Thursday 3 November 2016

Saskatoon Embarks on Energy Performance Contract

The City of Saskatoon has committed to reducing its greenhouse gas emissions by 30% from the 2006 levels by 2023. A key strategy is to implement broader-scale energy improvements to civic buildings through Energy Performance Contracting.

The City recently posted an RFQ for an energy performance contract on SaskTenders. The successful company will be asked to perform a detailed feasibility study on up to 20 municipal buildings in order to identify energy and water conservation measures and their potential cost and energy savings. The City will then choose which measures it wants to undertake.

Chris Richards, Manager, Energy and Sustainability, Environmental and Corporate Initiatives, says that energy performance contracts have a number of potential benefits:

  • The contractor, rather than the municipality, takes on the risk (and cost) of conducting the audit and identifying potential energy savings. 
  • The contract creates a mechanism for funding projects out of operating funds rather than having to compete with other capital projects. 
  • The companies applying for the contract undergo a financial screening process to ensure that they have the necessary qualifications. 
  • The contractor guarantees that there will be financial savings, making it easier to borrow money to finance the work. 
  • Work can be bundled together, eliminating the need to go through a tendering process on up to 100 individual processes. 
  • The contractor agrees to provide certain results so the onus is on the contractor to test and make sure that the completed work achieves the desired energy and cost savings. As a result, the contractor is much more likely to hire reliable sub-contractors to ensure that everything works efficiently. The City has fewer headaches and the project requires less oversight. 
  • The contract includes a measurement process. If the contractor underperforms, they will either have to do remedial work or cut a cheque. 

It’s good to see the City of Saskatoon taking steps to cut greenhouse gas emissions. It will be interesting to follow their progress.

Saskatoon Health Region recently undertook a similar energy performance contract. The work is described in an article we posted in 2015.