusetts Green Communities Act of 2008, together with a more streamlined procurement process for public agencies, has greatly increased the ability for municipalities to proactively reduce energy use and improve aging infrastructure through performance-based contracts. This is exactly what the Town of Reading and Reading Public Schools recognized together; and they have become one of the early leaders in our Commonwealth to capitalize on what can be accomplished through this process."

In just a year, the energy-efficiency improvements alone have saved Reading more than $340,000 in verified annual energy consumption costs and reduced emissions by roughly 1,300 tons of carbon dioxide, 3.5 tons of sulfur oxides and 2.0 tons of nitrogen oxides. The majority of the project is funded from reductions in energy and water consumption guaranteed by NORESCO. Grants and incentives from the local municipal electric utility and National Grid and funds from the American Recovery & Reinvestment Act through the Department of Energy Resources enabled an even greater array of measures than what would have been otherwise possible.

"We strongly believe this is the right thing to do as a community. Our residents understand the value of this project not only for today, but the long term as well," DeLai said.

While Reading had been active with energy-efficiency programs for some time, the largest driver for these new initiatives has been the comprehensive performance contract. Town leaders continue to look forward to their next steps, including seeking a Green Community designation, increasing the presence of solar power in the town, adding commuter van service and bike lanes, implementing residential incentives and replacing additional roofs and windows.

"We are just getting started," DeLai said. "Our efforts are already reaping results. In just a year, we were able to reduce our emissions the equivalent of removing approximately 340 vehicles from the road, and we're looking forward to continuing to increase this positive impact in the years to come."

As one of the largest energy services companies in the U.S., NORESCO utilizes design-build, performance-based contracting vehicles and asset monetization solutions to deliver energy and maintenance savings and significant infrastructure upgrades to existing facilities. NORESCO has guaranteed more than $3 billion in energy and operating cost savings at more than 7,000 facilities throughout the U.S. and abroad. NORESCO also offers a full suite of consulting services to integrate sustainable design strategies into new construction and existing buildings. NORESCO is a part of UTC Building & Industrial Systems, a unit of United Technologies, a leading provider to the aerospace and building systems industries worldwide.

About UTC Building & Industrial Systems 
UTC Building & Industrial Systems is the world’s largest provider of building technologies. Its elevator, escalator, fire safety, security, building automation, heating, ventilation, air conditioning and refrigeration systems and services promote integrated, high performance buildings that are safer, smarter and sustainable. UTC Building & Industrial Systems is a unit of United Technologies Corp., a leading provider to the aerospace and building systems industries worldwide.