N.C. A&T expects big energy, cost savings from Noresco pla


Students at N.C. A&T State University have been able to take part in the energy auditing and planning phases of a $4 million performance contract. Energy services firm Noresco is about to start the construction phase of that contract.

After more than two years of preparation, N.C. A&T State University is moving forward on the construction phase of a plan to slash energy usage on campus by at least 30 percent using a performance-based contract.

Campus officials say the 13-month construction process under the direction of energy services firm Noresco will get underway by April. N.C. A&T first solicited proposals to rework lighting, temperature control and other pieces of infrastructure in November of 2011, and it chose the Massachusetts-based Noresco as its prime contractor in September of 2012.

Since then teams from Noresco — working at times with faculty from the school’s Center for Energy, Research and Technology and with students who received some hands-on engineering experience — have been studying where costly energy is used on campus and where that cost can be limited. Savings might come from advanced technologies such as LED lights or simply improved insulation to reduce wasted heat or air conditioning.

“Noresco has completed the design of various initiatives that will save the university $303,000 per year while reducing our environmental footprint,” said Mary-Ann Ibeziako, director of energy services and sustainability at N.C. A&T. “During the construction phase we anticipate improvements to be made to the university’s lighting, steam system and building envelope, installation of new HVAC controls and retro-commissioning at selected buildings.”

The financed cost of the improvements is about $4 million, but the point of the performance-based contracting model is to make the savings on the school’s utility bills pay for all of the costs of the upgrades, so no capital contribution is needed. If the savings don’t materialize, the contractor has to cover those costs.

The state and the UNC system have several years of experience in performance-based contracting now, including the $5.8 million project at UNC-Greensboro installed by Trane Comfort Solutions and now in the fourth year of its savings guarantee period, according to the annual status report to the legislature for 2013.

The performance record on these contracts so far is good, the report says. Of 10 projects at state agencies and universities that represent a total upgrade investment of $134.5 million, five have been in place long enough to have cost savings data. The savings in those five projects are indeed paying for all project debt retirement costs and annual fees and collectively have exceeded the contractor’s guaranteed savings by $518,600.

At UNCG, contractor Trane guaranteed annual savings of $548,474. In the four years of the guarantee period so far, actual savings have ranged from a low of $557,632 to a high of $604,799.

Winston-Salem State University is about 90 percent done with the construction on its $6.5 million performance-based contract with Siemens Industry Inc., so no savings data is available from that project yet, the report said. WSSU is planning a second phase of improvements with contractor Honeywell that will cost about $8 million.

Those projects statewide that completed construction after Jan. 1 of 2011 or are in construction now have provided employment for about 1,310 people, the annual report said.

Noresco intends to use subcontractors from the Triad and elsewhere in North Carolina throughout the construction phase to install lighting improvements, upgrade building envelopes and HVAC controls and other tasks, Ibeziako said.

“In addition, the university through its Minority Office is continuously looking for robust use of minority-based firms so as to increase their participation,” she said. “For this project, the minority commitment is over 20 percent” of the available subcontracts.

The Business Journal

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