001April 17 2023 um Ben can you call the roll please okay Planet committee members Andrew Martelli here Sam Rosenberg here and Tim White was not here yet but you do have a quorum Mr chairman all right great could you pull up the flag for us I will do that got it all right I pledge allegiance to the pledge of the United States of America and to the Republic for which it stands as one nation under God indivisible with liberty okay any uh communication from the audience Mr maciano we have no audience present and I received nothing from audience in their emails either all right great thank you for that uh item number three presentation by energy we have some folks here this evening um so we'll turn the floor over to you and when Tim
002joins us um we'll just acknowledge Him and we'll go from there so I'm sorry about that but yeah I will just as Dave's bringing up the presentation I did want to just um do a brief introduction you know Kendra um and Dave are from energia and energia used to be known as ECG engineering when we did our energy performance contract with ameresco it's about eight years ago now um at the time ECG did serve as the owner's representative you know for that project we are still a customer they are still doing the uh measurement and and verification work every year so this is a follow-up to our last meeting where we had Johnson Controls did make a presentation and I know you know from speaking to Kendra and Dave they do know Aaron elibrio who
003made that presentation they do work with with Johnson Control uh Johnson Controls on projects um so they have a lot of experience you know in particular with schools and towns to do you know different types of infrastructure upgrades and we did share you know what Dave and Kendra a copy of our current capital plan and that really is kind of the the jumping off point for tonight's discussion that we do have quite a bit of work to do in our schools from an infrastructure perspective and if there's any Innovative way ways to do that we certainly think that energia can present at least some initial thoughts tonight and so with that I'll turn it over to you Kendra and Dave thank you Thank You Vince Dave is going to begin the presentation I just want
004to say um thank you for the opportunity to be here tonight we've really enjoyed our relationship with Cheshire um and you know we are excited about the possibility of helping you achieve some more um so thank you again and Dave okay thank you everybody good evening I'm Dave Newman I'm the VP of engineering for energia I was very very much involved in your original EPC um we've also had an assortment of other uh little energy evaluation type projects we've done with the uh the town and the schools over the years as well and I've LED those efforts as well so very quickly um who is energia um we specialize in energy performance contracts uh being owners representatives for epcs it's really all we do and as we said what we have already done for Cheshire
005in the past um it's a turn we provide a turnkey service that starts from the very very beginning of looking at energy at your your energy bills and your opportunity all the way through to the measurement and verification process of actually verifying that the project worked and that the savings are actually being produced which is something that we're kind of at the tail end now of doing um for the town we have over 125 successful epcs many of them in Connecticut many of them in New York and Pennsylvania and other places as well and our core role here is to protect your interests um we're performing the due diligence and managing the cross project at every step of the every step to make sure you're getting the maximum value and that you're protected and that
006the Esco is is producing real savings and giving you what you've what you were promised all right uh one other item to note is that we are actually endorsed by CCM as an owner's representative for espc uh work that's something we won uh competitively and we we do have an agreement with CCM that partnership um that we can actually take advantage of uh to work with you again okay so just a quick overview of our partnership in the original project uh and and the kind of things we've worked on so we were um competitively selected in an RFP back in 2014. um overall the project was 10.2 million dollars in construction costs um It produced about 618 thousand dollars in annual savings which reflects about a 24 reduction in the in the overall energy Baseline
007uh the Energy Services Company that was selected I know you mentioned you you had spoken to Johnson Controls your original project was actually done by a company named amaresco who is uh also an equally capable uh Esco who does quite a bit of work uh in New England and Connecticut um some of the major items that were done in the original project probably the biggest items were the complete electronic hydronic heating system conversion at Highland Elementary School uh and for on the newer wing of the high school uh LED lighting upgrades throughout the district tons of exterior lighting uh an oil to gas conversion uh work uh and then other small things like premium efficiency Motors and just general improvements to the water heating hydronic systems in the buildings for heating okay so a few
008other um a few other items we've actually done for the town schools over time um one of them was that um you were actually contemplating a power purchase agreement you're kind of pointing rooftop solar we did assist in some of the technical evaluation of that and looking at the providers that proposed we did look in an LED Street lighting project at one point uh and helped to evaluate the buyback uh economics of that um and you know just it and just again as we said we're we still oversee the m v and and really overseeing the original project to make sure that everything was that was promised was actually produced by the eskos and it was a very successful EPC in the in the in the original uh project yeah and just to kind of
009jump on that the you know the real substantial Savings in that first project that we did with Adam Moresco were the electric heat conversions you know and I know that you know the committee talked a little bit but that was pretty low hanging fruit we may not have that low hanging fruit to offset as much energy costs and if we look at another project I mean that's true maybe we do maybe maybe you'll find something Innovative but um that was that was a yeah I mean just purely on rates alone you know being able to get you off of electric heat was was absolutely huge yeah um just a quick list of other clients in Connecticut that we have worked with and have had successful projects with capital region uh correct Regional Education Council Derby
010RSD 13 Seymour East Haven Guilford Waterbury we had a massive project um I always like to highlight that one because it was it was a project where we did 18 boiler plants in a single summer about 36 physical boilers and all installed in a single summer window it was insane but um very proud very proud of the of accomplishing that um Branford of course Cheshire uh Southington next door we did a youth project um one of the notable ones there was in a similar fashion to Waterbury we replaced all the rooftop air handling air conditioning systems on their High School in a single summer and I forget I think it was like 15 uh units that we had to get done in that summer window um because you know as you know south of Southington
011has an absolutely huge High School um and it was you know just getting that equipment and getting everything ready for for school start was uh quite a quite a project it really was uh Monroe and then uh Thomaston schools as well we did a number of work there we also did Street lighting replacement uh at Thomaston okay so I did look at the um the list you sent this and uh I just kind of plucked out the kind of the pieces that looked like they were relevant um to an energy project um so of course HVAC type improvements are always on the table they're always available window replacements are very expensive but you can do them under an EPC uh fire alarm Control Systems um if they're you know if you have older systems and
012it's a life safety type issue it's something that and this operational uh costs with the old systems that's something that can be considered on an EPC mainly on the operational savings uh ceiling tiles we typically do you know in concert with lighting exterior doors are typical uh water savings or something that's eligible so you can do Laboratory um the China and the fixtures and you can't do a full-blown you know bathroom renovation but the actual pictures themselves you could do and then co-compliance issues and health and safety type items at least if it's in some way related to an energy system is something we can typically get into a project okay so really next steps um would be to engage energy in um we always offer a no-cost energy Financial assessment and really what that
013is is a high level overview of looking at your utility bills looking at your scope looking at the buildings in a very basic manner um and just looking at it to say is there enough work here to build an opportunity that would be you know worth moving ahead with um certainly just the sheer size of the buildings and you know in the number of buildings in the town there's little doubt in my mind that you've got ample opportunity for a project um the assessment we would do would give you a sense for how large and what type of major items we could do now you know we're very much aware of the fact that you have some very very major Capital renovation uh items planned in the schools building with new schools and adjusting so
014we would certainly need to you know would want to have details on on where those items are as well and we'll coordinate our report to you know to reflect the things you're already doing okay and I guess with that um really if anybody has any questions um we could certainly uh talk about the opportunity Andrew I'll wait on you because I you know of course I do have a couple of questions yeah I just want to welcome Tim Tim how are you Tim did you did you did you hear everything do you need any part of it um reiterated to you uh I logged on I logged on a couple uh minutes after six and I apologize to everybody for that I just got home from work um no I mean is this uh so
015Vin just as as a recap um ECG energy uh sorry uh you are basically contracted with the green Bank the Connecticut Green Bank as an owner's rep for a number of towns is that how it's set up right now it's it's actually hi Tim I'm Kendra mcquilton I'm the owner of uh energia um hi maybe you could go back to that slide we're we're actually in a partnership with CCM I think that might be what you're we're remembering um and so this is this was a um an agreement that was secured through a competitive process to provide uh the very services that we're discussing tonight which is um helping the town and the school district through an energy performance contract and just doing all the due diligence and Technical and Financial reviews and um you
016know Energy Engineering that would be required to make sure that your interests are protected throughout okay so you'd be so you'd be the owner's rep for us we would yeah and and so you know in contrast to Johnson Controls um you know they're a great company there's lots of great companies um but what we do is we sit between you and that company and Johnson would would need to um go through a competitive process as well which we would be spearheading on your behalf to make sure that they're giving you a competitive valuable proposal and Johnson Johnson would be acting in the same capacity as amaresco did 10 years ago or however correct yeah so I mean this this setup makes sense to me I mean the number one concern for me well number one
017concern is energy in the environment but uh good government is very important you've already gone through the process with CCM which is not officially government but in a sense it kind of is um yeah hold on Dave go talk to Mommy okay I'm sorry about this you're gonna be okay you need to eat your walnuts okay [Laughter] um I I mean in general just the the way the way all this is set up makes total sense to me and I'm I'm happy with it um I mean I I want to hear what you have to say then and everybody else has to say but conceptually this makes sense to me thank you Ben and Rich did we have a firm like this when we went through it with ameresco we did except um we did
018it a little bit backwards in my opinion um we first did um an RFP for the actual company that did the energy performance contract at Moresco and then we went out and hired ECG it was just kind of a timing and and I don't don't actually remember how we got introduced Kendra but I know it was after the fact and you know you did come in before the work started um but after the investment grade audit was done so that that experience kind of leads us to where we are tonight that the the best way to do this in my opinion is probably the owner's rep who will then provide the assistance to find you know the best contractor or the best Esco to do the work and you know maybe Dave and Kendra just
019kind of name some other names of companies that are that are doing the Esco work these days we know emeresco and we know Johnson Controls but what are some of the other ones that are active so I mean I mean the major companies out there right now are Honeywell noresco which is really um an arm of Carrier Corporation um train is out there Siemens energy does this work that's pretty much the in Connecticut those are the major players um there's a few others out there but they're smaller and not ones you'd want to use in a project this size yeah yeah I know the other one that bid when we went out the first time was Schneider Electric I don't know if they're still operating and doing much of this work we don't yeah they're
020still out there I I don't think I've done a project with them in probably seven years yeah okay they don't tend to compete their their biggest concern with them is they have a tendency not to want to compete if they want to get a project through relationships and then so they don't they don't bid on competitive work which is concerning unto itself because they don't they don't want people yeah yeah see the other thing that I wanted to ask if you could you know talk about a little bit is you know how you would can we work you know with you and with osc gr for Construction Grants to fund some of this work like the window projects you know um some of the other things that you mentioned do fall under a school construction
021Grant yeah now we've actually done that um we've done that on a number of the Connecticut projects that I um that we showed you um Guilford pursued um I believe for solar PV they got a grant for roofing Roofing and solar okay um so yes we can do it um we have done it in past projects um so there is a path forward where we can absolutely apply to get the uh the state Bill the state facility AIDS select items yeah okay and I think that's important for the committee the planning committee to understand I've realized that you know oscgr has very strict procurement requirements and and that they're not easy to work with sometimes but it would be substantial on some of these projects uh we have we have two questions um Sam you
022want to ask your question then kind of asked the oscgr question but excuse my ignorance so you guys would be and this might be a VIN question you would be the middleman so to speak between um Johnson Controls and us then is that how this works then yeah they would well the owner's representative would um you know do a lot of work actually in the beginning stages to put together a solicitation to find who that Esco that would actually do the work would be so that's kind of one major step and then once that firm is selected there's an investment grade audit that gets done where they go into every building and they look at all the potential energy savings opportunities and infrastructure work that would need to be done that's all documented and the
023owner's rep is is there to basically represent us and provide the expertise that we don't have in-house you know to do that review and when I say expertise that includes engineering expertise you know they're looking at the details of if it's a motor replacement or it's a boiler replacement or it's an HVAC that is one of the responsibilities the owner's rep has and then as construction proceeds you know they are you know working with us and with the Esco to actually do the get the work completed so they are hired to represent us and in the energy performance contract and I know this may be getting into a lot of detail but their their fee I mean the initial work that um Dave mentioned that would be at no cost for the review you know
024they will charge a fee assuming that we did business with energy right so their fee would be paid through the energy performance contract correct that's right okay that answers my question because I was going to ask how does the fee structure work here because there's a lot of expertise that we're pulling in and I know you guys got to eat so thank you yeah we roll it all it's another cost of the project hard and soft costs it's all rolled together um into the project to be paid out of the savings so there's no out of pocket for the uh the town or the school district Tim you're muted so anybody um feel free to correct me if I'm wrong on this but generally speaking um we are changing the order of how this is
025happening in part because go back 10 years ago and at that time in Connecticut I don't think that performance contracts were that widely used or at least for say like an entire School District which is what we did so it was kind of like breaking new ground and we were just pushing forward trying to do what we could to save money save energy um and you know it was it's changed since then we have a better understanding people in the state have a better understanding of how this would uh be best constructed in terms of an overall transaction so that's one of the I think that's probably a big reason why the yeah the sequence of actions was different 10 years ago yeah did it initially I I think it uh connected only even established
026its law the statute that governs it was only established right around that time yeah yeah so what we do is do it was brand new so bottom line Kendra what is the benefit of having you folks involved in the mix like fundamentally if I was going to explain to the taxpayer why do we need an owner's rep to this the reason you would want an owner's rep is that there's a tremendous amount of very complex foreign information that's going to be coming at the at you from companies that are super Savvy and skilled and expert in finding ways to increase their profits off on and I don't want to disparage the companies because they're great lesson checked you know the reason we got into this uh Niche is because we were engineers working with school
027districts and we were looking at performance contracts this is going back 20 years and we were able to review the financials and saw that the Esco was walking away with 50 profit when the customer could have got say 30 percent more Hardware out of their savings had they even known how to look at it how to hold the esco's feed to the fire um it's it's very very tricky and they are experts in how to pull it in their favor so you need to have an equal level of expertise to pull it back into your favor and that's what we provide um we've recently done a study that shows that on average we generate a million dollars roughly of additional value that goes back to our customer and that's in the form of catching Esco
028mistakes um you know making forcing them to guarantee rebates for example which they won't do unless they're forced and we have the influence over the industry in doing so many projects that we know what to look for we know what they'll go for we know what's a push for and we can stand up to them okay so that that's really the reason why you would want that um if not I think a lot of entities that have done a project without someone in between them in the Esco are left frustrated or confused or just not confident that the savings were borne out and that's never the case when we're involved you're going to be in the driver's seat telling the Esco what to do instead of the other way around God I appreciate that thank
029you my pleasure yeah I mean just um to kind of you know that continue along that Chain of Thought the one advantage of doing an energy performance contract that we really didn't talk about and this is whether or not you know energia would be involved but it it is a basically a lease Arrangement so and that's assuming that you know there's enough energy savings that warrants an energy performance contract and it'll work but when we did the first contract it was a lease Arrangement so it did not have to go to bonding and it therefore didn't have to go to referendum even though it was a 10.2 million dollar project it required Town Council approval only so that was one you know I think very important factor um that that we were able to benefit
030from and the second thing is that the um you know the cost of financing was pretty favorable at the time the market may be a little bit different now but if we do an energy performance contract you know everything is in the mix including the cost of financing the project so you know it either works on its own and if it doesn't that doesn't mean we don't have options and when I say it works on its own that means that the Energy savings will pay for the work that's getting done over a 15-year period of time you know so if the Energy savings isn't sufficient to pay back the full amount of the of the loan essentially then we could talk about ways that we could supplement but you know at this stage you know
031the the financing you know peace enables you to do a lot more infrastructure without you know having to go out and bond it all at once so I mean I know that the planning committee members you know have been you know involved or lived in town and Tim White has been on the Town Council you know that you know it's very rare that we would get 10.2 million dollars of infrastructure improvements approved for one year but that doesn't happen I mean you you know best case you know town and Board of Ed combined we're seeing five million dollars a year so I mean it would take us five years to get my 10 million dollars right exactly yeah exactly and then the other thing about the energy performance contract is we are not involved in
032the procurement of the of the contractors that do the work you basically hire the um energy Performance Contractor and they do all the work of finding the you know the subcontractors that are going to do the work there's no bidding involved on the part of the town so that's another big advantage the other benefit that weighs into that too is you have you have latitude to dictate because you can direct the Esco on contractors you like contractors you don't like unless you've had trouble in the past you can keep them out um specific equipment that you want um there's no low bid requirement here so we can direct them to you know to to use the equipment you you prefer which is a really nice advantage if I had one thing I mean the the
033way you had said before then about not going to referendum that is always something there's a benefit but there's also a drawback I don't I never when we did this 10 years ago since then I've never gotten any inkling from anybody from how many taxpayers that they felt like there was some sort of like games going on with that like people were generally happy as all I ever heard about it they I think people understood what the 10 million dollars was for and it was it was basically just an offset we're switching it out of our energy budget over to our debt budget right it's just important I just say this just to reinforce this for the voters like I think this is something that people would be comfortable with doing the lease instead of
034a capital Improvement type of thing right right yeah and it's not that was not to say that the the process wasn't somehow transparent the way the financing Arrangement worked like you say you know you spent less on energy and you made lease payments in return so you know under our town Charter did not have to go to referendum it didn't you know it wasn't something that needed to go out to the voters you know go Evan I was going to say just if you could talk one one more component that maybe you could share just some initial thoughts so I had mentioned that Doolittle school is a school that we know we need Windows because they're single pane still the roof needs to be replaced and we do have an interest in doing solar so
035if we could we bundle that those three things as an example and do you think there would be some you know enough energy Improvement in doing that that it may help us fund this overall project you want AC also at the same time didn't you I was waiting for somebody to throw that in well I'm just saying if you're doing all of them I mean yes laughs I mean the honest answer there is um to get Windows and a roof and have solar pay for probably not um potentially a roof and have the solar offset we've done that in other places there is potential for that assuming the roof can can actually structurally support the solar um I mean there are options for things like canopies and carports you can do ground type solar if
036there's you know suitable places for it um but that we have done and then of course Roofing is a is a an oacm eligible item yeah yeah and and there's some pretty aggressive solar incentives I know we talked about that that are available right now to municipalities that may not really have been um something that we could take advantage of in the past because of the changes in in the Solar incentives right that's true yeah 810 Brad oh thank you Andrew yeah no I was just curious about that in terms of the solar incentives that VIN just mentioned is that am I right and understanding it's it's 200 a megawatt hour for the what is it the nres program that's what I thought I was reading online but I'm not 100 on that it just
037says the general is the general guide for a state of Connecticut Dave David or Kendra do you know the answer to that um I do know that I do know the program is changing I don't know the exact that number Rings about um okay okay or if that's the exact number what are the conditions around it um believe it or not the Xerox program is still around um we I think we actually still have some Xerox but I don't think they compete with the enres now the incentives just to be clear the incentives got better 15 or 16 months ago January 2022. and so the z-rex probably don't the Xerox that we have don't make sense program would yeah you wouldn't you wouldn't forfeit one for the other that's true yeah 100 percent um so
038we could so that so if doing the solar could have uh could have some Financial gain or the ability to offset some other costs but it wouldn't it wouldn't offset an entire project that we're talking about which is I mean these are projects that we're talking about doing anyway so any sort of uh additional funding to offset the cost I think could be good right exactly and there's um inflation reduction act uh at some point they're putting going to put out guidance uh we're not going to wait for that but if you if you were to start the process um and they will be you know forthcoming you will most likely be poised to take advantage of uh whatever they are whatever monies they're offering because you will have been you'll be in the midst
039of this process of identifying okay what's feasible where you know where should we put soil and all of that will just come part and parcel with what we're doing and that I mean that the IRA um I mean it has an assortment of requirements for apprenticeship and labor and things that that make it a little more of a challenge but once and we don't have the rules yet which is the problem but you you know they're they're saying up to a base of 30 you know including interconnect costs as a straight buy down and that's huge I mean to buy now the first cost of solar that's that's a huge incentive so and if you did if we went for it and you did this high level initial review you can incorporate that in to
040kind of give us a sense of you know would it make sense or or you know what would the what would the savings offset be if any right absolutely but um thanks Andrew uh yeah so you just I think it froze up tonight am I still there can you hear me you're back okay okay so you're so I I wanna I think I had seen this in the ira mentioned um but you mentioned the word apprenticeship could you just speak for a minute about that I mean that it seems to me that you know being a school student is something that potentially be value in a wrapping that into an RFP at least we did it and saying hey it doesn't add or something like that yeah so what we would do in an RFP
041was we would lay out what the IRA requirements are essentially the Esco if you put on notice that if if there is an attempt to use the IRA Monies they are going to have to comply with the federal labor you know the federal prevailing wage and the there's significant Apprentice Union apprenticeship requirements essentially um participation that has to be on the project in the labor and the thing that why we would absolutely put them on notice early is that the IRS has already given us notice that they want essentially daily tracking of that apprenticeship um participation with significant penalties if you're caught in non-compliance so it's something that if we went forward we would be very diligent in making sure that that documentation system is in place and that um and that again is an
042example where in contract negotiations making sure that the contract as written with the Esco puts the liabilities on them for non-compliance because remember the IRS doesn't care at the end of the day you're the you're the you know you're the tax entity that's getting the benefit so we want strong contract language to make sure that at the end of the day the contractor is complying um so we would we would oversee that and make sure that you know any agreement that's written protects your interest in that regard um and then there's you can't you don't have a risk of being exposed to those Federal requirements um so I appreciate I appreciate everything that you just said I guess the only thing I was that I wanted to mention is actually if there's even a possibility
043of high school apprentices hey this is something that would be nice if you could manage something like that okay all right there's lots of options and flexibility and that's what one of the nice things about these projects is that it's let's hear your creative ideas let's hear everything let's put it out there on the table things that you would like them to evaluate and and see if we can include and and then we work whatever we can into it so that's a discussion that we would have certainly on your behalf at the appropriate time um with the Esko I will mention we do have a student engagement program a stem a real world world stem uh program that energia offers um it's not to the level of an apprenticeship certainly but it's it's an opportunity
044to engage the students in the project what is the school district doing what are the outcomes that we expect how do we calculate the savings and that can be done for high school or middle school and you know we'll talk more about that if if we move forward thank you that yeah that sounds that sounds really interesting thank you thank you thank you I know that there will be a lot of interest on the school district's part you know to do to do that certainly include students at least let them know what we're doing and give them the details yeah you know it's something we developed two years ago and then I'll send you a video of some middle school students that we that we it was it's adorable but um we have a retired
045superintendent who manages it for us and we just kind of customize it to something that's manageable and and something that the district would like we even had high school students present to the Board of Education after going through it uh what they learned and that was just fantastic so um we definitely look forward to talking about that yeah absolutely and when I got that I will share it with all the planning committee members as well great okay anything else let me ask if this might be really dumb question so once if you go through and you don't identify is there any liability for the district oh yeah not at all okay what we're looking to do as as the next step if you're interested in moving forward um with us is uh it's really a
046feasibility study so we don't want to send you down the road or us go down the road or the esco's until we have a fresh current understanding of what are the buildings spending and consuming per square foot we'll have more discussions about the facilities with Rich and Ben about different priorities and we're just going to put that into a report so that we can all set our expectations properly on the potential size of a self-funding phase two opportunity if there is nothing there we are happy to tell you you know I'm sorry thank you but there's nothing there um but we think there's going to be something there it's just a matter of what and you know we're very conservative in that we want to make sure that we you know under promise over deliver
047so at this point we're going to be conservative the project will grow if you proceed after that once the S goes dig in and start you know doing a more in-depth study you're welcome Mr White Ms Rosenberg anything else good all right okay well thank you guys well thank you very much for the opportunity well thank you goodbye are we adjourning what are we doing are we did you want us to vote on anything then or make any emotions no I mean you know what I'll do at this point if it's okay with the committee is I'll just ask Kendra and Dave to send us over kind of a summary or a document that that we could look at I mean you know certainly some we would like to at least take that as the
048next step so we we know what it is we would be engaging in and then you know I'll share that with the planning committee and and we'll Circle back to you and I don't think you need to vote if you know I know that was a long answer Tim but no you don't need to vote I'll get the information and then we could decide how to proceed after that all right great and there's nothing else on the agenda so it's up to you Mr Motel if you'd like to adjourn all right uh motion to adjourn okay Sam all right okay thank you thank you everybody thank you