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NMSU takes steps to achieve guaranteed utility savings through energy performance contract

Around the country, energy use is increasing and utility bills are growing larger and more unaffordable, especially for colleges and universities with hundreds of buildings on campus. That is not the case at New Mexico State University.


A man and a women talk in a building mechanical room.
Matt Baker and Chelsea Wolfman, both from Ameresco, examine airflow in a Science Hall mechanical room as part of the investment grade audit Ameresco performed at all NMSU facilities around the state in spring 2013. (NMSU photo by joni newcomer)
Workers in hardhats guide a large piece of mechanical equipment through an opening in a ceiling.
Workers help guide a portion of a new steam turbine chiller through an opening in the roof of NMSU's Central Utility Plant. This chiller, which will be operational in spring 2014, is one of many energy efficiency upgrades made by NMSU in recent years. (NMSU photo by Patrick Chavez)

In the past year, NMSU's utility bills have steadily dropped, in large part due to energy efficiency upgrades made with existing building renewal and refurbishment funding, such as lighting retrofits and the addition of the satellite chilled water facility, which came online in September 2012. The facility produces cooling capacity for the campus by making ice at night when the campus has lower electricity rates, then uses that ice to cool the campus during the day, when rates are much higher.

"We've done very well with the savings, and we're very enthusiastic about it and love talking about it, but we're still putting pencil to paper to verify exactly what our savings are," said Glen Haubold, NMSU associate vice president for Facilities and Services. "We know that we've done well. At most places, I think you'll find that utility bills are going up. We're pretty proud that we've been able to keep the utility bills level at New Mexico State. We try to take those savings and reinvest them in plant equipment to make ourselves even more efficient - that's some of the results we're already seeing."

More energy savings could be in NMSU's future, as the New Mexico State University Board of Regents voted Jan. 31 to approve NMSU's energy performance contract with Ameresco, an energy service company. The contract, in short, would allow NMSU to make improvements to 46 buildings, totaling 2,701,972 gross square feet. The proposed improvements are based on seven energy conservation measures indicated by Ameresco during their seven-month-long investment-grade audit of all NMSU properties throughout the state, including the agricultural science centers and community colleges.

The energy conservation measures the NMSU-Ameresco contract would address include interior lighting, exterior lighting, exterior pole-mounted lighting, retro commissioning, variable air volume retrofits, economizer upgrades and chilled water pump bypasses.

"The simple version is that we make energy improvements that then pay for themselves out of the energy savings. This has been a fairly common practice in many states," Haubold said. "In 2009, the State of New Mexico made some changes to the laws that made energy performance contracts more attractive, so New Mexico State began the RFP/RFQ process to select performance contractors."

One of the key drivers in seeking out energy performance contractors is the phasing out of T12 fluorescent lighting for more energy efficient T8 lighting due to the 2009 Department of Energy General Service Lamp legislation. NMSU has started the retrofitting process with existing funding, but to convert an entire campus is a costly, time-intensive project.

"We have been tackling this one building at a time, but we haven't been able to make the progress we'd like to make, simply because of a lack of funding," Haubold said.

Energy service companies help their clients make engineering improvements, just like any other contractor would, but since this is Ameresco's field of expertise, the company will help the university with the sale of bonds, and put its backing behind it.

"We get what's called a performance guarantee, so should the savings not achieve their projections, Ameresco will write the university a check. It's essentially an opportunity to do about $15 million of infrastructure improvements with no money up front," Haubold said.

"Some of the suggestions that Ameresco has made is that we make conversions of air conditioning equipment to more modern, computerized controls," said Patrick Chavez, NMSU energy manager, who worked extensively with Ameresco engineers during the investment-grade audit. "The lighting retrofits - that's a lot of what's going to happen on campus on the building side. Another thing they're going to do is to make recommendations to the utility operations as far as production alignments of equipment, reassessment of how we consume natural gas, and some of those things are really going to make great changes for the positive on our campus."

Education is an integral part of the proposed relationship with Ameresco, according to joni newcomer, NMSU manager of environmental policy and sustainability.

"From my perspective as the manager of the Office of Sustainability, my job is to educate people. Educating people to lower their energy use, thus energy cost, and thus our greenhouse gas emissions," newcomer said. "To educate people, we need a type of system, such as this, where we're inventorying buildings, changing out lighting and upgrading mechanical. This is our opportunity to teach people what we're doing and why."

If approved by the New Mexico Board of Finance and New Mexico Higher Education Department, work will begin in June, and take approximately 18 months to complete.

"What you're going to see is substantial - not just the savings, but the avoided costs," Haubold said. "New Mexico State University would ultimately have to replace T12 light bulbs and ballasts with the newer T8 technology because the T12 units will no longer be manufactured. Fourteen years from now, we own the corresponding $1.8 million in annual savings without investing any of our money."