REGION 16 — Mounting frustrations with an energy consulting firm finally boiled over as the Board of Education voted to terminate its contract with the Texas-based company.
The board unanimously approved buying out of its contract with Cenergistic (formerly Energy Education) for $178,200 at its June 26 meeting.
The company is an energy conservation company that trains its clients to implement behavioral and organizational changes in order to reduce energy consumption without any mechanical upgrades. In February 2011, the board unanimously approved a five-year deal with the firm.
Under the contract, the company’s fee was $118,000 a year for the first four years of the deal and nothing the fifth year. The contract also stipulated the board hire a part-time energy education specialist to oversee the program in the district, who was paid a stipend of about $20,000.
A little over a year into the contract, the board began to openly express concerns and frustrations with the company’s performance and how the savings were being calculated.
Those frustrations once again came to the surface last week as the board discussed terminating the deal.
“I’m very frustrated by this,” board member Robert Hiscox said.
Hiscox said the board paid the company a lot of money and there were supposed to be incentives if it didn’t produce.
“Where are those incentives?” he asked.
However, board Chair Priscilla Cretella said the figures the company shows argue it met the contract.
As part of the terms of the contract, the company had to reimburse the district if the savings did not exceed the money spent on the program in any given year.
According to figures presented in June 2012, the district saved, or avoided, $161,000 in energy costs from May 2011 to April 2012, according to the company’s calculations. The board’s costs were roughly $154,000 — netting the board a savings of about $7,000 over that time, according to the company’s calculations.
The fact that the savings in the first year just barely outpaced the district’s costs raised suspicions among board members. The board also contends some of the savings could be attributed to measures taken by David Langdon, director of facilities and maintenance supervisor for the district, not the company.
Superintendent of Schools Tim James said it’s a matter of proving ownership of the savings.
In an emailed statement, Mike Gullatt, senior vice president of corporate communications for Cenergistic, said the company has provided energy conservation training to the district since March 2011 and claimed the company assisted the district in saving more than $270,000 in utility costs over that time.
“Cenergistic was disappointed to learn that the Regional School District 16 board members voted to terminate our contract for services and will no longer realize energy conservation savings. … Our proven program is guaranteed to save more money than it costs to implement, and has done so,” Gullatt said in the email.
The board’s legal counsel has been reviewing the contract over recent months and talking with the company about negotiating a lesser buyout fee but the $178,200 figure remained firm.
The board first looked into terminating the contract last summer but decided against it due to financial concerns over buying out of the deal. However, a surplus in the 2012-13 budget presented the board the opportunity to get out of the deal.
Business Manager Pamela Mangini said the surplus to pay for the buyout came in the support staff salary, workers compensation and special education transportation budgets.
The board also instituted a spending freeze in February.
Mangini said even after paying the buyout, the district anticipates the budget “carryover” will be $300,000, which will be used by Beacon Falls and Prospect to offset education costs for this fiscal year.
Buying out of the contract also frees up funds in the 2013-14 budget earmarked for Cenergistic and running the program.
The vote to terminate Cenergistic’s contract comes at a time when the board is considering signing up for a different energy program.
Tyler Wall, an energy consultant at Advanced Energy Management, spoke to the board last week regarding state-backed energy programs for businesses his company runs in conjunction with Connecticut Light & Power.
The way the programs works is Advanced Energy Management will conduct a free audit to determine what needs to be done, such as replacing lights or mechanical measures. CL&P will pay for up to 40 or 50 percent of the cost of the upgrades and the remainder will be paid off by the district to CL&P through the savings on its electric bill, he said. There is no money out of pocket or up-front costs to the district, he said.
Using hypothetical round numbers, Wall explained, if the district’s electric bill is $1,000 a month the bill will remain $1,000 and any savings will go to pay for the work done. Once the work is paid off, the savings will go to the district.
James described the programs as a no-interest loan.
Among the upgrades that could be done under the programs are replacing interior and exterior lights with more energy efficient ones and the boiler at Long River Middle School.
Cretella said she’s skeptical referring to the issues the board had with Cenergistic and needs more questions answered.
Langdon said the board is looking at sizable savings if it signs up for the programs. He pointed to the transformers at Long River and Woodland Regional High School, which could be replaced under the programs. He said newer ones use less than 50 percent of the power of the ones currently in the schools.
“This is totally different from Energy Education,” he said about the programs.
Wall is expected to put together a proposal to present to the board at its July 17 meeting.