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Performance Contracting in a Massachusetts School: Step by Step Timeline

The Idea is Born

I began as Superintendent-Director at Montachusett Regional Vocational Technical School during the summer of 2011. The school, known in the region as Monty Tech, has more than 1,400 students. The district includes 18 member communities.

Some months after my arrival, Director of Facilities Richard Ikonen mentions the phrase “performance contracting” at one of our meetings, briefly describes the process, and says he is going to look into the idea further.

At this point, the concept strikes me as “too good to be true.”

Preliminary Investigation

  • May of 2012 – We invite representatives from Trane to make a presentation at a meeting of a School Committee subcommittee. Trane, a subsidiary of Ingersoll Rand and a manufacturer of HVAC equipment, is an Energy Services Company – better known as an ESCO. Trane’s staff explains performance contracting, suggests ways the school might save energy, and discusses guaranteed energy savings. Subcommittee members appear skeptical, but are interested in learning more.
  • Spring/Summer 2012 – Selected School Committee members and administrators visit several regional vocational technical schools in Massachusetts to look at completed performance contracting projects. The first trip is to Old Colony Regional Vocational Technical High School in Rochester, MA. The visiting team is deeply impressed.

Timetable for Procurement and Implementation

  • July 5, 2012 – The school issues a Request for Qualifications (RFQ) for an Energy Services Company.
  • August 17, 2012 – The school gets only two responses and decides to reissue the RFQ.
  • September 26, 2012 – The school issues a second RFQ.
  • November 12, 2012 – The School Committee votes to enter into a Performance Contracting Agreement with Trane. At the same meeting, the Committee votes to hire a consultant to review the agreement at a cost not to exceed $30,000.
  • December 20, 2012 – The parties execute a detailed audit agreement.
  • February 2013 – Trane delivers a list of possible Energy Conservation Measures (ECMs) to the school.
  • February 2013 – The school selects ECMs it wishes to undertake.
  • March 6, 2013 – The School Committee votes 21-0 to authorize the Superintendent and Treasurer to negotiate an energy management services contract and other documents with Trane. The Committee authorizes its Capital Improvements Subcommittee to award the contract.
  • March 21, 2013 – The Capital Improvements Subcommittee votes 6-1 to award the Energy Management Services contract to Trane U.S. and to authorize the Superintendent to execute documents related to the award, upon recommendation of legal counsel and the district’s consultant.
  • At the same meeting, the Subcommittee votes 6-1 to award a contract to Banc of America for the purpose of financing the Energy Management Services Contract, subject to review by legal counsel, the Business Manager, and Treasurer.
  • March 28, 2013 – The Superintendent executes the contract with Trane.
  • April 25, 2013 – The school and Bank of America/Banc of America Public Capital Corp. close on financing in the amount of $10 million for a 16½ year term at 2.99%.
  • April 25, 2013 – The school issues Trane a “Notice to Proceed” with the project.
  • April 2013 to October 2013 – Trane implements the project, achieving substantial completion, with systems operable.

Project Summary

At no additional expense to its member communities, Monty Tech received $10.7 million in much-needed capital improvements to its building.

Among other things, the school got a new roof, more than 40 new rooftop heating and air conditioning units, a new boiler system, new lighting, and a new energy management system.

From August 2013 to July 2014, the school’s consumption of electricity was reduced by an average of 45%. Its consumption of natural gas was cut by an average of 39%.

As an added bonus, Trane secured more than $500,000 in energy rebates for the school from Unitil, the local utility company.