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Midstate counties strive to stay ahead of rising energy costs

Constellation working with governments on long-term conservation efforts

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Dauphin County’s energy performance contract with Constellation includes installing a solar hot-water system at Dauphin County Prison.
Dauphin County’s energy performance contract with Constellation includes installing a solar hot-water system at Dauphin County Prison. - (Photo / Submitted)

In Cumberland County, it started with a little research on more energy-efficient lighting.

That led to a yearlong project with energy products and services provider Constellation. By 2005, the county would invest more than $1.9 million in a variety of conservation measures, including replacement of lighting and plumbing fixtures and upgrades to heating and cooling equipment.

Seven years later, Cumberland County had recouped its initial investment and already was seeing direct savings in its energy costs.

It finished 2012 with $2.1 million in savings.

"We led the parade on energy management," said John Lopp, the county's facilities director.

Since tackling energy performance nearly a decade ago, many counties across the state have implemented similar programs — some with the help of Constellation.

Lopp has fielded calls from other local governments seeking advice.

"I would rather be a leader than a follower," he said. "We do a lot of research."

When Cumberland County initiated the process, it received seven requests for proposals. Today, in the aftermath of price caps coming off electricity, the pool of vendors has grown exponentially.

"You need to be careful," Lopp said. "Check their history. Is this new for them?"

Constellation, part of Illinois-based Exelon Corp., is a National Association of Energy Service Companies-accredited energy services provider that has experience on both the supply and management sides.

"For us, the government vertical is a solid market and one we have significant focus on," said Larry Godleski, Constellation's director of sales for energy efficiency.

The company works with more than 250 customers in that market across Pennsylvania. That includes numerous counties, municipal governments and school districts.

Constellation's retail businesses serve more than 100,000 business and public sector customers, including more than two-thirds of the Fortune 100, and nearly one million residential customers, according to its website.

Driving the interest

Several factors have bolstered the conservation initiative at the government level, Godleski said.

Legislative efforts during the past two decades have allowed governmental entities to enter into guaranteed energy savings contracts, which leverage energy savings to complete capital improvements.

The second was federal stimulus grants at the end of the last decade. Cumberland County, for example, received $2.2 million and created a revolving loan fund for energy-efficient projects.

Budgetary pressures since the economic recession have also driven local governments to seek out new ways to trim costs in a more sustainable fashion, Godleski said.

"They are trying to find ways to do more with less," he said.

The guaranteed savings under these energy performance contracts gives counties more long-term planning ability. If annual savings come up short of projections, Constellation makes up the difference.

"The financial guarantee, that is something you are holding onto," Godleski said.

Financial stability of the company you work with is key, officials said.

Midstate partners

Dauphin County contracted with Constellation in 2009 and Lancaster County did so in 2013. The former has entered the second phase of its program, while the latter is under construction on its initial conservation measures across county facilities.

"By 2019, the savings generated by the energy conservation measures are expected to pay for phase one and, by 2022, the savings will cover phases one and two," said Amy Richards Harinath, spokeswoman for the Dauphin County commissioners.

In its first year, the county investment was guaranteed to save $512,153. It actually saved $664,197, she said.

Cumberland County has experienced similar results. The lowest savings year came in 9 percent above the guarantee, while the highest was 15 percent above, Lopp said.

But he is not sitting idle. He continues to look for new enhancements in lighting and other equipment that might extend those savings beyond the initial 15-year contract.

Implementing LED lighting is the most recent example of that, as those costs have come down in recent years.

"We're still in an economic situation like everyone in the nation. We are looking at every way (to save money)," Lopp said.

Godleski credits counties that have already made the financial commitment.

"You are integrating the most efficient technology available today. No matter where prices go, it's a built-in hedge against escalating prices," he said. "Even if the price doubles, you have protected yourself."

In the midstate

Constellation, part of Illinois-based Exelon Corp., works with several counties in Pennsylvania, including three in the midstate: Cumberland, Dauphin and Lancaster.

• Cumberland County: 15-year energy performance contract that began in 2005. Constellation guaranteed $4.1 million in energy cost savings over the term of the contract.

Cumberland County spent more than $1.9 million to implement the program, which included heating and cooling equipment upgrades, water conservation measures, high-efficiency lighting and kitchen exhaust fan, vending machine and freezer defrost controls.

The county saved $2.1 million through 2012, with an additional $300,000 to $350,000 projected when 2013 is totaled, said facilities director John Lopp.

• Dauphin County: 15-year energy performance contract that began in 2009. Constellation guaranteed more than $10 million in energy cost savings over the term of the contract.

Dauphin County spent more than $6.6 million to implement the two-phase program. The first phase included heating and cooling equipment upgrades, storm window installations, water conservation measures and high-efficiency lighting. The second phase, which was recently announced, includes installing a solar hot-water system at Dauphin County Prison. This upgrade is being funded in part through additional energy savings realized in the first phase.

The county has saved more than $1.3 million so far, said Amy Richard Harinath, a spokeswoman for the commissioners.

• Lancaster County: 20-year energy performance contract that began in 2013. Constellation guaranteed $10.5 million in energy cost savings over the term of the contract.

Energy conservation measures are currently under construction to the tune of $6.7 million. The work includes HVAC and building control upgrades, water conservation measures, high-efficiency lighting and building envelopment improvements.

Charles Douts Jr., the county’s facilities director, said most of the projects are getting underway and should be completed by June.

• • •

Constellation also works with several chambers of commerce and associations to offer competitive electricity supply to their members. That list includes the Harrisburg Regional Chamber and Capital Region Economic Development Corp., the Lancaster Chamber of Commerce & Industry, the Manufacturers’ Association and the Pennsylvania Municipal League.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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