Nye County green-lights $7.45 million in energy upgrades through performance contract

Following three years of gearing up for a large-scale energy conservation project, Nye County has now entered into a performance contract with Siemens Industry, Inc. that aims to provide an array of upgrades and improvements intended to reduce energy costs.

The $7.45 million contract agreement was green-lighted by the Nye County Commission during its Wednesday, June 2 meeting and the main take-away that a majority of commissioners seemed to want the public to have is that this project, while quite costly, will not be utilizing taxpayer dollars, as every cent to be paid on it is to be funded by the savings realized through the energy upgrades.

Before proceeding with the discussion on June 2, Nye County Deputy District Attorney Bradley Richardson interjected to make a clarification regarding the performance contracting agreement. “The bond amount being posted is 100% of the contract price. The cost of that bond has already been built into our contract price… The cost of that is being paid for out of the contract,” Richardson explained.

Nye County Commissioner Leo Blundo then asked for a representative of Siemens to provide a bit of an overview regarding the project.

“I don’t necessarily need a presentation,” Blundo said, acknowledging commission chair Debra Strickland’s remark that the board was already very familiar with the project, which has been in the works since early 2019. “I’m just going to ask a couple of questions to help illuminate the situation, because I know I am going get asked, why am I spending $7.5 million?”

“But you’re getting it back,” Strickland asserted.

“I know that, you know that, we know that,” Blundo said, indicating that some in the public may be unaware of the nature of performance contracting and the guarantees that are attached.

The biggest point to keep in mind is that Nye County will be receiving millions of dollars in energy upgrades and improvements, which will then be paid for with the savings it sees in its energy and operational bills. Siemens is providing assurances on the estimated savings by guaranteeing that if those savings are not realized, the company will make up the difference. This essentially means Nye County will not be on the hook for the cost of the performance contract, with all associated expenses to be funded by the money saved through reduced energy usage.

Eric Thatcher, senior sale executive of Energy Performance Services at Siemens, said the company has been in business for over 170 years and is one of the companies that has been vetted by the state for this specific kind of project.

“As far as this project, there are quite a few of the buildings that we are looking at doing… Essentially what we are doing is, we are focused on upgrading the HVAC equipment. A lot of the equipment in your buildings have reached the end of their useful life and there’s more efficient units we can replace them with. That’s pretty much the heavy lift for this project,” Thatcher stated.

“In addition to that, we’re also upgrading the building automation system, which will do a couple of things,” Thatcher continued. “The first thing it will do is, it will save you a lot of energy and will make the buildings more comfortable, but the main thing is, your buildings are kind of spread out… So when something goes wrong with a building today, one of your technicians has to jump in a truck and drive out there to address it. With the upgrades we are contemplating, they would be able to look at the building through a computer system and access the controls to see what is going on and to address a lot of the issues remotely.”

He noted that the other major aspect of the project is the installation of solar on the Pahrump Justice Center, which houses the courthouse, sheriff’s department, clerk’s office and district attorney’s office, as well as the Pahrump Detention Center.

“Over the lifetime, how much of a savings are we going to accrue?” Blundo asked.

“The project is self-funded so between the energy savings and the operational savings, it repays the entire amount over an 18-year term,” Thatcher explained.

The scope of work calls for lighting retrofits, building envelope upgrades, installation of window film, new HVAC units, boiler replacements, cooling tower replacement, coil cleaning and coating, automation upgrades and smart thermostats, a generator heat pump for the Pahrump jail and the installation of solar panels at the Pahrump justice facility and Pahrump jail.

There are a variety of buildings that will undergo improvements through the project, including the Nye County Commission Chambers, which houses Nye County Administration and the commissioners’ offices; the Pahrump justice center where the courthouse, clerk’s office, DA’s office and sheriff’s offices are located; the Pahrump Detention Center; the county health and human services building; its buildings and grounds offices; the “250” complex on Highway 160 where planning and public works are housed; the offices of the recorder, treasurer and assessor; the Pahrump Medical Facility which used to be home to Healthcare Partners of Nevada; the Beatty Justice Court; and the Tonopah Justice Facility.

Thatcher said the life of the upgrades and new equipment varies but the average for all of it is a life of 18 years. However, one of the major components of the project, the solar panels, will have a life of 25 years so that particular component will continue to provide energy savings after the 18-year term of the bond.

Nye County Commissioner Bruce Jabbour honed in on this, asking if the county would have to basically start again with a new project of this kind when the 18-year term is complete. Thatcher said that would depend upon many factors, although he did note, “But you will still have benefit far beyond that 18 years.”

Nye County Commissioner Frank Carbone, for one, was obviously pleased with the project, remarking, “This is a good thing for us. It’s also going to replace a lot of things that we would have to do on our own but it’s now in this process, which will help us out greatly. Because we have some antiques (old equipment) all over this place.”

Despite all of the assurances offered that afternoon, Nye County Commissioner Donna Cox said she was still not satisfied with the project. She asserted her belief that it would have been better and much less expensive to have the county staff take care of the upgrades themselves. “I just don’t like the cost on this,” Cox stated.

Nye County Buildings and Grounds Director William Allen jumped in to state that he had conducted an internal study to determine the costs if the county were to try to do the project in-house and as for the equipment costs themselves, they would be very similar to what Siemens was proposing. However, he said that his department does not have enough staff members to accomplish the project in a timely manner. Siemens, with its ability to dedicate a large team to the project, would be able to undertake all of the work within one year.

Nye County Manager Tim Sutton added that an independent third party had been involved in the energy auditing process and had verified Siemens’ estimated cost savings. Chris Halpin of NV5 Energy Efficiency Services confirmed that the project had checked out with his company.

“We’ve overseen over $100 million of these kinds of projects just here in Nevada, between the City of Henderson, City of Reno, Clark County schools, Washoe County schools and most of the northern school districts and Carson City as well,” Halpin said. “We act as sort of a go-between to make sure that everything that Siemens is putting on the table and promising to the county is something that is actually achievable… And as Eric had mentioned before, it’s a very good way for local governments, especially rural governments like Nye County… to be able to aggressively attack deferred maintenance issues.”

Halpin added that each and every project that NV5 has been involved in has met or exceeded its savings target.

Blundo made the motion to approve, with a second from Carbone. That motion passed 4-1 with Cox the sole voice against.

Nye County Ordinance 572, authorizing the bonding to fund the project, was also approved at the same meeting.

Contact reporter Robin Hebrock at rhebrock@pvtimes.com