Knoxville Saves $1+ Million/Yr With Energy Performance Contract

In 2008, Ameresco was deemed most qualified in a bid solicited by the City of Knoxville. A preliminary contract was executed between the two parties to conduct an investment grade energy and water audit of all city-owned facilities. It was the first step in a two-part process.  If the City had decided at that point not to pursue the project, they would have paid Ameresco $200,000 and not negotiated the improvement contract. The second step involved using the audit to develop a scope of energy-reducing capital improvements in a manner where the resulting savings would actually pay for those improvements.

Guaranteed Energy Savings, Myriad Benefits

In January 2010, the City of Knoxville and Ameresco began an energy conservation package for energy efficiency measures that reduce the City’s energy costs and consumption, while also reducing carbon emissions. The savings generated by those measures are expected to pay for their installation and maintenance at the city’s 99 buildings, 37 ballparks & athletic fields and three golf courses. 

Total costs of the energy services agreement over 13 years is $19,082,060, including the $13,500,000 in payments to Ameresco, annual maintenance, third party monitoring costs of $86,694, and interest fees on the lease agreement. The City’s guaranteed energy savings will range from $1,140,000 in the first year to $1,840,000 in year 13, averaging a roughly $1,100,000 annual reduction in a roughly $5,000,000 annual utility bill.  In addition to the cost savings the City will realize will also avert the release of approximately 18,500,000 pounds of CO2 emissions annually, which is equivalent to taking more than 1,600 cars off Knoxville’s streets. So, in addition to the financial benefits there are also significant health benefits for our community.

Energy Efficiency and Renewable Measures

Ameresco is one year into a two-year implementation process, and is currently 68% complete with upgrades. They are implementing more than 17 different energy conservation measures which range from simple traditional conservation efforts such as energy efficient lighting, water conservation and weatherization to more capital intensive improvements such as upgrades to building comfort control systems, boiler replacements and HVAC improvements.  Renewable measures, like solar hot water heating systems and a photovoltaic energy generation system, are included for several buildings.  Among the cost savings the City will realize include equipment standardization and a reduction in maintenance costs. 

The City of Knoxville’s administration is very pleased with this contract’s progress and performance to date, because it’s reducing our overall utility bill and our energy consumption at no risk to the tax payer.  If the savings guaranteed by Ameresco are not realized, they pay the City for the difference.  So far, however, the savings have been even greater than the estimates.