Cutting Missourians’ Electricity Bills

Recently the St. Louis Post Dispatch published an article written by Doug Sitton, President of Sitton Energy Solutions, that provides detail on how Missourians’ can cut their electricity bill by becoming more energy efficient.

From the article:
According to an analysis by SNL Energy (confirmed by data from the U.S. Energy Information Agency), from June 2007 to June 2016, Missouri’s retail electricity rates increased 46.7 percent, the fourth-fastest among all 50 states and the District of Columbia. Due to aging infrastructure and other reasons, rates are increasing in not just Missouri, but states across the country.

But by increasing investments in energy efficiency, Missouri can lower our electricity bills up to 6 percent on average by 2030 while we reduce harmful air and water pollution.

Furthermore, at the same time we are cutting electricity bills and reducing harmful pollution, we will put more people to work making homes and buildings to be more energy-efficient. A new analysis by the Natural Resources Defense Council (NRDC) finds that stronger energy efficiency investments in Missouri could create more than 8,000 jobs per year and add more than $600 million annually to the state’s economy.

Ameren Illinois Energy Innovator Award: New Technology

SSM Health St. Mary’s and SSM Health Good Samaritan Hospital’s were recently awarded the Ameren Illinois Energy Innovator Award in the New Technology category. Sitton Energy Solutions was thrilled to be their energy management consultants to help them maximize energy savings and ROI.

Pictured below: (left to right)
– Howard Jones (St. Mary’s and Good Samaritan Hospital’s)
– Mike Mellott (Good Samaritan Hospital)
– Dave Dickinson (St. Mary’s Hospital)
– Steve Tuthill (Good Samaritan Hospital)
– Jason Combs (Sitton Energy Solutions)

Jacob Weinstein Ameren Presentation

This summer, one of our interns, Jacob Weinstein was a speaker at the 2019 Ameren Illinois Energy Efficiency Internship Wrap-Up Presentations. Watch as Jacob goes into great detail about the work that Sitton does and how we help our clients become more energy efficient. Learn more about what goes in to retro-commissioning projects before and after the project begins.

“Getting the Most from Your Energy Savings Performance Contract” in MOASBO Journal March and April 2010

According to the Energy Services Coalition (www.energyservicescoalition.org), “Energy savings performance contracting enables building owners to use future energy savings to pay for up-front

costs of energy saving projects, eliminating the need to dip into capital budgets.”  It has become more common to use performance contracting for projects that also include non-energy savings improvements, and those for which the Owner has the capacity to finance the project on their own. With this expansion of performance contracting, it’s important to understand its application as well as its potential shortcomings. It can be a viable option for an Owner IF you 1) understand it and 2) manage it closely.

When considering performance contracting delivery, ask yourself these questions:

  • Do we need the Energy Services Company (ESCO) to provide the up-front financing?
  • Over what period do we want the energy savings to pay back the cost of improvements – 5, 10, 15 or 20?
  • Do we have non-energy savings improvements that we would like to include in the project?
  • Do we have the project delivery expertise in place to closely oversee the contracting, design and construction?

Depending on the answers to these questions, you can determine whether or not performance contracting is your most cost-effective option.

Most construction projects use a delivery method that has checks and balances built into the process by the existence of three legs on the construction stool: Owner, designer and constructor. In the case of performance contracting, the delivery is design-build, meaning the ESCO is responsible for both design and construction. It is critical that you understand this dynamic, for you will need to provide 100% of the oversight and checks and balances.

If you decide on performance contracting for your project, you should customize the process to maximize the value delivered. Customizing will help you get the maximum scope of work at the highest quality, and at a competitive price.

Performance Contracting can be a cost-effective and viable option IF you have the expertise on your side to understand it and manage it closely. In Part 1, we covered how to decide whether Performance Contracting is your best delivery option, and the importance of understanding the dynamics of the two-legged stool (no checks and balances between design and construction).

“High” Performance Contracting – Part 2: Customizing and Managing the Process. Once you’ve determined Performance Contracting is the best way to deliver your project, it’s time to customize the process to maximize the value delivered. Your goal in customizing is to help you get the maximum scope of work at the highest quality, and at a competitive price.

Here are some tips to maximize the value you receive:

  • Make the selection process competitive – both in terms of qualifications and price.
  • Make sure you have apples-to-apples proposals.
  • Negotiate a contract that is fair to both parties, and requires open book compensation to allow review of fees, allowances, contingencies, etc.
  • Match the Energy Services Company’s (ESCO) fees and contingencies to the risk taken on by the ESCO. Areas of risk may include: financing, guaranteed payback from energy savings, guaranteed maximum price, and typical construction risk.
  • Make sure the bidding of the construction work is competitive and open. Have the ESCO prequalify bidders as necessary.
  • Have the expertise in place to oversee and review energy savings calculations, design, bidding and construction (remember, you are 100% of the checks and balances).

Summary: Performance Contracting can be a viable and cost-effective delivery option IF you have the expertise in place to understand and manage it.