An exception in the bidding process for energy-conservation projects may be in part responsible for an interruption in the progress of the Emporia school district’s Facility Conservation and Improvement Program project.
The project is valued at a total cost of $6,710,142 for construction and related work done as well as overseen by Custom Energy Solutions of Overland Park.
The Kansas Legislature in 2000 passed a bill to encourage energy savings, according to Peter Armesto of the State Energy Office of the Kansas Corporation Commission.
A portion of that bill exempted governmental units and school districts involved in the energy savings program from the bid-advertising procedures usually involved in financing projects.
Instead, those governing entities can enter agreements with any of 10 private energy-service companies (ESCO) that the state has approved to work within the energy-office programs. Those ESCOs are authorized to act on behalf of school districts, for example, and obtain bids from companies the ESCOs have pre-approved as eligible and competent to provide the services needed.
The abbreviated bidding process allows the project to move forward faster, and the ESCOs stand to lose money if their energy-savings estimates — based in part on estimates from the pre-approved contractors — do not prove correct.
“The ESCO will guarantee that savings meet or exceed annual payments to cover all project costs — usually over a contract term between 10 and 15 years,” according to energy office requirements. “If savings don’t materialize, the ESCO pays the difference, not (the governing entity). To ensure savings, the ESCO offers staff training and long-term maintenance services.”
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Friday: Custom Energy and the Emporia school district are in the process of resolving the bid dispute.
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