Amendment 4 allows the State to execute multiyear contracts for projects to improve energy efficiency and conservation.
The amendment reads: Shall the Constitution be amended so as to provide for guaranteed cost savings for the state by authorizing a state entity to enter into multiyear contracts which obligate state funds for energy efficiency or conservation improvement projects?
What is an Energy Saving Performance Contract (ESPC)?
Performance contracts divert funds that would be spent on utility bills into building improvements that lower energy consumption. The key feature of an ESPC is that upfront costs are paid by the energy services company (ESCO) via guaranteed energy savings. Under performance contracts, the ESCO also bears all of the risk because the company guarantees to pay any difference between guaranteed savings and actual savings.
Why don’t we have ESPCs in Georgia?
Some provisions in Georgia’s Constitution prohibit multiyear contracts and prevent the state from partnering with private companies, making Georgia one of the few states in the U.S. that cannot use this tool. The legislature overwhelmingly voted to propose the amendment and it now must be ratified by voters.
What are the benefits of ESPCs to the state?
ESPCs would allow Georgia to fast track energy saving improvements to state owned buildings. With ESPCs, improvements can happen immediately at no cost to the state. Without ESPCs, building improvements must be made using cash or general obligation debt, which slows down the process, wastes energy and diverts funds from other critical needs.
How do ESPCs help the environment?
ESPCs help install such technologies as efficient heating and air conditioning, low consumption lighting, geothermal energy systems, solar energy systems, and other innovations that lower overall energy consumption. In turn, this reduces state costs for energy and water.
Will ESPCs help create jobs?
Yes. Because Georgia has been so far behind in implementing this tool relative to other states, there is a tremendous backlog of potential projects in our system. If we authorize ESPCs via a constitutional amendment in 2010, then we can see a substantial amount of economic activity beginning in 2011, with total numbers eventually reaching the hundreds of millions mark. Additionally, key areas of job creation are in engineering, electrical, construction and heating and air conditioning -- all areas that have been hard hit by the construction slowdown and are a significant cause of high unemployment and lagging state revenues in Georgia.
More than 11,000 jobs for Georgians can be created in the
service, manufacturing and construction sectors.
Because our state has a large backlog of projects, we will be able to launch tens of millions in performance contracts as soon as this Amendment is passed. Repairing outdated systems in our buildings will create more than 11,000 jobs, based on current estimates. Many of these jobs will be for engineers, electricians, plumbers and heating and air conditioning professionals. Creating jobs in these areas will help Georgia families who have been hurt by the real estate slowdown, and allow our workers to learn more about the technologies that will provide the jobs of tomorrow. Improving energy efficiency preserves valuable resources and
ensures Georgia continues to be the best place to live.
Every year, Georgians spend too much of their hard earned tax dollars on energy for our inefficient government facilities. Energy is the single largest operating expense in a typical office building, with 35% to 65% of the energy used in buildings consumed by space heating, cooling and refrigeration. As energy prices continue to rise, we cannot afford to spend more on our inefficient state buildings.
Georgia can save taxpayers millions of dollars instead of raising taxes
or increasing costs to the general public.
Without spending a dime of taxpayer funds, performance contracts use the savings created by improvements to finance their cost, and include a guarantee that the savings will be greater than the cost.
Lawrence Berkeley National Laboratory (LBNL) reports that the median energy savings for the 82 state building Energy Saving Performance Contract projects in its database that were completed between 2005 and 2008 is 23.8%. LBNL assembled and maintains this database, which now contains about 4,000 projects, in conjunction with the US Department of Energy. These improvements could ultimately save taxpayers more than $50 million per year now spent on utility payments by state agencies.
It seems like this is a no-risk deal for the state to partake in. System upgrades are financed by only if there are savings experienced between what the state would have paid and what they are paying for with the upgrade.
No comments:
Post a Comment