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September 30, 2013

Hospital's $30M retrofit launches CT energy program

Photo | Contributed Shew/Beers/Dix Halls will be renovated for patient comfort and energy savings under the state performance contracting program.

The 144-year-old Connecticut Valley Hospital campus in Middletown will receive a $30 million renovation as the inaugural project in the state's new program to significantly reduce government energy consumption.

The Connecticut Lead by Example Energy Efficiency Performance Contracting program allows state and municipal agencies to partner with pre-approved contractors — at no upfront costs — on projects that will reduce environmental impact and cut electric and heating expenses.

“Now that it is ready to go, it is going to achieve huge returns,” said Alex Kragie, deputy chief of staff for the Department of Energy & Environmental Protection. “This is a big deal in saving money for the taxpayers and doing so in a constrained budget environment.”

In its $30 million agreement with Massachusetts contractor Noresco, the 50-building Connecticut Valley Hospital mental health campus will receive upgraded lighting and controls, an improved heating and cooling system, new windows, a system modernization, and possibly a co-generation system to work with new boilers.

Long-term, the campus's administrator — the Department of Mental Health & Addiction Services (DMHAS) — is looking to install a solar hot water array and a 1 megawatt solar electric system under the contract.

“With the cost savings, we will be able to spend that money on other things,” said Steve Hecimovich, DMHAS chief of engineering services.

The performance contracting program is similar to the state's C-PACE program for businesses. As with the companies participating in C-PACE (Commercial Property Assessed Clean Energy), the government agencies using the new program will commit no upfront money to cover the improvements and the expenses are paid down through the energy savings achieved through the projects.

In addition to Connecticut Valley Hospital, DEEP expects to announce three other performance contracts in the coming weeks totaling $70 million: the Department of Correction for several of its facilities; the Department of Motor Vehicles for its Wethersfield office; and the city of Bristol for several municipal facilities.

“We are looking to focus more on municipalities as the program advances,” Kragie said.

Performance contracting is an extension of Gov. Dannel P. Malloy's Lead by Example program calling on government facilities to increase their energy efficiency. In the original phase, the state invested $10 million upfront to perform 41 projects at state and municipal buildings.

For the performance contracting program, the agencies have no upfront investment and all of the contract language has been pre-approved by the Attorney General's Office, so the contracting process will bypass most of the typical bureaucratic delays.

“The process was very smooth. That was one of the positive parts on this,” said Daniel Robertson, DMHAS building construction specialist.

When the Connecticut Valley Hospital improvements are finished, DMHAS expects to save roughly $2 million annually, Hecimovich said.

If the upgrades don't achieve the projected energy savings, the contractor must pay the difference to the government agency, Kragie said, ensuring Connecticut taxpayers remain whole regardless of the long-term outcome.

Noresco, a subsidiary of Hartford conglomerate United Technologies Corp., plans on emphasizing use of in-state contractors in the Connecticut Valley Hospital project, said Charles Wheeler, Noresco regional Northeast general manager.

“When constructed, the project is expected to provide substantial energy and cost savings to taxpayers, reduce the dependency on fossil fuels, and lower harmful emissions and greenhouse gases,” Wheeler said.

DEEP and the Attorney General's Office spent a year and a half finalizing the performance contracting program. With everything in place, the state will expedite its advance toward its goal of reducing state agency energy use 20 percent by 2018, said Kragie.

“It is the second state booster rocket,” Kragie said. “It is the primary tool we will use to meet our legislative mandate.”

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